Articles Posted in U.S. Court of Appeals for the Seventh Circuit

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In 2012, Jefferies, a securities and investment-banking firm, hired Frawley as its vice chairman and global head of metals and listed products. On the same day, Jeffries hired Webb, a sales executive in the global metals group headed by Frawley at a firm they had previously worked for, and Beversdorf, a director of that group. Webb and Beversdorf signed employment contracts, consenting “that any arbitration proceeding brought with respect to matters related to your employment or this Agreement shall be brought before [Financial Industry Regulatory Authority] … or if the parties are permitted … [or] to the personal jurisdiction of the state and federal courts. “ In 2013 Jefferies decided to get out of the iron ore business and ordered Frawley to tell Webb and Beversdorf to stop trading iron ore. Frawley did not tell them but pushed for more iron ore trades. Months later, Jefferies fired the two, who sued Frawley. Frawley successfully moved to compel arbitration. The Seventh Circuit affirmed in part, concluding that Beversdorf agreed to arbitration. Webb, however, did not sign such an agreement; the document he signed was just an agreement concerning venue. Webb remains free to litigate his dispute with Frawley in federal court. View "Webb v. Frawley" on Justia Law

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Dismissal for failure to exhaust collective bargaining agreement (CBA) grievance process was improper where it was unclear that CBA required resort to that process for claims under Fair Labor Standards Act (FLSA). Vega worked for Forest as a seasonal employee, subject to a CBA that included a mandatory four-step procedure culminating in arbitration to resolve employee grievances. Forest terminated Vega. At the time, Vega was owed compensation for 54 hours of work in the preceding two weeks. Forest did not tender a final paycheck, purportedly because it discovered that Vega lacked a valid Social Security number and it did not know how to lawfully make payment to him without such a number. The parties dispute whether Vega made efforts to initiate a grievance. The district court dismissed Vega’s suit under the FLSA, 29 U.S.C. 206(b), for failure to exhaust the grievance procedure. The Seventh Circuit reversed, stating that the collective bargaining agreement did not clearly and unmistakably waive Vega’s right to pursue his FLSA claim in a judicial forum. The district court did not consider whether the CBA required Vega to resort to the grievance process when he is pursuing rights granted to him by the FLSA rather than the contract itself. View "Vega v. New Forest Home Cemetery, LLC" on Justia Law

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Appeal of dismissal of challenge to city’s order requiring that police officers cover tattoos was rendered moot by city’s revocation of the order. Plaintiffs, military veterans employed as Chicago police officers, have tattoos relating to their military service and religion. The department issued an order without prior notice, requiring all officers on duty or otherwise “representing” the department to cover their tattoos. The announced reason was to “promote uniformity and professionalism.” Plaintiffs complained that covering their tattoos with clothing caused overheating in warm weather and that cover-up tape irritated their skin. The complaint sought a declaratory judgment that the order violated theirs’ First Amendment rights, attorneys’ fees and costs, and “other legal and/or equitable relief.” Without addressing class certification and before discovery, the court dismissed the suit on the merits, finding that wearing tattoos was a “personal expression,” not an effort at communicating with the public on matters of public concern, and was not protected by the First Amendment. Meanwhile, the police union filed a grievance. An arbitrator ruled that the order violated the collective bargaining agreement. The city conceded and agreed to reimburse officers for expenses in complying with the invalidated policy. The Seventh Circuit directed that the judgment vacated as moot. View "Medici v. City of Chicago" on Justia Law

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Dead Man’s Act barred testimony regarding now-deceased employer’s response to being told employee would file a worker’s compensation claim. Plata sued Eureka under 42 U.S.C. 2000e, claiming that he was fired in retaliation for having filed such a claim. He claimed that Bittner, Eureka’s owner, told him he was “done” after he told Bittner that he intended to file the claim. Bittner died suddenly, leaving Plata the only witness to the conversation. Eureka cited the Illinois Dead Man’s Act, 735 ILCS 5/8-301, which “forbids a party to a suit by or against a firm to testify about any conversation with a dead agent of the firm, unless a living agent of the firm was also present.” Federal Rule of Evidence 601 states that “in a civil case, state law governs the witness’s competency regarding a claim or defense for which state law supplies the rule of decision.” The Seventh Circuit affirmed that Plata could testify that he had told Bittner that he intended to file a claim, but could not testify to Bittner’s response. The courts rejected the federal claims as time-barred and unsupported by evidence, noting that Plata was a difficult litigant, whose lawyer was allowed to withdraw after Plata refused to respond to discovery requests. View "Plata v. Eureka Locker, Inc." on Justia Law

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Employee stock options, when exercised, constitute compensation, on which the employer must remit taxes under the Railroad Retirement Tax Act. Beginning in 1996, the railway began including stock options in the compensation plans of some employees, taking the position that income from the exercise of those stock options was not a form of “money remuneration” that would be taxable to the railway under the Act, 26 U.S.C. 3231(e)(1), which defines “compensation” as “any form of money remuneration paid to an individual for services rendered as an employee.” The Act requires the railroad to pay an excise tax equal to a specified percentage of its employees’ wages, and to withhold a percentage of employee wages as their share of the tax. The railroad retirement tax rates are much higher than social security tax rates. The IRS, the district court, and the Seventh Circuit concluded that the exercise of the stock options was compensation. The equivalence of stock to cash is actually signaled in the statutory exceptions for qualified stock options and for other forms of noncash employee benefits. View "Grand Trunk Western Railroad Co. v. United States" on Justia Law

