The Supreme Court of the United States (SCOTUS) issued two important decisions this week in cases reflecting the ongoing legal tensions between employers’ religious liberties and the right of employees to be free from discrimination; and in both cases, SCOTUS tipped the scales decidedly in favor of employers’ religious liberties.
First Amendment Supersedes Employment Discrimination Claims
The Supreme Court issued a decision in two similar cases – essentially dismissing the discrimination claims brought by two Catholic school teachers who were discharged from their instructional positions at two different Catholic schools in southern California. In Our Lady of Guadalupe School v. Morrissey-Berru (19-267), and St. James School v. Biel (19-348), the Supreme Court held by a 7-2 majority that the U.S. Constitution’s First Amendment Religion Clauses foreclose the teachers’ employment discrimination claims. In the OLG case, the former teacher sued for age discrimination; in the St. James case, the teacher was dismissed after she sought a leave of absence for cancer treatment. The teacher later passed away.
Relying on the “ministerial exception” outlined in the 2012 SCOTUS decision in Hosanna-Tabor Evangelical Lutheran Church v. EEOC, 565 U.S. 171 (2012), the majority opinion, authored by Justice Samuel Alito, noted that “religious education and formation of students is the very reason for the existence of most private religious schools, and therefore the selection and supervision of the teachers upon whom the schools rely to do this work lie at the core of their mission. Judicial review of the way in which religious schools discharge those responsibilities would undermine the independence of religious institutions in a way that the First Amendment does not tolerate.”
Justice Sonia Sotomayor, joined by Justice Ruth Bader Ginsburg in dissent, criticizes the majority for its distillation of the Hosanna-Tabor standard into “a single consideration: whether a church thinks its employees play an important religious role,” and observes that it “strips thousands of schoolteachers of their legal protections.”
Religious Exemptions From Birth Control Mandate Under the Affordable Care Act
In a similar but procedurally more complicated ruling, the Supreme Court upheld the federal government’s expansion of a federal rule that exempts employers with religious or moral objections from being required to provide employees with health insurance coverage for birth control under the Affordable Care Act (ACA).
In a 7-2 decision in Little Sisters of the Poor v. Pennsylvania (19-431), SCOTUS tackled the latest skirmish of the ACA’s birth-control mandate. The ACA mandate generally requires employers to provide female employees health insurance with access to contraception. Religious entities have repeatedly challenged the rules, as well as the opt-out accommodation process developed under the Obama administration for employers with religious or moral exemptions. (The Trump administration had expanded those exemptions.)
With the majority opinion authored by Justice Clarence Thomas, SCOTUS held that the departments of Health and Human Services, Labor, and the Treasury had authority to issue rules for employers. In a concurring opinion, Justice Elena Kagan (joined by Justice Stephen Breyer) acknowledges the statutory authority of the federal agencies, but cautions, “that does not mean the Departments should prevail when these cases return to the lower courts. The States challenged the exemptions not only as outside the HRSA’s [Health Resources and Services Administration’s] statutory authority, but also as ‘arbitrary [and] capricious.’”
In her dissenting opinion, Justice Ginsburg (joined by Justice Sotomayor) notes, “Today, for the first time, the Court casts totally aside countervailing rights and interests in its zeal to secure religious rights to the nth degree.”
Takeaways for Discerning Employers
While these Supreme Court decisions, in tandem, may bolster employers’ confidence in their sincerely held beliefs and moral objections about certain employment-related decisions, it is also important to recognize its limitations. Employers should strategize with their leadership and legal counsel to carefully weigh whether and to what extent these decisions should (or will) inform their own policies and practices, as well as any resulting reputational impact and workplace morale considerations.
As the daily news continues to show protests and calls for justice in response to the death of George Floyd and others at the hands of police officers, there is, unsurprisingly, a desire from employees to hear from their employers regarding the ongoing violence and racial unrest in our communities and across the country. Many employers recognized the gravity of the racial unrest by celebrating, for the first time, Juneteenth on June 19, 2020, a holiday celebrating the emancipation of slaves. But is that enough? How do employers respond?
As a practical matter, employers must be aware of the application of Constitutional free speech protections, employee rights under the National Labor Relations Act and state laws that may apply to expressive employee conduct, as detailed in our previous post.
Beyond that, employers can choose the level of their response and engagement, or choose to do nothing at all—there is no right or wrong answer or a “one size fits all” solution. The most common reaction from employers is to acknowledge the unrest and issue a statement of support. Many employers have also chosen to make a public announcement expressing solidarity and support of the Black Lives Matter movement.
Though these responses are important, they fail to accomplish the more ambitious goal of many employers, which is to articulate and implement a strategy for lasting and real change within their own workplace and beyond. This action requires substantial reflection, consideration, time and effort.
So, for employers looking to do more, where do they start?
Leadership: Good leaders serve as good models. Leaders can lead by example and provide a safe workplace where all employees feel respected and included. As it pertains to the current environment, leaders can be open about their own lack of knowledge and share their growth and experiences with their workforce.
Anti-Discrimination Policies: Employers can review their policies regarding equal employment opportunity and workplace discrimination. Though most employers articulate such policies as a matter of course, it is important to reinforce these policies and remind employees of what is expected of them and to reassure employees who may be feeling vulnerable at this time.
