Fifth Circuit Rejects Title VII Transgender Protection, but Grants Summary Judgment on Other GroundsIn Wittmer v. Phillips 66, Judge James Ho of the Fifth Circuit wasted no time stating the Fifth Circuit’s position on whether sexual orientation or transgender status are protected classes under Title VII – they are not. Interestingly, however, the defendant did not even raise that as a defense. In fact, the lower court and the Fifth Circuit both found in favor of Phillips 66 on other grounds. But it is pretty obvious from the majority opinion, and Judge Ho’s concurring opinion, that the Fifth Circuit wanted the world to know how it feels about the extent of sex discrimination protection under Title VII.

Nondiscriminatory Reason: Misrepresentation during the Interview

Nicole Wittmer, a transgender woman, applied for a position with Phillips 66. During her interview, Wittmer talked about her current employment with another company and the fact that travel with that job was why she wanted to change jobs. However, when Phillips 66 did a background check, it learned that Wittmer had actually been terminated from that company a month before. Disturbed by this inconsistency, Phillips 66 decided not to give Wittmer the job. Wittmer then wrote to them and alleged that Phillips 66 discriminated against her because of her transgender status. For its part, Phillips 66 said it had no idea about Wittmer’s transgender status before she sent that after-the-fact email and told her that the information would not have affected its decision anyway. Disagreeing, Wittmer filed a lawsuit alleging discrimination under Title VII based on her transgender status.

Phillips 66’s Defense

At the lower court level, Phillips 66 took no position on whether Title VII prohibits transgender discrimination. Instead, it moved for summary judgment arguing that Wittmer had not stated a prima facie case of transgender discrimination and, even if she had, that Phillips 66 had a legitimate, non-discriminatory reason for not hiring her—misrepresentation in her interview. The lower court granted summary judgment, and Wittmer appealed.

On appeal, Phillips 66 again decided not to take a position on whether Title VII prohibits transgender discrimination. Instead, it stood on the defense that it chose not to hire Wittmer because she didn’t tell the truth during her interview about her current employment.

Fifth Circuit Opinion

Although the Fifth Circuit ultimately agreed with the lower court that Wittmer didn’t establish a claim of discrimination and that Phillips 66’s reason for not hiring her was not pretextual, the court went out of its way to address the transgender Title VII issue. (The one that the defendant didn’t raise.) Judge Ho wrote the majority opinion and stated that although three other circuits have found that Title VII prohibits discrimination on the basis of sexual orientation or transgender status, the Fifth Circuit does not recognize that prohibition. Relying upon its 1979 Blum v. Gulf Oil Corporation decision holding that Title VII does not prohibit discrimination on the basis of sexual orientation, the Fifth Circuit rejected Title VII coverage for transgender status. Judge Ho also authored a 14-page concurring opinion in which he strongly takes issue with some of the developments in gender identity and transgender discrimination law.

Where Does That Leave Us?

This opinion leaves little doubt that the Fifth Circuit (which covers Mississippi, Louisiana and Texas), as of right now, does not recognize sexual orientation or transgender status as automatically protected classes under Title VII. Although Judge Ho’s concurring opinion takes some shots at the U.S. Supreme Court’s Price Waterhouse v. Hopkins decision on gender-stereotyping discrimination, the majority opinion did not hold that the Fifth Circuit rejected such gender-stereotyping protection. This opinion further sets up a circuit split that is likely to be decided by the U.S. Supreme Court sometime in the future.

Take Two: Alabama’s City Versus State Minimum Wage Dispute to Get Full Appellate ReviewMinimum wage laws invite controversy, and Alabama’s latest tug-of-war between the state and its largest city is going to get another wider review. You may recall that back in 2015, Birmingham, Alabama, passed a local minimum wage law. On the heels of that move, the Alabama Legislature then passed a state-wide minimum wage law, preempting local city laws. In response to the state’s new law, some Birmingham citizens, along with the NAACP, contended that the law discriminated against minorities and filed suit. After the federal district court dismissed the case, in July 2018 a three-judge panel of the Eleventh Circuit reversed, finding the plaintiffs asserted a plausible 14th Amendment claim. Under that decision, the litigation could go forward. That ruling, however, was recently vacated, and now every judge on the Eleventh Circuit court will weigh in on the matter.

Minimum Wage Controversy

In April 2015, the Birmingham City Council passed a resolution calling on the Alabama Legislature to raise the minimum wage to $10 per hour. The Alabama Legislature declined, so the Birmingham City Council adopted its own ordinance to raise the minimum wage, first to $8.50 per hour and then to $10.10 per hour.

