Indiana Law Review Survey of Employment Law Developments for Indiana Practitioners Ellen E. Boshkoff* Susan W. Kline** Introduction: National Trends and Developments This survey period was marked by incremental change—as opposed to major revision—in the area of employment law. Whether primarily representing employees or employers in employment cases, practitioners will find this year's developments a "mixed bag." From the plaintiff-employee perspective, good news came largely in procedural rulings, most notably the United State Supreme Court's generous application ofthe "continuing violation doctrine" in harassment cases. 1 Employer-defendants, on the other hand, will find comfort in the Court's rejection of Department of Labor regulations relating to notice requirements under the FMLA2 and decisions further narrowing the scope of "disability" or "reasonable accommodation" under the ADA.3 Regardless of one's perspective, this remains an area of the law where it is important to keep abreast of new developments—which seem to occur on an almost weekly basis. In the discussion below, we analyze the most notable new cases handed down during the survey period, including decisions under Title VII, the ADA, ADEA, FMLA, and related state laws. We close with our "watch list": cases pending before the U.S. Supreme Court that may generate significant new rulings during the next survey period. I. Title VII A. Continuing Violation Doctrine Under Title VII, an Indiana plaintiff must file a charge with the Equal Employment Opportunity Commission (EEOC) within 300 days "after the alleged unlawful employment practice occurred."4 In June 2002, the United States Supreme Court issued an important decision in National Railroad Passenger Corp. v. Morgan, 5 addressing whether, and under what circumstances, * Partner, Baker & Daniels, Indianapolis. B.A., 1983, Swarthmore College; J.D., 1990, Indiana University School ofLaw—Bloomington; Judicial Clerk to ChiefJudge J. Clifford Wallace, Ninth Circuit Court of Appeals, 1990-91. ** Associate Attorney, Baker & Daniels, Indianapolis. B.S., 1980, Butler University; M.B.A., 1992, Butler University; J.D., 2000, Indiana University School of Law—Indianapolis; Judicial Clerk to Chief Justice Randall T. Shepard, Indiana Supreme Court, 2000-02. 1. Nat'l R.R. Passenger Corp. v. Morgan, 122 S. Ct. 2061 (2002). 2. Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81 (2002). 3. Kg., Toyota Motor Mfg., Inc. v. Williams, 534 U.S. 184 (2002); U.S. Airways, Inc. v. Barnett, 535 U.S. 391 (2002). 4. 42 U.S.C. § 2000e-5(e)(l) (1994 & Supp. V 1999). 5. 122S. Ct. 2061(2002). 1036 INDIANA LAW REVIEW [Vol. 36:1035 a Title VII plaintiff may sue on events that occurred outside the statutory time period. PlaintiffAbner Morgan filed a charge claiming that, during his employment at Amtrak, he was harassed and disciplined more harshly than other employees based on his race. 6 Some ofthe acts ofwhich he complained occurred more than 300 days before the date he filed his EEOC charge.7 Amtrak sought summary judgment on all incidents that fell outside the 300 day filing period. 8 The U.S. Supreme Court noted that there was a split among the appellate courts on how to handle acts outside of the statutory filing period.9 Looking to the Title VII wording that "[a] charge under this section shall befiled within [300 days] after the alleged unlawful employmentpractice occurred'' the Court held that discrete acts, although related, could not be converted into a single unlawful practice for purposes of timely filing. 10 After analyzing case history, the Court stated several important principles. The first was that "discrete discriminatory acts are not actionable iftime barred, even when they are related to acts alleged in timely filed charges. Each discrete discriminatory act starts a new clock . . . ."u The Court did, however, hold that the statute would not bar an employee from using prior acts as background evidence to support a timely claim. 12 Moreover, the filing time period is subject to the equitable doctrines of tolling and estoppel. 13 The Court reasoned that "[discrete acts such as termination, failure to promote, denial of transfer, or refusal to hire are easy to identify. Each incident of discrimination and each retaliatory adverse employment decision constitutes a separate actionable 'unlawful employment practice.'" 14 The Court reached a different conclusion, however, on the issue of hostile environment claims. 15 The Court distinguished these types ofclaims because, by their nature, they involve repeated conduct. 16 Because a hostile work environment claim is comprised of a series of acts that add up to a single unlawful employment practice, the Court concluded that if one act contributing to the claim occurred within the filing period, the Court could consider the entire time period of the alleged hostile environment in determining liability. 17 Therefore, in order for a charge of hostile environment to be timely, the employee need only file the charge within 300 days of any act that is part of a 6. Id. at 2068. 7. Id. 8. Id. 9. Id at 2069. 10. Id. at 2070-71 (emphasis supplied by the court) 11. Id. at 2072. 12. Id. 13. Id. 14. Id. at 2073. 15. Id. 16. Id. 17. Id. at 2074. 2003] EMPLOYMENT LAW 1037 hostile work environment. 18 A court must, therefore, look at alleged acts that make up a hostile environment and consider events preceding the limitations period ifthey are part of the same actionable hostile work environment practice. 19 Plaintiff Morgan cited incidents involving the same type of employment actions which occurred with relative frequency and were perpetrated by the same managers.20 The conduct outside the limitations period was not, therefore, time-barred because all the acts making up the claim qualified as part of the same employment practice and at least one act fell within the statutory time period. 21 The Court left the door open for employers faced with situations where the plaintiff unreasonably delayed in filing a charge. 22 Employers may raise equitable defenses such as laches, which in the Title VII context requires proof of a lack of diligence by the plaintiff and prejudice to the employer. 23 B. Disparate Treatment Cases 1. "Lost Chance " Theory.—Two cases based on disparate treatment theories gave the Seventh Circuit opportunities to decide issues offirst impression. In the first case, the court borrowed from tort law principles and applied a "lost chance" theory in calculating a back pay award. 24 The court noted at the outset that the procedural posture ofthe case was a bit unusual because it was brought by white male applicants who successfully alleged race and gender discrimination in hiring and promotion by the Illinois State Police (ISP). 25 These men prevailed in their reverse discrimination case by proving that ISP's affirmative action plan was not narrowly tailored to meet a compelling governmental interest.26 Three of these plaintiffs appealed the calculation of their back pay award. 27 The district court judge took the novel approach of calculating back pay by evaluating the likelihood that each individual would have received a promotion. 28 He then awarded back pay on a proportional basis.29 The plaintiffs argued that each should receive the full amount of recovery, and that the burden of proofon the damages issue rested with ISP. 30 In effect, they argued that it was ISP's burden to prove by clear and convincing evidence that each of the plaintiffs 18. Id at 2075. 19. Id. at 2076. 20. Id 21. Id at 2077. 22. Id. at 2076. 23. Id. at 2077. 24. Bishop v. Gainer, 272 F.3d 1009 (7th Cir. 2001) 25. Mat 1011. 26. Id. 27. Id. at 1015. 28. Id 29. Id. 30. Id. 1038 INDIANA LAW REVIEW [Vol. 36:1035 would have failed to receive a promotion absent the reverse discrimination.31 The Seventh Circuit said the plaintiffs "ask[ed] too much." 32 The court cited Doll v. Brown, 33 where the court discussed the hypothetical situation ofmultiple candidates for a single promotion. 34 If four out offive applicants for a singlejob were discriminated against, and all were equally qualified, it would be obviously wrong to award all four back pay, give one the job, and allow the other three front pay as well. Because the issue was novel and had not been briefed in Doll, the court did not hold that the lost chance theory was available in employment discrimination cases but "commend[ed] it to the consideration of bench and bar as a possible method of arriving at more just and equitable results in cases such as this." 35 Here, the districtjudge evaluated the chances oftwo ofthe plaintiffs who had been competing for the same job and who placed third and fourth on the promotion list. He assigned one plaintiff a forty-five percent likelihood of success and the other a thirty percent likelihood. 36 The third plaintiff competed for a promotion with two other white males who occupied positions higher on the promotion list, so the judge assessed his chances at fifteen percent. 37 The Seventh Circuit noted that this approach "involves more art than science," but observed that this is also true of comparative negligence calculations and, in situations such as this, is the likeliest way to produce a just result. 38 It found "no reason to disturb the thoughtful calculations" ofthe district court judge. 39 2. Comparative Qualifications.—The second disparate treatment case offering the Seventh Circuit an issue of first impression was Millbrook v. IBP, Inc.* The question presented was when evidence ofcomparative qualifications supports a jury verdict of discrimination. Millbrook was a janitor at a meat processing plant who claimed that he suffered discrimination based on race when he was passed over for promotion to quality control inspector. 41 Ajury awarded him $7500 in pain and suffering, $25,000 in lost wages, and $100,000 in punitive damages. 42 IBP required that its quality control inspectors have strong communication skills because their job duties often brought them into confrontation with 31. Id. 32. Id at 1016. 33. 75F.3dl200(7thCir. 1996). 34. Bishop, 272F.3datl016. 35. Id. (quoting Doll, 75 F.3d at 1207) 36. Id at 1016. 37. Id. 38. Mat 1016-17. 39. Mat 1017. 40. 280 F.3d 1169 (7th Cir. 2002). 41. Id. at 1172. 42. Id. 2003] EMPLOYMENT LAW 1039 production supervisors. 43 Millbrook applied without success for an inspector position eight different times. 44 The jury concluded that another applicant was better qualified on seven of the eight occasions but found discrimination on the eighth claim. 45 The court began by noting that in evaluating pretext, the question is not whether the employer made a proper evaluation of competing applicants, but whether it used deceit to cover its discriminatory tracks. 46 IBPjustified its hiring decision by explaining that the successful candidate had prior experience in quality control, had superior communication skills to Millbrook, and was more confident in his demeanor. 47 Millbrook cited subjective comments from interviews such as "shows no real interest," "no skills experience pertaining to this position," "gave poor and incomplete answers to questions," and "lacks ability to answer questions clearly" as demonstration of racial bias. 48 The court disagreed, finding no evidence that the subjective criteria used in evaluating the candidates was a "mask for discrimination." 49 The quoted comments were negative but racially neutral, and at trial IBP offered specific facts in support of the subjective evaluations. 50 Additionally, similar comments were made about white candidates. 51 The court then revisited its precedent on the issue of when evidence of comparative qualifications, absent other evidence of discrimination, could be sufficient to support ajury verdict ofdiscrimination. 52 After reviewing holdings in other circuits, the court held that where an employer's proffered nondiscriminatory reason for its employment decision is that it selected the most qualified candidate, evidence ofthe applicants' competing qualifications does not constitute evidence of pretext "unless those differences are so favorable to the plaintiff that there can be no dispute among reasonable persons of impartial judgment that the plaintiff was clearly better qualified for the position at issue." In other words, "[i]n effect, the plaintiffs credential would have to be so superior to the credentials ofthe person selected for thejob that 'no reasonable person, in the exercise of impartial judgment, could have chosen the candidate selected over the plaintiff for the job in question.'" 53 43. Id. 44. Id 45. 7^. at 1172-73. 46. Id. at 1175. 47. Id. 48. Mat 1176. 49. Id. 50. Id. 51. Id. 52. Id. at 1179. 53. Id. at 1 180-81 (quoting Deines v. Tex. Dep't ofProtective & Reg. Servs., 164 F.3d 277, 1040 INDIANA LAW REVIEW [Vol. 36:1035 The court reiterated its often-stated position that its role is not to act as a super personnel department second guessing employers' business judgments. 54 Applying this standard, the court held that Millbrook could not prevail without providing some affirmative evidence challenging IBP's credibility.55 Applying the standard that comparative qualifications do not support a finding of pretext, the court found it "a close question" as to whether Millbrook' s qualifications equaled or exceeded those of the successful applicant. 