Diversity Initiatives: Employers can focus on building diversity within their ranks by ensuring that recruitment, hiring, retention and advancement are truly objective and based on merit. Employers can also consider implementing a version of the National Football League’s recently-revised “Rooney Rule,” wherein at least two non-white candidates must be considered for open head coaching positions, and one non-white candidate must be considered for coordinator, senior football operations or general manager positions. Forming a diversity committee or task force is another way to ensure that minority members of your workforce are being heard and understood by management.
Awareness: Employers can educate their employees about prejudice and racism in its various forms; this can consist of formal training or open forums in which employees can communicate with one another and, importantly, with their co-workers of color. Employers can also make educational materials available for employees.
Community Involvement: Employers can publicly support the movement in the form of donations or activism. Doing so can create a sense of pride among your workforce, and it can also help in attracting future hires that share the principles of your workplace.
The legal industry continues to respond to larger forces in society, and along with our usual focus on law firm moves, hires, and accolades, we take a look at the specific ways law firms are pledging to combat racism and fight for social justice in their communities and across the country.
Law Firm Moves, Hires and Recognitions
Down in Texas, Erin England joined Katten’s Dallas office as a partner in the firm’s commercial finance practice. England represents alternative lending institutions and banks in negotiating and structuring domestic and international commercial transactions. She also has experience in the real estate finance industry, representing lenders and borrowers in real estate and construction loans involving retail space and industrial properties.
“In the last two years, we’ve added leading attorneys like Erin in key growth areas such as commercial finance,” said Mark S. Solomon, managing partner of Katten’s Dallas office. “As an active member of several organizations committed to the hiring, retention, and promotion of diverse lawyers, Erin also shares in Katten’s deep commitment to diversity and inclusion, which is a fundamental part of the culture in our Dallas office.”
Michael Gaston-Bell of Katten
Also joining the Katten Dallas is Michael Gaston-Bell, who is the first labor and employment attorney in the firm’s Dallas office. His previous experience includes representing clients on Title VII, Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA) and the Family and Medical Leave Act (FMLA) and the Fair Labor Standards Act (FLSA) workplace matters in state and federal court, and working with corporate leadership on complex and often crisis level employment issues, including internal investigations, unfair competition and major transactions in health care, entertainment, banking, military contracting and retail industries.
“Michael is a talented attorney who will offer our clients in Dallas and across the country exceptional employment litigation counsel,” said David Crichlow, national chair of Katten’s Commercial Litigation group. “He has the skills to succeed and a track record for being a true advocate of his clients who often face tough, complicated issues.”
Katten opened the firm’s Dallas office with seven partners in 2018 and has grown to over 40 attorneys in the past two years.
George Howard joined the Restructuring & Reorganization practice of Vinson & Elkins (V&E) in their New York City office as a partner. Howard represents distressed debt investors, asset purchasers, companies, banks and secured lenders in out of court restructurings, chapter 11 reorganizations, distressed M&A, cross-border insolvency proceedings, and secured financing transactions.
“We are focused on growing the firm’s restructuring team particularly to meet increasing client demand for company and debtor side representations,” said V&E managing partner Scott Wulfe. “George is a great addition to the team not only because of his significant debtor experience, which perfectly complements our existing strengths but also because he is a natural team player and a great cultural fit for V&E.”
Matt Jones Ropes & Gray
Ropes & Gray’s Chicago office added Matthew (Matt) R. Jones to the firm’s employment, executive compensation, and benefits practice group. Jones advises private equity firms and their portfolio companies on executive compensation in relation to complex commercial transactions. Jones also advises clients on Securities and Exchange Commission executive compensation arrangement reporting obligations.
“We are very excited that Matt has joined the firm,” said global private equity practice co-chair Neill Jakobe. “Chicago is a priority market for our clients and our firm, and it is critical that we continue to attract the top talent in this market. Matt is an exceptional fit from a strategic and cultural perspective and he will further enhance the value we deliver to our clients locally, and globally.”
Christopher Passodelis Jr., James M. Sander, Brandon T. Uram and Megan L. Tymoczko-Korch joined Steptoe & Johnson PLLC, working remotely from the firm’s Southpointe office in Canonsburg, Pa., with plans to move to the downtown Pittsburgh office this fall. All four attorneys practice in the firm’s Business Department, handling business transactions and corporate services and tax. Uram focuses his practice on transactions and business litigation.
“Chris, Jim, and Megan bring an entrepreneurial spirit and many decades of diverse experience representing businesses large and small to our firm. Brandon is a creative and fierce advocate for clients who are faced with litigation,” said CEO Susan S. Brewer. “As Steptoe & Johnson grows its presence in western Pennsylvania, they will play a key role in helping us meet our clients’ needs.”
Immigration attorney Sarah Hawk joined Barnes & Thornburg (B&T) as a partner, along with Of Counsel Terra Martin and Paralegal Elizabeth Wei. She has 20 years of corporate immigration experience representing universities, corporations, and individuals, and leads the firm’s Southeastern immigration practice.
“In this critical time, we couldn’t ask for a better resource for our clients than Sarah,” said B&T’s labor and employment department leader Kenneth Yerkes. “COVID-19 has complicated many employees’ immigration statuses, whether it stems from remote work, reductions in force, border closings or shortened internship programs.”
