IDENTIFYING
A VAILABLE DEFENSES!
ARNOLD W. "TRIP" UMBACH III
STARNES DAVIS FLORIE LLP
100 BROOKWOOD PLACE, SEVENTH FLOOR
BIRMINGHAM, ALABAMA 35209
[email protected]
(205) 868-6000
WEBSITE: WWW.STARNESLAW.COM
When a complaint is received, the first consideration, before investigating the
facts, is whether the plaintiff has stated a claim for relief, and therefore, whether there
may be a basis to move for dismissal. Accordingly, Part I of this paper discusses the new
standard for analyzing whether a complaint states a claim. If there is no basis for such a
motion, or a motion to dismiss is denied, it will be necessary to investigate the facts (i.e.
meet with the decision makers in a discrimination case) and file an answer. Part II
outlines available defenses to consider. This paper focuses on federal law, as state law
employment claims and defenses will vary from state to state.
I.
Failure to State a Claim
In Twombly v. Bell Atlantic Corp., 550 U.S. 644 (2007), and Ashcroft v. Iqbal, 129
S. Ct. 1937 (2009), the Supreme Court of the United States announced a new plausibility
standard for pleading requirements in civil cases. Specifically in Twombly, the Court
held that a complaint cannot survive a motion to dismiss unless it contains "enough facts
to state a claim to relief that is plausible on its face." 550 U.S. at 570 (emphasis added)
(retiring the prior "unless it appears beyond doubt that the plaintiff can prove no set of
facts" standard). Then in Iqbal, the Court further defined this new standard by stating,
A claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. The plausibility standard is not akin to a
"probability requirement," but it asks for more than a sheer possibility that
a defendant has acted unlawfully .... Detennining whether a complaint
states a plausible claim for relief will [] be a context-specific task that
requires the reviewing court to draw on its judicial experience and
common sense.
1 This paper is prepared for the Fifth Annual Labor and Employment Law Conference put on by the Labor
and Employment Section of the American Bar Association, specifically a panel discussion titled "Selecting Causes
of Action and Identifying Available DeFenses" to be held on November 4,20 II in Seattie, Washington. The author
wishes to acknowledge the substantial contributions of Breanna R. Harris of Starn es Davis Florie LLP.
{BI3341 42}
129 S. Ct. at 1949-51. Although these holdings likely increase the difficulty of surviving
a motion to dismiss for some types of claims, recent studies have shown that the overall
impact of the decisions has been less substantial then originally estimated. However, it is
still important to analyze a Plaintiffs complaint against the heightened standard and to
make a decision on whether or not to attack it from the outset. To increase the likelihood
of success of an attack on the complaint at this early stage, it will be imperative that a
motion to dismiss explains why the Plaintiff fails to meet his/her burden under the facts
in the particular case. One way to do so is to point out the specific facts of the complaint
that make the Plaintiffs claims seem improbable and unlikely. Simply stating the
heightened standard will likely not be enough to be successful at the pleadings stage.
II.
Defenses
While Twombly and Iqbal held that a complaint now must set forth enough facts to
give rise to a plausible claim to relief, the decisions left unanswered whether this same
standard should also apply to a defendant's affinnative defenses. In fact, the decisions
make no reference to a defendant's pleadings. Lower courts are divided on this issue,
with a majority holding that the Twombly/Iqbal standard does apply to affirmative
defenses. Many of the courts that also apply the heightened standard to affirmative
defenses point to litigation costs, fairness, notice and efficiency to support this decision.
Specifically, many courts have concluded that requiring the same standard for both
Plaintiffs and Defendants will encourage more efficiently tailored discovery. Until this
issue is ultimately decided, it will be important to understand the standard applied in your
jurisdiction and to comply with those requirements in pleading affirmative defenses.
The balance of this paper is organized by claim. Section A covers defenses that
may be applicable to any claim. The remaining sections are claim specific.
A.
General
1.
The plaintiff's claims for damages are barred or reduced to the extent
that he failed to properly mitigate his alleged damages.
A person who claims damages as a result of an alleged wrongful act on the
part of another has a duty under the law to mitigate those damages; that is,
to take advantage of any reasonable opportunity he may have had under the
circumstances to reduce or minimize the loss or damage. If a plaintiff fails
to seek out or take advantage of a business or employment opportunity that
was reasonably available to him under the circumstances, then the amount
of damages awarded may be reduced by the amount he could have
reasonably realized if he had taken advantage of such opportunity.