56 At the end of the day, he failed to sufficiently prove intentional discrimination. Thus, the jury verdict could not stand. 57 In summary, the court stated, "Title VII is not a merit selection program. Not all members of the Seventh Circuit would have reached the same conclusion. Five judges voted to grant en banc rehearing of the 2-1 decision. 59 C. Harassment Three Seventh Circuit opinions issued during the survey period and dealing with claims of harassment are worth comment. In the first, Gawley v. Indiana University, 60 an Indiana University Police Department officer claimed that a senior officer had subjected her to harassment. Among other things, he made offensive comments about her pants being too tight and commented on her breast size when fitting her for a bullet-proof vest. 61 On one occasion, he groped her breast while he was adjusting the vest on her. 62 Gawley eventually complained but did not at that time mention the breast groping incident. 63 The senior officer received a counseling memorandum based on the offensive comments.64 The investigation continued after the counseling memorandum's issuance, and the report was eventually watered down to remove many conclusions that criticized the senior officer and the department. 65 Gawley resigned thereafter and claimed constructive discharge. 66 She conceded that after the counseling memorandum, the offensive conduct did not reoccur.67 In resolving the case, the Seventh Circuit considered the University's 279 (5th Cir. 1999) and Byrnie v. Town of Cromwell, 243 F.3d 93, 103 (2d Cir. 2001)). 54. Mat 1181. 55. Id. at 1182. 56. Id. 57. Mat 1184. 58. Id. 59. Mat 1169. 60. 276 F.3d 301 (7th Cir. 2001). 61. Mat 305-06. 62. Id. at 306. 63. Id. 64. Id. 65. Id. at 307. 66. Id. 67. Mat 31 1-12. 2003] EMPLOYMENT LAW 1 04 1 affirmative defense under Ellerth 6 * and Faragher, 69 that it exercised reasonable care to prevent and correct sexually harassing behavior in a prompt manner, and that Gawley unreasonably failed to take advantage ofthe corrective opportunities the University provided. 70 The conduct by the senior officer that Gawley characterized as harassment covered a span ofabout seven months. 71 She waited another seven months before pursuing a formal complaint through the University's procedures. 72 As soon as she availed herselfofthese procedures, the University took action that stopped the harassment. 73 The Seventh Circuit therefore affirmed summaryjudgment in favor ofthe University because Gawley unreasonably failed to take advantage of available corrective procedures. 74 Approximately a week after the Gawley decision, the Seventh Circuit handed down its opinion in Hall v. Bodine Electric Co. 15 Hall, a machine operator, complained that some of her coworkers had harassed her when one pulled her sleeveless blouse and t-shirt away from her body, exposing her breasts, and another commented on the size of her nipples. 76 During the investigation of that incident, Hall cited other instances of what she considered inappropriate sexual conduct that she had not previously reported. 77 The company's human resources manager interviewed eighteen people, including all those identified as potential witnesses and others stationed in the area ofthe alleged incident. 78 He took handwritten notes during these interviews, and then typed them into his computer and shredded the handwritten notes each day. 79 He concluded that not only had one of Hall's coworkers violated the company rules prohibiting sexual harassment, but also that Hall was guilty of similar violations. 80 The company discharged both employees.81 In the ensuing lawsuit, Hall pointed to the human resources manager's failure to preserve his handwritten notes as evidence that the investigation was a "sham" to dummy up a reason to fire her.82 The court disagreed, noting that employers are not required to keep every scrap ofpaper and that it is sufficient to retain the actual employment record itself.83 The investigator's reasons for disposing ofthe 68. Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998). 69. Faragher v. City of Boca Raton, 524 U.S. 775 (1998). 70. Cawley, F.3dat311. 71. Id. at 312. 72. Id. 73. Id. 74. Id. 75. 276 F.3d 345 (7th Cir. 2002). 76. Mat 351. 77. Id. 78. Id. at 352. 79. Id. 80. Id. 81. Id 82. Id. at 358. 83. Id. 1042 INDIANA LAW REVIEW [Vol. 36:1035 handwritten notes was that they were very rough and duplicative of the typed version, and that he wanted to preserve confidentiality. 84 The court found all those reasons "entirely plausible." 85 Moreover, the investigator's final report noted that eight ofsixteen witnesses interviewed described mutually inappropriate behavior between the two terminated employees. 86 Witnesses said that the two touched each other in a playful, sexual manner on numerous occasions, constantly told sexualjokes, and often made graphic sexual comments to each other.87 Hall attempted to argue that her conduct might have been inappropriate but fell short of Title VII sexual harassment. The court was unpersuaded, however, and said that "an employee's complaint of harassment does not immunize her from being subsequently disciplined or terminated for inappropriate workplace behavior." 88 In fact, the court went on to say, failure to terminate Hall would probably have constituted a Title VII violation in the form of sex discrimination against the other offender. 89 Less than a week after the Hall decision, the Seventh Circuit handed down Longstreet v. Illinois Department ofCorrections. 90 Longstreet complained of two incidents within a thirty-day period, the first involving another officer who masturbated in front of her and the second involving a fellow officer who allegedly rubbed his penis against Longstreet' s buttocks. 91 The court noted that both incidents, ifproven, would be "close to 9's on a scale of 10," but also noted that, because the offenders were coworkers, the employer would only be liable if it negligently failed to take steps to remedy the illegal harassment.92 Longstreet attempted to prove negligence by showing that both offenders had harassed others before her. The court found only one prior offense with "any potential legal meat." 93 The alleged masturbator apparently offered another female officer specified amounts of money for sexual acts. When the officer complained, the miscreant was reassigned so that his target did not have to work with him again.94 In evaluating whether the Department of Corrections had acted negligently, the Seventh Circuit found that the its response to the earlier incident was "not obviously unreasonable." 95 Moreover, the court declined to find employers strictly liable for every second incident of harassment committed by any 84. Id. 85. Id 86. Mat 359. 87. Id. 88. Id. 89. Id. 90. 276 F.3d 379 (7th Cir. 2002). 91. Id. at 381. 92. Id. 93. Mat 382. 94. Id. 95. Id. 2003] EMPLOYMENT LAW 1 043 employee, particularly when the first incident was much less serious than the second. The court also noted that the case might come out differently had there been other non-hearsay complaints of harassment preceding Longstreet's complaint. However, a rule imposing strict liability on an employer whenever an employee committed a second act of harassment would force employers to discharge first-time offenders in all harassment cases. 96 Longstreet also claimed that her reassignment to a different duty station was in retaliation for her complaints about harassment. This claim failed because the only evidence she offered of a connection between the complaint and the reassignment was timing. 97 The Court held, "[T]he transfer occurred 4 months after the second complaint. This is insufficient." 98 D. Retaliation 1. ProtectedActivity.—In order to establish a prima facie case ofretaliation under Title VII, a plaintiff must show that she engaged in statutorily protected expression, that she suffered an adverse employment action, and that there is a causal link between the protected expression and the adverse action. 99 During the survey period, the Seventh Circuit issued two opinions dealing with the definition ofwhat qualifies as statutorily protected expression. In the first, Worth v. Tyer, the plaintiffclaimed that over a two-day period her supervisor brushed up against her; stared at her breasts; stroked her face, hair, nose, backside, and leg; and put his hand down her dress and placed it on her breast for several seconds. 10° On the following day, Worth reported these actions to the local police department. She received a call the next day terminating her employment arrangement "in light of the recent circumstances." 101 She later filed an EEOC complaint and subsequently brought suit. 102 The defendants argued that Worth had not shown that she engaged in a protected activity, because she was fired before she complained to the EEOC, and her police report did not qualify as statutorily protected expression. 103 The Seventh Circuit disagreed, quoting Title VII's provision that "it shall be an unlawful employment practice for an employer to discriminate against any ofhis employees . . . because he has opposed any practice made an unlawful employment practice by this subchapter " 104 The Seventh Circuit concluded that Worth's police report fell within this "opposition" clause. 105 96. Mat 383. 97. Id. at 384. 98. Id. (citing Sauzek v. Exxon Coal USA, 202 F.3d 913 (7th Cir. 2000)). 99. Worth v. Tyler, 276 F.3d 249, 265 (7th Cir. 2001). 100. Id. at 257. 101. Id. 102. Mat 265-56. 103. Mat 265. 104. Id. (quoting 42 U.S.C. § 2000e-3(a) (1994 & Supp. V 1999)). 105. Id. 1044 INDIANA LAW REVIEW [Vol. 36:1035 The defendants offered evidence that the adverse employment action—i.e., Worth's discharge—was for a legitimate nondiscriminatory reason, but Worth countered that the statement that her firing was "in light ofrecent circumstances" constituted direct evidence that this reason was pretextual. 106 The supervisor lost credibility by initially denying that he ever touched the plaintiff in any manner, then later admitting that this denial was a lie. 107 The Seventh Circuit concluded that the jury's finding of retaliation was not clearly erroneous, so the district court did not err when it denied the defendant's motion forjudgment as a matter of law. 108 In another retaliation case, Fine v. Ryan InternationalAirlines,m the airline demoted a female pilot after she failed a mandatory proficiency check. 110 She believed the test was rigged to disadvantage women, and five months later she and three female coworkers wrote a letter to management complaining that the airline treated female pilots inequitably. 111 The following month the airline discharged her after she experienced difficulty scheduling training that she needed to become eligible for promotion back to her previous position. 112 The district court granted summaryjudgment to the airline on Fine's claims of sexual harassment and sex discrimination but allowed the claim of retaliation to go to a jury. 113 The jury awarded Fine $6000 in compensatory damages and $3.5 million in punitive damages, which the district court reduced to the statutory capof$300,000. 114 On appeal, the airline argued that the court should have been granted judgment as a matter of law in its favor on grounds that Fine did not "reasonably [believe] in good faith that the practice she opposed violated Title VII." 115 The Seventh Circuit paraphrased the airline's position as follows: "How . . . could Fine reasonably have believed she was complaining about discrimination when the district court found that she was not discriminated against as a matter of law?" 116 This argument missed the target, the court held, because it is only permissible to retaliate against someone who claims a Title VII violation if the claim is "completely groundless." 1 17 To be groundless, a claim must rest on facts that no reasonable person could possibly construe as a case of discrimination. The fact that a claim ultimately proves unsuccessful does not, therefore, mean 106. Id. at 265-66. 107. Mat 266. 108. Id. at 266-67. 1 09. 305 F.3d 746 (7th Cir. 2002). 110. Mat 749. 111. Id. 112. Id. 113. Id. at 751. 114. Id. 1 15. Id. at 752 (quoting Alexander v.Gerhardt Enters., Inc., 40 F.3d 187, 195 (7th Cir. 1994)). 116. Id. 1 1 7. Id. (quoting McDonnall v. Cisneros, 84 F.3d 256, 259 (7th Cir. 1996)). 2003 ] EMPLOYMENT LAW 1 045 that it was not protected activity. 118 On the record presented, the court could not conclude as a matter of law that Fine had no grounds whatsoever for believing that she had suffered sex discrimination. 119 Among other things, none of her male counterparts experienced similar delays in scheduling training, and two other women who failed proficiency checks also believed that the tests were manipulated in an effort to demote female pilots. 120 Fine was called a "whiner" after she complained of sexual harassment and was treated differently from a male pilot when they asked to see their personnel files. 121 In the end, "[t]here was enough evidence for the jury to find that Fine had a good-faith objectively reasonable belief that Ryan was discriminating against her on the basis of her sex," and the court declined to disturb that finding. 122 2. Summary Judgment Standard.