David F. Johnson of Winstead was named to the Board of Directors for the Texas Board of Legal Specialization (TBLS). Established in 1974, the TBLS is a certifies lawyers and paralegals in their specific area of law, bestowing certification upon demonstration of expertise, after passing a rigorous exam and demonstration of completion of CLE continuing education credits. Out of 110,000 attorneys licensed to practice in Texas, only 7400 are board-certified. Johnson, who writes extensively on Fiduciary law in Texas, is also Board Certified in Civil Appellate Law, Civil Trial Law, and Personal Injury Trial Law. He will serve a three-year term on the TLBS beginning July of 2020.
Law Firm Contributions to Social Justice
Law firms have responded in a variety of ways to the recent protests, civil upheaval, and calls for change surrounding the murder of unarmed minorities at the hands of police. Many law firms announced Juneteenth observances, and encouraged their employees to use the day as a chance to reflect on how to best encourage tolerance and justice in their lives and through their legal work.
Below is a sampling of some initiatives, pro-bono efforts, and other steps towards positive change announced by law firms.
One thousand attorney law firm BakerHostetler announced the firm’s intention to develop firm-wide plans to become a more “inclusive, diverse and successful place to work and thrive.” The firm announced plans to partner with civil and human rights organizations to develop an environment welcoming of honest conversations about race and discrimination, as well as resources to educate firm-wide to effect change. As an initial step, the BakerHostetler Foundation is donating $100,000 to the Equal Justice Initiative, a non-profit dedicated to justice, ending mass incarceration and police reform. Along with the donation, BakerHostetler acknowledges “like many other law firms, we have work to do to increase diversity among our attorneys and leadership, and we will not stop working to address these issues.”
A global law firm focused on technology and innovation, Orrick has also announced plans to advocate for racial equality and diversity in the legal industry. Along with increased resources devoted to the firm-wide pro-bono program, Orrick Cares, Orrick has also announced the Orrick Racial Justice Fellowship Program. This program will allow at least five attorneys within the firm to devote a year each to focus on social justice and civil rights issues.
Additionally, two associates with Orrick, Tatyanna Senel and Yasmina Souri rallied almost 1,000 attorneys to provide pro-bono representation to protesters in Los Angeles. Senel and Souri helped formalize a working relationship between Orrick and the National Lawyers Guild, an established bar association with a mission of using the power of the law for the people, by bringing together lawyers, law students, legal workers and jailhouse lawyers to work together on a wide spectrum of issues, and create change on the local, regional, national and international levels. The National Lawyers Guild (NLG) is one of the most progressive bar associations in the country, as well as one of the oldest, and the first to be racially integrated. Additionally, Senel and Souri activated their own networks to rally friends and colleagues to the cause. Senel says, “We’re [Senel and Souri] both passionate about the message, and we felt like there was something we could do with our law degrees.”
According to the LA Times, almost 3,000 protesters were arrested in Southern California during the upheaval surrounding George Floyd’s death. Through this partnership, NLG is able to deploy almost 1,000 attorneys with varying levels of expertise to provide legal defense to protesters arrested. Criminal Defense attorneys will handle the more complex matters, while attorneys with limited or no experience in criminal law will handle lower-level issues, like curfew violations. Additionally, the volunteers will provide training on how to act as a legal observer.
Wiggin and Dana LLP, in response to racial inequalities brought to the forefront by recent events, has announced the Wiggin Opportunity Initiative, a pledge to provide $10 million in pro-bono legal services to minority-owned businesses over the next decade. Managing Partner, Paul Hughes, said, “While born of current events and frustrations, the firm wants to do something that will outlast the spotlight of this particular moment and support long-term improvement in opportunity and equality in our communities. By leveraging the particular skillset of our sophisticated lawyers in a sizeable, sustained and focused effort over time, we hope to make real change in a way that we could not achieve by more modest, incremental efforts.”
The next step in the initiative is to identify, through collaboration with community partners businesses that could benefit from the initiative. The legal services will be available across a variety of practice groups in order to meet a variety of needs in the business community. With a ten-year commitment, the firm is hoping to develop long-term relationships with the minority businesses to form partnerships to amplify the success of the businesses, to best impart lasting change on the landscape.
WilmerHale is a full-service, international law firm with 1,000 attorneys is focusing their racial equality efforts on police reform. WilmerHale announced their intention to donate at least a quarter of a million dollars to organizations working on police reform efforts, and select two fellows to work with civil rights groups addressing issues related to systemic racism, criminal justice and holding police accountable.
Focusing on WilmerHale’s proven track record in Police Department Counseling, the firm has established a pro bono client initiative focusing on police reform and social inequities affecting minorities, focusing on police accountability—using WilmerHale’s long-standing expertise in advising police departments in Baltimore and Chicago under Department of Justice (DOJ) investigation to assess practices and bolster public safety by helping departments adopt best practices. WilmerHale indicates these steps are just the beginning, saying: “These are our initial steps in our efforts to ensure meaningful change. We plan to build on and expand this work.”
Many law firms have announced their intention to contribute financially as well as look internally and find ways to make their own workplaces more inclusive, by formalizing initiatives to increase diverse attorney representation across the industry. In fact, to further this goal, over 125 law firms have joined the Law Firm Antitracism Alliance, with the purpose of:
. . . leveraging the resources of the private bar in partnership with legal services organizations to amplify the voices of communities and individuals oppressed by racism, to better use the law as a vehicle for change that benefits communities of color and to promote racial equity in the law.
