US Supreme Court Gives Green Light For Employers To Use Offers Of Judgment To Moot FLSA Collective Actions

Today the US Supreme Court issued its long-awaited opinion in Genesis Healthcare v. Symczk. In the case, the Court held that employers could effectively end collective action lawsuits under the Fair Labor Standards Act (FLSA) by agreeing to pay the named plaintiffs in those lawsuits whatever they claim they are owed. The Court held that because the named plaintiff was made completely whole by the employer’s offer her individual claim was moot, and because the named plaintiff’s claim was moot the entire collective action litigation was dismissed. This decision provides a helpful tactical weapon for employers that face the prospect of long and expensive collective action litigation.

How To “Pick Off” A Big FLSA Collective Action Lawsuit
Laura Symczk was employed as a nurse for Genesis, and was non-exempt under wage laws like the FLSA. She filed an FLSA “collective action” against Genesis claiming that it unlawfully failed to pay her and other nurses for meal breaks in which she had to work (the FLSA requires that employers pay employees for all their work time, including during meal breaks when the employee is not relieved of all work duties). Very early in the litigation, Genesis Healthcare issued what is called an “offer of judgment” under Federal Rule of Civil Procedure (FRCP) 68, offering to pay Symczk everything she claimed she was owed for her own unpaid work time (about $7,500, plus her attorney fees to date). The trial court then dismissed her entire collective action lawsuit, finding that because Symczk was made completely whole by Genesis’ offer and no others had yet joined the collective action, the case was “moot.”

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U.S. Supreme Court Swats Case Back To Arbitration

In a terse per curium opinion issued today in Nitro-Lift Technologies v. Howard, the U.S. Supreme Court sent a very clear reminder to lower courts, and especially state courts, that once arbitration agreements are found enforceable, arbitrators, and not judges, are to decide everything else in the case involving interpretation of an arbitration agreement.  In so holding the Court reasserted that the Federal Arbitration Act ("FAA") and any Court opinions interpreting that law preempt any conflicting state law rules that disfavor private arbitration, including in the employment context.

The Rub:  Who Gets To Decide Legal Issues?

The case involved two employees who left Nitro-Lift, an oil company, to work for a competitor.  Nitro-Lift invoked arbitration pursuant to an arbitration clause in the employees' employment contract, because it believed the employees had violated a noncompete agreement.  The employees filed a lawsuit asking the trial court to declare the noncompete agreement invalid under Oklahoma law.  The trial court dismissed the employees' case and referred the case to arbitration.  On appeal, the Oklahoma Supreme Court agreed with the trial court that the arbitration agreement was enforceable, but then went on to find that the company's noncompete provision in the agreement was invalid under Oklahoma law.  The Oklahoma Supreme Court specifically held that the arbitration agreement did not preclude it from deciding questions of state law, including interpreting the Oklahoma state statute that it believed invalidated the noncompete agreement.

The narrow question before the U.S. Supreme Court was about who gets to decide legal issues related to the underlying contract claims in the dispute, after it has already been determined that the case belongs in private arbitration per a valid arbitration clause in that agreement.  Specifically, the issue was whether the judge, as opposed to the arbitrator, can can rule on the merits of the noncompete claim, including whether the noncompete provision in the agreement at issue was enforceable under state law.  The Court answered that question with a very solid "no"--once a judge finds that an arbitration agreement is enforceable and refers the case to arbitration, under the FAA the arbitrator, and not the court, will decide all other legal issues related to interpretation of the agreement, including legal interpretations of state contract law.  

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Stoel Rives Presents Webinar On Employer Group Health Plans After U.S. Supreme Court Decision Upholding "Obamacare"

As everyone who was not on Mars this summer knows, the U.S. Supreme Court issued a surprising and historic decision upholding key provisions of President Obama's Affordable Care Act ("ACA").  To help employers navigate the requirements of the law now that it has the stamp of approval of the Supreme Court, and to provide other updates on developments in federal health care reform, members of the Stoel Rives employee benefit and employment groups have been touring the region with a 90-minute presentation entitled "Health Care Reform After the Supreme Court’s Decision: Group Health Plan Update 2012."  The seminars were presented by Stoel Rives attorneys Howard Bye-Torre, Melanie Curtice, Bethany Bacci, Steve Woodland, Matthew Durham, Carolyn Walker, James Dale, Renae Saade, and Tony DeCristoforo in Portland, Seattle, Salt Lake City, Boise, and Anchorage during September and October.

Shameless Plug Alert!  Webinar Presentation on October 25, 2012

If you missed the show when it came to your town or are just interested in learning about this complex and evolving area of employee benefits law, there is one more opportunity to attend the seminar via a webinar which will be conducted on Thursday, October 25 at noon, Pacific Time. To RSVP for the webinar and get instructions for attending, please click here.