—In Stone v. City ofIndianapolis Public Utilities Division, 123 the court affirmed summary judgment against the pro se plaintiff without discussion or analysis, but it took the opportunity to clarify the standard for summary judgment when a plaintiff claims that he suffered retaliation based on a complaint of employment discrimination. 124 Plaintiffs in such cases may survive summary judgment using either of two approaches. 125 The more straightforward approach is to present direct evidence that he engaged in protected activity and suffered the adverse employment action as a result. 126 If he makes that snowing, and it is uncontradicted, the plaintiff is entitled to summary judgment. 127 Ifthe defendant contradicts this evidence, the case will go to ajury unless the defendant presents unrefuted evidence that it would have taken the same action against the plaintiff even absent no retaliatory motive. 128 In this latter scenario, the defendant is entitled to summary judgment because the plaintiff was not harmed by any retaliation that may have occurred. 129 There is no bright line rule as to how much evidence the plaintiffmust present when using this approach, but "mere temporal proximity" between the time of filing of the charge of discrimination and the allegedly retaliatory adverse employment action will rarely be enough, standing alone, to create a triable issue. 130 The second approach that a plaintiff may employ to survive summary 118. Id. 119. Id 120. Id 121. Id. 122. Mat 753. 123. 281 F.3d 640 (7th Cir. 2002). 124. Id. at 642. 125. Id. at 644. 126. Id. 127. Id 128. Id 129. Id 130. Id. (citations omitted). 1046 INDIANA LAW REVIEW [Vol. 36:1035 judgment is the adaptation ofMcDonnellDouglas131 to the retaliation context. 132 In this approach, the plaintiff must show that after filing the charge or engaging other protected activity, he alone, and not any other employee similarly situated who did not file a charge, suffered an adverse employment action despite satisfactory performance. 133 If the defendant presents no rebuttal evidence, the plaintiff is entitled to summary judgment. If the defendant presents unrebutted evidence of a legitimate nondiscriminatory reason for the action, the defendant is entitled to summary judgment. Otherwise, the question goes to a jury. 134 This case will help practitioners because it clarifies the prima facie case elements and the burdens of proof for retaliation claims in the Seventh Circuit. In particular, it clarifies how causation plays into each of the two alternative approaches to establishing Title VII retaliation. II. Procedural Issues A. United States Supreme Court Holdings During the survey period, the United States Supreme Court settled three procedural issues in the area of employment law. Perhaps the most significant decision came in EEOC v. Waffle House, Inc. 135 The question presented was whether an agreement between an employer and an employee to arbitrate employment-related disputes would serve to bar the EEOC from pursuing such victim-specific judicial relief as back pay, reinstatement, and damages. 136 Waffle House required all prospective employees to sign an application that provided for mandatory arbitration of any dispute or claim concerning their employment. Employee Eric Baker signed the application, began working as a grill operator, and sixteen days later suffered a seizure at work. Waffle House discharged him soon after the seizure. He never initiated arbitration proceedings, but he did file a timely EEOC charge alleging a violation ofthe Americans With Disabilities Act (ADA). 137 The Fourth Circuit Court of Appeals concluded that the agreement did not prevent the EEOC from bringing an enforcement action because the EEOC was not a party to the contract and had independent statutory authority to bring suit. 138 However, the court said that the EEOC was precluded from seeking victim- specific relief, in order to give effect to the policy goals expressed in the Federal Arbitration Act. 139 131. McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). 132. Stone, 281 F.3dat644. 133. Id 134. Id 135. 534 U.S. 279(2002). 136. Mat 282. 137. Mat 282-83. 138. Id at 284. 139. Id 2003] EMPLOYMENT LAW 1 047 The U.S. Supreme Court, in a 6-3 decision, 140 resolved a circuit split on this question. 141 The Court reviewed the history of Title VII and the Federal Arbitration Act, and noted that the Federal Arbitration Act directs courts to enforce arbitration agreements as they do other contracts, but it does not require parties who have not agreed to arbitrate to do so. 142 The Court also noted that when the EEOC does pursue victim-specific relief absent any arbitration agreement, it is "in command ofthe process" because it has exclusivejurisdiction over the claim for a period of time, and the employee may not prosecute the claim until the agency issue a right-to-sue letter. 143 If the EEOC chooses to file suit on its own, the employee has no independent cause of action, although she may intervene in the EEOC suit. 144 The majority's bottom line was that "a contract cannot bind a nonparty."145 It concluded that, as to both Title VII and the ADA, the EEOC might be acting in the public interest even when it pursued reliefthat was entirely victim specific. Because the EEOC's claim was not merely derivative, the employee's arbitration agreement did not stop the agency from bringing an action seeking victim- specific relief. 146 The Court did note that an employee's conduct could limit the relief the EEOC might actually obtain. 147 For example, if Baker had entered into a settlement agreement or failed to mitigate his damages, those actions would limit the recovery available to the EEOC. 148 Otherwise, the employer would be penalized by a double recovery. 149 In contrast to the 6-3 split in Waffle House, the U.S. Supreme Court Justices were in perfect harmony in the case of Swierkiewicz v. Sorema, 150 which dealt with the pleading requirement in employment discrimination cases. Swierkiewics, a fifty-three-year-old native of Hungary, claimed national origin and age discrimination based on his termination. 151 The district court dismissed his complaint because he did not allege circumstances supporting an inference of discrimination and therefore failed to adequately allege a prima facie case. 152 The Second Circuit Court of Appeals affirmed, and the U.S. Supreme Court granted certiorari to resolve a circuit split over the proper pleading standard for 140. Id at 281. 141. Id at 285. 142. Id at 293. 143. Id at 290-91. 144. Mat 291. 145. Id. at 294. 146. Mat 296-98. 147. Mat 296. 148. Id. 149. Id at 297. 150. 534 U.S. 506 (2002). 151. Mat 508-09. 152. Mat 509. 1048 INDIANA LAW REVIEW [Vol. 36:1035 employment discrimination cases. 153 The Supreme Court adopted the majority rule that a plaintiff need not plead a prima facie case of discrimination under the McDonnell Douglas standard to survive a motion to dismiss. 154 Some circuits had held that a complaint was inadequate unless it contained factual allegations supporting each element ofthe prima facie case. 155 The Supreme Court noted that the McDonnellDouglas prima facie case was an evidentiary standard rather than a pleading requirement. ,56 The particular requirements ofa prima facie case will vary depending on the context of the claim. 157 The employer argued that allowing lawsuits based only on conclusory allegations of discrimination to go forward would burden courts and encourage disgruntled employees to bring unsubstantiated claims. 158 In response, the Court pointed out that the plaintiff had alleged that he had been terminated based on national origin and age in violation of Title VII and the ADEA, had detailed events leading to his termination, had provided relevant dates, and had specified the ages and nationalities of at least some persons involved with his termination. 159 This, the Court held, was sufficient to satisfy liberal principles of notice pleading. 160 The third U.S. Supreme Court decision during the survey period dealing with procedural issues was Edelman v. Lynchburg College. 161 That case dealt with a challenge to an EEOC regulation that allowed a charging party who had filed on a timely basis to verify that charge after the filing time expired. 162 The Court looked to the purpose of the verification provision, which was designed to "provide some degree of insurance against catchpenny claims ofdisgruntled, but not necessarily aggrieved, employees." 163 The Court presumed that Congress did not intend the requirement of an oath or affirmation to change the fundamental nature of Title VII as a remedial scheme in which lay persons, rather than attorneys, initiate the process. 164 Allowing the "relation back" of an oath inadvertently omitted from an original filing would help ensure that uninformed lay complainants would not forfeit their rights. 165 On the other hand, the Court agreed that a verification should be required before an employer will be called 153. Id. at 509-10. 154. Id. at510n.2. 155. Id. 156. Id. at 510. 157. Id. at 512. 158. Id. at 5 14. 159. Id. 160. Id. 161. 535 U.S. 106 (2002), aff'd in part, rev'dinpart, remanded by 300 F.3d 400 (4th Cir. 2002). 162. Id. at 109. 163. Id. at 115. 164. Id. 165. Id. 2003] EMPLOYMENT LAW 1049 upon to respond to a complaint. 166 The Court held, taking both concerns into account, that the EEOC's relation back regulation was a valid and, indeed, "unassailable" interpretation of the statute. 167 B. Seventh Circuit Decisions Before the U.S. Supreme Court decided Edelman, the Seventh Circuit had an opportunity early in the survey period to address a case of first impression in the circuit: whether a district court abused its discretion by dismissing a complaint on the basis that it contained repetitious and irrelevant matter. 168 In Davis v. Ruby Foods, Inc., Davis, a former Dunkin Donuts employee, filed a claim of sexual harassment against a female supervisor. 169 His twenty-page complaint was highly repetitious and included material that Judge Richard Posner characterized as "sometimes charming" (citing the plaintiffs statement that "all federal judges should have their pay by law doubled"), but irrelevant and at times "downright weird." 170 The Illinois District Court dismissed the complaint without prejudice, and Davis did not refile. 171 The Seventh Circuit did not fault him for this failure because he was acting pro se, noting that the district court did not explain the deficiency that led to the dismissal or how it could be corrected. 172 The court recognized that Rule 8 of the Federal Rules of Civil Procedure requires a "short and plain statement" with each averment stated in simple, concise, and direct fashion and noted that this complaint failed that test. 173 Nonetheless, it performed the essential function of a complaint—it put the defendant on notice ofthe claim. 174 Indeed, the court noted, it gave the employer far more information than the civil rules require, and appeared to state a claim under Federal Rule of Civil Procedure 12(B)(6). 175 The court, therefore, sided with the plaintiff. The court noted that dismissal of a complaint as unintelligible would be a different matter. 176 It also noted that there were limits on its holding that extraneous matter would not warrant dismissal of a complaint under Rule 8. 177 It cited as an example a Third Circuit dismissal of a complaint that ran 240 166. Id. 167. Id. at 118. 168. Davis v. Ruby Foods, Inc., 269 F.3d 818, 820 (7th Cir. 2001), on remand, summary judgment entered by No. 00 C 5578, 2002 U.S. Dist. Lexis 10480 (N.D. 111. June 11, 2002). 169. Id. at 819. 170. Id. 171. Id. 172. Id. 173. Id. 174. Id. at 820. 175. Id. 176. Id. (citing Salahuddin i/. Cuomo, 861 F.2d 40, 42 (2d Cir. 1988)). 177. Id. at 821. 1050 INDIANA LAW REVIEW [Vol. 36: 1035 pages. 178 Judge Posner added one final bit ofguidance, advising defense counsel not to move to strike extraneous matter in a complaint unless its presence created some prejudice to the defense. 179 The case ofMcCaskill v. SCIManagement Corp. ,8° is similarly noteworthy because it offers a remarkable debate over what constitutes ajudicial admission. The case involved a provision in an arbitration agreement stating that each party would pay its own costs and attorney's fees, regardless of the outcome of the arbitration. PlaintiffMcCaskill argued that this provision improperly limited her ability to vindicate her rights under Title VII. During oral argument, SCI's attorney conceded that the agreement would be unenforceable if construed to limit the plaintiffs ability to recover attorney's fees under Title VII if she prevailed. Judge Bauer found no need to proceed any further in examining whether Title VII's fee shifting provisions override arbitration agreements because in his view, that verbal admission constituted a bindingjudicial admission "the same as any other formal concession made during the course ofproceedings." 181 He therefore concluded that the arbitration clause was unenforceable. 182 Judge Rovner concurred in the judgment but sharply disagreed with the "unprecedented expansion of the doctrine of judicial admissions." 183 She described Judge Bauer's opinion that a single comment during oral argument qualified as an assessment of the merits of the client's case as "simply stunning." 