The First U.S. Circuit Court of Appeals recently held that two plaintiffs whose untimely discrimination complaints were dismissed by a trial court should be permitted to develop facts in support of their argument that the time period for filing their discrimination complaints should be extended by the employer's failure to follow the Equal Employment Opportunity Commission's (EEOC) posting guidelines.
The First U.S. Circuit Court of Appeals recently held that two plaintiffs whose untimely discrimination complaints were dismissed by a trial court should be permitted to develop facts in support of their argument that the time period for filing their discrimination complaints should be extended by the employer's failure to follow the Equal Employment Opportunity Commission's (EEOC) posting guidelines. See Mercado v. Ritz-Carlton San Juan Hotel, Spa & Casino (First Circuit May 31, 2005).
In this case, the plaintiffs claimed their late filing of charges with the EEOC should be forgiven under the doctrine of equitable tolling because of the employer's failure to post statutorily mandated notices of their employment rights. The trial court rejected this argument, holding that the doctrine of equitable tolling only applies where the employer has actively misled the employee. The First Circuit held that the trial court erred in applying the "actively misled" standard in the context of a failure-to-post claim.
The court noted that while an employer's affirmative misconduct provides one rationale for extending the filing period, the First Circuit has also recognized that an employer's violation of the EEOC posting requirement may provide a second basis for an extended filing period where the employee had no other actual or constructive knowledge of complaint procedures. Here, the plaintiffs claimed the employer failed to post any informational posters and that they had no knowledge of their legal rights until informed by their attorney. Thus, the court held that they met the threshold requirements for avoiding dismissal of their Title VII lawsuit. The court also noted that the viability of their claims beyond this preliminary stage depends on facts that have yet to be developed.
Facts that must be developed in determining whether to allow equitable tolling in a particular case generally include: (1) lack of actual notice of the filing requirement; (2) lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one's rights; (4) absence of prejudice to the defendant; and (5) a plaintiff's reasonableness in remaining ignorant of the requirement.
The court held that the factual inquiry in this case must begin with an examination of whether, despite their assertion of ignorance, the plaintiffs had either actual or constructive knowledge of their Title VII rights. Actual knowledge refers to whether an employee is generally aware that he or she possesses a legal right to be free from the type of discrimination alleged. Constructive knowledge, meanwhile, would be presumed if the employer had complied with its statutory obligation to post the EEOC notices in conspicuous locations, and it also is presumed when an employee has retained an attorney - in both instances, regardless of whether the plaintiff actually aware of his or her rights.
The court noted that factual developments may show that the plaintiffs had sufficient knowledge to entitle the employer to summary judgment. The employer argued that the required notices had been posted and that the plaintiffs received copies of the employee handbook, which contains a general equal employment standard and sexual harassment policy. The court noted that if the handbook advises employees that they have a right under Title VII to seek redress in the event of gender or national origin discrimination, the plaintiffs may be deemed to have notice sufficient to foreclose equitable tolling. Additionally, their internal complaints may reflect knowledge of their statutory rights, depending on whether the handbook advised employees about their statutory rights or only referred to company policy.
Other issues to be resolved include the plaintiffs' diligence in pursuing their rights, possible prejudice to the defendants, and the plaintiffs' reasonableness in remaining ignorant of the 300-day filing period.
Employers' Bottom Line:
This case reiterates the importance of complying with the EEOC's posting guidelines and developing policies and procedures for ensuring that employees are informed of their statutory rights, as well as the employer's internal anti-discrimination policy. In addition to ensuring that your anti-discrimination policy informs employees of their rights under the law, it is a good idea to redistribute these policies on a regular (perhaps annual) basis and obtain an acknowledgment from employees that they have received and read these policies. For more information regarding this case or the development of effective anti-discrimination policies and procedures, please contact the Ford & Harrison attorney with whom you usually work.