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School district was not required to accommodate an administrator, whose disability precluded being “in the vicinity of potentially unruly students.” Brown was an assistant principal for Milwaukee Public Schools until she badly injured her knee while restraining a student. When she returned to work following surgery, she and her doctor stated that she could not be “in the vicinity of potentially unruly students.” Since virtually all students are “potentially” unruly, Milwaukee Schools understood that limit to bar virtually all student contact. It repeatedly communicated that understanding to Brown as it tried to find her a new position. When Brown’s three-year leave of absence expired before a suitable position was found, she was fired. Brown sued under the Americans with Disabilities Act, 42 U.S.C. 12101, claiming that her disability had never prevented interaction with students and that Milwaukee Schools failed to accommodate her disability. The Seventh Circuit affirmed summary judgment for Milwaukee Schools. All but one of the other jobs Brown identified as reasonable accommodations would have required proximity to students. The lone exception would have been a promotion for which Brown was not the most qualified candidate. The Act did not require Milwaukee Schools to promote her as an accommodation. View "Brown v. Milwaukee Board of School Directors" on Justia Law

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The Seventh Circuit upheld Milwaukee's residency requirement for law enforcement and emergency personnel. Milwaukee’s corporate charter previously required all city employees to live within city limits. In 2013, the Wisconsin legislature prohibited local governments from imposing a residency requirement as a condition of employment, exempting requirements that law enforcement, fire, or emergency personnel reside within 15 miles of jurisdictional boundaries. Milwaukee announced its intent to enforce its original residency requirement, citing the Wisconsin Constitution’s home‐rule provision. The Wisconsin Supreme Court rejected that argument. The city amended its charter to require all law enforcement, fire, and emergency personnel to reside within 15 miles of city limits, giving affected employees six months to comply, with extensions available for hardship. In a suit under 42 U.S.C. 1983, the Seventh Circuit affirmed judgment on the pleadings for the city. Municipal employees do not have a fundamental right to be free from residency requirements, for purposes of substantive due process. Rejecting a procedural due process argument, the court stated that no vested right was impaired. The amended charter does not apply retroactively. View "Milwaukee Police Association v. City of Milwaukee" on Justia Law

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Hirschbach, a trucking company, offered Turner, an African-American, a job as a driver contingent on his completion of orientation and a drug test. Turner claims that throughout orientation, the evaluator stared at him and once whispered insults. An independent facility collected a urine sample. MedTox split the sample, tested one part, and stored the other. As required by Department of Transportation regulations, MedTox reported Turner's positive result to Hirschbach’s independent medical review officer. Hirschbach’s safety officer, Winegarden, told Turner he could request that the second half of his sample be tested by a different laboratory. Turner told Winegarden he wanted the split test. That test never took place; the reason is disputed. Turner left the orientation program. Hirschbach, as permitted by DOT regulations, reported Turner’s results to an industry consortium which can be seen by future employers, with Turner’s permission. Turner sued under the Civil Rights Act, 42 U.S.C. 2000– e(2)(a)(1), 42 U.S.C. 1981, and Illinois civil conspiracy law. The district court granted Hirschbach summary judgment. The Seventh Circuit affirmed. Turner did not respond to most of Hirschbach’s statements of undisputed facts. Giving Turner the benefit of conflicts in the evidence, the court found evidence that Winegarden cancelled the split test and acted based on racial animus but no evidence that Winegarden’s racial animus caused him not to be hired. There was no evidence that the MedTox test was unreliable or that the split test would have been negative. View "Turner v. Hirschbach Motor Lines" on Justia Law

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Hirmiz, a Travelodge Hotel front‐desk clerk, was fired after being caught on video sleeping in the lobby while a fight broke out among guests. He sued under the Americans with Disabilities Act, 42 U.S.C. 12101, claiming that his employer had failed to accommodate a condition caused by long‐term exposure to high levels of electromagnetic voltage at the hotel; had discriminated against him because of his disorder; and had fired him in retaliation for his having complained about the hotel’s voltage levels to OSHA. OSHA found the electromagnetic voltage levels to be normal. The Seventh Circuit affirmed summary judgment in favor of the hotel. Hirmiz failed to present evidence that he is disabled for purposes of the ADA, that he engaged in any protected activity before his termination, or that his OSHA complaint played any role in his termination. The court noted debate in the medical community over whether sensitivity to electromagnetic voltage is a physical disorder or a psychological one and that Hirmiz did not try to prove that he has a “record” of an impairment or that he was “regarded as having” one by his employer. Hirmiz neither sought an accommodation, nor filed his EEOC discrimination charge before he was fired. View "Hirmiz v. New Harrison Hotel Corp." on Justia Law

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Hively, who is openly lesbian, began teaching as a part‐time adjunct professor at Ivy Tech in 2000. In 2013, she filed a charge with the Equal Employment Opportunity Commission (EEOC) claiming that she had been discriminated against on the basis of sexual orientation, having been blocked from full-time employment “without just cause.” After exhausting EEOC procedural requirements, she filed suit, pro se, under the Civil Rights Act, 42 U.S.C. 2000e (Title VII). The district court dismissed. The Seventh Circuit initially affirmed, holding that Title VII did not apply to claims of sexual orientation discrimination. On rehearing, the court reversed, interpreting the Act’s prohibition on discrimination on the basis of sex as including sexual orientation; “the essence of the claim is that the plaintiff would not be suffering the adverse action had his or her sex” been different. The court noted “the backdrop of the Supreme Court’s decisions, not only in the field of employment discrimination, but also in the area of broader discrimination on the basis of sexual orientation.” View "Hively v. Ivy Tech Community College of Indiana" on Justia Law