What Happens to Harassment Claims After a Business Is Acquired?

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What Happens to Discrimination and Harassment Claims When a Business Is Bought by a Larger Company?

Workplace harassment and discrimination are pervasive issues that affect millions of employees worldwide each year. From inappropriate comments and unfair treatment to deeply entrenched systems of bias, these experiences can leave employees feeling powerless and isolated. When a small business—your workplace—gets acquired by a larger company, questions often arise about what happens to ongoing or unresolved discrimination and harassment claims.

Do these claims disappear? Will the new company hold the previous owners accountable? Can victims expect their concerns to be addressed under a new management team? This blog explores the impact of corporate acquisitions on employee rights, providing clarity and actionable advice for navigating this complex scenario.

Workplace Acquisitions and Their Impact on Employees

Corporate acquisitions, where a larger company buys and takes over a smaller business, are commonplace in today’s business landscape. They often bring drastic changes for employees—from transitions in company culture to restructuring of roles and policies. While these mergers are marketed as growth opportunities for the business, employees may find themselves grappling with uncertainty and upheaval.

For employees who have filed discrimination or harassment claims prior to the acquisition, this uncertainty can turn into fear. Questions abound—is the new management obligated to honor pending claims? Will there be retaliation? Or will such complaints be swept under the rug, citing “corporate restructuring”?

An acquisition often leads to significant changes in Human Resources (HR) systems, policies, and responsible personnel. At times, it feels like the slate has been wiped clean for the incoming organization. However, this doesn’t mean previous claims are invalid—it’s a matter of understanding your legal protections and the process of maintaining accountability.

Legal Rights and Protections for Employees

Employees are protected by federal and state employment laws against harassment and discrimination under regulations such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). These laws make it illegal for employers to discriminate against employees based on race, gender, age, disability, religion, and other protected categories.

When a business is acquired, these protections do not disappear:

  1. Successor Liability:

Many jurisdictions enforce “successor liability,” meaning the larger company acquiring the smaller business inherits the legal responsibility for claims filed at the original organization. Employees should understand that their rights don’t evaporate just because ownership has changed hands.

  1. Pending Claims:

If a claim has already been filed with an external agency—such as the EEOC (Equal Employment Opportunity Commission)—the new owner is legally compelled to address it.

  1. New Policies:

While the new owners may implement new anti-harassment and anti-discrimination policies, this doesn’t absolve them of addressing past grievances under the prior management.

One critical point for employees to note is that the details of an acquisition agreement might stipulate whether discrimination claims are handled by the acquiring company or remain the responsibility of the previous owners. Understanding these provisions in the agreement is vital.

What Employees Can Do to Protect Their Rights

Filing or continuing a harassment or discrimination claim during a corporate acquisition can be intimidating. However, there are steps employees can take to ensure their rights are protected and their voices are heard amidst the upheaval:

  1. Document Everything:

Maintain records of incidents, including dates, times, witnesses, and specifics of any harassment or discrimination you’ve experienced. Documentation becomes even more crucial during an acquisition to preserve the context and details of your claim.

  1. Retain Claim Records:

If you’ve already filed a claim, make sure you have copies of all documentation, including communication with HR, legal filings, and correspondence with external agencies like the EEOC.

  1. Seek Legal Advice:

Consulting an employment attorney can help clarify how claims are addressed during acquisitions in your state. A lawyer can provide insights specific to your case and advocate for your rights if retaliation or dismissal occurs.

  1. Monitor New Policies:

Pay close attention to new codes of conduct and employee policies introduced by the acquiring company. If unclear, ask for explicit clarification on how prior complaints will be handled under these new guidelines.

  1. Continue Reporting:

If the inappropriate behavior persists, don’t hesitate to voice concerns to the new HR team. Just because the ownership or reporting structure changes doesn’t mean the behavior should be tolerated.

Remember, laws are designed to offer robust protection, but you may need to be proactive about ensuring they are enforced.

