The former CEO at the 77,000 member, $1.5 billion Polish & Slavic Federal Credit Union has sued the credit union’s board of directors, both as a group and individually, alleging he was fired in May for following state and federal laws on equal opportunity hiring.
But Mielczarek was dismissed in May 2012 because, he alleged in documents filed with the U.S. District Court for the District of New Jersey, he had hired and persisted in hiring credit union staff that were not of Polish origin or spoke Polish as a first language.
Mielczarek is of Polish and Hispanic descent and was reared in Spain, according to the documents.
“Upon commencing employment with defendant PSFCU, Plaintiff quickly learned that its board members and management expressed strong Polish values, which was not unexpected given the defendant PSFCU’s target member-client base,” Mielczarek stated in the filing.
“However, contrary to plaintiff’s expectations, defendant PSFCU engaged in unlawful racial, ancestral and ethnic employee hiring and retention practices,” he charged.
Mielczarek wrote that, for example, board members admonished him for “dismissing someone of Polish descent” when he fired then General Counsel Paul Sosnowski in September 2011.
Mielczarek also alleged that when he presented job candidates for positions to the board, the first question board members asked was whether the person was Polish. He noted that despite the labor pool where the credit union had physical locations was predominantly non-Polish, the credit union’s workforce remained 98% Polish.
The credit union, Mielczarek alleged, also had practice of only advertising jobs in the Polish-language media. His refusal to go along with the discriminatory policy led to his dismissal, he claimed.
“In September 2011, despite having received clear preferences from defendants to solely hire Polish individuals, plaintiff hired one Larry Lugaro, a non-Polish facilities manager of Hispanic descent, because such individual was, in plaintiff’s opinion, the most qualified candidate for job.”
Mielczarek also hired William Arnold, also non-Polish as chief lending officer for the same reason, he said in his court briefs.
Mielczarek’s complaint alleged a year of steadily rising tensions over the staffing issue between he and the board, with the board angered that he laid off Polish employees during a cost reduction plan. He also hired some temporary workers in April, some of whom were of East Asian origin and alleged that board members commented openly, “They are saying that Mielczarek is firing Poles and hiring blacks.”
Mielczarek’s complaint also included email from other PSFCU executives to the board challenging the hiring policy and warning the board that it was in violation of federal law. In one Lori O’Toole, then PSFCU’s head of human resources wrote the chairs of the board and supervisory committee about her concerns.
“Regrettably, there can be no question about the credit union’s policy of discrimination as it was confirmed in the board meeting I attended on Oct. 27, 2011,” O’Toole wrote in a Nov. 22 email which was included as an exhibit to the complaint.
“During that meeting, several members of the board repeatedly attacked me regarding the credit union’s hiring practices and admonished me for not recruiting Polish people only. Then this past Saturday, Nov. 19, 2011, in a members meeting held at our McGuinness location, this issue was again brought up, and again the board members present did nothing to stop the attack nor did they support our senior management and our nondiscriminatory hiring practices.”
The credit union has not yet filed any response to the complaint, but PSFCU issued a statement through attorney Dena Epstein of Jackson Lewis LLP in Morristown, N.J., reading, “The Polish & Slavic Federal Credit Union is an equal opportunity employer, which prohibits any and all forms of discrimination in its workplace. All qualified applicants receive consideration for employment without regard to race, color, religion, gender, gender identity or expression, sexual orientation, national origin, genetics, disability, age, or veteran status. As such, we take Oskar Mielczarek’s discrimination allegations very seriously and plan to vigorously defend the case. As this is a pending litigation, we have no further comment at this time.”
In addition to back pay and damages, Mielczarek is seeking to be reinstated to the CEO position and to have the credit union reverse its alleged discriminatory hiring policy.
The court has scheduled a conference among all of the parties to the case for Nov. 20 and has granted some of the defendants until Nov. 1 to file responses to the complaint.
This is not Mielczarek’s first employment termination-related lawsuit. In 2011, an Employment Appeals Tribunal in Ireland, the highest court in Ireland that hears complaints related to employment contracts and terminations, sided with Mielczarek in a dispute with a former employer, Adrian Lee Services Limited, an asset management firm. The court agreed with Mielczarek that the firm had arbitrarily changed the position for which it had first hired him, cut his wages and then laid him off without compensation. The Tribunal awarded Mielczarek 200,000 Euro or about $259,000 in the case, according to court documents.
Mielczarek has not yet commented publicly about either suit.
Human resource lawyers who familiarized themselves with the PSFCU complaint declined to predict how the court might view the matter, particularly without any filing from the credit union. If the details of the complaint could be substantiated through discovery, the case looked strong, they said.
“An employer may not legally prefer members of an ethnic group in hiring,” wrote John Myers, a partner at Eckert Seamans’ Pittsburgh office in response to a reporter’s query. “This would be a violation of Title VII of the Civil Rights Act of 1964, of Section 1981 of the Civil Rights Act of 1866 and of most states’ equal employment opportunity laws. An employer may condition employment on one’s ability to speak a particular language, if it is shown that this skill is a business necessity—such as a teller whose clientele predominantly consists of persons who speak only that language—even though this job requirement would have a disparate impact on nonmembers of the ethnic group. However, a person who is not of that ethnic group but is able to speak the language would, of course, be entitled to equal consideration. If the skill, not the ethnicity, is the criterion for employment, then the practice is not illegal.”
Calvin House, a partner with the Pasadena, Calif., law firm Gutierrez, Preciado & House, LLP, agreed and noted that the credit union did not appear to have hired for positions that would qualify for a narrow exception federal law allows.
“Although Title VII allows discrimination based on national origin if it results from a bona fide occupational qualification (BFOQ) that is reasonably necessary to the normal operation of the business, the courts generally do not recognize an employer’s preference for the national origin of those it serves as a BFOQ,” House wrote in an email about the case. “An example of a legal ethnicity-based BFOQ would be a requirement that only a Filipino actor could be hired to play a Filipino role in a movie.”
Kelly Kolb, an attorney with the Fort Lauderdale, Fla. firm Fowler White Boggs, said a BFOQ defense in this case would be a difficult one to mount because the credit union would have to show that there was something about working at PSFCU that only Poles could do.
“It’s really a swing for the fences defense because you are essentially admitting that the your hiring is discriminatory, but that you should be allowed to do so for some exceptional reason,” Kolb said. He cited an example of a strip club that justified hiring only female dancers on the grounds that being female was a key component of that job. A position with a BFOQ is one that would not exist if it were not held by a person of given gender or national origin, he explained. n