Through coordination of Pro-bono efforts, law firms will partner with legal services organizations to “identify and dismantle structural or systemic racism in the law.”
Akin Gump, wrote an amicus curiae brief on behalf of the respondents, in conjunction with the American Historical Association, the Organization for American Historians and the Fred T. Korematsu Center for law and Equality, along with over 40 individual historians, supporting the legal challenge to the Trump Administration’s decision to rescind the DACA program. The brief looks at the historical context of decisions such as these, with a focus on the coded language and implicit bias used by the government to support policies. The brief indicates, in part:
. . . [A]mici seek to ensure that this Court understands the ways in which racially coded language has been used by government actors, both past and present, to mask illicit discriminatory motives—particularly in the immigration context, including the rescission of DACA.
Pratik Shah, co-head of Akin Gump’s Supreme Court and appellate practice, pointed out that many DACA recipients have only ever known the United States as their home, and all who earn DACA protection had done so by furthering their education or serving in the military. He says, “The Court’s decision that the administration cannot arbitrarily upend the lives of hundreds of thousands who arrived in our country as children . . . is a victory for both the rule of law and common decency.”
A new in-depth report from the American Bar Association, Left Out and Left Behind: The Hurdles, Hassles and Heartaches of Achieving Long-Term Legal Careers for Women of Color, draws on data and interviews to tell the story of what life is like for women lawyers of color. The report, authored by social scientist Destiny Peery, past ABA president Paulette Brown and Chicago attorney Eileen Letts, demonstrates why, despite increased efforts by firms and the profession generally, to improve diversity and inclusion, women of color continue to face barriers to advancement and are much more likely than white women counterparts to leave the profession.
This report is essential reading for any law leader who is serious about making true substantive changes that will improve the retention and advancement of women of color — particularly those leaders whose firms are posting “Black Lives Matter” messages in internal communications and on social media channels. Becoming an antiracist law firm does not end with a slogan or “messaging” — it requires an honest examination of formal and informal policies and practices, and a reckoning with the impact of those policies on lawyers of color. Then it’s time to reimagine how your firm runs to make sure opportunities are fairly distributed.
While it’s very important to hear and sit with the stories individual lawyers share from their experience of implicit and explicit bias, if I know my audience of driven, task-oriented marketers and communicators, you will be skipping to the end, where the report recommends next steps for firms that want to take action. Below I outline those general recommendations, and then consider the role of the marketing department in helping to make them a reality.
Adopt Best Practices for Reducing Biases in Decision-Making. “[P]revious research that has shown that high levels of subjectivity in promotion standards, selection for assignments, compensation decisions, and performance appraisals are often colored by stereotypes and serve as institutional and structural barriers to the advancement of women of color and other underrepresented attorneys.”
What Marketers Can Do: How does your department determine which partners receive marketing and communications support as they work to build their business? Is there a way to distribute those resources — help with individual lawyers’ social media channels, assistance writing and placing thought leadership, nominations for awards and key boards of directors — more fairly to elevate your firm’s diverse attorneys? How can you help advise up-and-coming partners on which opportunities will be the best use of their limited time and make the biggest impact on their business development?
Improve Access to Effective, Engaged Mentors and Sponsors. “[W]omen of color are especially likely to report that they lack access to mentors or sponsors who are well-connected and have power and influence to both clue them into important dynamics of the workplace and effectively advocate for them.”
What Marketers Can Do: Marketers have a great opportunity to help create mentorship and sponsorship relationships through the business development and proposal-writing process. By now, most rainmakers and practice leaders understand that business clients demand to be served by diverse teams. So they’re being thoughtful about including diverse attorneys in pitch decks and other materials. You can help move that inclusion to the next level by adding a follow-up communication step to your BD process in which all named/pictured team members de-brief and offer feedback. This is a simple way to build a platform upon which younger and diverse attorneys can demonstrate their value in front of the senior partners who can shape their career opportunities. In addition, you can use channels like the internal firm newsletter to educate more senior partners on how to effectively advocate for diverse attorneys — and, in doing so, help the firm stand out as a leader on an issue that matters very much to clients.
Take an Intersectional Approach to Addressing Diversity and Gender. “[B]lindness to or ignorance of the ways that gender and race (as well as other social identities) can interact to create distinct experiences” has so far limited what firms have been able to achieve. Firms must acknowledge that, while they are still disadvantaged, white women’s careers develop differently because of their access to privilege. They navigate networking differently, are viewed differently by colleagues, clients, and judges, and receive distinct treatment when it comes to work distribution and performance evaluation.
What Marketers Can Do: Take a look at how you use words like “diversity,” “equity,” and “inclusion” in internal and external firm communications. Do you grapple with intersectionality — that is, the way that experiences of race and gender (and class and sexuality and ability) intersect for your attorneys — in your messaging? Are there ways that your “diversity” initiatives and communications erase the experience of women who are not white? How could you make changes to address this issue?
“[O]ur participants mentioned again and again the myriad ways that the culture of the legal profession interfered with their abilities to succeed, to feel valued, and sometimes to persist in the legal profession.”