Almost immediately thereafter, a state representative introduced a bill to quash the local ordinance and establish a uniform minimum wage throughout the state. The state has no minimum wage above the current federal minimum wage of $7.25 per hour. The Alabama House passed the bill in February 2016. In the meantime, the Birmingham City ordinance raising the minimum wage to $10.10 per hour went into effect, but only briefly. The next day, the Alabama Senate passed, and then Gov. Bentley signed, the Minimum Wage Act mandating the minimum wage be set at the federal minimum of $7.25 per hour and preempting all local laws. The law preempts all local labor and employment laws that a city or municipality might attempt.

Procedural Background

A few months later, a group of Birmingham residents, along with public interest groups, filed suit against the governor and state attorney general claiming racial discrimination under the 13th, 14th, and 15th Amendments of the U.S. Constitution and Section 2 of the Voting Rights Act. The plaintiffs contended that the state law has both a discriminatory purpose and effect. The state argued in response that the law is facially neutral. The federal district court dismissed all claims in February 2017, and the plaintiffs appealed to the Eleventh Circuit.

The three-judge panel of the Eleventh Circuit affirmed the dismissal of the claims under the 13th and 15th Amendments, as well as under the Voting Rights Act. However, it reversed the district court’s dismissal as to one claim, finding that the plaintiffs stated a plausible claim that the Minimum Wage Act purposely discriminated against Birmingham’s black citizens in violation of the 14th Amendment. In reversing, the panel highlighted that, according to the complaint, the act denied 37 percent of the city’s black wage earners a higher wage, compared to only 27 percent of white workers. Further, according to the complaint, black workers earn, on average, $1.41 less per hour in the city and $2.12 less per hour statewide than white workers. The panel’s ruling found it plausible that the act bore more heavily on black workers and that the plaintiffs had indeed stated a viable claim, deeming the legislative vote to have been “rushed, reactionary, and racially polarized.”

Shortly after the panel’s ruling, the State of Alabama and its attorney general filed a motion to have the matter reheard by the entire Circuit Court. In its motion, the state said the case “raises fundamental questions about the dignity of States, the efficacy of federal-court proceedings, the standard for finding state-sanctioned racism, and the role of courts in shaping public discourse” making it “an exceptionally important [case] that absolutely requires the full Court’s attention.”

Ruling Vacated and To Be Reviewed by Entire Circuit Panel

On January 30, the Eleventh Circuit granted the rehearing request (called “rehearing en banc”), thereby vacating the previous decision. Now the entire Circuit Court (12 judges) will review the claims and the district court’s dismissal. A rehearing of this nature is generally rare and granted only when necessary to maintain uniformity of decisions or for questions of “exceptional importance.” Reading the tea leaves of the decision suggests that the court will alter or revise the panel’s previous ruling in some way, but that is far from certain. Stay tuned for what will be a significant ruling related to Alabama’s minimum wage law and the discrimination allegations. For now, however, the minimum wage in Birmingham is still $7.25 an hour.

Changing Marijuana Laws and Effective Drug Testing PolicyAlthough marijuana is classified as an illegal drug under federal law, a majority of states have now legalized its use in one form or another. This rapidly evolving legal landscape presents new challenges for employers, particularly those with offices and employees in several states. Employers must balance complying with often divergent federal and state laws, maintaining a safe work environment, and protecting employees’ rights. Although difficult at times, there are steps employers can take to help successfully navigate this legal minefield.

Maintain a Safe Workplace

Workplace accidents can have significant effects on multiple areas of a business, including insurance costs, personal injury claims, third-party claims, and employee satisfaction and productivity. An employee’s impairment from drugs or alcohol can seriously increase the risk of injury to persons and damage to property. Accordingly, most employers have zero-tolerance policies that ban the use of alcohol and illegal substances. Although zero-tolerance policies typically permit an employee to avoid adverse employment actions by disclosing the use of prescription drugs prior to a positive drug test, these policies otherwise prohibit the off-site consumption of alcohol or drugs that will result in a positive test. The legalization of medical marijuana in a number of states has made maintaining a zero-tolerance policy more difficult.

