What's a company to do with an employe who adamantly refuses to work on the Sabbath? Last month two federal circuit courts handed down answers. While one ruling found that the employer had unlawfully discriminated against the Sabbath observer and the other vindicated the company, the two panels seemed to agree on an underlying policy: Management must go pretty far to try to accommodate the worker involved in the dispute, but there's a point at which the courts will say that enough is enough.
In fact, the U.S. Court of Appeals in Richmond seemed to have little sympathy for the worker who insisted that his religious beliefs prevented him for working on Sunday. The opinion spotlights his "uncompromising attitude" and "absolutist position."
The disputes are over the meaning of the proviso in the 1964 Civil Rights Act banning firings based on a worker's religion. Because the courts were not sure whether that language merely outlawed actions against a person because he or she was a member of a particular church or whether it covered religious practices as well, Congress tried to clarify the policy in 1972. It said that religion "includes all aspects of religious observation and practice," and told employers they must try to "reasonably accommodate" such beliefs.
Since then, the debate has been over how far a company need go to be considered reasonable. The Equal Employment Opportunity Commission says it means that a company must find a substitute work day for the Sabbath observer, even if it forces another reluctant worker to take the unpopular Sunday shift. But neither of the recent rulings would go that far.
On Sept. 24, the Richmond court, in EEOC v. Ithaca Industries, ruled by a 2-1 vote that all the company has to do is ask for volunteers for the Sunday shift. If it cannot find enough people, it has the right to assign workers, and, if they refuse, to fire them. Any other interpretation would mean open discrimination against workers with no religious scruples about working on the Sabbath, Judge G. Ross Anderson Jr. explained.
The U.S. Court of Appeals in Cincinnati, on Sept. 1, had said that a coal company had not done enough to try to accommodate a mechanic who would not work a Sunday shift. But that firm had not tried to find a voluntary replacement. Management told the mechanic to arrange his own shift switch, and he refused, feeling that meant he must solicit someone else to sin. The judges in Smith v. Pyro Mining, also by a 2-1 vote, suggested that the company would have complied with the antidiscrimination law had it merely posted a notice on the bulletin board asking for volunteers to take the Sunday shift.
In other cases, courts ruled that:
Investors do not have to prove that they relied on information they did not have. If a defendant in a damage suit brought under the Securities Exchange Act has withheld key information, he can be forced to pay the investor for any losses that developed from the deal. But there is liability only if the investors would have refused to buy in if they had had the additional data.
Courts have disagreed about which side had to prove what. In a suit by a plaintiff who contended that he did not know that his lawyer was getting a commission from putting him into a questionable tax shelter, the U.S. Court of Appeals in New York puts most of the burden on the defendant, saying that he has the tough job of proving that the investor would have gone through with the project even with the additional information in hand. (Du Pont v. Brady, Sept. 8)
Being incorporated in Delaware means being governed by Delaware corporate law. The Supreme Court said that in 1947, but since then there has been such a growth of multinational business that lawyers are not sure the ruling is still valid. Some states have told companies they have to obey local rules, even if they are incorporated in Delaware.
But the Delaware Supreme Court is sticking with the old doctrine. A company can be sued anyplace it operates for the kind of things an individual can be sued for, such as causing an injury. But litigation over changes in the corporate structure and the relationships between the corporation and its directors and stockholders are governed by the laws of the state of corporation, the justices said. (McDermott v. Lewis, Sept. 16)
States have no role to play in regulating the safety of interstate gas pipelines that pass through their territory. The U.S. Court of Appeals in St. Louis threw out an Iowa regulatory plan that required builders of such pipelines to get a state permit and certify that they complied with all federal regulations. (ANR Pipeline v. Iowa SCC, Sept. 8)
It's easier to win tax breaks for a farmers' marketing cooperative. To qualify for special treatment, most of the stock of such self-help groups must be owned by farmers who really trade through the cooperative. But the IRS put another requirement on, saying that to qualify as a stockholder-patron, the farmer had to do more than half of his business through the cooperative. There's no justification for such a requirement, the Tax Court ruled. (Farmers Cooperative v. Commissioner, Sept. 29)
Moskowitz covers legal affairs for McGraw-Hill World News.