184 She noted that this comment occurred in the context of the SCI attorney making an alternative argument, which was that the agreement should not be read as barring an attorneys fee award. 185 The attorney acknowledged at one point, in response to a question, that ifthe language was read to completely bar attorney's fees, that would be "inconsistent with Title VII." 186 In Judge Rovner' s view, this accurate assessment of the weakness of SCI's position was not a concession concerning a fact in issue, but a candid statement of legal opinion. 187 She did not find the comment to be "the sort of deliberate, clear, and unambiguous statement evincing an intentional waiver that has been held sufficient to constitute a judicial admission. She cited Moose Lodge No. 107 v. Irvis, where the U.S. Supreme Court said, "We are loath to attach conclusive weight to the relatively spontaneous responses of counsel to equally spontaneous questioning from the Court during oral argument." 188 Judge Rovner 178. Id. (citing In re Westinghouse Sees. Litig., 90 F.3d 696, 703 (3d Cir. 1996)). 179. Id. 1 80. 298 F.3d 677 (7th Cir. 2002). 181. Id. 182. Id. 183. Mat 681. 184. Id. 185. Id. 186. Id. 187. Id. 188. Id. at 682 (quoting 407 U.S. 163, 170 (1972)) (other citations omitted). 2003] EMPLOYMENT LAW 1 05 1 concurred with Judge Bauer's conclusion, based on her own interpretation ofthe contract language and its legal implications. 189 The Seventh Circuit dealt more directly with the enforceability of an arbitration contract in Penn v. Ryan 's Family Steak Houses, Inc. m Rather than directly requiring employees to agree to arbitration agreements when they were hired, Ryan's required new hires to execute contracts directly with the arbitration service. The agreement specified that the employer was a third-party beneficiary of the contract. The agreement lacked specifics, and the only responsibility it assigned the arbitration service was that of providing an arbitration forum. Employees who executed the agreements received a copy of rules providing for very restrictive discovery and complete discretion by the arbitrator over the location and time of arbitration proceedings. The Seventh Circuit declined to evaluate the merits ofthis system, however, because the employee never entered into an enforceable contract. 191 Applying Indiana contract law, the court examined the arrangement for mutuality of obligation. 192 Indiana contracts are unenforceable if they are too vague and indefinite for material provisions to be ascertained, and also if the arrangement fails to obligate one party to do anything. 193 The court found that the arbitration service did not make enough of a commitment to create mutuality of obligation. Because it was required only to provide an arbitration forum but did not specify the forum or the standards, it could have fulfilled its promise with a coin toss. 194 The arbitration service's contract with the employer might have saved the arbitration provision had it done more to limit the arbitration service's ability to change procedures, but it contained no such provisions. The provision allowing either the employer or the arbitration service to cancel the agreement on ten days' notice was not a sufficient limitation. 195 The court went on to look for mutuality in the employment application itself. 196 Again, it found nothing in Indiana law to support the proposition that a benefit received from a third party (i.e., the offer of employment by the employer) created mutuality. 197 Therefore, the court found the arbitration agreement between the employee and the arbitration service unenforceable without considering the plaintiffs additional argument that he had not knowingly and voluntarily entered into the agreement. 198 An additional survey period Seventh Circuit opinion dealing with procedural 189. Id. at 685. 190. 269 F.3d 753 (7th Cir. 2001) 191. Id at 758. 192. Id. at 759. 193. Id. (citations omitted). 194. Id. 195. Id. at 760. 196. Id 197. Id. 198. Id. at 761. 1052 INDIANA LAW REVIEW [Vol. 36:1035 issues is worthy of mention. In Beckel v. Wal-Mart Associates, Inc., 199 the plaintiff filed an untimely charge of sexual harassment against her former employer. She invoked the doctrine of equitable estoppel in an effort to overcome her delinquency, explaining that when she complained to higher-ups at Wal-Mart about harassment by her supervisor, she was told to discuss her allegations with no one outside top management. She said she took this to mean that she could not retain a lawyer or complain to the EEOC without risking her job. Judge Posner stated, "Ifthe employer merely orders the employee not to talk to anyone except the employer's managers about her allegation of sexual harassment, and she misunderstands this to mean that talking to a lawyer or filing an administrative complaint or a lawsuit would be considered employee misconduct and jeopardize her job, there is no basis for finding equitable estoppel unless the employer phrases the order in a way calculated to mislead a reasonable person." 200 Employers are entitled to take measures to prevent employees from spreading "what may be groundless rumors concerning improper conduct by another employee." 201 Based upon her deposition testimony, the court found the plaintiffs claim that the general manager told her she would be discharged if she disclosed the incident to anyone besides management not credible. 202 Judge Posner observed that affidavits offered to contradict a deposition "are so lacking in credibility as to be entitled to zero weight in summaryjudgment proceedings unless the affiant gives a plausible explanation for the discrepancy." 203 An error by counsel during the deposition is not a sufficiently plausible explanation. 204 Moreover, the court noted that even if things had occurred as the plaintiff described, equitable estoppel still would not apply, because such a threat would be grounds for a Title VII retaliation claim. 205 Therefore, a reasonable person would be encouraged to bring a claim in this scenario, not deterred. 206 Allowing a claim of retaliation to be used to extend the statute of limitations would misapply the equitable estoppel doctrine and circumvent limitations Title VII imposes on retaliation claims. 207 In short, the court held that "a threat to retaliate is not a basis for equitable estoppel." 208 199. 301 F.3d 621 (7th Cir. 2002). 200. Mat 623. 201. Id. 202. Id. 203. Id 204. Id. at 624. 205. Id. 206. Id. 207. Id. 208. Id. 2003] EMPLOYMENT LAW 1053 III. Americans With Disabilities Act A. U.S. Supreme Court Developments The United States Supreme Court's most contentious survey period decision involving the ADA came in U.S. Airways, Inc. v. Barnett.209 In Barnett, the Court grappled with the potential conflict when a disabled worker seeks assignment to a particular position as a "reasonable accommodation," in conflict with the interests of other workers who have superior rights to bid for the job under a seniority system. 210 A narrow five-justice majority held that "the seniority system will prevail in the run of cases" because a requested accommodation that conflicts with a seniority system's rules would not ordinarily be "reasonable." 211 To survive summary judgment on the question, a plaintiff would have to show special circumstances that make a seniority rule exception reasonable in that particular case. 212 Cargo-handler Barnett injured his back and invoked seniority rights to transfer to a mailroom position. U.S. Airways' seniority system allowed others to periodically bid on that position based on seniority. When Barnett learned that at least two employees with greater seniority intended to bid on the job, he asked to remain in the position as a reasonable accommodation for his disability-related limitations. U.S. Airways turned down his request, and Barnett lost the job. The district court granted summaryjudgment in U.S. Airways' favor, but the Ninth Circuit reversed in an en banc decision. The Ninth Circuit considered a seniority system merely one factor in the undue hardship analysis. When the case reached the Supreme Court, U.S. Airways argued, and Justices Scalia and Thomas agreed, that the requested accommodation was automatically unreasonable because it would have allowed Barnett to violate a rule that others must obey. 213 The Court's majority, however, focused on the definition of the term "reasonable," plus the fact that the plaintiff bears the burden of demonstrating that any given accommodation would be "reasonable." 214 The Court cited several considerations in support of its conclusion that an exception to a seniority system would not be reasonable in the run of cases. 215 Such systems, even if not collectively bargained, are important to employee- management relations because they contribute to employee expectations of fair and uniform treatment. 216 The resulting sense ofjob security and opportunity for steady, predictable advancement based on objective criteria helps encourage 209. 535 U.S. 391 (2002) 210. Id. at 393. 211. Id at 394. 212. Id. 213. Id. at 397-98. 214. Id. at 400-02. 215. Id. at 403-06. 216. Id. at 404. 1054 INDIANA LAW REVIEW [Vol. 36:1035 employees to stay with the employer. 217 The Court went on to give examples of situations where an exception to a seniority system might be a reasonable accommodation. 218 If the employer retains the right to change the seniority system unilaterally and does so fairly frequently, one more exception might not make much difference in employee expectations. 219 Also, the system itself might contain so many exceptions that one more would have little effect. 220 The Court found it easier to reach consensus in the case of Chevron U.S.A., Inc. v. Echazabal. 221 This case involved a challenge to an EEOC regulation that allowed employers to refuse to hire an individual if his performance on the job would endanger his own health, due to a disability. All nine justices agreed that the ADA permitted the regulation. Plaintiff Echazabal, who suffered from Hepatitis C, applied for a job at a Chevron oil refinery. He received an offer contingent on passage of a physical examination, but Chevron's doctors concluded that his condition would be aggravated by continued exposure to toxins at the refinery and the company withdrew the offer of employment. The Ninth Circuit concluded that the EEOC's regulation creating a threat-to- self defense for employers exceeded the scope ofpermissible rulemaking under the ADA. The text ofthe ADA explicitly allows employers not to employ those whose disability would place others in the workplace at risk, but says nothing about threats to the disabled employee herself. 222 The U.S. Supreme Court again ruled against the Ninth Circuit, thereby resolving a circuit split. 223 The Court examined the language of the statute and noted, among other things, that an interpretation limited to a threat to others in the workplace could mean that an employer could not refuse to hire a worker whose disability would threaten others outside the workplace.224 For example, it would make little sense if a typhoid carrier could successfully sue for being denied a job as a meat packer. 225 The Court also noted that the EEOC's interpretation allowing a threat-to-selfdefense would avoid conflicts with OSHA regulations. 226 A third survey period U.S. Supreme Court decision dealt with the ADA and the ongoing development of the law on what constitutes a disability under the Act. In Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 221 a unanimous 217. Id. 218. Id. at 405. 219. Id. 220. Id. 221. 536 U.S. 73 (2002). 222. Id. 223. Id. at 78. 224. Id. at 83-84. 225. Id. at 84. 226. Id. at 84-85. 227. 534 U.S. 184(2002) 2003] EMPLOYMENT LAW 1055 Court concluded that the plaintiffs carpal tunnel syndrome did not constitute a disability under the Act. 228 Plaintiff Williams worked with pneumatic tools in an automobile manufacturing plant in Kentucky. Her physician placed her on permanent work restrictions after diagnosing her with carpal tunnel syndrome and tendinitis in both arms. After two years of modified duty jobs and a workers compensation leave, Toyota assigned Williams to a quality control inspection position. This arrangement worked for a while, until Toyota implemented a process change requiring all the quality control inspectors to rotate through all ofthe tasks in the inspection process. One ofthose tasks was to wipe cars with oil, which involved working with hands and arms at shoulder height for several hours at a time. Williams requested the accommodation of working no more than two jobs within the quality control process. When the parties could not come to an agreement, Williams filed an ADA claim arguing that her physical impairment substantially limited her in manual tasks, housework, gardening, playing with her children, lifting, and working. The Sixth Circuit Court ofAppeals focused on the "manual tasks" claim and found that Williams was disabled because her condition "prevented her from doing the tasks associated with certain types of manual assembly line jobs, manual product handling jobs and manual building trade jobs (painting, plumbing, roofing, etc.) that require gripping of tools and repetitive work with hands and arms extended at or above shoulder levels for extended periods of time." 229 The Sixth Circuit disregarded evidence that Williams was able to tend to her personal hygiene and perform personal and household chores. 