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2.
Plaintiff's claims may be barred by the doctrine of after-acquired
evidence.
The after-acquired evidence defense allows employers to mitigate damages
by introducing evidence of an employee's wrongdoing that the employer
discovered after its employment decision. As a general rule, neither back
pay nor front pay will be an appropriate remedy where there is afteracquired evidence that would have resulted in the employee 's termination
had the employer known of the conduct. See McKennon v. Nashville
Banner Publishing Co., 513 U.S. 352 (1995).
3.
Plaintiff's claims are barred to the extent she failed to file an EEOC
charge within 180 days of the alleged discriminatory or retaliatory
actions.
The anti-discrimination laws give an employee a limited amount of time to
file a charge of discrimination. Generally, the employee must file a charge
within ISO calendar days from the day the discrimination took place. The
ISO-day filing deadline is extended to 300 calendar days if a state or local
agency enforces a law that prohibits employment discrimination on the
same basis. Note: The rules are slightly different for age discrimination
charges. For age discrimination, the filing deadline is only extended to 300
days if there is a state law prohibiting age discrimination in employment
and a state agency or authority enforcing that law. The deadline is not
extended if only a local law prohibits age discrimination.
4.
Plaintiff's claims, in whole or in part, may be barred by the applicable
statute of limitations.
a.
Plaintiff's claims are not timely for failure to file suit within 90
days of receiving a Notice of Right to Sue from the EEOC.
Once an employee receives a Notice of Right to Sue from the EEOC,
the employee must file a lawsuit within 90 days of his/her receipt of
the notice. If the employee does not do so, hislher right to sue under
Title VII, the ADA, or ADEA based on the allegations in the charge
will be lost.
b.
Plaintiff's claims are not timely under the statute of limitations
under 42 U.S.C. § 1981.
There is a four year statute of limitations for Section 19S1 claims.
See Jones v. R.R. DOllllelley & Sons Co., 541 U.S . 369 (2004).
3
{B1 334 142}
5.
The Defendant states that the Plaintiff's claims should be dismissed to
the extent that they were not set forth in his administrative charge.
Generally, a plaintiff cannot bring suit on claims that were not included in
the prior administrative charge-only those discrimination claims stated in
the initial administrative charge with the EEOC, those reasonably related to
the original charge, and those developed by reasonable investigation of the
charge may be maintained in a subsequent lawsuit. See 42 U.S.c.A. §
2000e et seq.
6.
To the extent Plaintiff has filed for bankruptcy and failed to disclose
his claims to the bankruptcy court, his claims are barred by estoppel.
Under the doctrine of judicial estoppel, a party is precluded from asserting a
claim in a legal proceeding that is inconsistent with a claim taken by that
party in a previous proceeding. More specific, a debtor seeking shelter
under the banlauptcy laws must disclose all assets, or potential assets, to the
bankruptcy court. The duty to disclose is a continuing one that does not
end once the fonns are submitted to the bankruptcy court. As such, a party
has a duty to disclose all claims, including pending lawsuits, to the
bankruptcy court. If a party intentionally fails to do so, the doctrine of
judicial estoppel will bar the party's claims asserted in the undisclosed
lawsuit. See Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (lIth Cir.
2002).
7.
The Defendant affirmatively asserts that it engaged in good faith
efforts to comply with the law. See Kolstad v. Americall Delltal Ass'lI,
527 U.S. 526 (1999).
In June 1999, the Supreme Court of the United States issued Kolstad v.
American Dental Association, 527 U.S. 526 (1999), which recognized that
punitive damages may be awarded for a Title VII violation "if the
complaining party demonstrates that the respondent engaged in a
discriminatory practice or discriminatory practices with malice or with
reckless indifference to the federally protected rights of an aggrieved
individual." However, the Court also held that an employer may not be
held vicariously liable for punitive damages for the discriminatory
employment decisions of managerial agents where these deCisions are
contrary to the employer's good-faith efforts to comply with the law.
8.
Plaintiff's claims are barred by the defense of waiver.