What's Covered

The seminars reviewed the Supreme Court decision upholding the constitutionality of the Affordable Care Act (ACA), and also some of the ACA's impacts which have already been felt by group health plans and employers, such as the requirement to cover children through age 26.  Regulatory developments planned for 2013 are also discussed, including:

  • the requirement to report the cost of health care coverage on W-2s;
  • the new disclosure document required by the ACA, the Summary of Benefits and Coverage (SBCs);
  • required 100% coverage for FDA-approved contraceptive methods for women; and
  • the reduction to $2,500 of the maximum amount that an employee can contribute to a health care flexible spending account. 

The seminars also discussed the new two federal fees on group health plans for 2013-2018, the Patient-Centered Outcomes Research Institute fee and the transitional reinsurance program fee. The seminars concluded with a discussion of the ACA requirements for 2014, including

  • the mandate for individuals to have health insurance coverage;
  • employer pay-or-play penalties, including new IRS guidance on the definition of “full-time” employees for purposes of the penalties;
  • recent IRS guidance on the 90-day maximum waiting period for health plans. 

We look forward to seeing you online for the webinar on October 25.

 

 

Supreme Court Rules Oral Complaints Of Wage Violations Are Protected Under FLSA

Today the U.S. Supreme Court issued another employee-friendly opinion in Kasten v. St. Gobain Performance Plastics Corp., holding by a 6-2 margin that the Fair Labor Standards Act ("FLSA") anti-retaliation provisions protect an employee’s oral complaints to supervisors about wage and hour violations. This is the latest of three opinions this term that have expanded the reach of various anti-retaliation provisions in employment discrimination statutes. (See World of Employment's analysis of the other two cases, Thompson v. North American Stainless, LP and Staub v. Proctor Hospital).

In Kasten, the plaintiff complained orally to his supervisors on several occasions that the location of time clocks in the workplace violated the FLSA, because it prevented employees from punching in and out while they were donning and doffing protective clothing and equipment.  Shortly afterwards, his employment was terminated for, ironically, multiple failures to properly punch in and out.  Plaintiff sued, claiming that his termination was in retaliation for his having complained that the Company was violating the FLSA.  The District Court dismissed his case, and the 7th Circuit affirmed, holding that the FLSA anti-retaliation provision, which prohibits employers from taking adverse action against employees because they “file any complaint or instituted or caused to be instituted any proceeding” complaining about wage and hour violations, protects only written complaints, not oral ones. 

The Supreme Court reversed, holding that oral complaints are also protected under the FLSA. The Court held first that the phrase “file any complaint” in the statute was ambiguous; the term “file” generally indicated a writing (although not always), while “any” indicated Congress intended to cover many different types of complaints.  The Court went on to look at the legislative history and purpose, Department of Labor interpretations, and numerous lower court opinions to ultimately decide that Congress must have intended the FLSA to protect oral complaints. 

At the end of the day, this opinion may change little for west coast employers. While the Kasten decision resolves a split among the Circuit courts, the law in the Ninth Circuit (which includes, amongst others, Oregon, Washington and California), has recognized for over a decade that oral complaints are protected under the FLSA. Further, the anti-retaliation provisions of other state and federal anti-discrimination statutes—most notably Title VII—also protect employees who make oral complaints of discrimination. Finally, the opinion merely holds that Mr. Kasten can go ahead with his lawsuit—he still needs to prove his case that his employer fired him because of his protected activity.

Still, Kasten and other recent U.S. Supreme Court decisions in Thompson and Staub provide useful reminders that courts--including the Supreme Court--read anti-retaliation protections broadly.  Employers must be careful to ensure and adequately document that any adverse employment actions against employees who have made any complaints about alleged unlawful activity in the past are for legitimate business reasons only. Retaliation claims are already the most common type of employment claims filed against employers.  This opinion isn’t going to change that. 

Supreme Court Upholds "Cat's Paw" Theory In Employment Discrimination Cases

Today the Supreme Court issued its opinion in Staub v. Proctor Hospital, upholding the "cat's paw" theory of employer liability, under which employers are liable for discrimination where lower-level supervisors with discriminatory motives influence, but do not make, adverse employment decisions made by higher-level managers.  The near unanimous opinion, authored by Justice Scalia, is likely to greatly increase employer accountability for the actions and recommendations of lower-level supervisors.

Vincent Staub worked for Procter Hospital as an angiography technician; he was also a member of the Army Reserves.  His immediate supervisors resented his absences, which required coworkers to “bend over backwards” to pick up the slack. In January 2004 Staub was placed on Corrective Action for failing to be at his desk as required, and in April 2004 his supervisor informed HR that Staub was again away from his desk without notifying a supervisor as required.  Staub disputed the original Corrective Action, and also said he left a voice mail for his supervisor before leaving his desk in April.  The HR Manager largely relied on the supervisor’s accusation, reviewed Staub’s personnel file, consulted with another HR employee, and decided to terminate Staub’s employment. 