In some states, employers must accommodate an employee’s use of medical marijuana. For example, in Noffsinger v. SSC Niantic Operating Co., LLC, a Connecticut federal court held that a federal contractor could not enforce its zero-tolerance drug policy against a medical marijuana user. Similarly, Oklahoma law prohibits employers from discriminating or punishing an employee based on the employee’s status as a medical marijuana card holder or a positive drug test for marijuana or its components unless the employer would lose a benefit under federal law or regulations. Although these statutes do not prohibit employers from disciplining employees who consume marijuana, or are under its influence, while on the job, it may be difficult to determine when an employee is actually impaired and a drug test is warranted. This difficulty can give rise to liability for discriminatory drug testing or wrongful employment actions in instances where a contractor is mistaken.

Other states that have legalized medical marijuana do not require accommodation of employees’ use. In California, for example, an employer can dismiss an employee who tests positive for marijuana and its components. Likewise, under Ohio law, employers are not prohibited from refusing to hire, discharging, or disciplining a person because of the use or possession of medical marijuana, nor are they prohibited from establishing and enforcing a zero-tolerance drug policy.

Between these two ends of the accommodation spectrum, a number of states’ laws provide for varying levels of accommodation for employees’ medical marijuana use. In Illinois, for example, employers are prohibited from discriminating against employees and job applicants who qualify as a medical marijuana patient unless the accommodation would result in the violation of a federal law or the loss of a federal benefit. Nonetheless, Illinois employers may still impose reasonable limitations on the consumption of medical marijuana and enforce zero-tolerance and drug-free workplace policies as long the policies are applied in a non-discriminatory manner. Other states, such as Delaware, Nevada, New York, and West Virginia, have similarly varied degrees of required accommodation.

To help navigate these nuanced laws, employers, especially those with a multi-state footprint, should develop a well-defined drug policy and administer a drug testing program in a non-discriminatory manner.

Develop a Well-Defined Drug Policy

Developing a well-defined company policy on marijuana use can minimize the risk of harm to persons and property, and decrease the likelihood that drug testing and disciplinary action arising from marijuana intoxication will open the door to liability for adverse employment decisions. At a minimum, employers should ensure that a company drug policy:

  • Defines the terms “marijuana,” “cannabis,” or any other derivation of the drug. Simply prohibiting the use of “illegal drugs” can create ambiguity because of marijuana’s legal status in various jurisdictions.
  • Indicates that the use of marijuana, whether recreationally or on the job, is strictly prohibited.
  • Articulates drug testing policies and procedures (including penalties for failing a drug test).
  • Educates employees on clinical issues relating to marijuana, such as its effects on the body, the length of time it can continue to impair cognitive and physiological functions, and the potential impacts on workplace safety and performance.
  • Is included in recruiting and new-hire onboarding materials to ensure notice to the individual.

Consistently Administer a Drug Testing Program

Once an employer adopts a drug policy, it is critical that drug tests are conducted uniformly for all employees. Failure to do so can subject an employer to liability for discrimination claims that arise from adverse employment actions.

If an employee tests positive for marijuana, the recourse available to an employer can vary greatly under federal and state laws. For example, the Americans with Disabilities Act (ADA) currently does not shield an employee from adverse employment actions for using marijuana to treat a disability, even if the employee refrains from using medical marijuana while on the job. The ADA exempts from its scope the “illegal use of drugs” and defines that term to include any substances that are unlawful under the Controlled Substances Act, which currently lists “marijuana” as a banned substance. As a result, at least under the ADA, employers can terminate an employee who tests positive for marijuana, even if that employee is disabled, prescribed medical marijuana, and only uses marijuana on his or her own time. Note, however, that under the ADA, if an employee discloses a disability and requests an accommodation, an employer is required to consider reasonable accommodations, which could include transfer to a non-safety sensitive job (where the marijuana use may not pose a safety concern) or temporary leave during treatment.

By contrast, as discussed above, some states require an employer to accommodate an employee’s use of medical marijuana and prohibit an employer from terminating an employee for a failed drug test for marijuana use. Employers should be mindful of the potential for conflict between their own drug testing policies and requirements mandated by federal or state laws. If there are questions as to what actions an employer can take against an employee for failing a drug test, the advice of legal counsel should be sought.

The Measure of Success

An effective drug policy decreases hazards and promotes an accident-free work environment. While state and federal laws meant to promote this goal may seem straight forward when read in isolation, problems arise when these laws overlap or conflict with one another. The growing number of states legalizing marijuana use, and the nuanced differences between laws, will only amplify this problem. Although all employers need to implement well-defined policies and procedures, it is particularly important that those employers operating in any of the 30 plus states in which marijuana is now legal in some form take time to review current policies and evaluate the need for changes to ensure employee safety and reduce company risk. If you have questions about this rapidly changing legal issue, you should contact an attorney with experience in this emerging area of the law.