4
{B 1334 142}
A defense of waiver is defined as "an intentional relinquishment of a known
right." Such a defense requires proof that plaintiff had knowledge of the
facts basic to the exercise of the right and the intent to relinquish that right.
9.
Release.
A release of claims in exchange for consideration is enforceable if it is
knowing and voluntary.
B.
Disparate Treatment
1.
McDollllell DOl/g/as Burden
Discriminatory Reason.
of Presenting
a
Legitimate
Non-
When a plaintiff is unable to prove discrimination or retaliation by direct
evidence, the establishment of a discriminatory motive is governed by the
allocation of burdens and order of proof set forth in McDonnell Douglas
CO/po v. Green, 411 U.S. 792 (1973). Under the McDonnell Douglas
analysis, the plaintiff first has the burden of establishing a prima facie case
of illegal discrimination or retaliation.
If the plaintiff succeeds in
establishing the prima facie case, the burden shifts to the defendant to
articulate some legitimate, non-discriminatory (and/or non-retaliatory)
reason for the challenged decision. The employer's burden at this point is
exceedingly light and is one of production, not persuasion. If the defendant
carries this burden, the plaintiff must then prove, by a preponderance of the
evidence, that the legitimate reason offered by the defendant was merely a
pretext for discrimination or retaliation?
2.
Defendant's actions toward Plaintiff were taken based on bona fide
occupational qualifications.
The Bona Fide Occupational Qualifications ("BFOQ") rule allows for the
hiring of individuals based on race, sex, age, and national origin if these
characteristics are bona fide occupational qualifications. This is an
exception and complete defense to Title VII and the ADEA. In order to
establish the defense, an employer must prove the requirement is necessary
to the success of the business and that a definable group or class of
employees would be unable to perform the job safely and efficiently. See
42 U.S.C. 2000e-2(e)(I)
2 As a technical matter, the McDonnell DOl/glas burden shifting model is not a true defense that must be
pled. Nevel1heless, it is so fundamental to the defense of an employment case, that it seemed appropriate to mention
it here.
5
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3.
Defendant's actions toward Plaintiff were taken based on a bona fide
seniority system.
See 42 U.S.C. 2000e-2(h). "It shall not be an unlawful employment
practice for an employer to apply different standards of compensation, or
different tenns, conditions, or privileges of employment pursuant to a bona
fide seniority or merit system, or a system which measures earnings by
quantity or quality of production or to employees who work in different
locations, provided that such differences are not the result of an intention to
discriminate because ofrace, color, religion, sex, or national origin."
4.
Defendant's actions toward Plaintiff were taken based on a bona fide
merit system.
See 42 U.S.C. 2000e-2(h). "It shall not be an unlawful employment
practice for an employer to apply different standards of compensation, or
different tenns, conditions, or privileges of employment pursuant to a bona
fide seniority or merit system, or a system which measures earnings by
quantity or quality of production or to employees who work in different
locations, provided that such differences are not the result of an intention to
discriminate because ofrace, color, religion, sex, or national origin."
5.
Plaintiff's claims are barred because the employment decision about
which he complains was made on the basis of reasonable factors other
than Plaintiff's age.
See 29 U.S.C. § 623(1). "It shall not be unlawful for an employer ... to take
any action otherwise prohibited under subsections (a), (b), (c), or (e) of this
section where age is a bona fide occupational qualification reasonably
necessary to the normal operation of the particular business, or where the
differentiation is based on reasonable factors other than age ... "
6.
Plaintiff's claims are barred because the employment decision about
which he complains was based on Plaintiff's failure to obtain security
clearance as required in the interest of the national security of the
United States.
See 42 U.S.C.A. § 2000e-2(g). "It shall not be an unlawful employment
practice for an employer to fail or refuse to hire and employ any individual
for any position, for an employer to discharge any individual from any
position ... if the occupancy of such position, or access to the premises in
or upon which any part of the duties of such position is perfonned or is to
6
{BI334142)
be perfonned, is subject to any requirement imposed in the interest of the
national security of the United States under any security program in effect
pursuant to or administered under any statute of the United States or any
Executive order of the President; and such individual has not fulfilled or has
ceased to fulfill that obligation."
7.