What Marketers Can Do. So much! 1) Take a look at your firm’s (pre-Covid, in-person) events. Where are they typically held? Do you always choose locations and activities that are most comfortable for wealthy white men? How might you change things up? 2) Does your firm have a written editorial style guide? If so, does it include a section on inclusive language so that everyone knows how to use language in the most inclusive ways possible? 3) If your intended audience for your internal firm communications is “everyone,” are you sure your language and framing actually accomplish that goal, or are you unintentionally treating a white reader as the default? 4) What other unexamined policies, practices, habits and conventions may implicitly communicate to diverse partners that they don’t fully belong? Learning how to spot potential for “othering” and exclusion in communications and other marketing activities is an important skill your department needs to teach its junior members and encourage them to practice.
True change that makes law firms into more equitable and inclusive workplaces for all lawyers must happen on both the systemic and individual levels. While many of the most sweeping and necessary changes are out of the hands of junior and senior legal marketers, there are plenty of things we can do within the scope of our influence that will make a difference. And the time to start is now.
Yesterday, in a much-anticipated opinion, the United States Supreme Court held that federal anti-discrimination laws protect LGBTQ employees in the workplace. This ruling provides much needed clarity for employers and resolves a court split in which some federal courts recognized that federal law prohibited LGBTQ discrimination, while others (including those covering Florida, Georgia, and Alabama) stated that LGBTQ discrimination was not unlawful.
This landmark ruling, in Bostock v. Clayton County, Georgia, arises out of three different appeals. In two of the cases, the employees were fired despite having long and successful careers after their employers learned that they were homosexual. In the third case, an employee who initially presented herself as a male announced several years later that she planned to transition to “living and working full-time as a woman.” The employer terminated her immediately.
The law at issue – Title VII of the Civil Rights Act of 1964 (“Title VII”) – prohibits discrimination in employment on the basis of race, color, religion, sex and national origin. However, the law makes no mention of sexual orientation.
Nevertheless, in a 6-3 decision, the Supreme Court held that all three terminations were illegal. In doing so, the Court noted that “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”
Although several states and municipalities have passed laws and rules prohibiting all or at least some forms of LGBTQ discrimination, this ruling clarifies that both sexual orientation discrimination and gender identity/transgender discrimination are prohibited by federal law throughout the United States.
The federal agency responsible for enforcing Title VII provides the following examples of LGBTQ-related conduct that it considers to be unlawful:
Refusing to hire an applicant because she is a transgender woman.
Firing an employee because he is planning or has made a gender transition.
Denying an employee equal access to a common restroom corresponding to the employee’s gender identity.
Harassing a woman because she does not dress or talk in a feminine manner.
Harassing a man because he dresses in an effeminate manner or enjoys hobbies that are traditionally associated with women.
Harassing an employee because of a gender transition, such as by intentionally and persistently failing to use the name and gender pronoun that correspond to the gender identity with which the employee identifies, and which the employee has communicated to management and employees.
Denying an employee a promotion because he is gay or straight.
Paying a lower salary to an employee because of sexual orientation.
Denying spousal health insurance benefits to a female employee because her legal spouse is a woman, while providing spousal health insurance to a male employee whose legal spouse is a woman.
Harassing an employee because of his/her sexual orientation (e.g., derogatory terms, sexually oriented comments, or disparaging remarks for associating with a person of the same or opposite sex).
Discriminating against or harassing an employee because of his/her sexual orientation or gender identity, in combination with another unlawful reason, for example, on the basis of transgender status and race, or sexual orientation and disability.
The penalties for non-compliance can be significant, including potential for significant emotional distress and other compensatory damages, punitive damages, and attorney’s fees.
This ruling is particularly significant to employers in jurisdictions like Florida that did not recognize that LGBTQ discrimination was unlawful under federal law. In light of this decision, employers should immediately take the following proactive steps to prevent and prohibit LGBTQ discrimination in the workplace:
Review your handbooks and anti-discrimination policies to ensure that sexual orientation and other LGBTQ-related status are included in your list of legally protected categories.
Consider adopting policies and procedures protecting the rights of transgender employees. For example, a transgender woman must be allowed to use a common female restroom or locker room facility, and dress code policies should permit employees to follow the dress code matching their gender identity.
Update your discrimination and harassment training modules to ensure that LGBTQ-related discrimination and harassment is addressed. Such training should include specific examples of what types of conduct could constitute unlawful discrimination. Managers and human resources personnel in particular need to be made aware that LGBTQ discrimination is unlawful and will not be tolerated.
In addition, employers will need to closely follow EEOC guidance and case law that follows this ruling. For example, as Justice Alito mentioned in his dissenting opinion, it is unclear what impact this ruling will have on employees who want their employers to pay for sex reassignment surgery and treatment.
Following the deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, Tony McDade, and Rayshard Brooks, protests against systematic racism in general, and police brutality in particular, have swept the globe. These protests have largely been peaceful, but a small, fractious group of individuals has used the protests as cover to incite violence, damage property, and loot businesses. While it might be cold comfort to the affected business owners to hear that property damage is not the norm, most have insurance that protects their pecuniary interest.[1]
First-party property insurance policies generally include riot and civil commotion as covered causes of loss, unless there is a specific exclusion in the policy. Although courts have acknowledged that defining a “riot” can be difficult because they can vary in size, courts have identified at least four elements:
unlawful assembly of three or more people (or lawful assembly that due to its violence and tumult becomes unlawful);
acts of violence;
intent to mutually assist against lawful authority where “lawful authority” is not limited to official law enforcement, but extends to those whose rights are or may be injured and who seek to protect those rights; and
some degree of public terror (i.e., any minor public disturbance does not rise to the level of “riot”).
