AMK&K EMPLOYER ALERT

EMPLOYMENT LAW NEWSLETTER

Job Testers Can Sue Under Title VII

BY MICHAEL C. HOLY*

What is a Job Tester?

Employment testers are people who pose as job seekers for the purpose of detecting unlawful hiring practices and discrimination. Employment testers are similar to housing discrimination testers that most Americans became familiar with during the Civil Rights Movement. However, unlike employment testers, housing discrimination testers are authorized to test fair housing by statute under the federal Fair Housing Act (Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3601, et seq.) Moreover, federal case law has long held that housing discrimination testers have standing to bring lawsuits for alleged violations of section 804(d) of the Fair Housing Act. Havens Realty Corp. v. Coleman, 455 U.S. 363, 373 (1982). Unlike Fair Housing Act cases, there is no federal law giving employment testers standing to sue. Until now, no federal appellate court addressed whether employment testers have standing to sue in federal court.

What is Standing?

Standing to sue means that a party has a sufficient stake in a matter which is appropriate for a court to hear. The requirement of standing may be satisfied if it can be said that the plaintiff has a legally protectible interest at stake in the litigation.

7th Circuit Holding in Kyles v. Guardian Security:

On July 5, 2000 the 7th Circuit Court of Appeals delivered its opinion in Kyles v. Guardian Security Services, Inc., 2000 WL 892805, 83 Fair Empl.Prac.Cas. (BNA) 404. The Court held that employment testers who experience discrimination as they apply for jobs have standing to sue under Title VII, even if they are not truly interested in employment.

Facts of the Kyles case:

Kyra Kyles and Lolita Pierce worked for the Legal Assistance Foundation of Chicago (“LAF”) as employment testers. LAF is a not-for-profit corporation that provides free legal services in civil law matters to individuals and not-for-profit organizations unable to afford legal counsel. Its employment-testing project is used to detect discrimination in the employment sector. Specifically, LAF pairs a white tester with a non-white, provides them with fictitious credentials designed to be comparable if not superior to the non-white tester, trains them to interview similarly, and then sends them to apply for work with the same employer. As a condition of their employment with LAF, Kyles and Pierce agreed to refuse any job offer extended to them as a tester. In the Spring of 1995, Guardian Security placed an advertisement in the Chicago Tribune seeking applications for a receptionist position. LAF sent a pair of resumes to Guardian, one from a white candidate and the other from an African-American. Each of the resumes purportedly included information that would permit a reader to realize the race of the applicant. Guardian did not respond to the African-American candidate, but called the white candidate three times. LAF then sent Kyles and Pierce to apply personally for the receptionist position. Kyles and Pierce are African-American and each was paired with a white tester. Neither Kyles nor Pierce were successful in the application process. Kyles had an interview with Guardian’s Director of Human Resources, Martin Labno, who told her that after consulting with Guardian’s President and Vice-President three or four candidates would be called back for a second interview. The next day, Kyles’ white counterpart interviewed. She not only met with Labno, she was interviewed by the Vice-President, was asked to return the next day for a typing test, and was offered the job on the spot. Shortly after the white tester turned the job down, Kyles called Guardian to check the status of her application and was told that Labno had not yet made a decision. Kyles never heard from Guardian again. A few days later Pierce interviewed for the same job. Labno told Pierce the same story he told Kyles regarding the application process. Labno also promised he would call Pierce within a day or two. Pierce’s white counterpart interviewed and took a typing test on the same day. One week later the white counterpart was contacted for a second interview and was offered the job. Soon after the white tester turned the job down, Kyles phoned Labno to check on the status of her application. Labno told her that the company was “running behind.” Pierce never heard from Guardian again.

Trial Court Decision:

Kyles and Pierce filed suit against Guardian alleging that Guardian had engaged in racially discriminatory hiring practices in violation of both Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1866, 42 U.S.C. § 1981. The plaintiffs assigned their rights to any monetary damages to the LAF. Guardian counterclaimed, alleging that the plaintiffs had fraudulently misrepresented their interest in employment with their company. On summary judgment, District Court Judge Conlon held that as testers, Kyles and Pierce lacked standing to maintain their lawsuit. The trial court found that the plaintiffs failed to allege a concrete personal injury since they had not been offered a job they neither wanted nor intended to accept. Kyles v. Guardian Security, 1998 WL 677165, 77 Fair. Empl. Prac. Cas. (BNA) 1473 (N.D. Ill. 1998).

