Employment & Labor Law

Second Circuit Finds Arbitrator's Decision Has Probative Weight In Subsequent Discrimination Litigation

The Court of Appeals for the Second Circuit recently ruled that, while an arbitration decision rendered in an employee's favor does not preclude the employee from pursuing a statutory discrimination action in court, "a decision by an independent tribunal that is not itself subject to a claim of bias will attenuate a plaintiff's proof of the requisite causal link" to prevail in the litigation. Collins v. New York City Transit Authority, 305 F.3d 113 at 119 (2d Cir. 2002).

James Collins was employed by the New York City Transit Authority ("Transit Authority") from February 17, 1981 through October 22, 1991. Collins, an African- American, had various problems with his immediate supervisors, Peter Fazzi (a white man who was Collins' supervisor from March 1987 to October 1990) and Nabil Badr (an Egyptian who was Collins' supervisor thereafter). During the course of his employment, Collins filed allegations of racial discrimination by Fazzi with the New York State Division of Human Rights ("SDHR") and had numerous disciplinary incidents with both Fazzi and Badr. The final incident occurred with Badr on June 11, 1991, and ended with Collins allegedly punching Badr in the face, breaking his glasses. On June 13, 1991, the Transit Authority terminated Collins for assaulting his supervisor. Collins filed a grievance under his collective bargaining agreement and filed another complaint with the SDHR alleging that his termination was discriminatory and retaliatory.

The arbitration board heard evidence during three days of hearings at which Collins was represented by his union, the Transport Workers Union of America, Local 100. The board issued a fourteen-page opinion finding corroboration that Badr's injuries occurred from an assault when he and Collins were alone and upholding Collins' termination for the assault.

Subsequently, Collins filed suit in federal district court for the Eastern District of New York against the Transit Authority and several employees alleging claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. ß 2000e, et seq. ("Title VII"); 42 U.S.C. ßß 1981, 1983 and 1985, and state law. Collins dropped some of the claims and, on October 30, 2000, the district court granted summary judgment to defendants dismissing the remaining claims, including those for retaliation and discrimination under Title VII. Collins appealed to the U.S. Court of Appeals for the Second Circuit.

Reviewing the grant of summary judgment de novo, Judge Winter first reiterated that the burden on a plaintiff to establish a prima facie case of employment discrimination is "minimal." Id. at 118. But, the court found that Collins had "not met even this low threshold, because the circumstances of his termination do not give rise to or support an inference of discrimination or retaliation." Id. With respect to the finding of no discriminatory intent, the court found particularly probative the fact that Collins was finally terminated after an independent inquiry by a neutral arbitration board. Id. The court concluded:

Where, as here, [the decision by an independent tribunal] follows an evidentiary hearing and is based on substantial evidence, the Title VII plaintiff, to survive a motion for summary judgment, must present strong evidence that the decision was wrong as a matter of fact ó e.g. new evidence not before the tribunal ó or that the impartiality of the proceeding was somehow compromised.

Id. Because an undisputedly unbiased tribunal determined that Collins' termination was supported by the evidence of his assault on his supervisor, and because Collins presented no evidence that the tribunal's determination was erroneous, the circumstances of his termination could not support an inference of discrimination or retaliation.

Employer Violated FMLA By Reducing Employee's "Stay Bonus"

In Dierlam v. Wesley Jessen Corp., 2002 WL 31118319 (N. D. Ill. Sept. 24, 2002), in an opinion written by Judge Harry D. Leinenweber, the court concluded that an employer violated the Family and Medical Leave Act of 1993, 29 U.S.C. ß 2601 et seq. ("FMLA"), when it reduced an employee's "stay bonus," intended for employees who remained "actively employed" while a new company took over the business, because the employee took twelve weeks of family leave after adopting a child.

In May 1997, defendant Wesley Jessen Corporation ("Wesley") hired plaintiff Valerie Dierlam ("Dierlam"). In 2000, Novartis AG, the owner of CIBA Vision, acquired Wesley. Certain employees, including Dierlam, were offered a "stay bonus" as an incentive to continue working during the transition period. Dierlam's "stay bonus," the terms and conditions of which were set forth in an Employment Transition Agreement ("ETA"), provided that "the employee shall be eligible to receive a lump sum payment of 50% of employee's current annual base salary as of the Effective Date (November 1, 2000) provided that (a) the employee remains employed and actively working for the Company as of September 30, 2001." Id. at *1. Under these terms, if Dierlam were to remain "actively employed" by Wesley until September 30, 2001, she would be entitled to a one-time bonus of $30,027.50 (50% of her annual base salary as of November 1, 2000).

On May 7, 2001, Dierlam requested and was granted twelve weeks FMLA unpaid family leave for the adoption of a child. Wesley conceded that up until the date of her FMLA leave, Dierlam remained "actively employed" by Wesley for the purposes of her stay bonus. Wesley contended, however, that during her FMLA leave, Dierlam was not "actively employed" for the purposes of the stay bonus. Wesley informed Dierlam that her stay bonus would be prorated and reduced by $8,407.70 to reflect her twelve-week FMLA leave. The ETA did not provide for the proration or reduction of the stay bonus for any reason, but Wesley argued that it was appropriate for the FMLA leave since the alternative would have been to find that Dierlam had not met the requirements of the ETA and was therefore not entitled to any bonus. After her leave, Dierlam returned to Wesley and remained actively employed for the remaining term of her ETA.

On November 1, 2001, Dierlam signed a Confidential Separation Agreement and General Release (the "Separation Agreement"). One of the clauses of the Separation Agreement contained a release, prohibiting Dierlam from filing a claim against Wesley under the FMLA. On December 6, 2001, Dierlam filed a lawsuit alleging that the reduction in her stay bonus violated the FMLA. Wesley moved to dismiss the complaint based on Dierlam's waiver of her FMLA rights in the Separation Agreement. On March 8, 2002, the Motion to Dismiss was converted into a Motion for Summary Judgment.

Wesley argued that the FMLA claim should be dismissed because Dierlam unequivocally waived her right to pursue FMLA claims in her Separation Agreement. Dierlam argued that the waiver of the FMLA rights obtained by Wesley in the...