Staub sued under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), which prohibits discrimination based on military service.  Under the so-called “cat’s paw” theory, Staub claimed that Procter Hospital was liable for discrimination, because the neutral decision-maker (the HR Manager) relied on information provided by lower-level supervisors who had discriminatory motives and were out to get him fired.  After winning in a jury trial, the district court granted Proctor Hospital’s motion to dismiss.  In affirming, the 7th Circuit had held that the employer should not be liable under the cat’s paw theory, because the lower-level supervisors’ input was not the “singular influence” on the decision, and because the HR Manager conducted “her own investigation into the facts relevant to the decision” and therefore was not “wholly dependent” on the discriminatory input.

Staub begins with an analysis of the text of USERRA, which expressly defines causation to include situations where discriminatory animus is "a motivating factor" in an adverse employment decision.  Drawing also on tort and agency principles, Justice Scalia concluded that the cat’s paw theory applies in cases where 1) a supervisor acts with discriminatory motive, 2) the discriminatory supervisor intends to cause the adverse action, and 3) the discriminatory act is a “proximate cause” of the adverse action.  Scalia rejected the argument that the decision-maker’s independent investigation should purge the decision of discriminatory motive, noting that the hostile supervisors’ recommendations remained a motivating factor in the decision.  He also noted, in contrast to the 7th Circuit, that the HR Manager largely relied on the supervisors’ account of the facts underlying the termination, and did not independently determine whether the supervisors’ recommendations were justified. 

 

What Employers Can Do:  Don’t Be A Cat’s Paw

While Staub opens the door wider to discrimination cases under the cat’s paw theory, the case offers some guidance on what employers can do to minimize exposure from these claims.  Most obviously, ultimate decision makers cannot simply rely on recommendations from subordinates, but should conduct a thorough and independent investigation into the facts underlying the employment action.  The subtext of Staub suggests the HR Manager’s investigation was far from adequate—she merely reviewed the personnel file and consulted another HR employee, but largely relied on the (hostile) supervisor’s accusation that Staub had, in fact, violated a workplace rule.  The better the independent investigation, especially into the underlying facts, the more likely it is to break the “proximate cause” nexus between coworkers’ discriminatory motive and the employer’s ultimate decision. 

In addition, and perhaps just as obvious, employers should do everything possible to detect and immediately end discriminatory animus brewing among lower level employees. The plaintiff inStaub easily satisfied the other two prongs of the Court’s test—that the supervisor acted with a discriminatory motive and intended to cause Staub’s firing—because the trial record was full of choice remarks by coworkers disparaging his military duty and complaining about his absences. His supervisors described his Reserve military duty as a “bunch of smoking and joking and a waste of taxpayers’ money,” and scheduled him additional shifts “to pay back the department for everyone else having to bend over backwards to cover his schedule for the Reserves.”

The Reach of the Cat’s Paw

Staub makes clear that its reasoning applies to more than just USERRA cases.  The opinion expressly noted that Title VII also uses the “a motivating factor” causation standard.  What is less clear is whether it applies to just discriminatory supervisors, or also to non-supervisory coworkers. For the moment, however, the Supreme Court has given a green light to cat’s paw cases, and employers should assume it could apply broadly and to any discrimination claim.

 

Supreme Court Holds Title VII Can Cover Third Party Retaliation Claims

The United States Supreme Court issued a unanimous opinion today in Thompson v. North American Stainless, LP., 562 U.S. ___ (2011), that confirms the expansive scope of persons protected by Title VII. The Court held that it is unlawful for an employer to intentionally harm one employee in order to retaliate against another employee who engaged in protected activity.

Plaintiff Thompson and his fiancée Regalado were engaged to be married and both worked for North American Stainless (NAS). The EEOC notified NAS that Regalado had filed a charge of sex discrimination. Thompson was fired three weeks later. The issue was whether Thompson could state a claim for retaliation, even though he had not engaged in any protected activity. The Court confirmed that “Title VII’s antiretaliation provision must be construed to cover a broad range of employer conduct.” It “prohibits any employer action that well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court found that it was “obvious” that Regalado would have been dissuaded from making her complaint if she knew that Thompson would lose his job as a result. 

The employer argued that to permit a third party retaliation claim in this case would lead to a dangerous slippery slope – would firing an employee’s boyfriend count? How about just a friend? Anytime the employer fired a person who happened to have a connection to someone else who had filed an EEOC charge, the employer would have potential liability. The Court responded: “Although we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII. . . . Given the broad statutory test and the variety of workplace contexts in which retaliation may occur, Title VII’s antiretaliation provision is simply not reducible to a comprehensive set of clear rules.” In other words, there is no bright line test for who is protected from retaliation. 

After concluding that the antiretaliation provision of Title VII was broad enough to encompass the activity in this case, the Court tackled the question of whether Thompson could sue NAS. Here the Court took a more narrow approach. It declined to follow the Court’s prior view that, to be “an aggrieved person” under Title VII, all that was required was that the person have “minimal Article III standing, which consists of injury in fact caused by the defendant and remediable by the court.” That minimalist approach would lead to “absurd consequences.” For example, if the minimalist approach was applied, a shareholder who could show that his stock value declined because of the company’s unlawful termination of a valuable employee could sue under Title VII. Instead, the test, the Court said, is as follows: “[A] plaintiff may not sue unless he falls within the zone of interests sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.” Thompson, it said, fell within the “zone of interests” protected by Title VII because he was a NAS employee and NAS intended to injure him in order to punish Regalado. 

