Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

After complaints about his professionalism, Indiana University Hospital required Dr. Hamdan, a U.S. citizen of Palestinian descent, to participate in a peer-review process, which resulted in disciplinary letters. Hamdan successfully appealed. The hospital ultimately voided the letters. Nonetheless, Hamdan resigned and relinquished his hospital privileges. Hamdan sued the hospital for discriminating against him based on race. Hamdan was not a hospital employee and could not sue under Title VII, so he sued under 42 U.S.C. 1981, part of the Civil Rights Act of 1866, intended to protect the ability of newly-freed slaves to enter and enforce contracts. Hamdan alleged discrimination in his contractual relationship with the hospital. The Seventh Circuit affirmed a verdict for the hospital, rejecting an argument that the district court erred in allowing the hospital to ask Hamdan impeachment questions relating to his prior work at other hospitals. The court noted Hamdan’s testimony that his reputation was “untarnished” before he received the disciplinary letters. The Seventh Circuit also rejected an argument that the court erred in permitting the hospital to try to impeach him with questions about matters that were confidential under the peer-review statutes of Indiana, Louisiana, and Michigan. Even if the state laws applied, the judge did not abuse his discretion in allowing impeachment questions about incident reports. View "Hamdan v. Indiana University Health North Hospital, Inc." on Justia Law

Armstrong, a BNSF train conductor, was not wearing the proper uniform for the third time in two weeks. Armstrong’s supervisor, Motley, noticed and called him into the “Glasshouse” office. Nelson left the Glasshouse as Armstrong arrived. Armstrong claims that Motley began yelling and that he tried to leave because he felt threatened; Motley pushed the door shut, striking Armstrong’s knee and foot. This is not seen on a video recording. Nelson testified that, outside the Glasshouse, he could hear Armstrong curse at Motley. The video showed Motley standing away from the door as Armstrong exited. Motley, who claims he did not close the door on Armstrong, called his supervisor, Johanson. After speaking to Armstrong, Johanson took Armstrong to an on-site clinic, where he was provided a soft walking shoe. Human Resources took statements and secured the video. BNSF issued a notice of investigation for insubordination, dishonesty, and misrepresentation. A hearing officer concluded that Armstrong had lied. BNSF terminated Armstrong’s employment. Armstrong sued, alleging that BNSF dismissed him for reporting a work‐related injury, (Federal Rail Safety Act, 49 U.S.C. 20109(a)(4)). The Seventh Circuit affirmed a jury verdict for BNSF, upholding a jury instruction that “Defendant cannot be held liable under the FRSA if you conclude that Defendant terminated Plainiff’s employment based on its honestly held belief that Plaintiff did not engage in protected activity under the FRSA in good faith.” While a FRSA plaintiff need not show that retaliation was the sole motivating factor in the adverse decision, the statute requires a showing that retaliation was a motivating factor. View "Armstrong v. BNSF Railway Co." on Justia Law

Verfuerth, the founder and former CEO of Orion, had disputes with Orion’s board of directors, involving outside counsel's billing practices, potential patent infringement, potential conflicts of interests involving a board member, violations of internal company policy, such as consumption of alcohol at an informal meeting, the board’s handling of a defamation suit by a former employee, and the fact that the chairman of Orion’s audit committee allowed his CPA license to expire. The board ignored his advice to disclose those matters to stockholders. Orion removed Verfuerth as CEO, citing high rates of management turnover. The board conditionally offered Verfuerth emeritus status. Verfeurth declined. The parties were unable to negotiate his severance package. The board fired him for cause, citing misappropriation of company funds in connection with his divorce, disparagement of the new CEO, and attempts to form a dissident shareholder group. Verfuerth filed suit, claiming that his complaints to the board were “whistleblowing” and that, by firing him, Orion violated the Sarbanes‐Oxley Act, 18 U.S.C. 1514A(a), and the Dodd‐Frank Act, 15 U.S.C. 78u‐6.e. The Seventh Circuit affirmed summary judgment for Orion. An executive who advises board members to disclose a fact that the board already knows about has not “provide[d] information” about fraud.. Nothing in any federal statute prevents a company from firing its executives over differences of opinion. View "Verfuerth v. Orion Energy Systems, Inc." on Justia Law