Real-Life Case Studies

Case Study 1: Accountability in the Workplace

In 2017, a teenage employee at Elite Wireless endured repeated sexual harassment from a sales manager, including unwelcome advances and requests for sex. The situation worsened when the sales manager sexually assaulted her during a holiday party. Despite the employee filing reports and a criminal complaint, Elite Wireless failed to take action, allowing the manager to continue working alongside her. In 2019, Wireless World acquired Elite Wireless and, according to the EEOC’s charges, became liable for the company’s failure to address these serious allegations. This case highlights the critical need for swift and decisive responses to workplace harassment to protect employees and promote accountability.

Case Study 2: Discrimination and Corporate Bias

Mr. Sizar joined Hatch Mott MacDonald (a predecessor to The Mott MacDonald) in 2013 and advanced through the corporate ranks, consistently earning praise for his strong performance through glowing reviews and evaluations. Despite his success, he observed a troubling pattern of bias within the organization, where younger white males were favored over more qualified non-white, female, and older employees.

For example, his supervisor, Daniel Tempelis, terminated two senior staff members in their early sixties—one of Chinese descent and the other of Asian Indian heritage—and replaced them with younger, less experienced white males. Mr. Sizar also reported that numerous other non-white and older employees were similarly dismissed and replaced by less qualified, younger white males.

This case underscores the pervasive issue of systemic discrimination in the workplace. It serves as a powerful reminder of the importance of fostering equity, addressing bias, and holding organizations accountable for the fair treatment of all employees.

What This Means for You

Discrimination and harassment should never be overlooked, whether under your current employer or a new corporate owner. If your workplace is undergoing changes due to an acquisition, remember that federal and state laws exist to protect you. Don’t hesitate to consult professionals, document your experiences thoroughly, and speak up if necessary.

Acquisitions might bring a storm of change, but your rights form the anchor. Stay informed, proactive, and engaged in ensuring your voice is heard.

Are you currently dealing with workplace harassment or discrimination during a corporate acquisition? Seek legal advice to protect your rights and review your options. The right support could make all the difference.

Kurt Bluemel Accused of Pregnancy Discrimination: A Closer Look at the PWFA

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Kurt Bluemel Accused of Pregnancy Discrimination: A Closer Look at the Pregnant Workers Fairness Act

A recently filed lawsuit against Kurt Bluemel, a Baltimore County-based commercial nursery, underscores the critical importance of enforcing pregnancy discrimination laws. The complaint alleges that the company failed to accommodate a pregnant employee seeking to return to work after maternity leave. Upon her attempt to resume her position, she was informed that no work was available despite the company hiring new, non-pregnant employees both before and after her return attempt. Such actions, if proven, directly violate the Pregnant Workers Fairness Act (PWFA) and Title VII of the Civil Rights Act of 1964. This case raises serious concerns about the commitment of businesses to upholding workers’ rights, particularly those of pregnant employees.

The Pregnant Workers Fairness Act: A Timely Intervention

Enacted to protect the rights of soon-to-be-mothers in the workplace, the PWFA requires employers, agencies, unions, and employees to provide reasonable accommodations to qualified employees experiencing limitations related to pregnancy or childbirth. This is unless such accommodations would lead to undue hardship to the business.

The enforcement of the PWFA mirrors the provisions of Title VII and related acts, permitting damages but with limitations if the employer can prove a good faith effort to provide reasonable accommodations. The Equal Employment Opportunity Commission (EEOC) has been charged with the task of creating regulations and has made improvements to charge processing.

Decoding the Pregnant Workers Fairness Act

The PWFA is comprehensive in its approach to safeguarding pregnant employees. It defines “known limitation” as any physical or mental condition related to pregnancy or childbirth communicated to the employer. Even conditions that may seem minor, episodic, or related to general health, if related to pregnancy or childbirth, must be acknowledged by the employer.

The Act provides a framework to support reasonable accommodations for pregnant employees, from temporary suspension of certain functions, job restructuring, to assignment in a light or modified duty program. Employers are required to find the best fit that does not result in undue hardship.