What This Case Means for Employers

Employers probably didn’t need another reminder that the potential claims they face are only limited by the imagination of plaintiffs’ attorneys. Before an employer takes any disciplinary action against anyone, it must ensure that it has legitimate business reasons for doing so and that an improper reason – such as a desire to exact revenge on another employee – hasn’t infected the decision. 

Oregon Supreme Court Allows Greater Punitive Damage Award in Some Employment Cases

The Oregon Supreme Court has recognized an exception to limits on punitive damage awards in certain employment cases where the compensatory damages are low.  In Hamlin v. Hampton Lumber Mills, Inc., the Oregon Supreme Court considered the case of a plaintiff who was injured on the job and whose employer failed to reinstate him as required by ORS 659A.043.  That statute requires employers to reinstate injured workers on request within three years of the injury, unless other exceptions apply.  A jury found the employer had violated ORS 659A.043 and awarded the plaintiff $6,000 in lost wages and $175,000 in punitive damages.

As the Court noted, the Due Process Clause in the Fourteenth Amendment of the United States Constitution imposes limitations on punitive damages awards.  The exact limitations are based on factors including the ratio of compensatory to punitive damages and the reprehensibility of the act, among other things.  Courts have held that in the ordinary case, the ratio of punitive damages to compensatory damages should be limited  to single digits (for example, 4:1).  In this case, the ratio was 22:1.  The Oregon Court of Appeals held that the punitive damages award was unconstitutional and ordered it reduced to $24,000 – or a 4:1 ratio.

The Oregon Supreme Court reversed, upholding the 22:1 ratio because it determined that the compensatory damages were “relatively small” and that a violation of ORS 659A.043  was particularly reprehensible.  The Court noted that “the harm that offending employers inflict may be more than monetary and . . . a plaintiff who is not reinstated and who is, therefore, unemployed, is in a more vulnerable position than is a person who is employed when he or she suffers monetary loss.  A person who suffers a loss of employment is without the present ability to earn money to recover economic loss and to avoid further consequential loss.” 

The ruling leaves a number of perplexing loose ends.  First, as the dissenting justices noted, the opinion creates the possibility that a plaintiff who receives a larger compensatory damage award could actually be limited to a smaller punitive damages award.   For example, a plaintiff who received $25,000 in lost wages could be limited to a ratio of 4:1, allowing only $100,000 in punitive damages – less than those awarded in this case.  Second, the ruling leaves unclear whether ORS 659A.043 is the only statute that the Court will consider it particularly reprehensible to violate, or whether the Court’s holding applies to any unlawful employment practice that leaves the plaintiff employee without a job.  The matter may end with the United States Supreme Court.  In an unusual move, the dissenting justices specifically requested further clarification from that Court. 

 

Supreme Court issues Favorable Ruling for Employers in Texting/Privacy Case

Yesterday the United States Supreme Court issued a long-anticipated decision in City of Ontario v. Quon, unanimously ruling that a search of sexually explicit personal text messages sent by a police officer using his department pager was reasonable and did not violate the individual officer’s privacy rights. At issue was the right of a government employer to monitor its workers private communications because it believed employer-owned equipment was being abused. Even if a public employee has a legitimate privacy expectation, an employer’s intrusion on that expectation “for noninvestigatory, work-related purposes, as well as for investigations of work-related misconduct, should be judged by the standard of reasonableness under all the circumstances,” Justice Anthony Kennedy wrote. Click here to read the Supreme Court’s full decision in Quon.

In Quon, the employer, the City of Ontario, distributed to its police officers pagers with texting capability. The City audited the use of text messages by the officers to determine whether coverage charges may have been caused by personal use of the service. During the audit, it discovered that Quon had sent several personal, sexually explicit text messages. Quon sued the City, asserting violations of his right to privacy under the Fourth Amendment of the United States Constitution as well as under Article I, Section I of the California Constitution. The federal District Court dismissed Quon's suit after a jury found that the City conducted the audit to investigate usage, not misconduct. The Ninth Circuit Court of Appeals reversed, holding that the City violated Quon's constitutional privacy rights by reading his private texts, and the City's articulated policies did not give Quon sufficient notice that his texts could be read by others to overcome his privacy rights. The Ninth Circuit’s decision, which we blogged on the World of Employment, was unanimously overturned by the Supreme Court.  