The defendant states that, even if the Plaintiff is able to prove that a
prohibited factor motivated the Defendant's alleged employment
action, which the Defendant expressly denies, the same action would
have been taken even absent such motivation and, therefore, the
Plaintiff's claims must fail.
"On a claim in which an individual proves a violation under §2000e-2(m)
of this title and a respondent demonstrates that the respondent would have
taken the same action in the absence of the impermissible motivating factor,
the court (i) may grant declaratory relief, injunctive relief (except as
provided in clause (ii» and attorney's fees and costs demonstrated to be
directly attributable only to the pursuit of a claim under § 2000e-2(m) of
this title; and (ii) shall not award damages or issue an order requiring any
admission, reinstatement, hiring, promotion, or payment, described in
subparagraph (A)." 42 U.S.C. § 2000e-5(g)(2)(B); Desert Palace, Inc. v.
Costa, 539 U.S. 90, 94-95 (2003).3
C.
Disparate Impact
1.
Dcfendant's actions were based on the results of a professionally
developed ability test which was not designed, intended or used to
discriminate because of race, color, religion, sex or national origin.
See 42 U.S.C. § 2000e-2(h). "[N]or shall it be an unlawfitl employment
practice for an employer to give and to act upon the results of any
professionally developed ability test provided that such test, its
administration or action upon the results is not designed, intended or used
to discriminate because of race, color, religion, sex or national origin."
2.
All standards and selection criterion used by Defendant are job related
and consistent with business necessity.
See 42 U.S.C. § 2000e-2(k). "An unlawful employment practice based on
disparate impact is established under this subchapter only if (i) a
3 See Healthy City School Dist. Bd. 01 Educ. V. Doyle. 429 U.S. 274, 286 (1977) for the application ofu,is
defense in § 1983 cases against government entities.
7
{BI334142)
complaining party demonstrates that a respondent uses a particular
employment practice that causes a disparate impact on the basis of race,
color, religion, sex, or national origin and the respondent fails to
demonstrate that the challenged practice is job related for the position in
question and consistent with business necessity."
D.
Harassment
1.
Plaintiff's complaint is barred, in whole or in part, because the
Defendant exercised reasonable care to prevent and correct promptly
any discriminatory or retaliatory conduct and because Plaintiff
unreasonably failed to properly take advantage of any preventive or
corrective opportunities provided by the Defendant or to avoid harm
othenvise.
Under the Supreme Court's decisions in Faragher v. City of Boca Raton,
524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742
(I998), an employer is entitled to an affinnative defense against a
harassment claim where: (i) there is no tangible employment action (i.e., the
employee is not terminated, demoted, subject to reassignment), (ii) the
employer exercised reasonable care to prevent and correct promptly any
sexually harassing behavior, and (iii) the plaintiff employee unreasonably
failed to take advantage of any preventive or corrective opportunities
provided by the employer or to avoid hann otherwise. In other words,
where the employer has taken all appropriate action and the employee
declines to avail him/herself of the policies and opportunity for correction,
the employer may avoid liability for harassment.
E.
Americans with Disabilities Act
1.
All standards and selection criterion used by Defendant are job related
and consistent with business necessity.
See 42 U.S.C. 121 13 (a). It may be a defense to a charge of discrimination
under this chapter that an alleged application of qualification standards,
tests, or selection criteria that screen out or tend to screen out
or otherwise deny a job or benefit to an individual with a
disability has been shown to be job-related and consistent with
business necessity, and such performance cannot be accomplished by
reasonable accommodation, as required under this subchapter.
8
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2.
To the extent that a reasonable accommodation could not be made, the
Defendant specifically pleads the affirmative defense of undue
hardship.
An employer does not have to provide a reasonable accommodation that
would cause an "undue hardship" to the employer. Such "undue hardship"
must be based on an individualized assessment of current circumstances
that show that a specific reasonable accommodation would cause
significant difficultly or expense. A determination of undue hardship is
based on several factors including the nature and cost of the
accommodation needed and the impact of the accommodation on the
operation of the facility. See 42 U.S.C. § 12111(10) and 29 C.F.R. §
1630.9.
3.
Because Plaintiff posed a direct threat to the health and safety of
himself or others in his employment with Defendant, he is not a person
"otherwise qnalified" to perform the essential functions of his job.
