News 2002

July 17 : June 21 : April 12 : April 5 : January 21 : January 11

July 17, 2002

  • The Washington Legal Foundation has published a Legal Backgrounder entitlted, "California High Court Muddles Standard for Workplace Tort Suits," written by Lynn A. Bersch.

    Bersch explains, "In a pair of decisions rendered January 31, 2002, the California Supreme Court ruled that businesses hiring independent contractors may be liable for workplace injuries suffered by the contractors' employees. In Hooker v. Department of Transportation, 27 Cal.4th 198 (2002), and McKown v. Wal-Mart Stores, Inc., 27 Cal.4th 219 (2002), the Court held that a business hiring an independent contractor may be liable to the contractor's employees for workplace injuries to the extent the hiring business "affirmatively contributes" to the injuries by either exercising retained control over worksite safety conditions or providing unsafe equipment. To read the full document click HERE (PDF).

June 21, 2002

  • United States Supreme Court Further Limits the ADA
    On June 10, 2002, the United States Supreme Court handed down a major victory for employers in Chevron v. Echazabal, No. 00-1406, 2002 WL 1270586 (U.S. June 10, 2002). Further limiting the American with Disabilities act ("ADA"), the Supreme Court unanimously reversed the Ninth Circuit and held that the ADA does not entitle people to jobs that might jeopardize their health. In other words, an employer may make employment decisions (including hiring, assignment, transfer, and firing) based on a disabled employee's "direct threat" to himself or herself.

    Mario Echazabal worked for independent contractors at a Chevron plant in El Segundo, California before twice applying for a regular job with the company. Chevron refused to hire Echazabal both times based on a test that showed that Echazabal suffered from chronic, active Hepatitis C, a liver condition that can lead to cirrhosis, liver failure and death. According to doctors, continued exposure to toxins at the refinery would exacerbate the liver condition.

    Chevron subsequently asked the maintenance contractor to fire or reassign Echazabal in 1996, which it did, arguing that he risked further liver damage the longer he worked around the chemicals at the plant, and that his medical condition was outside the protection of the ADA. Echazabal filed suit under the ADA. Chevron argued that an Equal Employment Opportunity Commission ("EEOC") regulation permitted the defense that an employment decision based on a worker's disability on the job that would pose a direct threat to his health does not violate the ADA. The Ninth Circuit reversed summary judgment granted to Chevron by the District Court finding that the EEOC regulation exceeded the scope of permissible rulemaking under the ADA. The Supreme Court agreed with the District Court and reversed.

    The ADA generally prohibits discrimination against a qualified individual because of a disability. 42 U.S.C. § 12101 et. seq. Prohibited actions include the use of qualification standards that tend to screen out disabled individuals. 42 U.S.C. § 12112(b)(6). The EEOC regulation in question expands upon the affirmative defense created by the plain language of the ADA allowing an employer to rely on such a qualification standard "shown to be job-related for the position in question and … consistent with business necessity," which may include " a requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace. § 12113(b). The regulation allows employers to screen not only for risks that an individual would pose to others but for risks he or she would pose to himself or herself. 29 CFR § 1630.15(b)(2) (2001).

    The Court's holding that the EEOC regulation is valid under the ADA is based on its disagreement with the Ninth Circuit's application of the statutory interpretive canon, expressio unius exclusio alterius, or, expressing one item of an associated group or series excludes another left unmentioned. Rather, the Court found the expansive language of the ADA's provision on what may be included in that which defines job relatedness and business necessity to permit a qualification standard which takes into account potential harm to one's self.

April 12, 2002

  • On March 12, 2002, Senator Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee, introduced legislation entitled the Corporate Criminal Accountability Act of 2002. This is another bill that was created in response to the Enron crisis. A whistleblower protection provision is included in the legislation, among other provisions, to address some concerns caused by the recent crisis. Specifically, the bill protects whistleblowers at publicly traded companies from retaliation by their employers in fraud cases. If an employee alleges that retaliation has taken place, a complaint can be filed with the Department of Labor, or the individual can file a lawsuit in district court.
  • To see the text of the bill, please visit (The whistleblower provision is Sec. 7 of the bill):

April 5, 2002

  • In response to the Enron collapse and the loss of personal savings suffered by its company's employees, President Bush proposed reforms to protect employee pensions. H.R. 3762, the Pension Security Act, is legislation introduced by Representative John Boehner (R-OH), Chairman of the House Committee on Education and the Workforce, that codifies the President's proposals.