 

What does the Supreme Court’s decision mean for employers?  The Supreme Court issued a narrow ruling in a case involving a public, not private, employer. For most private employers, this case could have little or even no impact because federal privacy rights such as those that come from the U.S. Constitution’s Fourth Amendment apply only to public, and not private, employers. Justice Kennedy cautioned that even with regard to public employers, the “Judiciary risks error by elaborating too fully on the Fourth Amendment implications of technology before its role in society has become clear . . . .” Private California employers should continue to be wary: California courts have sometimes applied state constitutional rights to private employers, and could rule that their employees have privacy rights in work-provided email and text systems. For all employers, whether or not the Fourth Amendment applies to them, it remains a “best practice” to adopt and distribute policies clearly stating that employees have no expectation of privacy in employer-owned equipment, or in communications they make using or interfacing with employer-provided equipment and systems, such as email, text messages, cell phones, social media and other avenues of technology.

Supreme Court Invalidates Nearly 600 Decisions Made by Two-Member NLRB

This morning the United States Supreme Court issued a highly-anticipated decision in New Process Steel v. National Labor Relations Board, ruling 5-4 to effectively invalidate almost 600 decisions made by the NLRB during the time it only had two members. 

Normally, the NLRB is comprised of five members, but typically delegates its powers to decide most cases to panels of three members, in which a two-member majority can (and often does) carry the day.  However, from late 2007 through March 2010, the Board only had two members.  Those two members argued that they had the authority to decide cases as long as they agreed on the decision; after all, had they been the majority on a three-person panel, they would have made the same decisions.

The Supreme Court disagreed.  It held that the National Labor Relations Act (NLRA), the law that gives the NLRB its powers, only allows the Board to delegate the authority to decide cases to a panel of at least three members.  Accordingly, no two-member panel could have decision-making authority under the NLRA. 

What does this mean for employers?  If you had one of the 600 cases decided by the two-member Board, it may mean that your case will have to be reconsidered by a new three-member panel.  We suspect, however, that the vast majority of those cases will be decided the same way.  For the rest of us, this decision will have little impact.  The two-member Board did not take up any controversial cases and did not issue any decisions that would overturn existing precedent or make "new law." 

Supreme Court: Disparate Impact Plaintiffs Can Sue Based on the Application of the Discriminatory Practice

The Supreme Court today issued a judicial smackdown to the Seventh Circuit Court of Appeals, unanimously reversing its decision in Lewis v. City of Chicago (as we suggested it should when we reviewed the details of this case back in October!). Briefly put, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their application test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The Seventh Circuit held that the “discrimination was complete when the tests were scored...and the applicants learned the results.”

Justice Scalia, writing for the entire Court, stated that because there is no dispute that the claim was filed within 300 days of the hiring of the new class, the issue in this case is not “whether a claim predicated on the [on the hiring of the new firefighter class] is timely, but whether the practice thus defined can be the basis for a disparate-impact claim at all.” (Emphasis in original.) In other words, while the parties agreed that the adoption of a practice had a disparate impact, the real question was whether a cause of action can arise from the application of that same practice. The Court held that it could. Citing its recent opinion in another firefighter test case—Ricci v. DeStefano, the court noted that “a plaintiff establishes a prima facie disparate-impact claim by showing that the employer ‘uses a particular employment practice that causes a disparate impact’ on one of the prohibited bases.”

Per the Court, the City believes that this decision “will result in a host of practical problems for employers and employees alike,” in that it may subject employers to an increased number of disparate-impact lawsuits based on long-stranding practices. That may, in fact, be true. Following this decision, any employer engaging in a practice whose application may result in a disparate impact on some protected classification of employees should take the time to reevaluate that practice. While there may be a legitimate business defense for the practice (as remains to be seen in the Lewis case on remand), it’s going to be easier for employees to get their foot in the door and state a claim.

Supreme Court To Decide Scope of Cat's Paw in Employment Cases

 

Yesterday, the Supreme Court granted certiorari in Staub v. Proctor Hospital to address the question of when an employer may be held liable in “cat’s paw” situations, where an employee with unlawful intent influences a decisionmaker but is not involved in making the ultimate employment decision.

In this case the employee, Vincent Staub, was a member of the Army Reserves. He was required to attend occasional weekend training as well as a two-week training program during the summer. Reservists, of course, are protected from discrimination by the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). The department’s second in command, Janice Mulally, resented the fact that Staub was in the Reserves. She made numerous anti-Reserves comments and purposely scheduled him on weekends when he had training. In the weeks leading up to his termination, Staub was disciplined for allegedly insubordinate behavior. The veracity of the allegations against him were suspect, coming largely from Mulally, who was known to dislike Staub. Staub was terminated by the Vice President of Human Resources after he allegedly engaged again in similar insubordinate behavior. The parties agree that the decisionmaker had no unlawful animus whatsoever. She testified that her decision was based on both the more recent allegations of insubordination, as well as Staub’s well-documented history of being difficult to work with.