The ADA permits employers to establish qualification standards that will
exclude individuals who pose a direct threat- a significant risk of
substantial harm-to the health or safety of the individual or of others, if
that risk cannot be eliminated or reduced below the level of a "direct threat"
by reasonable accommodation . However, an employer may not simply
assume that a threat exists; the employer must establish through objective,
medically supportable methods that there is a significant risk that
substantial hann could occur in the workplace. See 42 U.S.C. 12113.
4.
Plaintiff's claims are barred to the extent that he failed to control a
controllable disability.
When an employee knows that he is afflicted with a disability, needs no
accommodation from his employer, and fails to meet the employer's
legitimate job expectations, due to his failure to control a controllable
disability, he cannot state a cause of action under the ADA. See 42
U.S.C.A. § 12112(a) and Burroughs v. City of Springfield, 163 F.3d 50S
(8th Cir. 1998).
5.
Plaintiff's claims are barred to the extent that he failed to snbmit to a
medical evaluation.
A covered entity may require a medical examination (and/or inquiry) of an
employee that is job-related and consistent with business necessity. Also,
an employer with a reasonable belief that an employee's present ability to
9
(81334142)
perform essential job functions wilI be impaired by a medical condition or
that he/she wilI pose a direct threat due to a medical condition, the
employer may make disability-related inquiries or require the employee to
submit to a medical examination. However, any inquiries or examination
must be limited in scope to what is needed to make an assessment of the
employee's ability to work. See 29 C.F.R. § 1630.14 and Enforcement
Guidance: Disability-Related Inquiries and Medical Examinations of
Employees under the ADA, EEOC Notice Number 915.002,7/27/00.
6.
Defendant relied upon the Plaintiff's physician's evaluation of Plaintiff
indicating that the employee could not perform an essential function of
her job.
If a plaintiff cannot perfonn an essential [unction of her job, with or without
reasonable accommodation, she is not a qualified individual with a
disability and, therefore, is not protected by the ADA.
7.
To the extent that a reasonable accommodation could not be made, the
Defendant specifically pleads the affirmative defense that such
accommodation would be contrary to seniority rights of others.
Requiring an employer to infringe on the seniority rights of other
employees is not a reasonable accommodation.
8.
Plaintiff is not a qualified individual with a disability as defined by
federal law.
To be protected by the ADA, an individual must be a qualified individual
with a disability, which means an individual with a disability who, with or
without reasonable accommodations, can perform the essential functions of
the employment position that such individual holds or desires. "For the
purposes of this title, consideration shall be given to the employers
judgment as to what functions of a job are essential, and if an employer has
prepared a written description before advertising or interviewing applicants
for the job, this description shall be considered evidence of the essential
functions of the job." See 42 U.S.C. 12111 (8).
F.
Fair Labor Standards Act
1.
The Defendant affirmatively pleads the two-year and three-year
statutes of limitation under the FLSA.
10
(81334142 )
Under the FLSA, an employee must commence a lawsuit within two years
from the date that the employer failed to pay minimum wages or ovet1ime,
violated other provisions of the FLSA, or retaliated or discriminated against
the employee for asserting hislher rights under the FLSA. The FLSA
permits the extension of the statute of limitations period to three years if an
employer's violation is willful. An FLSA violation is considered to be
willful if the employer (a) knew that its conduct was prohibited by the
FLSA; (b) showed reckless disregard as to whether conduct was prohibited
by FLSA; (c) disregarded the possibility that it was violating the FLSA; or
(d) had prior FLSA violations and evidence of the employer's recklessness
is shown. A finding of willfulness not only extends the statute of limitations
but it also permits the recovery of three years of back wages from the time
of filing the lawsuit and may entitle the employee to liquidated damages.
2.
Without admitting liability for any acts or omissions alleged, any acts
or omissions complained of were undertaken or made in good faith,
and/or in conformity with, and in reliance on, written administrative
regulations, orders, ruling, or interpretations of the Administrator of
the Wage and Hour Division of the Department of Labor for the
Courts.