Carle’s medical residency program, which has an employment component, was governed by annual contracts. Residents were required to complete rotations before advancing and to pass the Step 3 U.S. Medical Licensing Examination before entering the third year. A third Step 3 failure results in termination. Carle residents cannot graduate unless they complete licensing requirements. Illinois medical students with five failures in the Step tests are not eligible for licensure without significant remediation. Rodrigo failed his first attempts at Step 1 and Step 2. He was required to repeat four rotations. His supervisors thought a neuropsychological examination might identify issues affecting his performance. Rodrigo never underwent recommended testing. Carle extended Rodrigo’s first and second years to allow him to repeat rotations and the Step 3 test, which he failed a second time. Rodrigo then informed Carle that he had a sleep disorder. Although Rodrigo did not request an accommodation, the director suggested that he take time off. Rodrigo did so, but failed a third time. Rodrigo asked to be promoted so that he could attempt to pass Step 3 in California. After termination of his residency, Rodrigo sued under the Americans With Disabilities Act. 42 U.S.C. 1210. The Seventh Circuit affirmed summary judgment in favor of Carle, finding that Rodrigo was not a “qualified individual.” Passing Step 3 is an “essential function.” Rodrigo presented no evidence of a causal connection between his protected activity (seeking an accommodation) and his termination. View "Rodrigo v. Carle Foundation Hospital" on Justia Law

Ennin, a naturalized American citizen born in Ghana, began working for CNH in 2012 as a supervisor of hourly workers--the only black supervisor at the Lebanon, Indiana facility. Ennin received a written warning for misconduct in 2014, based on a verbal altercation with another supervisor about a radio, which was witnessed by hourly employees. Months later, Ennin’s car broke down on his way to work. Ennin notified his supervisor that he would be late, then called his hourly employee, Chavez, who had clocked in. Chavez left work to help Ennin. Ennin permitted Chavez to follow him through the supervisor’s entrance, in violation of company policy and neglected to adjust Chavez’s time sheet to reflect that Chavez had been absent for 46 minutes. After meeting with supervisors about the incident, Ennin went home for medical reasons. Ennin did not return to work but scheduled a planned hemorrhoidectomy and received leave from CNH’s third‐party administrator, Prudential, which approved his short‐term disability benefits. CNH sent a letter, informing Ennin that his employment had been terminated before he took medical leave Ennin sued, arguing that he was fired because of his race, national origin, disability, and decision to take FMLA leave. The court granted CNH summary judgment. The Seventh Circuit affirmed. Ennin waived the admissibility of evidence that CNH terminated him knowing that Ennin was disabled and on FMLA leave. No evidence indicated that CNH’s stated reasons for termination were pretextual. View "Ennin v. CNH Industrial America LLC" on Justia Law

Plaintiffs brought a collective lawsuit against Jimmy John’s on behalf of all assistant store managers nationwide for violations of the Fair Labor Standards Act (FLSA). Jimmy John’s owns just 2% of their stores; the rest are operated by franchisees. Jimmy John’s claimed that it did not maintain employment records for franchisee-employees and did not have contact information for the vast majority of putative collective members. The parties ultimately agreed that Jimmy John’s would send a letter to the non‐party franchisees asking for contact information for their assistant managers. Eventually, about 600 franchisee and 60 corporate employees joined the suit. The court bifurcated discovery, with the first phase to focus on the joint-employer issue. Two years into the litigation, plaintiffs filed separate lawsuits against their franchisee employers in district courts nationwide, asserting the same claims, arguing that the FLSA statute of limitations was running continuously on those claims. The district court subsequently enjoined plaintiffs from pursuing their lawsuits against the franchisee employers until their claims against Jimmy John’s were resolved. The Seventh Circuit reversed, rejecting arguments that the injunction was authorized under the court’s inherent equitable powers or the All Writs Act because it was necessary to prevent duplicative litigation, avoid inconsistent rulings, and protect the court’s pretrial orders regarding discovery and notice procedures. View "Lucas v. Jimmy John's Enterprises, LLC" on Justia Law