At trial, Staub sought to attribute Mulally’s animus to the decisionmaker, arguing that the decision would not have been made but for Mulally’s unlawful animus. The jury returned a verdict in Staub’s favor.  On appeal, the Seventh Circuit reversed that decision, noting that in order to successfully assert a cat’s paw theory, the discriminatory animus of the non-decisionmaker can only be attributed to the decisionmaker where the non-decisionmaker had “singular influence” over the decisionmaker. The Court held that while the decisionmaker was clearly influenced by Mulally, there was no evidence of “blind reliance,” and the cat’s paw theory should never have gone before the jury.  The Court pointed to undisputed evidence that the decisionmaker took into account other aspects of Staub’s employment unrelated to the alleged acts reported by Mulally, including his reputation for being difficult to work with, and his history of employment issues dating back to the beginning of his employment--before Mulally became second in command of the department.

While not completely eviscerating the cat’s paw doctrine, the Seventh Circuit in Staub enunciated a very narrow, pro-employer, interpretation of the “singular influence” requirement. What the Supreme Court may do is anybody’s guess, but it seems likely that given the Court’s current makeup it will affirm the Seventh Circuit’s narrow interpretation of the cat’s paw doctrine. A copy of the Seventh Circuit opinion can be found here

Supreme Court to Review Text Message Case; Primarily of Interest to Public Employers

Yesterday the United States Supreme Court agreed to consider whether a police officer has a reasonable expectation of privacy in text messages sent using his department-issued pager.  The Ninth Circuit Court of Appeals ruled earlier this year that the officer had such a privacy right.  Click here to read the opinion below in City of Ontario, California v. Quon

In Quon, the employer, the City of Ontario, distributed to its police officers pagers with texting capability.  The City then audited the use of text messages by the officers to determine whether overage charges may have been caused by personal use of the service.  During the audit, it discovered that Quon had sent several personal, sexually explicit text messages.  Quon sued the City, asserting violations of his right to privacy under the Fourth Amendment of the United States Constitution as well as under Article I, Section I of the California Constitution.  The District Court dismissed Quon's suit after a jury found that the City conducted the audit to investigate usage, not misconduct.  The Ninth Circuit reversed, holding that the City violated Quon's constitutional privacy rights by reading his private texts, and the City's articulated policies did not give Quon sufficient notice that his texts could by read by others to overcome his privacy rights. 

What does this mean for employers?  For most private employers, this case will have little or no impact.  Federal privacy rights, such as those that come from the Fourth Amendment, apply only to public employers and not to private ones.  Private California employers should watch out:  California courts have sometimes applied state constitutional rights to private employers, and could rule that their employees have privacy rights in work-provided email and text systems.  Still, it is a good practice for all employers, public and private and in all states, to adopt and distribute policies clearly stating that employees have no expectation of privacy in communications they make using employer-provided equipment and systems, such as email, text messages, cell phones, etc. 

Supreme Court Lets Stand Ruling Allowing EEOC to Issue Subpoenas After Right-To-Sue

Yesterday the U.S. Supreme Court declined to review a Ninth Circuit Court of Appeals decision that allows the Equal Employment Opportunity Commission (EEOC) to continue investigating allegations of employment discrimination, and even to issue subpoenas to employers, after issuing a right-to-sue letter to the employee who filed the initial complaint.  Click here to read the Ninth Circuit decision in Federal Express Corp. v. EEOC

In order to file a lawsuit under Title VII of the Civil Rights Act of 1964, an employee must first file a complaint of discrimination with either the EEOC or an analogous state agency, a process known as "exhausting administrative remedies."  Only after the EEOC issues a "right-to-sue letter" may the employee then file a lawsuit.  It is not uncommon for an employee to file a complaint with the EEOC and withdraw it almost immediately, obtain the right-to-use letter and file a lawsuit, all before the EEOC has had a chance to investigate.  In Federal Express, the employee did just that in order to join a pending class action lawsuit.  The employer expected the EEOC to drop its investigation, but instead EEOC continued to investigate and issued a subpoena to the employer. 

The Ninth Circuit enforced the subpoena, writing:  "By continuing to investigate a charge of systemic discrimination even after the charging party has filed suit, the EEOC is pursuing its obligation to serve the public interest."  The Ninth Circuit's decision is in line with a decision from the Third Circuit, but contrary to decisions from the Fifth, Seventh and Tenth Circuits.  The Supreme Court will often take a case like Federal Express to resolve such splits between the circuit courts, but declined to do so in this case.  As a result, the EEOC's investigatory powers will continue to vary depending on where a complaint is made. 

Given the Supreme Court's ruling in Federal Express, employers can no longer safely assume that the EEOC will drop its investigation once it issues a right-to-sue letter.  The EEOC may choose to continue investigating charges of discrimination, especially in cases involving allegations of systemic or widespread violations of anti-discrimination law.  Employers (at least those in the Ninth and Third Circuits) should be prepared to comply with EEOC investigations even after the right-to-sue letter has issued. 

Supreme Court to Rule on Authority of Two-Member NLRB

This week the U.S. Supreme Court agreed to hear an appeal in New Process Steel v. NLRB and determine whether the National Labor Relations Board (NLRB or "the Board") has the authority to decide cases with only two sitting members. 