Civil commotion likewise is undefined in most property policies. As a starting point, the term necessarily means something other than “riot,” since each term in an insurance policy is presumed to have its own meaning. See, e.g., Portland Sch. Dist. No. 1J v. Great Am. Ins. Co., 241 Or. App. 161, 171 (2011). Thus, while “civil commotion” may be similar to a riot, courts have construed the term more broadly, finding that civil commotion entails “either a more serious disturbance or one that is a part of a broader series of disturbances.” Pan Am. World Airways, Inc. v. Aetna Cas. & Sur. Co., 368 F. Supp. 1098, 1138 (S.D.N.Y. 1973), aff’d, 505 F.2d 989 (2d Cir. 1974). In fact, most property policies contain no limitation on the breadth of commotion or the type of harm that it might pose to person or property.
In many policies, riot, civil commotion, vandalism, and malicious mischief are “specified causes of loss.” The practical effect of this designation is that numerous exclusions will contain exceptions for loss caused by these situations. For example, while damage to a business’s electronic data may be excluded, the exclusion may contain an exception for damage to electronic data resulting from specified causes of loss, such as riot or civil commotion. Similarly, even where the policy contains a pollution exclusion – purportedly excluding loss, damage, cost, or expense caused by or contributed to or made worse by the release of “pollutants,” which could include tear gas – that exclusion may not apply to loss or damage caused by riot, civil commotion, or vandalism.
If a policy covers riot or civil commotion, covered losses may include property damage to the building and its contents, and lost income while the building is under repair or subject to government orders affecting the business’s operations (e.g., curfews limiting hours of operation) where the order is the result of property damage elsewhere. Business insurance policies may also cover costs incurred in protecting insured property from future, imminent harm or continued damage. These costs might include hiring (or increasing) security personnel, boarding up windows and doors, securing inventory in place or moving inventory and operations off-site.
Prior to the riots in Minneapolis, Minnesota, the costliest U.S. civil disorder occurred after the acquittal of police officers involved with the arrest and beating of a black American, Rodney King, from April 29 through May 4, 1992, causing $775 million in insured losses.[2] More recently, there were approximately $24 million in insured losses following the death of Freddie Gray, a black American who died in police custody after suffering a spinal cord injury.[3] Insured losses are not yet available for the riots in Minneapolis, but the Property Claims Services (“PCS”) unit of Verisk Analytics designated the event as a catastrophe. On June 4, 2020, PCS included over 20 other states, making the civil unrest that started in Minnesota a multi-state catastrophic event.[4]
If your business has experienced or may experience a loss because of civil unrest or riots, you should begin keeping track of these losses – and costs incurred to avoid them – immediately. Save receipts and inventory damages. Contact your insurance company as soon as you experience a loss to report your claim and diligently log your interactions with your insurer and its representatives. If you feel your insurer wrongfully denied your claim or delayed payment, contact experienced insurance coverage counsel.
[1] The authors by no means intend to equate property damage and a lost life. Quite the opposite. One is recoverable (and insurable); the other is irreplaceable.
Several prominent companies across the nation recently announced that they would observe Juneteenth as a holiday. This new trend of observing Juneteenth comes in the wake of several weeks of protests across the world advocating for an end to racial injustice and police brutality. These protests have generated discourse across the country, including in workplaces, about systemic racism and what actions we all can take to address the issues. Although Juneteenth is not a new holiday, recognizing and observing the holiday is one of many proactive measures that employers can take to demonstrate their commitment to fostering diverse and inclusive workplaces and to promoting racial justice.
What Is Juneteenth?
Juneteenth is the oldest nationally celebrated commemoration of the end of legal slavery in the United States. Although the Emancipation Proclamation was issued on January 1, 1863, the news did not reach enslaved Black people in Galveston, Texas, until June 19, 1865, where it was met with shock and jubilation.
The newly-freed people in Galveston celebrated after the announcement, and the following year, freedmen and freedwomen organized the first of what became the annual celebration of “Jubilee Day” on June 19 in Texas. Over time, the annual celebration spread from the Black community in Texas to the rest of the United States. Juneteenth celebrations focus on education, history, self-improvement, culture, and pride.
Who Is Observing Juneteenth?
Many companies have announced they will make Juneteenth an annual corporate holiday. The decision to observe Juneteenth in the workplace comes as more employers voice their support for racial justice. Other companies have also announced donations to organizations promoting racial justice.
How Can Employers Observe the Holiday?
Give employees a paid day off.
Consider observing Juneteenth as a company holiday and giving employees a paid day off as the company would for other observed holidays. This can help remind employees that the employer believes that the history of all its employees matters and that it is taking an active stand to promote racial justice.
If closing to observe Juneteenth is not a viable option for a company, they may want to consider alternatives. For example, some companies plan to remain open and give full-time non-exempt workers the option of taking the day off with full pay or working the day with time-and-one-half pay.
Honor Juneteenth in the workplace.
Recognizing Juneteenth in the workplace can strengthen a company’s commitments to its mission, vision, and values to promote a diverse and inclusive workplace and to foster social and racial justice.