230 In analyzing whether Williams' conditions amounted to a disability, the Supreme Court observed that the dictionary definition of"substantially," as used in the phrase "substantially limits," excludes impairments that interfere with the performance of manual tasks in only a minor way. 231 Moreover, the word "major" in the phrase "major life activities" requires that those activities be important — in fact, of "central importance to daily life."232 The impact of the impairment must also be permanent or long-term. 233 The Court noted the special necessity of an individualized assessment of an impairment's effect when the impairment is such that symptoms vary widely among individuals.234 Carpal tunnel syndrome, the Court noted, is that type of condition. 235 The Court cited studies that one quarter of carpal tunnel cases resolve in a month without surgical treatment, although in twenty-two percent of 228. Id at 187, 202. 229. Id at 192 (quoting 224 F.3d 840, 843 (6th Cir. 2000)). 230. Id. 231. Id at 196-97. 232. Id. at 197. 233. Id at 198. 234. Mat 199. 235. Id 1056 INDIANA LAW REVIEW [Vol. 36:1035 cases the symptoms linger for as long as eight years or more. 236 The Court also clarified its holding in Sutton v. United Air Lines, Inc.,221 where the Court held that the major life activity of working is substantially limited only if the plaintiff is unable to work on a broad class ofjobs.238 Sutton was not intended, the Court said, to suggest that other major life activities besides working were also subject to a class-based analysis. 239 The Court explained that the ADA does not require the analysis of whether an impairment constitutes a disability to focus entirely on the effect of the impairment in the work place. 240 It should instead focus on whether the individual has a disabling impairment in the context of carrying out the normal tasks of her daily life, rather than tasks that are unique to any particular job. 241 In this case, "repetitive work with hands and arms extended at or above shoulder levels for extended periods of time" would not be an important part of daily living for most people. 242 The court of appeals therefore erred in disregarding evidence that the respondent was able to maintain her personal hygiene and perform personal and household chores. 243 The evidence showed that she could "brush her teeth, wash her face, bathe, tend her flower garden, fix breakfast, do laundry, and pick up around the house." 244 Her condition did require her to avoid sweeping, give up dancing, require occasional help dressing, and reduce the frequency with which she played with her children, gardened, and drove long distances. 245 However, the Court concluded that these changes "did not amount to such severe restrictions in the activities that are ofcentral importance to most people's daily lives that they establish a manual-task disability as a matter of law." 246 B. Seventh Circuit Rulings on What Constitutes a Disability During the survey period, the Seventh Circuit also added to the body of law on what constitutes a disability under the ADA. In Furnish v. SVI Systems, Inc., 247 a plaintiff, Furnish, who suffered from cirrhosis caused by chronic Hepatitis B was terminated for unsatisfactory performance.248 His position at 236. Id. 237. 527 U.S. 471 (1999). 238. Toyota Motor Mfg., Inc., 534 U.S. at 200. 239. Id 240. Id. at 201. 241. Id. 242. Id. (quoting 224 F.3d 840, 841 (6th Cir. 2000)) 243. Mat 20 1-02. 244. Id. at 202. 245. Id. 246. Id 247. 270 F.3d 445 (7th Cir. 2001). 248. Id. at 446. 2003] EMPLOYMENT LAW 1057 SVI involved video system installation work at hotels. 249 His Hepatitis B limited his ability to travel and to keep up with his employer's installation schedule. 250 The Seventh Circuit concluded that Furnish 's ADA claim failed because the major life activity he cited as the basis for his claim—liver function—does not qualify as a major life activity under the Act. 251 Although Hepatitis B is both serious and chronic, the court did not deem liver function something "integral to one's daily existence" in the same sense as functions such as eating and working. 252 Furnish failed to assert that his condition substantially limited him in working or in any other activity. Moreover, even if liver function served as a major life activity under the ADA, the plaintiff failed to prove that his disease substantially limited his liver function, because doctors' reports characterized his liver function as "adequate" and "normal." 253 In its treated condition, the plaintiffs liver disease became dormant, and because courts examine conditions taking into account corrective or mitigating measures, he could not show any substantial limitation in liver function. The Seventh Circuit next addressed whether diabetes was a disability under the ADA in Nawrot v. CPC International. 25* Nawrot's type I diabetes required him to inject himself with insulin three times daily and to test his blood sugar at least ten times daily. 255 Even with these measures, he still experienced episodes of both high and low blood sugar that affected his health, personality, and behavior. In the two years leading up to his termination, he had three diabetic episodes at work. 256 In February 1997, when introduced to a new employee, Nawrot said "I would shake your hand but I just went to the bathroom and did not wash my hands."257 He later blamed this strange behavior on disorientation due to hypoglycemia. He took a three-month leave ofabsence to attend to his health but, when he returned, he and his employer could not agree on appropriate accommodations, andNawrot was eventually fired.258 Nawrot brought suit, arguing that his diabetes substantially limited the major life activities ofworking, thinking, and caring for himself. The Seventh Circuit agreed that Nawrot's diabetes substantially limited his ability to think and care for himself, and focused on those two major life activities. 259 The court then went on to consider Nawrot's condition in light of mitigating 249. Id. 250. Id. at 447. 251. Mat 449. 252. Mat 449-50. 253. Mat 450-51. 254. 277 F.3d 896 (7th Cir. 2002). 255. Mat 901. 256. Id. 257. Id. 258. Mat 901-02. 259. Id. 1058 INDIANA LAW REVIEW [Vol. 36:1035 measures. 260 The court noted that despite his medical regimen, Nawrot could not completely control his blood sugar level. 261 He would on occasion lose consciousness and fall and experience difficulty expressing coherent thoughts. 262 Physically, he had incurred kidney damage and nerve damage in his feet.263 Although the Seventh Circuit determined thatNawrot was disabled under the ADA definition, his suit failed because he was unable to show that his employer's proffered legitimate, nondiscriminatory reason for discharging him was a pretext for disability discrimination. 264 After "numerous documented occasions of inappropriate behavior," Nawrot' s employer demanded that he "straighten up and fly right," but "instead he crashed and burned" when he harassed a coworker by contacting her outside ofwork hours in violation ofthe employer's explicit directive. 265 The court found that the fact that the harassment did not occur at the workplace was of no moment and held for the employer because Nawrot's discharge was unrelated to his disability status. 266 The next opinion the Seventh Circuit issued during the survey period addressing what constitutes a disability came in Stein v. Ashcroft,267 a case involving myofacial pain syndrome, which is a muscle problem that results in soreness and tenderness from repetitive muscular motion. 268 Plaintiff Stein worked for the Immigration and Naturalization Service (INS) in Chicago. She worked mostly at the INS office, but at times she would travel outside the office to perform "outreach" assignments. These excursions required moderate physical activity such as long periods of standing, carrying boxes of files and office supplies, and setting up chairs and folding tables. 269 After Stein's diagnosis with myofacial pain syndrome, she was limited in her ability to perform heavy lifting. 270 Her supervisor eliminated her "outreach" duties, because it was not feasible to provide an assistant to do the lifting and carrying of boxes, and the INS did not want the risk of further injury to Stein. Stein filed suit under the Rehabilitation Act of 1973, 271 claiming that the elimination of her outreach duties caused her to lose opportunities for overtime pay, points necessary for promotion, and opportunities to socialize and exchange ideas. 272 Stein argued that she was substantially limited in the major life activity of 260. Id. at 904. 261. Id. at 905. 262. Id. 263. Id. 264. Id. 265. Id. at 907. 266. Id. 267. 284 F.3d 721 (7th Cir. 2002) 268. Id. at 723-24. 269. Id. 270. Id. 271. 29 U.S.C. §794(1994). 272. Stein, 284 F.3d at 724-25. 2003] EMPLOYMENT LAW 1059 working and other major life activities. 273 The Seventh Circuit looked to the ADA for guidance because its definition of disability was carried over nearly verbatim from the Rehabilitation Act. The court rejected Stein's claim that she was substantially limited in the major life activity ofworking, because lifting and carrying heavy items on outreach assignments was only a single aspect of Stein's duties. 274 The inability to perform a single, narrowjob for one employer does not establish that one is precluded from working in a broad class of jobs, as is required for protection under the ADA.275 The court went on to consider Stein's other alleged substantial limitations in major life activities. 276 She claimed that her condition had caused her "loss of sleep, impaired sexual relations, inability to participate in sports, inability to cut her food and inability to brush her hair." 277 The court quickly disposed of these claims, because the only evidence Stein offered was her own affidavit in which she referred to these alleged problems only in the past tense. 278 The court also cited the recent decision in Toyota Motor Manufacturing, Inc. v. Williams219 for the proposition that a plaintiff claiming an impairment that substantially limits the major life activity of"performing manual tasks" must show that the limitation is long term or permanent and substantial in effect. 280 A final survey period Seventh Circuit case involving the perimeters of disability came in Szmaj v. American Telephone & Telegraph Co.281 Plaintiff Szmaj suffered from congenital nystagmus, which caused him difficulty focusing his eyes and prevented him from holding any job that required more than fifty percent of his time to be spent reading. 282 Szmaj, a long time AT&T employee, had applied for a job that required reading a computer screen for eighty percent or more of the work day. The Seventh Circuit affirmed summary judgment for AT&T, stating "we can imagine, though with some difficulty, a society of bookworms in which a person unable to read more than fifty percent ofthe time would be deemed unable to engage in a major activity of life. That is not our society. To be unable to read all day long is a misfortune for someone who loves to read or who wants to hold a job (a judgeship for example!) that requires continuous reading, but the ability to read all day long is not a major life activity." 283 The court sympathized with the fact that the plaintiff could not read at all without some discomfort, but noted that "discomfort and disability are not 273. Id. at 725-26. 274. Id. at 726. 275. Id. at 725-26. 276. Id. at 726. 277. Id. 278. Id. 279. 534 U.S. 184(2002). 280. Stein, 284 F.3d at 726 (citing Toyota Motor Mfg., Inc. 534 U.S. 184). 281. 291 F.3d 955 (7th Cir. 2002). 282. Id. at 956. 283. Id. 1 060 INDIANA LAW REVIEW [Vol. 36: 1035 synonyms." 284 C. Temporary Light Duty Positions One more notable Seventh Circuit ADA case during the survey period involved an employer who set aside a pool of light duty positions for employees who were recovering from various physical difficulties.285 Plaintiff Tamara Watson, an assembly line worker, suffered a shoulder injury that restricted her ability to perform repetitive motions. 286 Her employer normally required all assembly line workers to rotate through all positions (in an effort to avoid repetitive stress injuries) but allowed Watson to perform only a limited series of tasks during her recovery. When Watson's physician imposed a permanent restriction against any tasks that required repetitive motion of her upper right arm, her employment was terminated. She sued on the grounds that the light duty position should have been assigned indefinitely as a reasonable accommodation. 287 The Seventh Circuit held that assuming Watson was disabled (which the court deemed doubtful under Toyota v. Williams), it would not be reasonable to require her employer to create a newjob tailored to Watson's individual abilities. Here, Watson acknowledged thatjob rotation was both the normal procedure and a sensible business practice, rather than a scheme to avoid ADA obligations.288 The court considered the practice of creating a pool of light duty positions that keep experienced workers available for reassignment after a recovery period, and concluded that this procedure is exactly what the ADA encourages. Watson sought to turn this practice against the employer by claiming entitlement to occupy such a light duty (or limited task) position indefinitely. 