The NLRB is the independent federal agency that administers the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector.  Typically, the NLRB is made up of five members, appointed by the President.  There are currently three vacancies on the Board, leaving only two sitting members.  The statute governing the NLRB's powers (29 U.S.C. § 153(b), if you really care) provides that "three members of the Board shall, at all times, constitute a quorum of the Board."  Nevertheless, the two remaining Board members have decided a number of cases, under the theory that as long as those two members agree, they would have formed the majority of any three-member quorum anyway. 

The Court will resolve a split between the federal appellate courts.  In New Process Steel v. NLRB (the case on appeal) the Seventh Circuit held that the current two-member NLRB does have the power to decide cases.  The First Circuit agreed in in Northeastern Land Services v. NLRB.  However, the D.C. Circuit disagreed in Laurel Baye Healthcare of Lake Lanier v. NLRB and rejected the power of a two-member Board to do anything.  If you want to read more about this dispute, click here to read New Process Steel's Petition for Writ of Certiorari to the Court. 

For most employers, New Process Steel will have little relevance--none of the cases decided by the two-member Board were particularly controversial, and none represented a significant departure from existing NLRB law.  The only employers with a significant stake in the outcome of New Process Steel will be those employers whose cases were ruled on by the two-member Board.  If the Court reverses New Process Steel, those cases will be reheard by a future three-member panel, and will likely be upheld. 

The First Monday in October: Supreme Court Roundup

The first Monday in October traditionally marks the beginning of the United States Supreme Court's yearly term - and it provides an excellent opportunity to look at the cases the Court will be hearing this year.  In an earlier post, the World of Work brought you detailed discussion of the Court's only Title VII case this term:  Lewis v. City of Chicago.  Here's a sampling of other labor and employment-related cases to watch for throughout the term:

This morning, in Mohawk Industries, Inc. v. Carpenter, the Court will consider whether an employer's attorney's investigation of an internal complaint is protected by the attorney-client privilege.  The internal complaint alleged that the company was conspiring to hire individuals who were not authorized to work in the United States.  The case involves a former employee's claim for witness tampering; a separate lawsuit involving the alleged conspiracy is proceeding on a separate track.

On October 7, the Court will hear a case involving the Railway Labor Act.  The issue in Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers is whether the Seventh Circuit Court of Appeals had the power to overturn, on due process grounds, an arbitration award in the railroad's favor.  

On October 14, in Perdue v. Kenny A., the Court will consider whether attorney fee awards under 42 USC 1988 can be enhanced when the lawyer does a particularly good job.  Section 1988 is a common basis for fees in employment-related lawsuits.

On December 9, the Court will hear Stolt-Nielsen SA v. AnimalFeeds International.  This case asks the Court to decide whether an employee bringing a claim under an arbitration agreement may sue, not only on his own behalf, but on behalf of a class of similarly situated employees.  In this case, the arbitration agreement did not specifically allow class claims, but the arbitrators allowed those claims anyway.

Finally, on a date to be announced, the Court will hear Granite Rock Co. v. International Brotherhood of Teamsters.  This case again involves questions about arbitration.  Here, the issue is whether an arbitrator (not a court) may decide whether a valid collective bargaining agreement exists.

Supreme Court to Decide Title VII Statute of Limitations Question

The U.S. Supreme Court agreed yesterday to hear a challenge to a Seventh Circuit Court of Appeals decision in a case with similar factual overtones to the Ricci case decided earlier this year. Like Ricci, this case involves a firefighter qualification test that had a disparate impact on black applicants; unlike Ricci, at issue here is the statute of limitations on a Title VII claim.

In this case, Lewis v. City of Chicago, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The trial court held that the hiring of each new firefighter was a new violation of Title VII, so the EEOC charges were timely filed. On appeal, the Seventh Circuit reversed, holding that the “discrimination was complete when the tests were scored...and the applicants learned the results.” At issue for the Supreme Court is whether the limitations period for a Title VII claim begins to run when an employer announces the results of a test that could violate Title VII’s disparate impact provision, or if the right to sue begins only once the employer has acted on that policy.

At face value, it seems that the trial court probably got this one right and the Supreme Court should reverse the Seventh Circuit. How can an employee know what the actual disparate impact will be until the employer’s hiring decisions are actually made? If, for example, the employer’s business needs ultimately dictate that it need hire nobody, there has been no harm done regardless of the results of the test. An actual harm needs to occur before the right to sue accrues. Notwithstanding that analysis, and given the current makeup of the court, however, it is unclear which way the Court will go on this one. The Stoel Rives World of Employment will let you know when a decision is reached and how that decision may impact your workplace.

2009 Mid-Term Federal Legislative Update

We expected many changes in federal labor and employment law in 2009 - for the first time in years, Democrats control the White House and both houses of Congress and have the political ability to make significant reforms.  However, not much has happened in 2009: we have only significant labor and employment bill signed into law.  To be fair, President Obama and the Congress have had other things to worry about:  a war or two, a lousy economy, health care and selecting a new White House dog to name a few.