The Importance of Career Continuity for Women

The devastating reality is that women often face significant hurdles in maintaining their careers while pregnant or raising families. This not only stunts career growth but also disrupts financial stability and well-being. It is absolutely critical that businesses take steps to accommodate pregnant employees’ needs, ensuring they can effectively balance their professional responsibilities and personal health.

A Final Word – Know Your Rights

If you have personally experienced pregnancy-related discrimination or retaliation, it’s paramount that you seek assistance. Contact an experienced employment law attorney who can help assess your situation and guide you through the legal recourse available. The law is there to protect you – you don’t have to face discrimination in silence.

The Battle Toward Equal Pay: Unveiling the Maryland Department of Health’s Sex Discrimination Case

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The echoes of “equal pay for equal work” resonate more than ever with the recent settlement of a sex discrimination lawsuit involving the Thomas B. Finan Center of the Maryland Department of Health. This mental health center, based in Cumberland, Maryland, will pay a sizable sum of $270,000 to address pay injustices that have persisted for years.

The lawsuit alleged that a less experienced male recreation therapist received a higher wage compared to his four female colleagues who had greater job experience. Unfortunately, their requests for pay equalization fell on deaf ears. The unjust situation squarely contravenes the Equal Pay Act of 1963, a historic legislation that outlawed gender-based pay discrimination.

Passed more than five decades ago, the Equal Pay Act of 1963 set the foundation for a more equitable work environment. Powerhouse politicians like Esther Peterson, the then-assistant secretary of Labor and director of the Women’s Bureau, and President John F. Kennedy, were instrumental in its enactment. Their relentless advocacy and sheer determination ensured the landmark law was etched into the statutory books.

This act revolutionized the workplace dynamic, offering women new opportunities and greater earning potential than ever before. However, the Finan Center case is a grim reminder that the battle for gender parity continues.

If you are a woman who suspects you may be a victim of wage discrimination, it is crucial to recognize your rights. The workplace should be fair and free from any form of discrimination, including gender-based pay discrimination. If you observe discrepancies in your pay compared to your male counterparts who perform equal work, don’t hesitate to raise it with your HR personnel. HR professionals themselves should take the lead in speaking out against such discriminatory practices.

Finally, remember, you are not alone in this fight. Seek the counsel of an experienced employment law attorney to protect your rights and ensure you receive equal pay for equal work. While the journey toward achieving gender pay equality may be tough, each step forward propels us all towards a more equitable future. Every woman deserves equal pay for equal work. The fight for equity and justice continues, and together, we can make a difference.

Unveiling the Dark Side of Medical Devices: Investigating Corporate Ethics and Patient Safety

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In recent years, medical device giant Medtronic has come under fire due to allegations involving their business practices and patient safety concerns. Central to this controversy are their medical devices, particularly the GIA 80 surgical stapler, which has led to numerous patient injuries and even deaths due to malfunctions and alleged cover-ups.

Leanne Houston, a former Medtronic sales representative, highlighted Medtronic’s questionable business practices. Taking on the role of a whistleblower, Houston revealed unsettling, unethical conduct by the corporation. She exposed that Medtronic was using kickbacks to secure exclusivity over hospitals and surgeons. This strategy pushed forward the use of their medical devices despite being more expensive and often marketed for off-label uses. Such manipulative actions flagrantly violate the law and indubitably prioritize corporate profits over patient safety.

The allegations made by Houston against Medtronic are grave indeed. The company’s indifference towards patient safety led to the covering up various issues with the surgical staplers and payments to hospitals and physicians solely for the sake of using their products. Houston’s lawsuit accuses Medtronic of engaging in unlawful conduct by leveraging kickbacks to induce hospitals and surgeons to purchase their devices.

This is not the first time Medtronic has been in the hot seat for ethical violations. The company’s history is marred with accusations of fraud, kickbacks, and anti-competitive conduct. In fact, Medtronic’s past settlements total over $60 million on allegations regarding fraud and kickbacks alone. Yet, despite their ongoing controversy, the penalties Medtronic has faced thus far appear to be merely the price of doing business.