7th Circuit Opinion:

The issue before the 7th Circuit Court of Appeals was whether Kyles and Pierce had standing to maintain their lawsuit under Title VII and § 1981. The Court explained that where federal statutory rights are at issue, Congress has considerable authority to shape the assessment of standing. Congress can extend standing to the outermost limits allowed by the U.S. Constitution. Therefore, the Court reasoned, “whether a person has constitutional standing to sue under Title VII or § 1981 depends in great measure on the particular rights conferred by those statutes.” Title VII provides in relevant part that “[i]t shall be an unlawful employment practice for an employer (1) to fail or refuse to hire ... any individual ... because of such individual’s race ...; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee because of such individual’s race ....” 42 U.S.C. § 2000e-2(a). Additionally, Congress enabled individuals to act as “private attorneys general” by pursuing their own claims of employment discrimination. Newman v. Piggie Park Enters., Inc., 390 U.S. 400, 402, (1968)(per curiam). Thus, the Kyles Court opined that the language in Title VII signals a Congressional intent to extend standing to the outermost limits under the U.S. Constitution.

Impact on Employers:

The 7th Circuit’s decision does not mean that Guardian was guilty of discriminatory hiring practices. Kyles and Pierce still have the burden of proving that Guardian intentionally discriminated against them. Moreover, there is no indication from the Court whether Kyles and Pierce will be successful in their lawsuit. The appellate court remanded the case to the trial court. As a result, the parties will proceed on their claims at the trial court level. What this case does stand for is the proposition that employment testing is now a legitimate procedure that will at least allow tester-plaintiff’s the right to bring lawsuits in federal court in the 7th Circuit (Illinois, Wisconsin, Indiana).

Tips for Employers in Light of the Kyles Case:

Employers should be aware of testing practices, and leery of the fact that Testers will present themselves with fraudulent credentials with no intention of accepting the position being offered. Applicants should be screened and their references checked. Lawful reasons for not hiring an applicant should be clearly documented. It is important for employers to review their hiring procedures, as well as employment decision procedures so that they comply with federal, state and local laws prohibiting unlawful discrimination in the workplace. In light of the Kyles opinion, employers should train human resources personnel in the areas of interviewing applicants consistently and in accordance with company hiring guidelines and procedures. The employer should be able to support its denial of a job applicant with a non-discriminatory, lawful reason which is clearly documented for later review, if the need arises.

Employee’s Case No Longer Depends On Additional

Evidence Of Discriminatory Motive

BY MICHAEL C. HOLY*

In Reeves v. Sanderson Plumbing Products, 120 S.Ct. 2097, 147 L.Ed.2d 105 (Decided June 12, 2000), the United States Supreme Court clarified the standard to establish intentional employment discrimination. The decision has been read by many in several jurisdictions as a victory for employees, making it more difficult for employers to win summary judgment and avoid trial. However, in the 7th Circuit (Illinois, Wisconsin, and Indiana) and other jurisdictions, the case merely confirms present case law. The Reeves case appears to resolve a conflict among the United States Courts of Appeals on the issue of whether a plaintiff’s prima facie case of discrimination, combined with sufficient evidence for a reasonable fact finder to reject the employer’s non-discriminatory explanation for its negative employment decision, is adequate to sustain a finding of liability for intentional discrimination against the employer.

What is a prima facie case and the burden shifting analysis?

A prima facie case is the minimum evidence necessary for the plaintiff to maintain their lawsuit. In employment discrimination cases, the burden of producing evidence shifts to the employer after the employee has produced enough evidence to meet her prima facie case. If the employer is able to produce evidence of a non-discriminatory reason which explains the negative employment decision, the burden shifts back to the employee to prove the employer was really motivated by discriminatory reasons. The typical burden shifting formula follows. In order to establish a prima facie case of discrimination, the plaintiff must establish that at the time of the negative employment action: (1) plaintiff was a member of a protected class; (2) plaintiff was otherwise qualified for the job position; (3) a negative employment action took place; and (4) that plaintiff was replaced by a non-protected employee or the position remained open. The burden then shifts to the employer to articulate a legitimate, non-discriminatory reason for the negative employment action. If the employer provides sufficient evidence to support its non-discriminatory explanation, the burden shifts back to the employee who is afforded the opportunity to prove that the legitimate reason offered by the employer is a “pretext” for discrimination. In other words, the plaintiff must show that the defendant’s reason for the negative employment action is false or unbelievable.