The Seventh Circuit affirmed the district court's grant of summary judgment for Morgan Stanely in a civil rights action. Plaintiff alleged that she was terminated on the basis of her sex and that Morgan Stanley allowed her coworkers to create a hostile work environment. The court held that plaintiff was not entitled to a trial on her discrimination claim because she presented no evidence that her sex influenced the decision to terminate her and she presented no evidence of discrimination based on the cat's paw theory. The court also held that plaintiff was not entitled to a trial on her hostile work environment claim because the statute of limitations restricted the allegations that the court could consider as part of her claim and the remaining conduct did not create a hostile work environment. View "Milligan-Grimstad v. Morgan Stanley" on Justia Law

Indiana law previously provided that, when school districts needed to reduce their teaching staffs, tenured teachers that were qualified for an available position had a right to be retained over non-tenured teachers. A 2012 amendment eliminated that right and orders school districts to base layoff choices on performance reviews without regard for tenure status. Madison Consolidated Schools relied on the new law to lay off Elliott, a teacher who earned tenure 14 years before the new law took effect, while it retained non-tenured teachers in positions for which Elliott was qualified. Elliott, who had been elected as president of his union, sued, claiming that the amendment violated the Contract Clause when applied to him. The Seventh Circuit affirmed summary judgment in Elliott’s favor. The statute, not the annual contracts, granted Elliott his contractual tenure rights, which became enforceable the year Elliott earned tenure. A decrease in job security necessarily impairs his rights under that contract. The change substantially disrupted teachers’ important and reasonable reliance interests. Improving teacher quality and public-education outcomes are important public interests of the highest order but even important goals and good intentions do not justify this substantial impairment of the tenure contract for already-tenured teachers. View "Elliott v. Board of School Trustees of Madison Consolidated Schools" on Justia Law

Marybeth Lauderdale served as acting superintendent and superintendent for the Illinois School for the Deaf (ISD), 2006-2010. During her last year as superintendent, she was paid a total of $88,048. Reggie Clinton was superintendent for the School for the Visually Impaired (ISVI), 1998-2003 and again, 2008-2010. When Clinton returned to ISVI in 2008, he received a 1.9% salary increase from his most recent salary at the Arcola School District. He was paid, at the end of his tenure at ISVI, $121,116 per year. After Clinton resigned, the Illinois Department of Human Services, which oversees ISD and ISVI, created one combined superintendent role to cover both schools and offered Lauderdale the role. Lauderdale wanted to be paid as much or more than Clinton had been paid but eventually accepted a salary of $106,500. Lauderdale sued, alleging sex discrimination under the Equal Pay Act, Title VII of the Civil Rights Act of 1964, and 42 U.S.C. 1983. The district court concluded no reasonable juror could find the pay discrepancy was a product of sex discrimination and that the discrepancy resulted from budget concerns and from the application of the Illinois Pay Plan. The Seventh Circuit affirmed, agreeing that the record indicated that the pay discrepancy was not based on sex. View "Lauderdale v. Illinois Department of Human Services" on Justia Law

The Unions represent engineers employed by the Railroad, which is an amalgamation of several carriers. As a result, the Railroad is a party to multiple collective bargaining Agreements (CBAs). The Railroad modified disciplinary rules; the new policy was set forth in “MAPS," and supplanted UPGRADE. The Railroad had previously made changes to UPGRADE over the Union’s objections. When it shifted from UPGRADE to MAPS it did not consult the Union. The Railway Labor Act, 45 U.S.C. 151–88 allows employers to change “rates of pay, rules, or working conditions of ... employees” in any way permitted by an existing CBA or by going through the bargaining and negotiation procedure prescribed in section 156. MAPS falls within the scope of “rules” and “working conditions.” The Railroad argued that the change was permitted under the CBA. The Seventh Circuit affirmed the dismissal of the Union’s suit. If a disagreement arises over the formation or amendment of a CBA, it is considered a “major” dispute under the Act, and it must be decided by a court. If it relates only to the interpretation or application of an existing agreement, it is labeled “minor” and must go to arbitration. In this case, there is at least a non-frivolous argument that interpretation of the agreement between the parties, not change, is at stake. View "Brotherhood of Locomotive Engineers and Trainmen v. Union Pacific Railroad Co." on Justia Law