This incessant prioritization of profits over patients must invariably cease. It is of utmost urgency that real, substantial barriers and penalties be put in place to deter corporate misdeeds and protect patients’ lives. We must stand against harmful corporate greed exemplified by the likes of Medtronic, ensuring the corporations prioritize their ethical and social responsibilities.

If you or a loved one have been harmed due to a medical device, do not hesitate to seek help and justice. Approach a trustworthy and dedicated lawyer who can help guide you through the legal complexities and ensure you receive the compensation you deserve. Furthermore, if you possess any information about corporate misdeeds, please come forward. Your courage can ensure justice is served and can protect countless others from facing similar harm. Whistleblowers play a vital role in highlighting corporate misconduct and even stand to potentially receive rewards. It’s high time we call out corporate greed and prioritize patient safety.

Source: https://www.icij.org/investigations/implant-files/whistleblower-accuses-medical-tech-giant-medtronic-of-putting-profit-before-patients/

Jury Awards $2.17 Million in Sex Harassment Lawsuit Against SkyWest Airlines

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A troubling story is unfolding in the aviation industry. Sarah Budd, a former SkyWest Airlines employee, bravely shared her experience of sexual harassment by colleagues at Dallas-Fort Worth International Airport. She courageously spoke up about the crude and demeaning behavior she faced in a mostly male department. Sadly, her calls for help from her bosses were ignored.

On her first day, a co-worker asked if she “liked whips and chains and leathers,” suggesting she’d fit in well if she did. Over the months, she endured countless off-color jokes and comments. “They didn’t seem to care if I was uncomfortable,” she told the jury. “In fact, it only spurred them on more. … It’s like they enjoyed my discomfort.”

Her male colleagues hid behind crude jokes and inappropriate comments, creating a toxic environment that left her feeling unsafe and isolated. Despite her attempts to report the harassment, her supervisor took no immediate action, highlighting an uncaring culture.

Title VII of the Civil Rights Act of 1964 clearly prohibits such harassment, and SkyWest Airlines failed to manage Budd’s case properly, violating this law. It’s a grim reminder of the struggles women face at work, where their concerns often go unheard.

“Ms. Budd had over a decade of experience at SkyWest and before the sexual harassment occurred and had intended to retire there,” said Alexa Lang, a trial attorney in the EEOC’s Dallas District Office. “All Ms. Budd wanted was to be heard and to stop this from happening to other women. The jury heard her. We hope the verdict sends a message to SkyWest and other employers that they must take responsibility for making sure their workplaces are free from sexually hostile conduct. Everyone deserves to feel safe at work.”

Taking her case to court, the jury awarded Sarah $2.17 million for the trauma she endured. However, an outdated provision in the Civil Rights Act of 1991 reduced this to just $300,000, the maximum for companies with over 500 employees. This unfair cap undermines the real harm victims suffer.

Efforts are underway to fix these disparities with the Equal Remedies Act of 2024. If passed, this law will eliminate damage caps in employment discrimination cases, offering more fair remedies for victims.

Despite the emotional turmoil, Sarah’s resilience led to a unanimous verdict from the Dallas jury, finding SkyWest Airlines guilty of harassment and inaction.

For those facing similar situations, remember you’re not alone. An experienced employment lawyer, especially one familiar with sexual harassment cases, can be a huge help. A committed lawyer can even take your case to the U.S. Supreme Court. Standing up against discrimination and injustice isn’t easy, but with the right legal support, victims can reclaim their dignity and peace.

Championing Disability Rights: The Role of ADA and Legal Support

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In a ground-breaking move that draws attention to the important protections granted by the Americans with Disabilities Act (ADA), Catalyst Family Inc., a non-profit entity operating child development centers across California, has agreed to a settlement amounting to almost $150,000. The settlement resolves a disability discrimination lawsuit alleging that the company violated the ADA by firing an assistant teacher instead of granting his request for an accommodation due to his intellectual and cognitive disabilities.

