Court of Appeal Holds Arbitration Agreement Was Illusory and Unenforceable

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Created on Wednesday, 02 May 2012 17:54

Last updated on Wednesday, 16 May 2012 03:57

Published on Wednesday, 02 May 2012 17:54

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In a recent case, Peleg v. Neiman Marcus Group, Inc., the Court of Appeal, 2^nd District, held that an arbitration agreement entered into by Amir Peleg, and his employer, Neiman Marcus Group, was illusory and therefore unenforceable. Peleg, is a gay Jewish male of Israeli national origin. He worked at a Neiman Marcus store in Beverly Hills and allegedly performed his duties in an exemplary manner. In 2008, Neiman Marcus discharged Peleg, allegedly because of his national origin, religion, and sexual orientation in violation of the Fair Employment and Housing Act (FEHA). He was also allegedly harassed and subjected to retaliation for the same reasons. Peleg exhausted his administrative remedies under the FEHA and received a right-to-sue letter. He then filed a lawsuit and Neiman Marcus sought to enforce an arbitration agreement (Agreement) that the parties had signed. However, the Agreement contained a modification provision stating that Neiman Marcus could amend, modify, or revoke the arbitration contract on 30 days‘ written notice and at the end of the 30-day period, a contract change would apply to any claim that had not been filed with the American Arbitration Association (AAA).  

Peleg argued that the employer‘s unilateral right to make changes rendered the Agreement illusory. The 2^nd District agreed, concluding that “an arbitration contract containing a modification provision is illusory if an amendment, modification, or revocation — a contract change — applies to claims that have accrued or are known to the employer...Were it otherwise, the employer could amend the contract in anticipation of a specific claim, altering the arbitration process to the employee‘s detriment and making it more likely the employer would prevail.”  Read More.

Employers Must Exercise Caution When Using Employee Selection Tools

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Created on Tuesday, 24 April 2012 05:08

Last updated on Tuesday, 24 April 2012 05:16

Published on Tuesday, 24 April 2012 05:08

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As highlighted by a recent lawsuit filed by the United States Justice Department (DOJ) employers must exercise caution when using employee selection tools (such as written examinations) for hiring or promotion purposes, because such tools can have a disparate impact in the workplace. In the lawsuit, the DOJ alleges that the city of Jacksonville, Florida, discriminated against African-Americans in its fire and rescue department. Specifically, the lawsuit challenges the fire department’s use of written examinations for the promotion of firefighters to four ranks – Lieutenant, Captain, and District Chief, all in the suppression line, and Engineer. The complaint filed by the DOJ asserts that the examinations have a disparate impact on African-American candidates in two ways. First, African-American candidates for promotion pass the examinations at much lower rates than white candidates. Second, even those African-Americans who pass the examinations are rarely promoted because the fire department allegedly selects candidates for promotion in descending rank-order based primarily upon each candidate’s written examination score and African-American candidates score significantly lower than whites. According to Thomas Perez, Assistant Attorney General for the Civil Rights  Division, “This complaint should send a clear message to all public employers that employment practices that have the effect of excluding qualified candidates on account of race will not be tolerated…At best, these tests measure only a slice of what is necessary to be a supervisor, but they stand in the way of qualified African-Americans advancing in the fire department. The Justice Department will take all necessary action to ensure that such discriminatory practices are eliminated and that the victims of such practices are made whole.”  Read More.

Employer WIll Pay $150,000 to Settle Allegations of Race Discrimination

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Created on Wednesday, 18 January 2012 15:39

Last updated on Wednesday, 30 November -0001 00:00

Published on Wednesday, 18 January 2012 15:39

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As demonstrated by a recent case, employers must continue to be proactive in ensuring that any form of discrimination, harassment or retaliation is prohibited in the workplace by conducting regular training, instituting the proper policies and procedures, and posting the proper notices about workplace discrimination, harassment and retaliation. The case involves Shack-Findlay Automotive, LLC (doing business as Findlay Honda and Findlay Automotive Group, Inc.), which is a car dealership in Henderson, Nevada. The company will pay $150,000 to two black employees for allegedly subjecting them to discrimination, harassment and retaliation. The EEOC filed suit against the company on behalf of the two employees alleging that a parts department manager made racially derogatory comments and jokes on a near-daily basis and imposed stricter work-related rules on black employees than non-black employees. Two black employees were eventually terminated, one after allegedly advising that he was going to file a discrimination charge against the company. In addition to the monetary settlement amount, the company must hire an outside EEO consultant; distribute its policies and complaint procedures regarding workplace discrimination, harassment and retaliation; track future complaints; and provide annual equal employment opportunity training. Anna Y. Park, regional attorney for the EEOC’s Los Angeles District Office, stated that, “We commend Shack-Findlay Automotive for taking proactive measures to ensure a workplace free of discrimination…We encourage other employers to take steps to ensure that managers are trained about their obligations under Title VII.” Read More.

Employer Will Pay $219,000 for Alleged Discrimination Against Blacks and Caucasians

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Created on Tuesday, 17 January 2012 01:03

Last updated on Wednesday, 30 November -0001 00:00

Published on Tuesday, 17 January 2012 01:03

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The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) announced that government contractor JacintoPort International LLC will pay $219,000, and provide other relief, to settle a lawsuit in which the OFCCP alleged that the company engaged in hiring discrimination on the basis of race. The case involves 48 African-American and 21 Caucasian job applicants, who were allegedly rejected for longshoreman positions at the company's cargo facility in Houston.  JacintoPort had previously been cited by the OFCCP for failing to institute an applicant tracking system for new hires, and for failing to develop and execute action-oriented programs to recruit women and African-Americans. That matter was settled on June 6, 2006, and JacintoPort agreed to correct the violations and produce semiannual reports on the company's progress in employing women and minorities. Regarding the current settlement, OFCCP Director Patricia A. Shiu commented that "In this day and age, it is shocking that any company would allow race to be a factor in determining who gets hired…This settlement should put all federal contractors on notice that, in the Obama administration, we will be persistent when it comes to rooting out workplace discrimination and will vigilantly monitor employers who violate the law until they get it right." In reviewing the company’s progress reports, OFCCP investigators apparently discovered that the company was allegedly giving preferential treatment to Latino applicants and systematically discriminating against African-Americans and Caucasians seeking longshoreman jobs. Under the terms of the settlement agreement, JacintoPort has agreed to pay $219,000 in back wages and interest, and make 17 job offers to members of the original class as longshoreman positions become available. In addition, JacintoPort will implement extensive self-monitoring measures to ensure that all hiring practices are compliant with law. Read More.