Facts of the Reeves Case:

Roger Reeves was 57 years old and worked 40 years at Sanderson Plumbing Products. Reeves job included recording the attendance and hours of workers under his supervision. In the summer of 1995 Reeves was informed by his employer that production was down because of employee absenteeism. An audit of Reeves timekeeping records was conducted. Purportedly, numerous errors and misrepresentations were found. As a result, Reeves and one other employee were terminated. Reeves filed suit alleging that he had been fired because of his age in violation of the Age Discrimination in Employment Act (ADEA).

Trial Court Opinion:

At trial, Reeves attempted to demonstrate that Sanderson’s reason for firing him was mere pretext for discrimination. Reeves introduced evidence that he accurately recorded the attendance and hours of the employees under his supervision. Moreover, Reeves introduced evidence of age-based animus from his superior. Sanderson countered with testimony regarding Reeves’ poor record keeping. The jury found for Reeves and awarded him damages. Sanderson moved to throw out the verdict and requested a new trial, which were both denied. The trial court determined that Reeves made a substantial showing that the employer’s explanation was false. The 5th Circuit Court of Appeals reversed, holding that Reeves had not introduced sufficient evidence for a rational jury to conclude that Reeves had been discharged because of his age. The Appeals Court acknowledged that Reeves offered sufficient evidence for a jury to find that the employer’s reason for termination was pretextual, however, the Court explained that this was not dispositive of the issue of whether Reeve’s age motivated the employment decision.

U.S. Supreme Court:

The United States Supreme Court reversed the 5th Circuit Court of Appeals holding that it is permissible for the jury to infer the ultimate fact of discrimination from the falsity of the employer’s explanation. The Supreme Court ruled that the 5th Circuit erred in determining that the plaintiff must always introduce additional, independent evidence of discrimination.

Tips for Employers:

The Reeves case is significant because it emphasizes the importance of investigation and documentation before a negative employment decision is made. All decisions to terminate employees should be reviewed by the human resources department, and in most instances, by legal counsel. In a case such as Reeves, employees who are found to be deficient in their job duties should be notified about their deficiencies and afforded an opportunity to remedy them. If the employee remains deficient, the lawful reason for termination will less likely be viewed as pretextual. The ultimate issue still remains whether the decision was motivated by improper discrimination. Rest assured that the fact finder will be less likely to second-guess an employer that can show through objective evidence that it acted fairly and terminated its employee for a legitimate non-discriminatory reason.

AMK&K’S Legal Team

Assists Employers With The Ever Changing Employment Law Landscape:

· AMK&K Reviews Workplace Policies and Manuals in light of Current Case Law.

· AMK&K Provides a FREE Seminar to Management Personnel Entitled “Tips On How To Prevent Employment Related Lawsuits”

For any Employment Law Inquiries feel free to Contact: PETER A. MONAHAN, LINDA J. HAY, ANNE M. OLDENBURG, MICHAEL C. HOLY, PATRICIA M. NOONAN, or CARL M. SCHULTZ.

Alholm, Monahan, Keefe & Klauke, L.L.C., 180 N. Wacker Drive, Suite 600, Chicago, Illinois, 60606, 312.704.8444, 312.704.1352 FAX, and Check out our WEBSITE: www.illinois-law.com

About the Newsletter Authors:

MICHAEL C. HOLY is an Associate with AMK&K. Mr. Holy is licensed to practice law in the states of Illinois and Wisconsin, as well as the Seventh Circuit Court of Appeals, the federal district courts in Northern Illinois and Eastern Wisconsin, and is a member of the Federal Trial Bar. Mr. Holy is a member of the Illinois Association of Defense Trial Counsel Employment Law and Medical Liability Committees, the Illinois State, Wisconsin State, Chicago, and American Bar Associations. Mr. Holy received his B.S., cum laude, in 1991 from Northern Illinois University, and his J.D. from Marquette University Law School in 1994. Mr. Holy was Champion of the 1993 Klizke Moot Court Competition; President of the 1994 Moot Court Board; Member of the 1994 National Moot Court Team; Member of the 1993-94 Marquette Law Review; and Member of the 1992-93 Marquette Sports Law Journal. Mr. Holy is a frequent speaker in the area of employment law.

*Also acknowledged for his contribution is CARL M. SCHULTZ. Mr. Schultz recently passed the Illinois Bar Exam and will join AMK&K in November as an Associate. Mr. Schultz received his B.A. in 1992 from the University of Wisconsin at Madison, and his J.D. from Chicago-Kent College of Law in 2000.

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