Butler Williams & Skilling Blog

President Obama to Sign Lilly Ledbetter Fair Pay Act of 2009 on January 29, 2009

Following the Senate's approval last week, on January 27th the House passed the Lilly Ledbetter Fair Pay Act of 2009.  President Obama is scheduled to sign the Act into law on January 29.  This law will overturn the Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Company, which barred claims for discriminatory pay practices if they were not initiated within 180 days of the first application of the discriminatory practice, rather than recognizing continuing employer liability arising from each discriminatory paycheck.  The Supreme Court's ruling in Ledbetter effectively encouraged bad employers to conceal their discriminatory practices - and to avoid liability for such discrimination if they had successfully hidden them or intimidated employees from challenging the practices when they first began to receive discriminatory pay checks.  The truth is that many employees never learn of such discriminatory pay practices, may only suspect it or are too frightened of retaliation to challenge the pay practice early in employment.  This places responsiblity with the employer, who is under the obligation to pay irrespective of gender, race, age or other protected characteristic.  The Act will amend Title VII to the 1964 Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the Rehabilitation Act, providing renewed pay protection to a wide array of persons who have historically suffered pay discrimination. 

The Act is intended to return the law to the 'paycheck accrual rule' which had allowed the statute of limitations to be revived each time a discriminatory paycheck was issued, the rule that was widely recognized by the courts prior to the Ledbetter v. Goodyear Tire & Rubber decision.  The Lilly Ledbetter Fair Pay Act of 2009 is retroactive to May 28, 2007, the date before the Ledbetter v. Goodyear Tire & Rubber decision, to assure that the wage protections afforded employees are not compromised by application of the rule outlined in the Ledbetter Supreme Court decision. 

The new law states: "For purposes of this section, an unlawful practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application or a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice." 

This is cause for celebration for all advocates of fair pay, irrespective of one's gender, race, color, religion, national origin, disability or age.  It's about time!  According to the last available census figures, women are paid substantially less than male workers.  For every dollar a male made in 2003, a woman made 75.5 cents.  While Ms. Ledbetter led the charge against such unfair treatment, the Supreme Court's decision means that she will not be able to revive her case or recover for her own wage disparty.  However, many, many people after her can thank her for her efforts to change the law.  Thank you, Lilly Ledbetter, for standing up.  And thank you to all of the hard working Americans who supported the change in the law and called their representatives to return reason to the law controlling workplace wages. 

Supreme Court Reaffirms Retaliation Protection

On January 26, 2009 the Supreme Court issued a unanimous opinion reaffirming broad retaliation protections for employees who participate in internal investigations of workplace discrimination, rejecting the employer's narrow view that the retaliation law only protected those who actually asserted claims of discrimination or participated in legal proceedings.  In Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, the Court sent a strong message to employers that anyone who responds to interview questions qualifies for protection.  

In this case, three employees interviewed during an investigation of a supervisor's reported harassment and had confirmed the harassing behavior were later fired, purportedly for unrelated reasons.  The supervisor who had been investigated was not fired.  Title VII to the 1964 Civil Rights Act protects employees from retaliation for both "opposing" illegal practices and for "participating" by filing a charge of discrimination, testified, assisted or participated in an investigation, proceeding or hearing under the Act.  The two clauses are commonly referred to as the "opposition" clause and "participation" clause.  The employer argued that these employees had not initiated a complaint and therefore had not "opposed" discrimination and, likewise, had not filed a lawsuit or served as a witness to a legal or administrative proceeding - so, the employer concluded, these employees had engaged in no "protected activity" and were not entitled to the law's retaliation protection.  The Court labeled this argument as suggesting a "freakish" rule whereby an employee who reports discrimination is protected but an employee who confirms the discrimination when asked by the employer is not.   

The Court made clear that the "opposition" clause of Title VII protects not only "active, consistent" behavior, but may be used to describe someone who had taken no action at all to advance a position beyond disclosing it.  Employers who state that they have complaint or grievance procedures, but try to undermine them by terminating or otherwise retaliating against employees who use the process or respond to questions, will not be protected by the law.  The retaliation provisions of the discrimination laws are in place to assure that, whether the employer agrees with what is said by an employee regarding discrimination or harassment, or not, the employee has absolute protection of the courts to state such views, without fear of retalation.  This decision follows a series of strong statements by the Supreme Court that it will not buy into pro-employer arguments suggesting that the nation's anti-discrimination laws' retaliation protections be diluted, with resulting "freakish" outcomes.   

Defamatory Job Evaluation Statements: Virginia Supreme Court Clarifies Actionable Defamation Cases

We all know that employers can ruin reputations by creating false impressions of poor job performance.  However, when employers mix partially true statements and opinion with false statements, some courts have been reluctant to enforce the rule that requires the statements to be viewed as a whole to discern the underlying defamatory message or content conveyed.  Now, the Virginia Supreme Court has delivered a clear message that an alleged defamatory statement must be viewed as a whole to determine the truth or falsity of the statement – and this includes the falsity created by accompanying inference and innuendo.

