United States: Court Issues Preliminary Injunction Prohibiting Employer From Terminating Employee Pending Resolution Of EEOC Lawsuit

On July 22, 2015, in Equal Employment Opportunity Commission v. Peters' Bakery, Case No. 13-CV-045107 (N.D. Cal. July 22, 2015), Judge Beth Labson Freeman of the U.S. District Court for the Northern District of California, granted the EEOC's request for a preliminary injunction enjoining Peters' Bakery from terminating Claimant Marcela Ramirez' employment pending resolution of the EEOC's lawsuit.

While such injunctions are rare, this decision is a cautionary tale and must read for employers who may be considering terminating an employee after he or she files a charge of discrimination or a lawsuit under Title VII or similar state statutes.

Background

In September 2013, the EEOC filed suit against Peters' Bakery alleging that it subjected Ramirez to harassment and discrimination based upon her race/national origin and that Peters' Bakery had retaliated against Ramirez after she engaged in protected activity of filing a charge with the EEOC. The EEOC alleged that the owner of Peters' Bakery, Charles Peters, allegedly subjected Ms. Ramirez to comments such as "Mexicans like you would rather lie than tell the truth" and "I never trusted your kind of people."The EEOC also alleged that Mr. Peters terminated Ramirez' employment in August 2011, but was forced to reinstate her after an arbitrator ordered him to do so in a union grievance proceeding.

A couple years after the lawsuit was filed, on June 30, 2015, Peters' Bakery informed Ramirez that she was being fired effective, Friday, July 3, 2015. When asked why, Mr. Peters allegedly stated that Ramirez "knew why," that he did not have to give Ramirez "a f***ing reason," that he doesn't like her, and that he needed to fire her "before [he] f***ing lose[s] it and kill[s] someone."

The EEOC filed an application for a temporary restraining order ("TRO") and an order to show cause for entry of a preliminary injunction on July 2, 2015. The Commission sought to enjoin Peters' Bakery from terminating, disciplining, threating, or harassing Ramirez. The Court granted the TRO in part, enjoining Peters' Bakery from terminating Ramirez pending a hearing on the motion for preliminary injunction. On July 22, 2015, following oral argument, the Court granted the EEOC's preliminary injunction in part, enjoining Peters' Bakery from terminating Ramirez' employment pending resolution of the lawsuit.

The Court's Ruling

The Court first addressed Peters' Bakery argument that the EEOC was seeking a mandatory injunction reinstating Ramirez, and thus the EEOC has a heavier burden. Id. at 4. The Court rejected this argument, noting it was not supported by the evidence because Ramirez had not been fired before the TRO of July 2, 2015. Rather, the Court found that Ramirez had been given notice that she would be fired effective July 3, 2015. Id. Additionally, the Court held that even if the EEOC was requesting reinstatement, the EEOC would be entitled to such relief under the Court's broad authority to grant preliminary injunctive relief and due to the fact that reinstatement is a form of relief specifically provided for by Title VII. Id.

Next, the Court applied the four part test for a preliminary injunction set forth in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 22 (2008). Under this four part test, a plaintiff seeking a preliminary injunctive relief must establish: (1) that he is likely to succeed on the merits; (2) that he is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in his favor; and (4) that an injunction is in the public interest. Id. at 3. The Court found that the EEOC satisfied its burden to establish each of these four elements with regard to the threatened termination, but not with regard to the harassment and discipline. Id. at 7.

Threatened Termination

The Court found the EEOC established the first Winter factor — likelihood of success on the merits — because the EEOC submitted evidence that Mr. Peters previously terminated Ms. Ramirez in August 2011 without cause, refused to comply with an arbitrator's order to reinstate her; used language on July 30, 2015 giving rise to an inference of improper motive; and gave no legitimate business reason for terminating Ramirez. Id. at 5. The Court also found that the EEOC satisfied the second factor — likelihood of irreparable harm — citing Ramirez' declaration, which stated that if she was fired, Ramirez would not have enough money to pay her mortgage or keep her children in private Catholic school, she and her family would lose their healthcare benefits, she would lose the positive relationships she developed with coworkers over the last 14 years working at Peters' Bakery, and she would lose her seniority in the union. Id. The Court also noted that terminating Ramirez may have a chilling effect on other employees who might wish to file charges with the EEOC and could interfere with the EEOC's mission. Id. at 5-6.

As to the third and fourth Winter factors — the balance of equities and whether an injunction is in the public interest — the Court found that the equities tip in the EEOC's favor. Id. at 6.Although the Court was sympathetic to Mr. Peters' testimony that working with Ramirez affects his health and causes him stress, the Court noted that Mr. Peters is the owner of the bakery and his hours are within his own control.Id.Any inconvenience that would result from Mr. Peters changing his hours is far outweighed by the irreparable harm that would be imposed on Ramirez if she was fired.Id.The Court also noted that taken to its logical conclusion, Mr. Peters' argument would mean that anytime an employee sues an employer, the employer could fire the employee to avoid being stressed.Id.The Court held such a result is not within the public interest.Id.

Harassment And Discipline

The Court denied the EEOC's request for preliminary injunction to enjoin discipline and harassment.Id. at 7.The Court noted that the EEOC did not present specific evidence regarding the irreparable harm Ramirez would suffer if the harassment and discipline was not enjoined.Id.Further the Court found the injunction would be hopelessly vague to the point of threatening Peters' Bakery's due process rights.Id.

Implication for Employers

This decision is a reminder to employers that courts can, and sometimes do, enjoin employers from making termination decisions or require an employer to reinstate an employee pending the outcome of litigation alleging violations of Title VII or similar state statutes. If an employer is considering terminating an employee with a pending charge or lawsuit, that employer should ensure it has substantial justification for its decision. Stress or mere inconvenience to an employer will likely not be sufficient to support a termination.

Readers can also find this post on our EEOC Countdown blog here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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