Jury Awards $8 Million to Fired DOE Contractor Employee

In 2015, Julie Atwood, a senior project manager with DOE (Department of Energy) contractor MSA (Mission Support Alliance LLC) filed a lawsuit against MSA alleging retaliation, discrimination, and wrongful termination. Also named in the suit was Steve Young, MSA's Vice President of Portfolio Management (also the mayor of a local city) and its COO (Chief Operations Officer). At the time of filing, MSA was a joint venture of Lockheed, Centera, and Jacobs Engineering. Lockheed has since sold its interest in the joint venture to Leidos.

In 2010, MSA hired Ms. Atwood as Project Manager of Environmental Regulatory and Waste Management. At that time, she had nearly 30 years in the field of regulatory compliance, waste management and environmental affairs. Three years later, she was terminated, despite having had excellent performance evaluations.

In her lawsuit, Ms. Atwood alleged that in September 2013, Mr. Young mistakenly believed that she was responsible for an anonymous report to MSA alleging that he was creating a hostile work environment. Before MSA began its own internal investigation of the anonymous report, the COO reported to DOE (Department of Energy) that it was investigating Ms. Atwood for timecard fraud (The investigation eventually cleared Ms. Atwood of any timecard fraud). Then, MSA forced Ms Atwood to sign a resignation letter on the threat that she would lose her benefits. After signing the resignation letter, she was escorted out of the building while co-workers looked on.

The matter finally went to trial last September and the Jury awarded Ms. Atwood damages in the amount of $8.1 million ($2.1 million in lost wages and $5 million in emotional harm damages). The Jury also found that Mr. Young aided and abetted in MSA's wrongful actions. The Jury found that she was fired in retaliation for statements made to investigators and that her gender was a substantial factor in her termination.

Earlier this week, a judge refused to reduce the $8.1 million verdict against MSA and Young and also denied them a new trial. The Judge noted that Ms. Atwood had endured mistreatment due to the corporate culture of MSA before her termination. Evidence was also presented of long-lasting emotional harm and physical side effects, which the jury evidently believed, according to the Judge. The evidence indicates that her mental suffering went far beyond 'simple disappointment' from losing her job.

Concerning gender discrimination, the Judge found that it did not have to be the only, or even the main motivation in the decision to fire Ms. Atwood. "There rarely is direct evidence in the form of a smoking gun to prove gender discrimination. Many cases are frequently based on circumstantial evidence. The evidence of the corporate culture at the contractor and some alleged off-color gender-based comments by Mr. Young, provided sufficient circumstantial evidence of gender discrimination to allow the issue to be submitted to the Jury.

New Regulation Preventing Contractors From Retaliating Against Employees Who Disclose their Compensation Level

Last week the FAR (Federal Acquisition Regulation) Councils published a spate of new regulations. We discussed one of those last Friday (see Prohibition on Contracting with Delinquent Taxpayers and Felons) and will continue our coverage this week on several that directly affect Government contractors (and prospective contractors). Today we'll discuss the new prohibition on retaliating against employees who disclose or discuss compensation matters. Now you might think that this is old news and it is, in a way. In 2014, the President issued an executive order (E.O.) called "Non-Retaliation for Disclosure of Compensation Information". That was followed in September 2015 with the Department of Labor's implementing rule entitled "Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions". So, why is it necessary to add more rules; rules upon rules? The FAR Council's rationalize it this way:

Issuance of an interim rule allows for the requirements to be included in solicitations and contract immediately and puts contractors on clear notice of legal responsibilities that are already in effect. If the FAR rule is not issued ... this new requirement will not be incorporated into contracts, and contractors will be put at unnecessary risk of non-compliance with the E.O and labor rule. More importantly, this may unnecessarily delay action by contractors in providing the important protections for contract employees that the E.O. and labor rule are designed to provide.

The new rule prohibits contractors (and subcontractors) from discharging, or in any other manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.

This prohibition against discrimination does not apply to instances in which an employee who has access to compensation information of other employees or applicants as part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

So now, employees may chatter freely about the compensation levels without fear of reprisal. A quick internet search didn't show any cases of reprisals against employees who disclosed their compensation information but, by golly, we now have a regulation in place - just in case it ever happens.

Department of Labor Publishes Updated Sex Discrimination Rules

The Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) issued final rules yesterday updating sex discrimination regulations for the first time in over 40 years. The new rules are intended to reflect the current state of the law and the "reality of a modern and diverse workforce". Updated rules on workplace sex discrimination will mean clarity for federal contractors and subcontractors (we'll see about the "clarity" claim in time) and equal opportunities for both men and women applying for jobs with or already working for, these employers.