 

On January 16, 2009, the Virginia Supreme Court reiterated that damaging defamation can occur in the workplace when untrue statements are combined with partially true statements and opinion.  The Supreme Court again reviewed the case of defamatory statements made in a performance review which, when read together with all the circumstances, inferences and innuendo, were alleged to have a defamatory meaning.  The case, decided Friday, January 16, 2009 is Hyland v. Raytheon Technical Services Company, et al, Record No. 080157.  The case may be read in its entirety at http://www.courts.state.va.us/opinions/opnscvwp/1080157.pdf

 

In Cynthia Hyland v. Raytheon Technical Services Company, et al, the Virginia Supreme Court held that a claim for defamation is stated when one makes a false factual statement that concerns and harms a person’s reputation.  Ms. Hyland’s case arises out of defamation that occurred in the workplace.  Cynthia Hyland worked for Raytheon for about 21 years and was a senior VP and general manager of a Raytheon division when the statements which she contends were defamatory were made.  Ms. Hyland oversaw a division that bid for government contracts.  While her division lost government contract bids in 2000 and 2002, Ms. Hyland continued to receive positive performance evaluations - and was even appointed senior VP and general manager for her division and two additional units.  However, after Ms. Hyland made critical statements about the leadership style of the president, Bryan Even, in a supposedly confidential internal job assessment, she saw a dramatic change.  Apparently, Mr. Even learned of the critical comments.  Ms. Hyland’s next performance appraisal was negative and her employment was later terminated.  She filed suit for defamation.  A jury returned a verdict for $1,850,000 (including $350,000 punitive damages), based on five allegedly defamatory statements, and a judgment was entered for Ms. Hyland.  Raytheon appealed.

 

That judgment was reversed by the Virginia Supreme Court in a 2007 Virginia Supreme Court case, Raytheon Tech. Servs. Co. v. Hyland, 273 Va. 292 (2007) and the Supreme Court sent the case back to the trial court because 3 of the 5 statements relied on by Ms. Hyland at trial were determined to not be actionable defamation (the Supreme Court determined that 3 statements were opinion).  Because the jury considered all 5 statements in its verdict, the Supreme Court could not determine which statements the jury had relied upon: the 2 statements of defamation or the 3 statements of opinion. 

 

The second trip to the Supreme Court involves the trial court’s dismissal of the case.  On remand to the trial court, the Fairfax Circuit Court (the trial court) granted judgment to Raytheon, this time holding that the 2 defamatory statements contained true elements of fact and opinion and, therefore, were true - and that Ms. Hyland admitted as much.  Ms. Hyland took the position that she had not conceded this, relying on the full inferences and defamatory implications of the entire statements as a whole, and she appealed. 

 

Last week, handing down an opinion in its second review of this case, the Virginia Supreme Court reversed and again returned the case for trial on the 2 statements Hyland relied on as defamatory.  The Supreme Court stated that the trial court was wrong when it parsed the defamatory statements to separate factual portions and when it failed to consider the statements as a whole.  Defamation may be stated by inference, implication or insinuation.  While opinion is not considered actionable defamation, factual statements made in support of an opinion can form the basis for a defamation action.  A court may not isolate one portion of the statement from another portion of the statement to sanitize it or insulate it from a defamation claim.  A court must consider the statement as a whole.  Factual portions of an allegedly defamatory statement must not be viewed in isolation, but must be considered in view of accompanying opinion and other stated facts.  The key is what message is conveyed and whether the facts used to support the message may be proved false.  Once a court determines that an allegedly defamatory statement is capable of being proved false it is the jury’s function to evaluate the evidence presented and determine whether the plaintiff has proven that the statement is false.     

 

            The Virginia Supreme Court recognized the following performance evaluation statements as stating a claim for actionable defamation:

 

Cynthia lead [sic] [Raytheon] in the protest of the FAA’s evaluation selection process for the TSSC contract and through a difficult procurement for the TSA, both of which demanded her constant attention.  These visible losses created significant gaps in our strategic plans and in her business unit financial performance.

 

Cynthia and her team met their cash goals, but were significantly off plan on all other financial targets including Bookings by 25%, Sales by 11.5%, and profit by 24%.

 

The employer’s use of the word “significantly” did not make the statements non-actionable opinion because the factual statements used addressed Hyland’s responsibility for the losses and purportedly missing goals.  Raytheon convinced the trial judge that the case should be dismissed because, it alleged, Ms. Hyland admitted the truth of aspects of the two allegedly defamatory statements.  By improperly limiting its consideration to the separate factual portions of statements (and excluding consideration of the statements as a whole) the trial court denied Ms. Hyland the opportunity to demonstrate that the messages conveyed, “including any implications, inferences or insinuations that could reasonably be drawn from each statement,” were defamatory.  Ms. Hyland returns to Fairfax Circuit Court to have a jury determine whether her employer defamed her – under the rule of law that allegedly defamatory statements must be viewed in their entirety, as a whole, for defamatory content.

 

The Bottom Line:

 

• Virginia law protects employees from defamatory employer statements in the workplace, even in performance appraisals;

 

• Defamatory statements must be viewed as a whole, with all defamatory inferences and innuendo;

 

• Employees’ reputations are not legally subject to an employer’s whim when it mischaracterizes facts to convey that the employee has failed to perform, has cost the employer money or to otherwise falsely paint an employee as a poor performer;

 

• Situations where employers dramatically change position on performance to retaliate against employees for some reason are often the starting point for such false statements – this may occur when, for example, an employee has taken legally protected actions such as reporting illegal or unethical conduct by the employer, has responded honestly to an internal request for information (as it appears was the case with Ms. Hyland) or has reported sexual harassment, gender discrimination or racially based discrimination or harassment;

 

• Virginia trial courts should be expected to follow this clarification of defamation law where someone makes false statements to harm one’s reputation.  Under our legal system, employers should not escape the harmful result of their actions by arguing to judges that portions of their statements were true or were opinion.  Under the clear rule in Virginia, juries should be permitted to determine the falsity and reputational damage done to employees in workplace situations and in other situations involving reputational damage.

• With this case and other helpful case law, Virginia employment lawyers and civil rights lawyers can better protect employees whose reputations have been damaged by malicious defamatory statements in the workplace.