There are many ways that employers can commemorate Juneteeth in the workplace:
Invite guest speakers to the workplace to speak on current issues;
Sponsor relevant workplace activities (on-duty and off-duty); or
Engage in the same kinds of activities that the company engages in for other commemorations for people of color.
Participate in local Juneteenth events.
Many communities across the country host Juneteenth celebrations. These events include parades, rodeos, cookouts, live concerts, and community outdoor activities. Consider hosting a company-sponsored booth or contest in these community events.
Is Juneteenth an Observed Holiday?
Juneteenth is an observed holiday in 47 states and the District of Columbia, but it is not a mandated federal holiday. Texas was the first state to recognize Juneteenth as a state holiday in 1980. A more comprehensive history of Juneteenth can be found here.
The death of George Floyd is a national tragedy that should never have happened. The winds of change are in the air and we can only hope that peace, understanding, justice and fairness for all will prevail. What happened to George Floyd and the cries to end racial injustice, however, have been overshadowed in the eyes of many by the vandalism, looting and rioting that followed. That brings us to insurance.
There have been many articles discussing whether and how the business losses arising from the vandalism and looting will be covered under insurance policies. Because these losses took place during the novel coronavirus pandemic, the insurance coverage issues have become more complex. This is particularly true for business interruption claims.
There are three issues that I thought were worth highlighting. The first concerns the confluence of the existing COVID-19 stay-home orders and the vandalism and looting. The second is the necessary nexus between direct physical damage and civil orders under coverage for civil authority. Finally, the effect of anti-concurrent cause clauses in property policies.
First, some of the business interruption claims now being brought by businesses that had to shut down because of the protests or because of the curfew orders have been complicated by overlapping civil authority stay-home orders because of the novel coronavirus. Where a business was closed because of COVID-19 stay-home orders or was open only to provide curbside pickup or delivery services, how is its loss of income and extra expense calculated if the business had to close because of the civil unrest? Analyzing this issue requires much more space than this blog post can provide. It is a complicated issue that depends on exactly what coverage is provided and how loss of income is calculated under the relevant business interruption coverage grant.
Just as an example, under a common business income and extra expense coverage form, the amount of business income loss is determined based upon the net income of the business “before the direct physical loss or damage occurred,” the likely net income of the business “if no physical loss or damage has occurred . . . ” and “the operating expenses, including payroll expenses, necessary to resume operations with the same quality of service that existed just before the direct physical loss or damage.” When applied to the recent vandalism and looting business interruption losses, the net income before the vandalism and looting may have been much less than in months or years past because of the COVID-19 stay-home orders. If no vandalism and looting had occurred, the likely net income would have been the same as under the existing COVID-19 stay-home orders; that is to say, most likely diminished from prior periods. Yet some are pushing for the COVID-19 effect not to be considered at all in the calculation of net income in the context of business interruption losses due to vandalism and looting.
Second, civil orders that prevented ingress and egress to and from businesses because of the threat of violence from possible protests likely will not be sufficient to trigger coverage under business interruption civil order provisions. The common form requires a nexus between direct physical damage and the civil order. For example, the action of civil authority must be “taken in response to dangerous physical conditions resulting from the damage or continuation of the Covered Cause of Loss that caused the damage. . . .” If a local government shuts down a business district in advance of a protest and before there is any physical damage to property, that civil order should not trigger coverage under the business interruption coverage grant. A civil order that shuts down a business district after vandalism because the area is dangerous likely would result in some coverage under the business interruption coverage grant depending on other policy factors.
Finally, some property policies limit coverage to covered causes of loss and preclude coverage if the loss was caused in part by a non-covered cause of loss. For example,
We will not pay for loss or damage caused directly by any of the following. Such loss or damage is excluded regardless of any other cause of event that contributes concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.
If an insurance policy excludes a cause like looting, but covers vandalism, even if the loss was caused in part by looting, the anti-concurrent causation clause would preclude coverage. So too, if part of the loss claimed was caused by the novel coronavirus and the policy has a virus exclusion, that would preclude the loss even if part of it was caused by vandalism.
As always, it is most important to read the complete policy because not all insurance policies are the same. Nevertheless, there is no doubt that business interruption losses arising from the recent civil unrest have been complicated by existing governmental orders covering the novel coronavirus. It will take patience by all parties and careful analysis to work through these claims.
Today, June 15, 2020, the Supreme Court of the United States issued a landmark decision in Bostock v. Clayton County, Georgia, holding that Title VII of the Civil Rights Act of 1964 (“Title VII”) protects lesbian, gay, bisexual, and transgender workers. The Court held that employers who discriminate against employees based on sexual orientation or gender identity unlawfully intend to rely on sex in their decision-making. Justice Gorsuch, along with Chief Justice Roberts and the four liberal justices of the Court, wrote, in deciding the question of whether an employer can fire an individual for being homosexual or transgender: “the answer is clear.” Specifically, “an employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” Ultimately, “an employer who fires an individual merely for being gay or transgender defies the law.”
