Supreme Court Rules on Title VII’s Administrative Exhaustion Requirement
The U.S. Supreme Court recently issued a ruling that impacts an employer’s ability to challenge a Title VII lawsuit on the grounds that the plaintiff did not exhaust his or her administrative remedies. The main takeaway for employers: if a defendant in a Title VII lawsuit does not assert in a timely manner the affirmative defense that the plaintiff failed to exhaust administrative remedies, the right to raise that defense will be waived.
On June 3, 2019, the U.S. Supreme Court unanimously ruled in Fort Bend County v. Davis that Title VII’s requirement that a plaintiff must first file a claim with the federal Equal Employment Opportunity Commission (“EEOC”) before filing a lawsuit is a “claim-processing” rule, not a “jurisdictional” prerequisite. The ruling clarified a technical procedural aspect of Title VII, but it has a significant impact for employers defending against discrimination claims.
Title VII of the Civil Rights Act of 1964 is the basis for most of the federal employment anti-discrimination laws. Title VII contains an “administrative exhaustion requirement” for potential plaintiffs. Essentially, aggrieved employees must first try to resolve their claims through an administrative body—i.e., file a charge with the EEOC—before the employee may file a discrimination lawsuit in federal court.
In the underlying case before the Supreme Court, Lois Davis, an employee of Fort Bend County, filed an EEOC charge against her employer alleging sexual harassment and retaliation for reporting the harassment. Later, she tried to supplement her EEOC charge by handwriting “religion” on her EEOC intake form, but she did not amend the formal EEOC charge document itself.
Davis later filed a lawsuit in federal district court alleging retaliation for reporting sexual harassment and religion-based discrimination. The district granted summary judgment for the County on both claims. The Fifth Circuit Court of Appeals affirmed the ruling on Davis’ retaliation claim, but reversed on her religious discrimination claim. Back at the district court, the County argued for the first time that Davis’ religious discrimination claim should be dismissed because had not formally amended her EEOC charge document to include her that claim, and thus failed to exhaust administrative remedies. The district court agreed and dismissed Davis’ claim on the grounds that administrative exhaustion is a “jurisdictional” prerequisite, meaning that the defense can be raised at any point.
Davis appealed to the Fifth Circuit, which reversed the district court’s decision. The Fifth Circuit held that administrative exhaustion is not a “jurisdictional prerequisite,” but a “prudential prerequisite” that must be challenged as an affirmative defense, and because the County waited too long to raise that defense and thus waived its right to do so. The County appealed to U.S. Supreme Court, which agreed to hear the case.
Prior to the Supreme Court’s ruling in Davis, there was a split among the federal courts of appeals. Some courts, including the Tenth Circuit (which includes Colorado), had held that Title VII’s administrative exhaustion requirement was a “jurisdictional” rule. Meaning, if a plaintiff fails to file a charge with the EEOC before filing a lawsuit, the federal courts have no jurisdictional authority to adjudicate the case, and a defendant may raise the failure-to-exhaust defense at any point in the litigation. To oversimplify: no EEOC charge, no lawsuit, and no time limit to raise the defense.
Other circuit courts had ruled that Title VII’s administrative exhaustion requirement was a mandatory non-jurisdictional “claim-processing” rule. Basically, a potential plaintiff must file a charge with the EEOC before filing a lawsuit, but if he or she doesn’t, the lawsuit may still proceed through the courts unless the employer raises plaintiff’s failure to file an EEOC charge as an affirmative defense, at which point the lawsuit could be dismissed; however, the employer must raise the issue in a timely manner or it waives its right to assert the argument. To oversimplify again: no EEOC charge, no problem… unless the employer raises the defense in a timely fashion.
In Davis, the Supreme Court said it is Congress’ job to draft laws and, in doing so, to determine whether a requirement is “jurisdictional.” If Congress does not treat a requirement as jurisdictional, then it should not be considered as such. The Court then looked at the language of Title VII and noted that it does not clearly state that the administrative exhaustion requirement is jurisdictional. Therefore, the Court held, “Title VII’s charge-filing requirement is a processing rule, albeit a mandatory one, not a jurisdictional prescription delineating the adjudicatory authority of courts.”
The Court’s ruling in Davis settles the circuit split and confirms that a Title VII plaintiff’s failure to exhaust administrative remedies is not an absolute bar to suit, and that a defendant must plead the failure-to-exhaust defense in a timely manner or lose its right to do so.
This is a departure from previous Tenth Circuit and federal Colorado case law. Any employer that does not already plead failure-to-exhaust as an affirmative defense early in litigation should make it a regular practice.
The case is Fort Bend County v. Davis, 587 U.S. _____ (2019). The Supreme Court’s full opinion available here.
New Colorado Employment Laws
Following the close of the 2019 legislative session, Governor Jared Polis signed several bills into law that will affect Colorado employers.
Equal Pay for Equal Work
The Equal Pay for Equal Work Act creates several obligations and prohibitions for Colorado employers. First and foremost, the Act requires employers to pay the same wage to employees who do the same work regardless of the employee’s sex.
The official text of the Act states:
An employer shall not discriminate between employees on the basis of sex, or on the basis of sex in combination with another protected status . . . , by paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work, regardless of job title . . . .