289 The Seventh Circuit declined to punish a good deed, holding that a person is "otherwise qualified" within the meaning ofthe ADA only ifhe or she can perform a regular position with or without accommodation. 290 Watson could not do so and, instead, wanted the employer to create a different job by carving out a subset of the various assembly line tasks. 291 The court affirmed summary judgment for the employer, holding that "the ADA does not require employers to create new positions." 292 284. Id. 285. Watson v. Lithonia Lighting, 304 F.3d 749 (7th Cir. 2002). 286. Id. at 750. 287. Id. at 750-51. 288. Id. 289. Id. 290. Id. 291. Id. 292. Id. 2003] EMPLOYMENT LAW 1 06 1 IV. Age Discrimination in Employment Act A. Disparate Impact The debate continues on whether disparate impact claims are viable under the Age Discrimination in Employment Act (ADEA). In March 2002, the U.S. Supreme Court heard oral arguments in Adams v. Florida Power Corp. 293 That case was brought by 117 employees who were displaced during a series of reorganizations and workforce reductions. The plalintiffs were among the seventy percent of affected Florida Power workers who were over forty years of age. 294 These employees claimed that their employer's action had a disparate impact on workers over forty, because a seemingly neutral policy fell more harshly on that group and, they argued, there was no valid business reason for the disparity. 295 The district court initially allowed the case to proceed as a class action, but later reversed its position and held that the ADEA required proof of intentional discrimination. The Eleventh Circuit Court of Appeals agreed. 296 During oral arguments, Justice Ruth Bader Ginsberg pointed out that the core definition of discrimination in the ADEA exactly tracks Title VII language, yet Florida Power was asking that those identical words be interpreted differently. 297 Justice Sandra Day O'Connor, however, observed that the disparate impact test might be more appropriate for race discrimination than for age discrimination because of a long societal history of racial bias. 298 Court watchers awaiting resolution ofthe issue were disappointed when, on April Fool's Day, the Supreme Court backed away from the issue by dismissing its writ ofcertiorari as improvidently granted. 299 Some commentators viewed this as a victory for older workers generally, although a defeat for these particular plaintiffs, because it appeared that the court conservatives would probably have had the votes to affirm the Eleventh Circuit ruling, had certiorari not been dismissed. 300 The Seventh Circuit has taken a position similar to that of the Eleventh Circuit. In Miller v. City ofIndianapolis, 301 the court declined to decide whether disparate impact claims could be prosecuted under the Uniform Services Employment and Reemployment Rights Act302 (USERRA), because the case 293 . Linda Greenhouse, Supreme Court Hears Arguments on Major Issues in Age Bias Law, N.Y. Times, Mar. 21, 2002, at A33. 294. Id 295. Id. 296. Id. 297. Id. 298. Id. 299. 535 U.S. 228 (2002). 300. Gina Holland, Court Will Not Rule in Age Case, ASSOCIATED PRESS, Apr. 1 , 2002. 301. 281 F.3d 648 (7th Cir. 2002). 302. 38 U.S.C. § 4301 (1994 & Supp. V. 1999). 1062 INDIANA LAW REVIEW [Vol. 36:1035 failed on the facts. 303 The court took the opportunity to reiterate that, "[a]t some future time it may become necessary for us to decide whether a disparate impact claim can be prosecuted under USERRA. We do not always allow such claims. For instance, we do not recognize disparate impact claims in this circuit under the Age Discrimination in Employment Act."304 B. Pretext and Independently Sufficient Reasons In Lesch v. Crown Cork& Seal Co.,305 a sixty-one-year-old comptroller with nearly forty years of service was forced into early retirement during a corporate reorganization, and a fifty-year-old was appointed head of the new accounting group. 306 The Seventh Circuit bypassed an analysis ofLesch's prima facie case, stating, "It is not always necessary to march through this entire process ifa single issue proves to be dispositive. Here, as is often true, that issue is pretext or the lack thereof." 307 Crown offered several justifications for its decision to discharge Lesch. The principal reason was that the comptroller position was eliminated during a phase- out ofa Crown division. 308 The executive in charge ofdeciding who would head up the new accounting group believed the younger candidate the most obvious choice because he was most familiar with certain accounting projects, had been doing a satisfactory job for her, and was competent as an accountant to lead the group. Also, the successful candidate had a superior understanding ofcomputers and proficiency with accounting software. 309 On appeal, Lesch challenged some ofthese reasons for the retention decision, but the court noted that "he has said nothing about others. This alone dooms his effort to establish pretext. Where an employer offers multiple independently sufficientjustifications for an adverse employment action, the plaintiff-employee must cast doubt on each of them" 310 The Court therefore affirmed summary judgment for the defendant. 311 C. No State Immunity Against EEOC Suits In EEOC v. Board ofRegents? n the EEOC brought a public enforcement action on behalf of four former employees ofthe University of Wisconsin Press who claimed they were terminated on the basis of their age. The University of Wisconsin argued on appeal that the suit should have been barred under Eleventh 303. A//7/er,281F.3dat651. 304. Id. 305. 282 F.3d 467 (7th Cir. 2002). 306. Id. at 469. 307. Mat 472-73. 308. Id. 309. Id. at 474. 310. Id. at 473. 311. Id. at 474. 312. 288 F.3d 296 (7th Cir. 2002). 2003] EMPLOYMENT LAW 1 063 Amendment concepts of sovereign immunity.313 The Seventh Circuit noted that, "[i]fthis case was to be prosecuted in federal court, the EEOC had to do it. The individual charging parties were barred by the Eleventh Amendment from suing the state."314 The court went on to note, however, that it is well established that just because states retain sovereign immunity for private lawsuits does not mean that they have similar immunity from suit by the federal government. 315 In Alden v. Maine, 316 the U.S. Supreme Court held that even though private suits against states were barred under the ADA, ADA standards could be enforced "by the United States in actions for money damages."317 The University of Wisconsin argued that the nature of this case made it different because the EEOC was not seeking to remedy a pattern of intentional discrimination, but was rather "simply standing in the shoes of the [four] individuals and acting in privity with them as their representative. In other words, it is just a private suit dressed in fancy clothes." 318 The court was unpersuaded, noting that "[wjhatever wind might originally have been in the sails of this argument has been knocked out by EEOC v. Waffle House, Inc."319 In Waffle House, the U.S. Supreme Court upheld the EEOC's right to bring an enforcement action under the ADA on behalf of a former employee who signed a valid binding arbitration agreement. 320 The Seventh Circuit acknowledged the University of Wisconsin's argument that sovereign immunity was different and more important than the Federal Arbitration Act or arbitration agreements, but concluded that "[i]f ultimately Waffle House is to be distinguished from a case such as this one, that distinction should be drawn not by us, but rather by the Supreme Court." 321 The court therefore affirmed a jury verdict in favor of the EEOC.322 The court also addressed the University's argument that the EEOC had not established a prima facie case because it did not show that the charging parties were replaced with persons at least ten years younger. 323 The EEOC argued that prima facie case analysis was no longer relevant at that stage ofthe proceedings. The Court noted authority on both sides of this issue, but went on to "look briefly" at the University's argument. 324 The University cited O'Connor v. Consolidated Coin Caterers Corp., where the U.S. Supreme Court stated that a 313. Mat 299. 314. Id. 315. Id. 316. 527 U.S. 706(1999). 317. Id. (citing Board of Trustees v. Garrett, 531 U.S. 356 (2001)). 318. Bd. ofRegents, 288 F.3d. at 299-300. 319. Id. at 300. 320. Id. 321. Bd. ofRegents, 288 F.3d at 300 (citing Agostini v. Felton, 521 U.S. 203 (1997)). 322. Mat 305. 323. Mat 302. 324. Id. 1064 INDIANA LAW REVIEW [Vol. 36:1035 prima facie case ofage discrimination required replacement ofthe claimant with someone "substantially younger." 325 The Seventh Circuit has defined "substantially younger" as a ten-year differential. 326 The court has also held, however, that the ten-year line is not indelible. 327 The court, therefore, looked at other evidence offered.328 Aside from the fact that the four oldest employees were the only ones terminated, other facts supported an inference that the choice was based on age.329 For example, justifications for the layoff proposal were developed only after the termination decisions had been made. 330 The two decision makers acknowledged during cross examination that they were seeking a "new vision" for the Press, that bringing younger individuals into the Press was part of that vision, and that the ADEA was viewed as a "legal hurdle" to hiring replacements who would fit that new vision.331 One decision maker expressed the opinion that the Press had not "had the vision to be agile enough" and that by terminating the charging parties, the Press would "improve that agility." 332 The court concluded that the jury could reasonably have inferred that in this decision maker's mind, youth and agility were linked. 333 After reviewing the evidence, the Seventh Circuit concluded that the jury verdict for the EEOC was supported by the evidence, despite the fact that some of the charging parties' replacements were less than ten years younger. 334 V. FAMILY AND MEDICAL LEAVE ACT A. Advance Designation ofLeave Not Required In a 5-4 decision, the U.S. Supreme Court struck down a Labor Department regulation requiring employers to inform employees in advance that leave would be designated as Family and Medical Leave Act (FMLA) leave in order for that leave to count toward FMLA entitlement. In Ragsdale v. Wolverine World Wide, Inc., 335 plaintiffRagsdale was diagnosed with Hodgkin's disease in 1996.336 She became unable to work and exhausted the seven months ofunpaid sick leave she was allowed under the company's policy . During this time, the company held her position open and maintained her health benefits. When Ragsdale sought an 325. Id 326. Id. (citing Kariotis v. Navistar Int'l Transp. Corp., 131 F.3d 672 (7th Cir. 1997)). 327. Id (citing Hartley v. Wisconsin Bell, Inc., 124 F.3d 887, 893 (7th Cir. 1997)). 328. Id 329. Id. 330. Id 331. Id. at 303. 332. Id. 333. Id: 334. Id. at 299, 301,304. 335. 535 U.S. 81(2002). 336. Id. at 84-85. 2003] EMPLOYMENT LAW 1065 additional thirty days ofleave after missing thirty consecutive weeks ofwork, the company advised her that she had exhausted her available leave. Ragsdale contended that she was still entitled to twelve weeks of leave under the FMLA because she had never received specific notice that any part ofher absence would count as FMLA leave.337 Labor Department regulations require employers to inform their workers about the FMLA and how it relates to the company's leave plan.338 Employers must give written notice that leave has been designated as FMLA leave within a reasonable time after the employee provides notice ofthe need for leave under the regulations, with a reasonable time defined as "one or two business days if feasible." 339 The majority of the Court held that the categorical penalty of denying an employer any credit for leave granted prior to notice of the designation of the leave was contrary to the remedial design of the FMLA.340 The penalty lacked any connection to whatever prejudice the employee might have suffered. 341 In Ragsdale' s case, she had not shown that she would have taken less time off, or taken time on an intermittent basis, had she received timely notice. 342 The government argued that a categorical penalty was easier to administer than a fact-specific inquiry, but the Court was unpersuaded, pointing out that the FMLA requires a retrospective, case-by-case analysis.343 The Court also noted that the Labor Department regulation could have a backlash effect because employers seeking to avoid the problem that Wolverine experienced might simply discontinue voluntary programs providing leave in addition to the FMLA's minimum requirement.344 They would then simply designate all leave as FMLA leave, and employees would end up worse off.345 B. Calling in Sick Is Insufficient FMLA Notice In Collins v. NTN-Bower Corp.™6 the plaintiff had accumulated twelve informal and four formal warnings for attendance problems before she called in sick for two days and was discharged. Collins argued that in situations where advance notice by the employee ofthe need for leave is impossible, the employee is never required to advise the employer that the leave request falls within the FMLA.347 337. Id. 338. Id. at 86-87. 