Bostock v. Clayton County, Georgia consisted of three individual employment cases, all of which involved an employer terminating the employment of a long-time employee shortly after the employee revealed the he or she was homosexual or transgender. Gerald Bostock worked as a child welfare advocate for Clayton County, Georgia for over ten years and was fired shortly after participating in a gay recreational softball league. The reason given for his termination was an allegation of misspent funds and “conduct unbecoming of a county employee;” however, Bostock argued that was pretense and the real motivation for his termination was his sexual orientation. Both the District Court and the Eleventh Circuit held that Title VII did not include protection against discrimination towards sexual orientation.
In Altitude Express Inc. v. Zarda, Donald Zara worked as a skydiving instructor for Altitude Express in New York. Zarda worked for the company for several years and his employment was terminated shortly after mentioning to his employer that he was gay. While the District Court ruled in favor of the employer, the Second Circuit ruled that Title VII protects employees from discrimination based on sexual orientation.
Lastly, in R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission, Aimee Stephens, a funeral home employee in Garden City, Michigan, who originally presented herself as a male upon hiring, revealed to her employer during her sixth year of employment that she would be transitioning and working and living full-time as a woman. Shortly thereafter, she was dismissed from her job due to her transition. Initially, the District Court found for the funeral home on two bases: (1) Title VII did not protect transgender persons nor gender identity, and (2) the Religious Freedom Restoration Act permitted the funeral home to make employment decisions based on faith. The Sixth Circuit reversed this decision, ruling that Title VII’s “discrimination by sex” does include transgender persons and also that the funeral home had failed to show how Title VII interfered with its owner’s religious expression.
Given the split among the circuit courts, the Supreme Court took up this trio of cases to render a clear determination as to whether sexual orientation and gender identity are protected categories under Title VII. This case of first impression signifies a key development in the interpretation and meaning of discrimination on the basis of “sex” under Title VII. The opinion resolved the issue of whether those who drafted Title VII could have intended protection of these classes, with Justice Gorsuch explaining: “Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s consequences that have become apparent over the years, including its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination supply no reason to ignore the law’s demands. When the express terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.”
Employers must ensure that their policies, including their equal employment opportunity, harassment, and discrimination policies, reflect this opinion and prohibit discrimination on the basis of sexual orientation and gender identity. In addition to these policy matters, employers should take actions to prevent discrimination on the basis of sexual orientation or gender identity and communicate the development in the law to employees and key decision makers in the company.
In a highly anticipated decision, the U.S. Supreme Court held Title VII of the federal Civil Rights Act protects LGBTQ employees from being fired because of their sexual orientation or gender identity.
The opinion, released on June 15, 2020, was a consolidation of three federal appellate court decisions—Bostock v. Clayton County; Altitude Express v. Zarda; and R.G. & G.R. Harris Funeral Homes v. Equal Employment Opportunity Commission. In each case, the employer terminated the plaintiff after learning that he or she was gay or transgender.
In Bostock, the 11th Circuit Court of Appeals held Title VII did not protect an employee against discrimination because of his or her sexual orientation, relying on circuit precedent. The 2nd Circuit came to the opposite conclusion in Zarda, concluding an employer discriminated on the basis of sex (including gender stereotypes) when it terminated a long-time employee. In R.G. & G.R., the 6th Circuit held Title VII protected against discrimination based on an employee’s transgender or transitioning status because such discrimination is grounded in an employee’s failure to conform to gender stereotypes.
Justice Neil Gorsuch, writing for the majority, analyzed whether discrimination because of sexual orientation or transgender status is fundamentally sex discrimination for failing to conform to gender stereotypes—an issue already determined to fall within Title VII’s scope.
In its analysis, the majority used the example of an employer who has a policy of firing any employee who is known to be gay. According to the Court, if a model employee brings a female spouse to an office holiday party and the employee is then fired due to also being female rather than male, the employer discriminated on the basis of sex, even if the intent was to discriminate on the basis of sexual orientation.
Similarly, the Court reasoned that an employer cannot discriminate against one of two otherwise identical female employees because she was identified as a male at birth. In doing so “the employer intentionally penalizes a person identified as male at birth for traits or actions that it tolerates in an employee identified as female at birth.” Accordingly, such discrimination is indistinguishable from sex discrimination.
Justice Samuel Alito, joined by Justice Clarence Thomas, authored one of two dissenting opinions. Justice Alito’s primary points of disagreement with the majority were: (1) the definition of “sex,” as understood by the legislators who authored Title VII, does not include sexual orientation or transgender status; and (2) Congress has had opportunities to amend Title VII to expressly include such protections but has failed to do so.
Justice Brett Kavanaugh’s dissent relied on his interpretation of the “ordinary meaning” of Title VII, which he concluded does not include protections for sexual orientation or transgender status. As such, Justice Kavanaugh reasoned it was not the Court’s role to expand the scope of Title VII. Despite his disagreement with the majority, Justice Kavanaugh’s dissent concluded with a congratulatory note to those he would deny Title VII’s protections, “Millions of gay and lesbian Americans have worked hard for many decades to achieve equal treatment in fact and law. They have exhibited extraordinary vision, tenacity, and grit—battling often steep odds in the legislative and judicial arenas, not to mention in their daily lives. They have advanced powerful policy arguments and can take pride in today’s result.”
The upshot of the Court’s Bostock decision is effectively an expansion of Title VII’s antidiscrimination protections to LGBTQ employees. While many employers already have policies prohibiting discrimination because of sexual orientation and/or transgender status, this decision presumably authorizes EEOC charges and Title VII claims for such discrimination.