    On March 20, 2002, the full Committee on Education and the Workforce voted to approve the legislation and send it to the House floor by a vote of 28-19. The bill addresses many of the problems that were experienced by Enron employees. Some of the provisions include:

    • Senior employees would be prohibited from selling company stock during "blackout" periods when other employees are unable to make changes in their plans.
    • Employees would be able to diversity their stock in their 401(k) plan-
      they would be allowed to sell their stock three years after receiving it in their pension plan.
    • Employers would have to provide better information to employees about their pensions
    • Employers are encouraged to provide employees professional investment advice (this provision was already approved by the full House in the Retirement Security Advice Act, H.R. 2262)

Senator Jeff Bingaman (D-NM) and Senator Edward Kennedy (D-MA) have introduced their own pension reform bill, Protecting America's Pensions Act of 2002 , S. 1992. The Senate Committee on Health, Education, Labor, and Pensions approved the measure on March 21, 2002. A key difference between the House and Senate legislation, according to the House Committee, is the Senate bill will discourage, not encourage, employers to provide investment advice to employees.

Helpful Resources:

H.R. 3762

Committee on Education and the Workforce press release

S. 1992

  • Does the Age Discrimination in Employment Act (ADEA) provide for lawsuits based on a disparate impact theory of liability? The answer to this question remains unresolved as the Supreme Court decided that it had improperly granted certiorari on a case it heard in March (Adams v. Florida Power Corp., 01-0584). The 11th Circuit Court of Appeals had held that the ADEA does not provide for disparate impact claims under the ADEA.

There is a major split in the circuits on this issue. The 1st, 3rd, 7th, 10th, and 11th circuits have held that a disparate impact claim is not allowed. The 2nd, 8th, and 9th circuits have held that a disparate impact claim is allowed. A primary argument in favor of allowing disparate impact claims is that the language in the ADEA allegedly mirrors that of Title VII, a statute that does allow for disparate impact claims.

11th Circuit Opinion:

January 21, 2002

  • The U.S. Supreme Court ruled last week that the Equal Employment Opportunity Commission can step into disputes covered by arbitration agreements. In this case, an applicant, Eric Baker, signed a Waffle House employment application containing an agreement that any employment-related dispute would be decided by binding arbitration. Soon after Mr. Baker was hired, he suffered a seizure at work and was discharged shortly thereafter. He never initiated arbitration proceedings, but filed a disability-discrimination charge with the EEOC. After investigating the charge, the EEOC filed suit against Waffle House, seeking broad injunctive relief, as well as victim-specific relief - backpay, reinstatement, and compensatory and punitive damages - on behalf of Mr. Baker.

    Waffle House argued that allowing the EEOC to obtain victim-specific judicial relief for Mr. Baker would undermine the federal policy favoring arbitration agreements. The Supreme Court rejected Waffle House's argument and held that because the EEOC was not a party to the arbitration agreement between Waffle House and Mr. Baker, that agency was not barred from bringing an enforcement action in its own name. The Supreme Court further held that because the discrimination statutes (Title VII and the Americans with Disabilities Act) at issue in this case grant the EEOC the right to obtain all statutory remedies (including backpay and compensatory and punitive damages) in any action it brings, the EEOC was free to seek victim-specific relief on behalf of an individual who could not himself file a lawsuit for such relief.
    The ruling could reverse or complicate the trend of using arbitration in employment disputes by depriving arbitration of finality, employer-side labor lawyers said. From Kilpatrick Stockton.

    The Supreme Court's Decision in EEOC v. Waffle House, Inc.

January 11, 2002

  • On January 8, the U.S. Supreme Court ruled that a Kentucky woman with carpal tunnel syndrome could not be categorized as a disabled worker under the Americans with Disabilities Act because she is still able to care for herself off the job. The unanimous ruling came in Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, No. 00-1089.

    The case can be found here:

    A New York Times editorial states "Congress should either revisit the Americans With Disabilities Act and clarify its language or pass a new law." Read the editorial here:

  • On January 2, U.S. District Judge Henry H. Kennedy, Jr., struck down an executive order by Pres. Bush that requires government contractors to advise their workers that they need not join a union. Read the decision HERE.


2003 The Federalist Society