339. Id. at 87 (quoting 29 C.F.R § 825.301(c)) 340. Id. at 88. 341. Id. 342. Id. at 90. 343. Mat 91. 344. Id. at 94-96. 345. Id. 346. 272 F.3d 1006 (7th Cir. 2001). 347. Id. at 1008. 1066 INDIANA LAW REVIEW [Vol. 36:1035 The Seventh Circuit disagreed, holding that in such situations notice may be delayed, but it is not entirely excused. 348 In other words, "notice is essential even for emergencies," although it may occur after the fact.349 The court repeated its previous position that the ADA protects only persons who are capable ofworking full time over the long run, and noted that courts have been similarly "reluctant to read the FMLA as allowing unscheduled and unpredictable, but cumulatively substantial, absences." 350 Collins' argument suffered from two flaws. First, she notified her employer simply that she was "sick," which does not imply any serious health condition.351 Second, her deposition testimony that she was incapacitated by depression between ten percent and twenty percent of the time placed her squarely on the horns of a dilemma. Had she truly been incapacitated to that extent, in an unpredictable manner, she would not have qualified for protection under either the ADA or the FMLA. Her actual attendance record showed, however, that she had not missed even ten percent of scheduled work days prior to her discharge, which tended to show that her depression was not as severe as this testimony would indicate.352 Moreover, the Court noted that "depression did not come on [Collins] overnight." 353 When Collins became aware ofher condition, she could have given her employer timely notice of her need for time off to allow the employer to evaluate whether she qualified for FMLA leave.354 C. "No Call No Show " Policy Upheld in FMLA Context In Lewis v. Holsum ofFt. Wayne, Inc., 355 an asthma sufferer who worked at a bakery was put under medical restrictions to avoid flour dust. 356 On December 17, 1997, she suffered an asthma attack at work and checked into a medical center for four days. Her husband delivered an "off work slip," dated December 18, 1997, which stated that Lewis was currently hospitalized but did not state when Lewis would return to work. Lewis did not work as scheduled on December 19, 1997, and the company counted that time as FMLA leave.357 Lewis took scheduled vacation time from December 21, 1997, through December 28, 1997. Her next three scheduled work days were December 29, December 3 1 , and January 2, 1998. Lewis did not report to work on any ofthose days, nor did she call to explain her absence. 358 On January 2, 1998, Holsum 348. Id. 349. Id. 350. Id. at 1007. 351. Id. at 1008. 352. Id. at 1007-08. 353. Id. at 1008. 354. Id. 355. 278 F.3d 706 (7th Cir. 2002). 356. Id. at 708. 357. Id. 358. Id. 2003] EMPLOYMENT LAW 1067 terminated Lewis' employment in accordance with its company rule, contained in a collective bargaining agreement that supported discharge for a three consecutive days of no call, no show. 359 Lewis eventually obtained an off work slip verifying her need for time off from December 17, 1997, through January 8, 1998. Her husband delivered the slip to the company on January 2, 1998. This was insufficient under the company policy, however, which required a call in advance of the absence.360 The court repeated its prior holding that the FMLA does not "authorize employees on leave to keep their employers in the dark about when they will return." 361 Lewis admitted that she had access to a telephone during her absence, and also that her husband, who also worked at Holsum, could have notified the company of his wife's reason for absence. The company was therefore within its rights to enforce its policy of discharge for a three day no call, no show. 362 VI. Worker's Compensation A. Determination ofIndependent Contractor Status In 2001, the Indiana Supreme Court established two different tests for evaluating employment status. In GKN Co. v. Magness 363 the court adopted a seven-factor test for determining whether an individual was an employee oftwo different employers. The court listed the following factors: "(1) right to discharge; (2) mode of payment; (3) supplying tools or equipment; (4) belief of the parties in the existence of an employer-employee relationship; (5) control over the means used in the results reached; (6) length of employment; and (7) establishment of the work boundaries." 364 The court stated further that "the right to control the manner and means by which the work is to be accomplished is the single most important factor in determining the existence of an employer- employee relationship." 365 Later in the year, the court addressed the question of employee versus independent contractor status in Moberly v. Day. 366 The ten factors Indiana courts will consider are as follows: (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation with reference to whether in the locality the work is usually done under the direction of the employer or by a specialist without 359. Id. at 709. 360. Mat 710. 361. Id. (citing Gilliam v. UPS, Inc., 233 F.3d 969, 971 (7th Cir. 2000)). 362. Id. 363. 744 N.E.2d 397 (Ind. 2001). 364. Id. at 402 (citing Hale v. Kemp, 579 N.E.2d 63, 67 (Ind. 1991)). 365. Mat 403. 366. 757 N.E.2d 1007 (Ind. 2001). 1068 INDIANA LAW REVIEW [Vol. 36:1035 supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools and the place of work for person doing the work; (f) the length of time for which the person is employed; (g) the method of payment whether by the time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business. 367 In Expressway Dodge, Inc. v. McFarland?™ the Indiana Court of Appeals had occasion to decide which (if either) of these tests to use in determining whether an individual was an independent contractor for purposes of the worker's compensation statute. McFarland was a retiree who drove vehicles to and from auctions and other sites for an automobile dealership. He was free to accept or reject assignments, but when he did accept he typically began and ended his day at the dealership and wore clothing bearing the Expressway logo. Expressway neither designated routes nor directed the speed and manner of McFarland 's driving. Mileage reimbursement was based on the most direct route, and Expressway provided insurance, dealer plates, gasoline, meals, and occasionally lodging. On December 15, 1998, when McFarland was seriously injured in a one-car accident while driving to an auction on Expressway's behalf, the question arose whether McFarland was an employee subject to the Worker's Compensation provisions, or an independent contractor. 369 The court of appeals held that the ten-factor restatement test followed in Moberly v. Day was most appropriate in the worker's compensation context and, in a 2- 1 opinion, proceeded to apply the ten factors. 370 The majority determined that Expressway did not control the work details. However, this was not dispositive because the type of work did not require significant supervision, especially given McFarland' s experience. 371 Although the work was intermittent, it had been going on for years, McFarland had no particular skill or separate business. The work was part of the dealership's regular business and the company provided all instrumentalities needed. McFarland was paid by the job without tax withholdings, although the parties had treated the arrangement as an employment relationship. The majority concluded, all things considered, that McFarland was acting as an employee when he was injured.372 Judge Friedlander dissented, agreeing generally with the discussion of applicable law but disagreeing over the conclusion to be drawn from applying the ten-factor test. 373 He identified control as the single most important factor based 367. Id. at 1 1 10 (quoting RESTATEMENT (SECOND) OF AGENCY, § 220(2) (1958)). 368. 766 N.E.2d 26 (Ind. Ct. App. 2002). 369. Id. at 28. 370. Id at 30. 371. Id. 372. Id at 32. 373. Id. at 33. 2003] EMPLOYMENT LAW 1069 on GKN Co. v. Magness, and noted that McFarland was always free to decline any trip without adverse consequences. If he chose to accept, his instructions were limited to destination and did not cover manner of driving, route, or even departure time. Because of this "largely unfettered discretion," in Judge Friedlander's view McFarland was not an employee of Expressway.374 This case is helpful because it identifies the relevant factors for consideration in distinguishing between employees and independent contractors for purposes of Indiana worker's compensation. It is also instructive by illustrating the judgment involved when applying those factors. The panel evaluated a fairly complete set of facts, with one judge arriving at a conclusion exactly opposite that reached by the other two. Indiana employers will welcome the clarification as to what test will apply, but must keep in mind that, because the analysis is extremely fact specific, the conclusion will often be difficult to predict. B. Coverage During Arrivals and Departures During the survey period, the Indiana Court ofAppeals dealt with two cases involving worker's compensation coverage for employees arriving at or departing from the employer's premises. In Milledge v. The Oaks, 315 a decision subsequently vacated when the Indiana Supreme Court granted transfer,376 a diabetic housekeeper at a living center twisted her ankle in the parking lot as she arrived for her shift. The injury gradually grew worse until she developed gangrene that required the amputation of her leg below the knee. The Worker's Compensation Board found as fact that the asphalt surface ofthe parking lot was clean, dry, level, and free of debris, and denied coverage on the basis that Milledge's injury did not arise out of and in the course of her employment because there was no causal connection between the sprained ankle and her work duties. 377 On appeal, the focus was whether the injury occurred "in the course of and also "arose out of employment, because both elements must be present for the injury to be compensable. 378 The court agreed that an injury "arises out of employment when a causal nexus exists between the injury and the duties or services that the injured employee performed. 379 The court also noted that risks are incidental to employment if they are not risks to which the public at large is subjected. 380 In this case, the evidence showed that the clear, level, and dry parking lot did 374. Id. 375. 764 N.E.2d 230 (Ind. Ct. App. 2002). This decision has since been overruled by Indiana Supreme Court, 784 N.E.2d 926 (Ind. 2003). 376. 774 N.E.2d 518 (2002). 377. Milledge, 764 N.E.2d at 232-33. 378. Id. at 234. 379. Id. 380. Id. at 235 (citing Smith v. Bob Evans Farms, Inc., 754 N.E.2d 18, 25 (Ind. Ct. App. 2001)). 1070 INDIANA LAW REVIEW [Vol. 36:1035 not pose any risk to Milledge or, indeed, to anyone else. 381 Although the injury arose in the course ofMilledge's employment, nothing about the work premises or the nature ofher work caused or contributed to the injury, so the injury did not "arise out of employment.382 The Indiana Court of Appeals held that the Worker's Compensation Board did not err when it denied Milledge's application for benefits. 383 Seven months later, the court of appeals addressed an injury that occurred during an employee's departure. In Price v. R&A Sales,™ a controversy arose when an employee was injured while leaving the building right after he had been terminated. Price had reported to work the morning of August 17, 1998, and within ten minutes his supervisor advised him of his immediate discharge. He left the office and started to walk down a flight of steps to leave the premises, but slipped and fell backwards, allegedly sustaining injuries. R&A argued that the injuries still fell under the worker's compensation statute, despite Price's discharge prior to the injury. The company successfully filed a motion to dismiss in the trial court. 385 The Indiana Court ofAppeals looked for guidance to the U.S. Supreme Court in Bountiful Brick Co. v. Giles where the U.S. Supreme Court said, "[e]mployment includes not only the actual doing ofthe work, but a reasonable margin of time and space necessary to be used in passing to and from the place where the work is to be done."386 The court of appeals also looked to its 1994 decision in Burke v. Wilfong, 387 where it deemed worker's compensation was the exclusive remedy of an employee who was injured on the employer's property ten minutes before his shift was scheduled to begin. 388 The court also observed that several other jurisdictions have held that discharge does not altogether dissolve an employer-employee relationship for worker's compensation purposes if the employee is injured within a reasonable time after termination while leaving the premises. 389 The court ofappeals concluded that, for purposes ofworker's compensation, the employment relationship does not immediately terminate when the discharge takes effect. Here, Price's injuries "clearly arose out of and in the course of his employment with R&A."390 Worker's compensation was his exclusive remedy.391 381. Id. at 236. 382. Id. 383. Id. 384. 773 N.E.2d 873 (Ind. Ct. App. 2002). 385. Id. at 784. 386. Id. at 876 (quoting Bountiful Brick Co. v. Giles, 276 U.S. 154, 158 (1928)). 