Whether job duties are considered “substantially similar work” is based on a composite of skill, effort (which may include consideration of shift work), and responsibility.
The Act carves out several exceptions. Pay differentials are allowed only if the employer shows that the wage difference is based on at least one of the following: a seniority system; a merit system; a system that measures earnings by quantity or quality of production; the geographic location where the work is performed; education, training, or experience; or travel.
The Act also imposes several other prohibitions and requirements on employers.
An employer may not:
- Rely on an employee’s prior wage history to justify a pay disparity
- Rely on a person’s prior wage rate to determine their wage rate
- Ask about or seek a prospective employee’s wage rate history
- Discriminate or retaliate against a prospective employee for failing to disclose their wage rate history
- Discharge or retaliate against an employee for asserting their rights under the Act or for doing so on behalf of another employee
- Prohibit or attempt to discourage an employee from discussing their wage rate
An employer must:
- Pay the same wage to employees who do the same work regardless of the employee’s sex
- Announce to all employees any employment advancement opportunities and job openings and the pay range for the openings
The Equal Pay for Equal Work Act applies to all employers with employees in Colorado. The law takes effect January 1, 2021, so companies have time to conduct pay audits and review their hiring and compensation practices. The full text of the Act is available here.
Criminal Penalties for Failing to Pay Wages
Colorado employers could face criminal penalties for certain wage and hour violations under this new law. Current law states that an employer who willfully refuses to pay a wage claim or falsely denies the amount or validity of a wage claim is guilty of misdemeanor “wage theft.” The new law redefines “wage theft” simply as “theft,” which is a felony if the amount is more than $2,000.
The current law contains an exemption from the criminal penalties for employers whose inability to pay wages is due to Chapter 7 bankruptcy or other court action resulting in the employer having limited control over its assets. The new law removes this exemption.
The new law applies to all Colorado “employees” and “employers,” and defines “employee” as any person who performs labor or services for the benefit of an employer. The definition of “employer” is the same as that in the federal Fair Labor Standards Act (29 U.S. Code § 203), and specifically includes foreign labor contractors and migratory field labor contractors or crew leaders.
The new law takes effect at the beginning of next year: January 1, 2020. The law is intended to combat victims of human and labor trafficking, who are particularly susceptible to wage theft, but it applies equally to all Colorado employees and employers (that meet the statutory definitions).
The full text of the law is available here.
Criminal History Inquiries
A new “ban the box” law will impose restrictions on inquiring about a job applicant’s criminal history.
Under the law, employers may not:
- State in an advertisement or an employment application that a person with a criminal history may not apply for a position
- Inquire about an applicant’s criminal history on an initial application form
The law does not prohibit an employer from inquiring about the applicant’s criminal history later in the application or hiring process, or from obtaining a job applicant’s publicly available criminal background report at any time.
An employer is exempt from the restrictions in three circumstances: (1) when the law prohibits a person who has a particular criminal history from being employed in a particular job; (2) the employer is participating in a program to encourage employment of people with criminal histories; or (3) the employer is required by law to conduct a criminal history record check for the particular position.
The law will apply to all Colorado employers. For employers with 11 or more employees, the law takes effect soon, September 1, 2019. For all other employers regardless of size, the law takes effect September 1, 2021.
Although smaller employers have longer to comply, larger employers should review their job advertisements and application forms to make sure they comply by the September 1 effective date.
The full text of the law is available here.
Local Government Minimum Wages
This new law will allow each city and county in Colorado to set its own local minimum wage higher than the statewide rate. Current law prohibits local governments from setting their own minimum wage laws.
Local governments can begin setting their own minimum wage rates starting January 1, 2020.
The full text of the law is available here.
Wage Garnishment Reform
This law reduces the amount of an employee’s wages that are subject to garnishment.
Under the new law, the amount of an individual’s disposable earnings subject to garnishment is the lesser of either: (a) 20% of the individual’s disposable earnings for a week, or (b) the amount by which an individual’s disposable earnings for a week exceed 40 times the state or federal minimum wage. The current law sets those rates at 25% of disposable earnings or 30 times the federal minimum wage.
Currently, if an individual provides court-ordered health insurance for a child, the cost of that insurance is deducted from the individual’s disposable earnings subject to garnishment. The new law states that the cost of any health insurance that is provided by the individual’s employer and voluntarily withheld from the individual’s earnings may be deducted from their disposable earnings subject to garnishment.
The new law will create an exemption that permits individuals to prove that the amount of their pay subject to garnishment should be further reduced or eliminated altogether if they can establish that such reductions are necessary to support the individual or the individual’s family. It will also require clearer and more timely notice to an individual whose wages are being garnished and gives the individual more time after receiving the notice before garnishment starts.
The new law will apply to all writs of garnishment issued on or after January 1, 2020, regardless of the date of the judgment that forms the basis of the writ of garnishment.
The full text of the law is available here.
Tip-Sharing Notices
This bill signed by Governor Polis changes the requirements for posting notices about employee tip-sharing. Current law allows an employer to require employees to share gratuities if the employer posts a sign in a conspicuous place. Under the new law, the employer must notify each patron in writing, such as on the menu, table, or receipt. The law takes effect on August 2, 2019.
The full text of the law is available here.