See 29 U.S.C. § 259(a). "[N]o employer shall be subject to any liability or
punishment for or on account of the failure of the employer to pay
minimum wages or overtime compensation under the [FLSA] . .. if he
pleads and proves that the act or omission complained of was in good faith
in conformity with and in reliance on any written administrative regulation,
order, ruling, approval, or interpretation, of the . . . [Administrator] .. . with
respect to the class of employers to which he belonged. Such a defense, if
established, shall be a bar to the action or proceeding, notwithstanding that
after such act or omission, such administrative regulation, order, ruling,
approval, interpretation, practice, or enforcement policy is modified or
rescinded or is determined by judicial authority to be invalid or of no legal
effect."
3.
The Plaintiff is not entitled to liquidated damages, even if he can prove
a violation of the law, because any acts or omissions giving rise to
Plaintiff's claims were undertaken or made in good faith, and the
Defendant had reasonable grounds for believing that its actions or
omissions did not violate the law.
See 29 U.S.C. 260. "[I]fthe employer shows to the satisfaction of the court
that the act or omission giving rise to such action was in good faith and that
he had reasonable grounds for believing that his act or omission was not a
11
(B I334 142 )
violation of the [FLSA], the court may, in its sound discretion, award no
liquidated damages or award any amount thereof not to exceed the amount
specified in § 216 of this title." Therefore, to avoid liquidated damages, an
employer must establish, to the judge's satisfaction, that its act or failure to
act was in good faith and that it had reasonable grounds for believing that
its act/omission did not violate the FLSA.
4.
The Plaintiff is not entitled to any recovery in this action because he
was, and is, exempt from the minimum wage and/or overtime
requirements of the FLSA.
Exemptions must be asserted as an affirmative defense to a claim under the
FLSA. The employer bears the burden of pleading and proving all
elements of an exemption, such as the professional, administrative, and
executive exemptions, from minimum wage and overtime provided in 29
U.S.C. § 213 (a)(I).
G.
Employee Retirement Income Security Act
1.
Plaintiff's claims or some of them are preempted by the Employee
Retirement and Income Security Act of 1974 ("ERISA"), 29 U.S.c. §
1001, et seq.
ERISA § SI4(a) preempts any and all State laws that relate to any employee
benefit plan covered by ERISA.
2.
Plaintiff's claims are barred in whole or in part due to a failure to
exhaust applicable administrative remedies as required under ERISA
and the governing plan documents.
Employee benefit plans governed by ERISA have provided a procedure for
employees to complain. A claim may be dismissed if a plaintiff fails to
exhaust these procedures.
H.
Equal Pay Act
1.
Defendant cannot be held liable for any alleged wage dispal"ity because
any such disparity was the result of: (a) a seniority system; (b) a merit
system; (c) a system that measures earnings by quantity or quality of
production; and/or (d) any factor other than sex.
Under the Equal Pay Act, an employer is permitted to pay employees
differently if the reason for the pay difference is based solely on a bona fide
12
[BI334142)
seniority system, merit system, incentive system, or any other factor other
than sex. See 29 U.S.C. § 206 (d).
I.
Family and Medical Leave Act
1.
The plaintiff failed to provide proper notice as required by the FMLA.
See 29 C.F.R. § 825.304. Eligible employees seeking to use FMLA leave
may be required to provide: (a) 30-day advance notice of the need to take
FMLA leave when the need is foreseeable; (b) notice "as soon as
practicable" when the need to take FMLA leave is not foreseeable; (c)
sufficient information for the employer to understand that the employee
needs leave for FMLA-qualifying reasons; and (d) where the employer was
not made aware that an employee was absent for FMLA reasons and the
employee wants the leave counted as FMLA leave, timely notice (usually
within 2 business days of returning to work) that leave was taken for a
FMLA-qualifying reason.
2.
Defendant declined to reinstate plaintifffollowing FMLA leave because
plaintiff was a "Key Employee."
See 29 CFR § 825.217. Under limited circumstances, where restoration to
employment will cause "substantial and grievous economic injury" to its
operations, an employer may refuse to reinstate certain highly-paid, salaried
"key" employees. In order to do so, the employer must notify the employee
in writing of hislher status as a "key employee" (a salaried, FMLA-eligible
employee who is among the highest paid 10 percent of all the employees
employed by the employer within 75 miles of the employee's worksite), the
reasons for denying job restoration, and provide the employee a reasonable
opportunity to return to work after so notifying the employee.
13
11l1334142)