Founded in 1975 as Continuing Development Incorporated and subsequently rebranded to Catalyst Family, Inc. in 2020, the organization has been serving families and children in California for over 45 years. Yet, it found itself at the receiving end of a lawsuit when it dismissed a part-time employee who had been with the company for two years after he sought an accommodation for his disability in March 2021. Remarkably, this termination occurred instead of fully implementing the requested accommodation, leading to allegations of the ADA’s contravention.

A cornerstone of the ADA, a fundamental legislation in the United States, is the requirement for employers to provide reasonable accommodations to employees with disabilities unless it leads to an undue hardship on the company. This mandate was enacted to level the playing field and give equal opportunities to all, regardless of their disability.

After investigating the issue, a pre-litigation conciliation process ensued, leading to the aforementioned settlement. Catalyst Family Inc. agreed not only to pay the monetary damages but also to revise its non-discrimination policies and procedures and provide training for all managers, recruiters, and HR personnel.

The company also committed to offering the terminated worker a neutral reference letter and removing the termination notice from his personnel file. The employee, now employed at a different educational program, expressed satisfaction with the settlement, indicating it was beneficial for everyone with disabilities, their families, and the children under their care.

Nancy Sienko, Equal Employment Opportunity Commission San Francisco District Director, noted that Catalyst Family’s cooperation to ensure compliance with the ADA’s requirements marks a victory for all involved. She highlighted the agency’s Strategic Enforcement Plan, emphasizing the importance of protecting vulnerable workers, including people with developmental or intellectual disabilities, from employment discrimination.

Through this case, it is clear that the ADA’s provisions for reasonable accommodations are not just optional niceties but essential rights for people with disabilities. It reminds businesses about the high cost of disability discrimination in the workplace, which goes beyond monetary penalties to include significant reputational damage.

As this case illustrates, employees who believe they have been discriminated against due to their disability should not hesitate to stand up for their rights. Seeking an experienced ADA attorney can make all the difference in challenging discriminatory practices, ensuring that policies align with the ADA, and attaining the justice they deserve. Reaching out to a legal expert can be the first step towards a more inclusive and fair workplace where everyone’s right to pursue their dreams is respected.

Religious Discrimination – Failure to Accommodate

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Lawsuit Charging Debt Collector Denied Employee Unpaid Time Off to Observe Religious Holidays, Forcing Him to Quit

The history of the United States is littered with countless examples of discrimination and injustices. To help address this pressing issue, Title VII of the Civil Rights Act of 1964 was enacted. This federal law prohibits employers from discriminating against employees based on sex, race, color, national origin, and religion. The legislation was necessary to address widespread and profound discriminatory practices rampant in the employment sector. The Act has served society by promoting a wholesome and diverse workplace, boosting economic productivity by placing competent individuals in positions irrespective of their identities.

In light of this regulation, the recent case involving Center One and Capital Management Services offers a pertinent example of religious discrimination. Center One, a provider of debt collection services, and its related company, Capital Management Services, fell under scrutiny for alleged religious discrimination. The lawsuit, filed in 2016, claimed that an employee practicing Messianic Judaism was denied a change in work schedule to observe religious holidays. The company refused due to the employee’s inability to provide certification from a religious leader or organization.

The company’s actions violated Title VII of the Civil Rights Act, which clearly states employers must present reasonable accommodations for employees’ religious practices, barring undue hardship on the employers’ business. The employee was represented by attorneys from the Stanford Law School Religious Liberty Clinic, and despite the district court initially granting summary judgment for Center One and Capital Management Services, the appellate court vacated this ruling.

This case eventually resulted in the companies agreeing to a settlement before trial and paying the employee $60,000. Additionally, they were prohibited from denying reasonable accommodations for employees’ religious beliefs and specifically barred from requiring certification from a religious leader or group as a precondition for providing religious accommodation.

Cases like this are a stark reminder that religious discrimination still pervades our society, even in today’s progressive times. It’s important to note that if you, or anyone else, are experiencing religious discrimination, including refusal of employment due to religion or denial of religious accommodation, it’s advisable to seek the services of a lawyer specializing in employment law. Lawyers with this expertise can guide you through legal complexities, ensuring you get the protection and justice you deserve under the law and ultimately contributing to a more equitable and respectful society.