387. 638 N.E.2d 865, 868-69 (Ind. Ct. App. 1994). 388. Price, 773 N.E.2d at 875-76. 389. Id. at 876. 390. Id. at 877. 391. Id. 2003] EMPLOYMENT LAW 1 07 1 C. Frampton Claims by Union Workers An additional notable survey period worker's compensation decision is Goetzke v. Ferro Corp? 92 Goetzke, an employee who sustained a back injury, was discharged for allegedly defrauding the company regarding the nature and extent of his injuries. The key issue that the Seventh Circuit addressed was the company's claim that former employees who were covered by collective bargaining agreements when they were discharged could not assert "Frampton claims" alleging retaliatory discharge for exercise of workers compensation rights. 393 The Seventh Circuit had previously held that Frampton claims were unavailable to such workers, but the Indiana Court ofAppeals had subsequently held otherwise. 394 Because the Indiana Supreme Court had not addressed the question, the court of appeals decision was authoritative absent compelling reason for doubt, thus the Seventh Circuit reversed its position. 395 The Seventh Circuit went on to assess the merits ofGoetzke' s claim that his discharge was retaliatory. The company presented evidence that within three months after back surgery, while Goetzke was still on medical leave, he was videotaped engaging a variety of activities including carrying and loading groceries into his vehicle. 396 The day before he participated in a functional capacity evaluation("FCE"), he was caught on tape working on his car, which involved leaning under the hood and pressing the hood down with both hands to close it. 397 The tape also showed him stretching across the front seat of a truck with his feet dangling awkwardly out of the vehicle. 398 Moreover, the person who performed the FCE believed that Goetzke "did magnify his symptoms and his ability may be greater than what the data on the test indicates."399 Although Goetzke presented various evidence in rebuttal that he was indeed severely injured, the court focused on the fairly substantial time period between Goetzke 's worker's compensation claim and his termination a year later. 400 The court acknowledged that the company had evidence that Goetzke was malingering, and noted that although company officials may have been negligent by not reading the entire FCE report, or in relying only on the portions they considered unequivocal, "Indiana law does not render a company liable for retaliatory discharge because it used poorjudgment." 401 The court concluded that Goetzke could bring a Frampton claim even though he was covered under a 392. 280 F.3d 766 (7th Cir. 2002). 393. Mat 772-73. 394. Id. at 773 (citing Vantine v. Elkhart Brass Mfg. Co., 762 F.2d 51 1, 517 (7th Cir. 1985); Bentz Metal Prod. Co. v. Stephans, 657 N.E.2d 1245 (Ind. Ct. App. 1995)). 395. Id. 396. Id. at 770. 397. Id. 398. Id at 770-71. 399. Id. 400. Id. at 775. 401. Id. at 776. 1072 INDIANA LAW REVIEW [Vol. 36:1035 collective bargaining agreement, but that his claim failed because he did not show that the company's asserted reason for his discharge, i.e., fraud, was pretextual. 402 In arriving at this conclusion, the court looked to Title VII case law where "the question is not whether [the evaluation was] right but whether the employer's description ... is honest." 402 VII. Other State Law Developments A. Amount ofPayments Under the Wage Payment Statute The most significant employment law decision by the Indiana Supreme Court during the survey period was an interpretation of Indiana's Wage Payment Statute, which provides treble damages as the penalty for failure to pay amounts due on a timely basis. 404 Dr. Robert Steele had an employment agreement with the Hospital. In the third year ofthat agreement, the Hospital became concerned that certain payments under the agreement ran afoul of proposed regulations issued by the Federal Healthcare Financing Administration. When the Hospital began withholding these amounts, Steele filed suit alleging breach of contract. The Hospital responded that the Wage Payment Statute, on which Steele's claim was based, governed only the frequency and not the amount that employers must pay employees. Because the Hospital had paid at the appropriate intervals, it argued that it could not be liable for the treble damages. 405 The court looked to the language of the statute, which provides that an employer "shall pay each employee at least semi-monthly or bi-weekly, if requested, the amount due the employee." 406 The statute goes on to say, "payment shall be made for all wages earned to a date not more than ten (10) days prior to the date of payment." 407 The court took the view that the phrases "all wages" and "amount due" established, by their plain, ordinary and usual meaning, that the legislature intended this statute to govern both frequency and amount of payment. 408 The court went on to note that this interpretation avoided an absurd result. Ifthe statute governed only frequency ofpayment, employers could easily avoid liability by paying a nominal amount such as one dollar either bi-weekly or semi- monthly, without regard to the true amount owed. 409 The court also noted that the Wage Payment Statute was the appropriate vehicle for Steele's claim, because it covers current employees and those who have voluntarily left employment 402. Id. at 776-77. 403. Id. (quoting Gustovich v. AT&T Communications, Inc., 972 F.2d 845, 848 (7th Cir. 1992)). 404. St. Vincent Hospital & HealthCare Center, Inc. v. Steele, 766 N.E.2d 699 (Ind. 2002). 405. Id. at 701. 406. Id. at 702 (citing Ind. CODE § 22-2-5- 1(a) (1998) (emphasis added)). 407. Id. (emphasis added). 408. Id. at 703-04. 409. Id. at 704. 2003] EMPLOYMENT LAW 1073 temporarily or permanently. 410 The Wage Claim Statute, which the Hospital invoked and which requires that claims be submitted to the Indiana Department of Labor as a prerequisite to filing a complaint in court, applies to employees who have been separated from work by their employer and those whose work has been suspended as the result of an industrial dispute. 411 The court did leave one question unanswered. The Hospital had argued at the court ofappeals that it should not be subject to treble damages because it had a good faith basis for withholding the amount ofwages at issue.412 The court of appeals rejected the notion of any good faith exception to the Wage Payment Statute. Upon transfer, the Hospital did not challenge the court of appeals' decision on that point, and the Indiana Supreme Court specifically expressed no opinion on that issue. 413 B. Interviewing Adverse Former Employees The day after the Indiana Supreme Court decision in Steele, the Indiana Court of Appeals handed down a notable decision in P. T. Barnum 's Night Club v. Duhamell. 4U In this case, a bachelorette party guest suffered injury when a male entertainer fell while trying to lift her. In the ensuing litigation, her attorney sought to interview a former employee who had been acting as general manager ofthe club on the night ofthe accident. The attorney asked the former employee whether he was represented by the club's counsel. The employee said he was not and eventually signed an affidavit, which the club later moved to strike.415 The club looked to Indiana Rule of Professional Conduct 4.2, which states: "In representing a client, a lawyer shall not communicate about the subject ofthe representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so." 416 The court of appeals considered the American Bar Association's position on this rule as applied to former employees, and went on to survey various other jurisdictions' approaches. 417 After discussing these various points of view, the court joined the majority ofjurisdictions in holding that Rule 4.2 does not prohibit an attorney from contacting a former employee of an adverse party. 418 The court did acknowledge the risks that such contacts create, particularly the possibility that such ex parte interviews could result in disclosure of 4 1 0. Id. at 705 (citing IND. CODE § 22-2-5- 1 (b)). 411. Id. (citing Ind. CODE § 22-2-9-2(a) (b)). 412. Mat702n.2. 413. Id. 414. 766 N.E.2d 729 (Ind. Ct. App. 2002). 415. Id. at 731. 416. Id. at 732. 417. Mat 733-36. 418. Id. at 737. 1074 INDIANA LAW REVIEW [Vol. 36:1035 information covered by an attorney-client privilege. 419 It invited the Indiana Supreme Court to use its rulemaking authority to consider the question, but held that "Rule 4.2 contains no limitations on the contacts an attorney may make with the former employee of an adverse party." 420 Within a month, this holding was being applied in federal court.421 The EEOC filed a motion for leave to conduct an exparte interview with one ofDana Corporation's former employees in a racial harassment suit. 422 The district court noted that the question of who may be contacted under Rule 4.2 is frequently litigated and reviewed both Seventh Circuit district court case law and the recent court of appeals determination. 423 Dana Corporation argued that because the former employee had managerial responsibilities, ex parte contacts should be barred. The court noted that Dana did not, however, contend that any information the employee might provide would be either imputed to Dana or binding upon Dana. 424 Moreover, Dana did not argue that the ex parte communication could result in disclosure ofconfidential, classified, or privileged information. 425 The court concluded that absent any specific reason for prohibiting exparte contact with the former employee, particularly privileged communication, the EEOC's motion for leave to interview should be granted.426 C. Wrongful Termination and Refusal to Incur Personal Liability In August 2002, the court of appeals took on the timely topic of corporate officer responsibility. In McGarrity v. Berlin Metals, Inc., 421 the plaintiff was hired as CFO of a corporation and, he claimed, soon discovered that his new employer was falsifying its property tax returns to understate tax liability.428 McGarrity refused to go along, and the company owner responded by outsourcing preparation ofthe returns and refusing to provide McGarrity with a copy. McGarrity obtained the information from the local taxing authority, calculated the tax liability as understated by at least $66,000, and lost his job shortly thereafter. 429 The Indiana Court of Appeals reviewed some common law exceptions to 419. Id. 420. Id 421. EEOC v. Dana Corp., 202 F. Supp. 2d 827 (N.D. Ind. 2002). 422. Mat 828. 423. Mat 829-30. 424. Id. at 830 (citing Orlowskiv. Dominick's Finer Foods, Inc., 937 F. Supp. 723 (N.D. 111. 1996) and Brown v. St. Joseph County, 184 F.R.D. 246 (N.D. Ind. 1993) for the proposition that "former employees cannot bind the corporation"). 425. Id 426. Id. All. 11A N.E.2d 71 (Ind. Ct. App. 2002). 428. Id. at 74. 429. Id. at 75. 2003] EMPLOYMENT LAW 1 075 Indiana's baseline employment-at-will rule. 430 The relevant exception in this case was that an employee who claims that he or she was discharged for refusing to commit an unlawful act that would result in personal liability may sue for wrongful discharge. 431 McGarrity could have committed a Class C felony by certifying the company's financial statements as accurate to company lenders if he knew that the tax liability was significantly understated. 432 He could also have been liable for tax evasion and conspiracy. 433 The court distinguished McGarrity' s situation from that ofan employee who refuses an order to violate public policy without incurring personal liability. 434 It had previously held in Campbell v. Eli Lilly & Company that no employment- at-will exception covers those situations. 435 Here, however, the court of appeals sent the wrongful termination claim back for jury trial. 436 The court also reconsidered a jury verdict in favor of the employer on McGarrity's breach ofcontract claim. 437 This claim was based on assurances the employer allegedly provided when recruiting McGarrity that company employees left only of their own accord.438 McGarrity and his wife testified that they both told the company owner that they were interested in the relocation and job change only if the new employment would be permanent, and were assured that it would be. 439 Indiana also recognizes an exception to the employment-at-will doctrine if the employer knows the employee had a former job with assured permanency and accepted a new position only upon receiving assurances that the new employer would guarantee similar permanency.440 Then, the employee may be fired only for good cause. 441 The trial court instructed the jury that the company could not terminate McGarrity, assuming he proved a promise of permanent employment, as long as McGarrity was "performing the job as he was sought out to do. There must [have been] some good reason to have him fired apart from whim." 442 The court of appeals agreed with McGarrity that this instruction did not define the term "good cause" with sufficient particularity, and sent the question back for retrial. 443 430. Id. at 76-77. 431. Id. at 76. 432. Id. at 78. 433. Id. at 77-78. 434. Id. at 78. 435. Id. (citing 413 N.E.2d 1054 (Ind. Ct. App. 1980)). 436. /rf. at79. 437. Mat 75, 80. 438. Id. at 79. 439. Id. at 77-78. 440. /d. at81. 441. Id. 442. /