The final rules, which implements the President's Executive Order 11246 updates OFCCP's sex discrimination regulations to make them consistent with current law. It makes explicit the protections against compensation discrimination, sexually hostile work environments, discrimination based on pregnancy, childbirth or related medical conditions; and discrimination based on unlawful sex stereotypes, gender identity and transgender status. The new regulations also promote fair pay practices.

The final rules are divided into eight sections and together, total nearly 200 pages. Not everyone is going to want to slog through 200 pages so it will most likely fall to the HR Departments to figure out implementation strategy. The first section covers the rule's purpose.

The second section sets forth the general prohibition of sex discrimination, including discrimination on the bases of pregnancy, childbirth, related medical conditions, gender identity, transgender status, and sex stereotypes. It also describes employment practices that may unlawfully treat men and women disparately. Finally, it describes employment practices that are unlawful if they have a disparate impact on the basis of sex and are not job-related and consistent with business necessity.

The third section covers circumstances in which disparate treatment on the basis of sex may be lawful - i.e. those instances when being a particular sex in a bona fide occupational qualification reasonably necessary to the normal operation of the contractor's particular business or enterprise. Presumably sperm banks would fall withing this category.

The fourth section covers sex-based discrimination in compensation and provides illustrative examples of unlawful conduct.

The fifth section deals with discrimination on the basis of pregnancy, childbirth, and related medical conditions. This section also discusses application of these principles to the provision of workplace accommodations and leave.

The sixth section sets out the general principle that sex discrimination in the provision of fringe benefits is unlawful, with pertinent examples, and clarifies that the increased cost of providing a fringe benefit to members  of one sex is not a defense to a contractor's failure to provide benefits equally to members of both sexes.

The seventh section covers employment decisions on the basis of sex stereotypes and discusses four types of gender norms that may from the basis of a sex discrimination claim under the Executive Order; dress, appearance, and/or behavior; gender identity, jobs, sectors, or industries within which it is considered appropriate for women or men to work; and care-giving roles.

Finally, the eighth section concerns sexual harassment, including hostile work environments based on sex, articulates the legal standard for sexual harassment based on the EEOC's guidelines and relevant case law and explains that sexual harassment includes harassment based on gender identity; harassment based on pregnancy, childbirth, or related medical conditions; and harassment that is not sexual in nature but that is because of sex or sex-based stereotypes.

To all contractors and subcontractors out there that must implement these new regulations, good luck.

Navy Award Was Not Biased

It is very difficult to win a discrimination case of any kind in Federal Court. The number of discrimination cases have steadily declined to less than half the number there were in 2000. In 2006, only 15 percent of cases were settled in favor of plaintiffs. In fact, the odds of winning a discrimination case have many attorneys unwilling to even try. Many attorneys will no longer take individual discrimination cases because of the high likelihood of losing. Of course, the low probability of winning could be a reflection of out-of-court settlements. Employers who are charged with discrimination often settle out of court if there is any substance to the claim. Employers are not stupid. Or perhaps, employers settle out of court because they've calculated that settling is cheaper than the cost to litigate - even if they think the discrimination case has no merit.

The GAO (Comptroller General) recently published a bid protest case involving discrimination. The unsuccessful bidder for a Navy contract involving architectural-engineering services challenged the Navy's evaluation of its experience and technical competence and alleged that the Navy's evaluation reflected gender bias against women architects and engineers. The protestor is an economically disadvantaged women-owned small business (EDWOSB).

The GAO denied the request because the record demonstrated that the Navy reasonably evaluated the protester's experience and technical competence consistent with the solicitation's selection criteria and the record did not support the protester's allegation of gender bias.

The Navy evaluation of the protester's qualifications determined that it did not meet the experience and technical competence selection criterion. Three of the projects submitted to support experience were not relevant, involving only construction inspection services. The Navy found that the protester presented a high risk to the Government because it submitted only two relevant projects. The protester was asked to address this lack of experience during an interview. After it and other bidders were interviewed, the Navy ranked the three bidders among which the protester was last. The protester had the least amount of relevant projects among the three firms.

The Comptroller General (CG) reviewed the record and essentially determined that the Navy did everything correct. The CG reported "Quite simply, the contemporaneous record here supports the Navy's conclusion that (the protester's) limited experience and technical competence presented a high risk."

The protester alleged bias against the firm because it was woman-owned. In that regard, the protester submitted a number of reports and academic papers supporting the protester's arguments that women are discriminated in scientific fields such as architecture and engineering. The CG dispatched this argument quickly. "Government officials are presumed to act in good faith, and we will not attribute unfair or prejudicial motives to procurement officials on the basis of inference or supposition; where a protester alleges bias, it must not only provide credible evidence clearly demonstrating bias against the protester or in favor of the successful firm, but must also show that this bias translated into action that unfairly affected the protester's competitive position."

Those last words are key: "credible evidence clearly demonstrating bias".  If you cannot show or demonstrate that, you have no case.

You can read the entire GAO decision here.