ADA Advocacy – Ensuring Equal Employment Opportunities for People with Disabilities

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The Americans with Disabilities Act (ADA) has been instrumental in ensuring that people with disabilities receive the same employment opportunities as everyone else. This transformative civil rights law strives to protect disabled individuals from discrimination, giving them an equal footing in many areas of public life, including the workplace.

Among the medical conditions recognized as disabilities is hypertension, also known as high blood pressure. This long-term condition persistently elevates blood pressure in the arteries. It is a silent illness, often unnoticed as it usually doesn’t cause symptoms, but it is a significant risk factor for severe conditions like stroke, heart failure, and kidney disease, among others. About 90–95% of hypertension cases are primarily caused by a mix of lifestyle and genetic factors.

People with disabilities, such as hypertension, are entitled to request reasonable accommodations to facilitate their work performance. A prime example is a lawsuit settled against Verizon Maryland, LLC, in which the ADA’s protective mandate was decisively enforced.

In this case, a management employee suffering from hypertension asked for a change of position to accommodate his health condition. He hoped to switch to a field position or an alternate management role. Despite an opening for a field role he had previously held, Verizon insisted that he had to quit his job and reapply for the position in six months. This offer of resignation and reapplication was the only accommodation provided by the company, forcing the employee to quit due to medical necessity.

After legal proceedings, Verizon Maryland agreed to pay $115,000 to settle this disability discrimination lawsuit. Beyond the monetary settlement, the lawsuit has led to significant changes within the company. Verizon can no longer suggest resignation and reapplication as accommodations under the ADA. The company must also provide training on the ADA, emphasizing that resignation and reapplication are not reasonable accommodations.

This case highlights the ADA’s crucial role in ensuring equal employment opportunities for disabled individuals. It also serves as a stark reminder for employers to consider and implement reasonable accommodations for their employees facing health issues.

In conclusion, employees subjected to disability discrimination must seek legal representation to protect their rights effectively. An attorney who is well-experienced in employment law and disability discrimination can help navigate the complexities of disability rights and champion your case in this specialized legal field. Upholding the spirit of the ADA is not just the responsibility of companies but each of us, fostering a more inclusive society.

Achieving Equality: A New Era in Fire Department Culture

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The Journey of Women Firefighters: A Tribute Amidst the Mountain Fire

As the Mountain fire continues to put our brave firefighters to the test, we take a moment to shine a light on our women firefighters and their journey over the years. Despite the raging fires, we stand in awe of the slow yet steady progress in the world of firefighting as it opened its doors to women.

Historical Milestones: From Molly Williams to Judy Brewer

From Molly Williams, held in slavery, bravely serving as a firefighter in the early-1800s, to Judy Brewer, the first full-time career female firefighter hired in the United States, women have slowly but surely carved a place in this profession. Today, the fire service in the United States boasts around 15,000 women serving as career firefighters and an additional 78,000 volunteers.

Current Landscape: Women in Firefighting Today

The Challenges Ahead: Addressing Gender Disparities in the Fire Service

However, there is much terrain yet to conquer. Women still only account for 4% of career firefighters and 11% of volunteers. We recognize the existing challenges and the necessity for further inclusion in the fire service workforce. But the story is not just about numbers.

The Impact of Discrimination: A Case Study of Rebecca Reynolds

Discrimination and harassment at least partially explain why women firefighters have only increased by 0.3% over the past 25 years. One example of such harassment is why The Kansas City Council’s finance committee is poised to approve a record $1.3 million settlement for firefighter Rebecca Reynolds, who alleges years of harassment from male colleagues due to her gender, sexual orientation, and age. Incidents included questioning her authority and an alleged act of a colleague urinating on her belongings. Reynolds plans to drop two pending discrimination lawsuits in exchange for the settlement, which represents the largest ever in a fire department discrimination case. The settlement follows the city’s history of addressing harassment claims, with recent settlements totaling $2.8 million in the past two years alone.

