4th Circuit: Equal Opportunity Harasser Defense is Limited

In a June 18 ruling in EEOC v. Fairbrook Medical Clinic, the 4th Circuit ruled that an “equal opportunity harasser” can create a hostile work environment if he or she uses gender-specific slurs.

Dr. Deborah Waechter said that while she was employed at Fairbrook Medical Center, owner Dr. John Kessel harassed her about her body, sex drive and decision to breastfeed. Waechter alleged that on several occasions she told Kessel these comments made her uncomfortable.

Fairbrook argued that Kessel was not a harasser but a crude person. The 4th Circuit found that although he made offensive remarks around both men and women, his gender-specific slurs indicated an intention to demean women. Fairbrook also argued that, because they deal with human bodies daily, medical employees have a casual response to anatomical jokes. The appeals court, however, determined that a medical work environment did not excuse otherwise harassing behavior.

6th Circuit: Insurers Win Credit Rating Battle

By a 4-3 decision, the Michigan Supreme Court ruled in Insurance Institute of Michigan v. Commissioner Financial Insurance Services to reverse Gov. Jennifer Granholm’s initiative to ban the use of credit ratings when setting home and auto insurance rates.

Granholm began pushing for a ban in May 2003 and, in 2004 the Michigan Office of Financial and Insurance Services (OFIS) adopted rules barring credit-based scoring in insurance rating. Insurers scored a victory, however, in April 2005 when a trial court found the OFIS rules “illegal, invalid and unenforceable.” The OFIS appealed and, in August 2008, the court of appeals issued three separate opinions on the case; two reversed the trial court’s decision and one supported it, each citing different reasons.

On July 8, the state Supreme Court ruled that the OFIS’ ban exceeded its authority. It found a clear correlation between the ratings and risk of loss and also cited evidence that prohibiting insurance scoring increases rates for the majority of residents and decreases the availability of coverage.

Chief Justice Marilyn Kelly dissented, calling credit reports unreliable tools for setting insurance rates.

8th Circuit: FMLA Invalidated if Leave is Rejected

An employee suffering depression who fails to disclose the extent of his condition and rejects an offer of Family and Medical Leave Act (FMLA) leave is not protected under the act if he is fired for excessive absence, the 8th Circuit ruled June 21 in Kobus v. The College of St. Scholastica, Inc.

In mid-2005, Michael Kobus, an employee at the College of St. Scholastica, was diagnosed with depression but did not inform his supervisor, Tim Orlowski. In November 2006, Orlowski put the college’s FMLA request form in Kobus’ mailbox after Kobus complained of “stress and anxiety.” Kobus said he didn’t need any leave and was soon issued a written warning for excessive absenteeism. In January 2007, he eventually requested “mental health leave” but again declined to apply for FMLA. He was offered two week’s severance upon his resignation, which he accepted.

Kobus then sued the college, alleging forced resignation and violation of FMLA, the Americans with Disabilities Act and the Minnesota Human Rights Act. The district court granted summary judgment to the college, dismissing all claims. Kobus appealed, but the 8th Circuit upheld the district’s ruling, stating Kobus “expressly rejected” FMLA leave. Furthermore, the court held that to establish a disability claim under the ADA, one must “inform the employer that an accommodation is needed.”

DC Circuit: EPA Orders Don’t Violate Due Process

The Environmental Protection Agency’s ability to order companies to clean up hazardous waste for which they are responsible is not unconstitutional, the D.C. Circuit ruled on June 29 in General Electric v. Jackson. In the latest lawsuit in a decade-long legal battle, General Electric (GE) claimed that the EPA’s unilateral administrative orders (UAOs) violate companies’ Fifth Amendment right to due process because they are issued without a hearing before a neutral decision maker.

The court disagreed and affirmed the district court’s grant of summary judgment to the EPA.

Judge David Tatel wrote in the unanimous opinion that the law “satisfies due process because the UAO recipients may obtain a pre-deprivation hearing by refusing to comply and forcing the EPA to sue in federal court.”

GE countered that due process was nonetheless violated because by issuing a UAO, the EPA can immediately inflict irreparable damage to a company’s brand, causing a depreciation of its stock price and an increased cost of financing. The court ruled, however, that these injuries were the result of market reactions to a UAO, not of the EPA’s issuance of one.