Labor & Employment Law Daily Pressuring employee to sign arbitration agreement after EEOC charge may be ADA interference
Monday, June 4, 2018

Pressuring employee to sign arbitration agreement after EEOC charge may be ADA interference

By Lorene D. Park, J.D.

In the third of a series of lawsuits concerning a Neiman Marcus employee’s claims that the luxury retailer failed to accommodate his disability, retaliated against him for filing EEOC charges, and interfered with his exercise of ADA rights by forcing him to choose between signing an arbitration agreement or losing his job and continuing to pursue his discrimination claims in the forum of his choice, a federal district court in California, on remand from the Ninth Circuit, found a triable issue on whether the employer’s conduct constituted ADA interference in violation of Section 503(b). Summary judgment was denied (Bayer v. Neiman Marcus Group, Inc., May 30, 2018, James, M.).

The employee worked in the cosmetics department at Neiman Marcus. He took FMLA leave due to a respiratory condition, and upon return asked that his five-day schedule be reduced to four days per his doctor’s restrictions. The employer refused and he filed an EEOC charge in June 2007, the first of three charges he would file during his employment.

Alleged ADA interference. Around that same time, Neiman Marcus notified employees of its mandatory dispute resolution program. It required employees to sign an arbitration agreement as a condition of continued employment, but the employee refused. In July 2007 he filed a second EEOC charge claiming the retailer was unlawfully interfering with his ADA rights by requiring him to agree to the arbitration agreement to continue employment. He testified that two managers told him that if he did not sign, he would be terminated. He also claimed HR personnel asked him to sign the acknowledgement form “a couple more times.” He believed these were coercive attempts by the employer to get him to sign, though the employer disputed his version of events. Despite his refusal to sign, he worked at Neiman Marcus until January 2009.

Three lawsuits. The employee filed suit over the first charge and the parties settled. While the EEOC was still investigating his second charge, he filed a third charge and another lawsuit, this time alleging his termination was retaliatory. The employer moved to compel arbitration of the retaliation claim, which was denied, and the employer appealed.

Meanwhile, in July 2013, six years after it began investigating the second charge, the EEOC issued a right-to-sue letter and the employee filed this third lawsuit alleging that Neiman Marcus’s insistence in June and July 2007 that he choose between quitting his job and being bound by its arbitration agreement constituted ADA interference in violation of Section 503(b). When, in July 2014, the Ninth Circuit affirmed the lower court’s ruling in his second suit that the arbitration agreement was not binding on the employee, the district court here dismissed this third lawsuit as moot, finding no live controversy for which effective relief could be granted.

“Complete justice” may require nominal damages. Reversing in June 2017, the Ninth Circuit found that the “unique circumstances of this case illustrate that complete justice may require a district court to award nominal damages as equitable relief.” The appeals court explained that where an employee alleges an employer interfered with his ADA rights by imposing a mandatory arbitration agreement, dismissing that suit “merely because he or she successfully resisted the employer’s attempt to enforce that agreement could only compound whatever dignitary harm the employee suffered due to the employer’s alleged unlawful conduct.”

Now once again before the district court, the parties disputed the effect of the Ninth Circuit’s opinion. In the court’s view, the remand for further proceedings to achieve “complete justice” required it to evaluate the employee’s arguments that Neiman Marcus violated his ADA rights by forcing him to choose between his job or the exercise of his statutory rights to pursue ADA claims in court, with a right to a jury trial and appellate review.

Proving ADA interference. Under Section 503(b), 42 U.S.C. § 12203(b), it is unlawful to “coerce, intimidate, threaten, or interfere with any individual in the exercise or enjoyment of, or on account of his or her having exercised or enjoyed, or on account of his or her having aided or encouraged any other individual in the exercise or enjoyment of, any right granted or protected” by the ADA. Neither the Supreme Court nor the Ninth Circuit has outlined a legal test for a Section 503(b) interference claim, so the court had the parties brief: 1) whether the employee had to show the employer’s efforts to have him sign the arbitration agreement were causally linked to his protected activity, and (2) whether there were triable issues on that causal link.

Considering the parties’ briefing and decisions from other circuits on the causality requirement, the court concluded that to state a claim for interference with his ADA rights, the employee had to show a nexus between the employer’s conduct surrounding the arbitration agreement and his assertion or enjoyment of his ADA rights. He could do so either by proof of discriminatory intent or proof of discriminatory effect (disparate impact).

Focus is on employer’s conduct, not on agreement. Here, while Neiman Marcus’ brief focused on the lack of substantive unconscionability in the arbitration agreement, that approach ignored the crucial fact that the employee never agreed to be bound by the agreement. Thus, the issue was not enforceability of the agreement but was instead whether the employer’s conduct constituted coercion, intimidation, threats, or interference under Section 503(b).

Triable issues. It was undisputed that the employee engaged in protected conduct by requesting accommodations and filing EEOC charges and lawsuits. It was also undisputed Neiman Marcus deployed its ADR program after he requested accommodations and filed EEOC charges, and that it tried to have him acknowledge the arbitration agreement, taking the position that the only way employees could opt out was by resigning. In addition, the court found triable issues on whether managers threatened the employee that he would be fired if he didn’t agree and whether he was pressured to sign after informing HR in writing that he would not do so, in part, because he worried it would prevent him from asserting claims based on his pending EEOC charges. Based on all of this, a reasonable jury could find Neiman Marcus interfered with his ADA rights, in violation of Section 503(b), by forcing him to choose between his job or abandoning the litigation of his EEOC discrimination charge in a forum of his choosing, concluded the court.

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