Progress and Change: Making Fire Departments More Inclusive

Celebrating Leadership: Women Breaking the Glass Ceiling in Firefighting

Over the years, laws and norms have changed to make fire departments more inclusive and family-friendly. Station designs have been reconsidered, grooming standards revisited, and there is an ongoing effort to make uniforms and Personal Protective Equipment more accessible for women. Women have broken the glass ceiling in leadership roles, leading large departments as chiefs, and serving in prestigious positions like the U.S. fire administrator and the superintendent of the National Fire Academy.

The Importance of Diversity in the Fire Service

We salute our women firefighters for their courage, resilience, and their contribution towards building a better, more inclusive fire service that celebrates diversity. Each step forward not only benefits women in the service but all firefighters, and the community they valiantly serve.

Looking Forward: Honoring Women Firefighters and Pushing for Equity

As women continue to strive for equality and inclusion within the firefighting profession, it is crucial to be aware of the resources and support systems available to them. Experiencing discrimination or harassment in the workplace can be daunting, but it is important to take action and seek the guidance of an experienced employment attorney. Legal professionals specializing in employment law can provide invaluable assistance, helping to navigate complex legal systems and ensuring that rights are protected. Taking this vital step not only serves the individuals affected but strengthens collective efforts toward a more inclusive, respectful, and equitable environment for all firefighters.

Let us remember, as the fires rage on, the progress we’ve made and the challenges yet to overcome. We stand with our women in firefighting, honoring their past, cherishing their present, and pushing for a more inclusive, equitable future.

Overcoming Barriers: Racial Discrimination and Arbitration Agreements

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In a recent incident that has sparked important conversations around racial discrimination in the workplace, Sureste Property Group, along with its divisions Sureste Property Services and Sureste Development, agreed to pay $75,000 in a race discrimination lawsuit. The lawsuit alleged that the real estate operating company unjustly terminated a black project development manager due to his race.

“This case underscores the sad reality that racism in the workplace still exists,” said Marcus G. Keegan, regional attorney for the EEOC’s Atlanta District Office.

The former manager, who had been the first and only black individual in his role at the company, was said to have been fired under the pretense of being “lazy” and not fitting in with the company’s “culture.” Despite performing well and handling more workload than his white colleagues, he was let go less than a year into his role. The company later tried to justify the termination, claiming that his role was no longer required, only to promote a less qualified white employee to his position within a month.

Such an act contravenes Title VII of the Civil Rights Act of 1964, a law that explicitly forbids all forms of discrimination on the basis of race. Moreover, it is essential to note that employees who have signed arbitration agreements are not devoid of rights. The EEOC (Equal Employment Opportunity Commission) continues to be fully accessible for employees to assert their EEO rights and have their cases investigated, regardless of any pre-existing arbitration agreements.

This assertion is based on two significant Supreme Court rulings. The first, Gilmer v. Interstate/Johnson Lane Corp., articulated that an arbitration agreement does not preclude an individual from filing a charge with the EEOC. The second, EEOC v. Waffle House, Inc., maintained that the EEOC can pursue relief for a victim of discrimination, regardless of any enforceable arbitration agreement between the victim and their employer.

“When an individual is forced to arbitrate, they are giving up their fundamental constitutional right to a jury trial. As with all constitutional rights, we should analyze any waiver with an extremely high level of scrutiny.” Gregory D. Helmer, Helmer Friedman LLP, commented after a recent Court of Appeals victory involving mandatory arbitration.

With the conclusion of the Sureste Property Group lawsuit, a consent decree spanning three years has been approved by the federal court. The decree obliges the defendants, their subsidiaries, and successor companies to provide monetary relief, distribute anti-harassment and anti-retaliation policies, and post notices about the settlement. The company must also administer specialized training to all supervisors, managers, and employees, alongside regular reports on race discrimination complaints during the decree’s term to the EEOC.

This lawsuit reinforces the need for employees experiencing racial discrimination to pursue all legal avenues, regardless of any arbitration agreements. Discrimination in any form is unacceptable and employees have the right and freedom to fight against any such injustices.