On September 11, 2018, the 7th Circuit issued an opinion in which it explained the joint employer doctrine and reversed the district court's decision on summary judgment that an employer management services company was not a joint employer of the plaintiff-employee in her sexual harassment, retaliation, and pregnancy discrimination lawsuit against multiple separate companies. Frey v. Hotel Coleman, et al., No.17-2267 (7th Cir. 9/11/2018). This case presented issues regarding the employer-employee relationship that arise in the increasingly common scenario in which one employer hires another entity to manage the day-to-day operations of an enterprise. One entity provides the paycheck but another entity manages the tasks typically associated with an employer, such as hiring, firing, training, supervising, and evaluating employees. In this case, a hotel hired a management company to handle its daily operations. Under the hotel management agreement, the management company was responsible for hiring, supervising, directing, and discharging employees, and determining the compensation, benefits, and terms and conditions of their employment. The hotel agreed that it would not give direct instructions to any employee of the hotel or the management company that may interfere, undermine, conflict with or affect the authority and chain of command established by the management company. The plaintiff and other staff members who worked at the hotel were on the hotel's payroll, and the management agreement stated that all personnel are in the employ of the hotel.
Employment Law Chicago Blog
On September 10, 2018, the 7th Circuit affirmed a jury verdict in favor of a former employee of a big box company, who alleged and testified that she was harassed by a store customer. Equal Employment Opportunity Commission v. Costco Wholesale Corporation, Nos. 17-2432 & 17-2454 (7th Cir. 9/10/2018). The employee testified at trial that she was stalked by a store customer for over a year. Things got so bad at the end that she secured a no-contact order from an Illinois state court. She took unpaid medical leave due to emotional trauma from the experience, and when she did not return to work from medical leave, the company terminated her employment. The Equal Employment Opportunity Commission ("EEOC") filed a lawsuit against the company on behalf of the employee, alleging that the company had subjected her to a hostile work environment by tolerating the customer's harassment. The 7th Circuit held that a reasonable jury could conclude that the customer's conduct was severe or pervasive enough to render the employee's work environment hostile.
On September 4, 2018, the 7th Circuit affirmed an order of summary judgment in a lawsuit filed by an assistant professor against a state university, in which the professor alleged that the University denied him tenure because of his race, African-American, in violation of Title VII of the Civil Rights Act of 1964, as amended ("Title VII") and Section 1981 of the Civil Rights Act of 1866 ("Section 1981"). Haynes v. Indiana University, No. 17-2890 (7th Cir. 9/4/2018). The plaintiff was employed as an assistant professor in the Department of Education at Indiana University. At the conclusion of his six-year probationary employment contract, he was denied tenure. The 7th Circuit held that the record does not support an inference that the University denied tenure because of the plaintiff's race.
Effective August 24, 2018, the Illinois Human Rights Act ("IHRA") is amended by Public Act 100-1066. Under the amended IHRA, complainants may opt out of the Illinois Department of Human Rights ("IDHR") investigation and commence a lawsuit in circuit court. To do so, complainants must submit, within 60 days after receipt of notice of the right to opt out, a written request seeking notice from the Director indicating that the Complainant has opted out of the investigation and may commence a civil action in the appropriate circuit court. This amendment may dramatically change Illinois employment law litigation. Plaintiff-side Illinois employment lawyers may choose to take advantage of the opt-out provision by quickly opting out of the IDHR investigation and filing employment lawsuits with jury demands in state court. Before the amendment, IDHR complainants were required to wait 365 days from the charge filing date or until the IDHR investigator completed her investigation, before they could file a lawsuit in court. With the long wait out of the way, the new opt-out provision may also influence plaintiff-side Illinois employment lawyers to file charges of discrimination first at the IDHR, rather than first at the EEOC. It will still be crucial for complaining parties to have their charges cross-filed with both the IDHR and the EEOC, and to perfect all federal law and state law employment discrimination claims, in order to preserve the right to obtain complete relief.
On August 27, 2018, the 7th Circuit affirmed the dismissal of a retaliation claim under the Fair Labor Standards Act ("FLSA") for legally insufficient pleading of protected activity. Sloan v. American Brain Tumor Association, No. 18-1103 (7th Cir. 8/27/2018). The plaintiff sued her former employer for unlawful retaliation in violation of the FLSA. The district court dismissed the complaint. The 7th Circuit held that the plaintiff's allegations, even if generously construed, do not remotely support a claim that the defendant retaliated against her for asserting rights protected by the FLSA. Under federal pleading standards, a complaint must state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads facts that allow a court to draw a reasonable inference that the defendant is liable for the misconduct alleged.
On August 24, 2018, the 7th Circuit reversed an order of summary judgment in favor of an employer-defendant in a lawsuit filed by an employee who claimed that the employer discriminated against her because she had a disability, failed to accommodate her disability, and retaliated against her for exercising her right to request reasonable accommodations, in violation of the Americans with Disabilities Act ("ADA"). Rowlands v. United Parcel Service, No. 17-3281 (7th Cir. 8/24/2018). The district court granted the employer's motion for summary judgment on all of the employee's ADA claims, finding that she did not have a disability within the meaning of the ADA, had waived her failure to accommodate claim, and failed to establish a prima facie case of ADA retaliation. The employee appealed her failure to accommodate and retaliation claims. The 7th Circuit reversed the district court, finding that there are genuine issues of fact that are material to the employee's failure to accommodate and retaliation claims, which were not waived.
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