But, the 2009-2010 legislative session is still not over, and Congress may yet pass some of the many labor and employment-related bills still pending.  Employers may want to take note, as some of these may become law before the end of the session in 2010.  Click on "continue reading" for a complete list.

Continue Reading...

Supreme Court Agrees to Hear Case About Meddling International Union

The US Supreme Court just agreed to hear a case asking just how much international unions will be allowed to meddle in the affairs of their local affiliates.  In Granite Rock v. Teamsters, the employer sued the International Brotherhood of Teamsters in federal court claiming that the International interfered with the relationship between the employer and the Local Teamsters union. 

In Granite, the employer and the Local had reached a tentative new agreement which contained a no-strike clause. The employer alleged that the Local ratified the agreement and then engaged in a strike.  Apparently a high ranking official of the International was the motivating force behind the strike.  The 9th Circuit held that the employer could not sue the International because the agreement was between the employer and the Local, and did not involve the International.  The Supreme Court granted cert and will hear the case, perhaps recognizing that international unions are often working behind the scenes with their local unions.

The Court will probably not hear the case until the 2010 session, and it could be some time before an opinion is issued.   It is not uncommon for employers to have good relationships with local unions.  Sometimes those relationships are strained through pressure from out-of-town international union officials.  Currently, international unions are somewhat insulated from liability for meddling in negotiations and other ongoing business relationships between local unions and employers.  Ultimately, this decision could open a new legal avenue for employers to hold international unions accountable for their actions.

 

Ricci v. DeStefano -- Supreme Court Holds City Violated Title VII By Rejecting Racially Disparate Test Results

To end its term, the Supreme Court today issued its long awaited opinion in Ricci v. DeStefano--a case that has received extra media attention because Supreme Court nominee Sonia Sotomayor was on the Second Circuit Court of Appeals panel that decided the case below. The conservative justices on the Court  reversed the Second Circuit (and by extension, Judge Sotomayor) in a 5-4 decision, ruling that the city of New Haven violated Title VII by discarding the results of a firefighter promotion test where white applicants fared disproportionately better than other applicants.  As one might expect, Justice Kennedy provided the swing vote and authored the majority opinion.

New Haven used the test in question to identify firefighters best qualified for promotion.  Despite being objectively administered, the test's racially disproportionate results led the city to question whether it should validate the results.  The city, of course, found itself in a "damned if you do, damned if you don't" position:  certify the test results, and face Title VII disparate impact litigation from minority applicants; fail to certify them, and face Title VII reverse discrimination litigation from the white officers who passed but were denied a promotion.  The city opted for the latter course, and, as expected, the white firefighters filed a reverse discrimination lawsuit.  The city prevailed on summary judgment at the district court level, and the Second Circuit affirmed.

The Supreme Court found that discarding the tests violated Title VII , while certifying the test would not have been a violation of law because there was no "strong basis in evidence" for believing that the black firefighters would prevail on a disparate impact claim.  The court noted that despite what otherwise would have constituted a "prima facie" showing of disparate impact race discrimination, several defenses were available to the city--namely that the exam at issue was job related, consistent with business necessity, and there existed no equally valid, less discriminatory alternative that suited the city's needs but was not adopted.  The four dissenting justices disagreed, arguing that the majority's analysis was flawed because "New Haven had ample cause to believe its selection process was flawed and not justified by business necessity."

Ultimately, the Ricci decision will have little to no impact on most employers, but represents a small victory for employers (despite the positioning here that held against the city/employer).  Employers can now take a somewhat more confident stand in backing test results that may demonstrate some disparate impact, so long as the test was objective and no other less discriminatory alternative exists.  The Ricci decision may not last for long, however.  Political condemnation by Democrats has been swift, with Senator Patrick Leahy (D-VT) saying that "it is less likely now that employers will conscientiously try to fulfill their obligations under this time-honored civil rights law.  This is a cramped decision that threatens to erode these protections and to harm the efforts of state and local governments that want to build the most qualified workforces."  Don't be surprised if Congress passes legislation down the road aimed at upending the Ricci decision.

Supreme Court Tightens Standards for Age Discrimination Plaintiffs

Yesterday the United States Supreme Court ruled 5-4 that trial courts may not use a "mixed motive" framework in federal age discrimination cases.  Rather, plaintiffs in age discrimination cases must prove that "but for" their age, they would not have been discriminated against.  Click here to read the Court's decision in Gross v. FBL Financial Services

Under a 1991 amendment to Title VII  of the Civil Rights Act of 1964, plaintiffs may prove race, sex, religion or national origin discrimination by proving either they would not have been discriminated against "but for" their employer's unlawful motive, or if their employer had a "mixed motive," meaning that the employer had some lawful motives to take an adverse action against the employee, but also some unlawful motives.  In "mixed motive" cases, employers can avoid some (but not all) liability by proving that it would have taken the same action against the employee even absent the unlawful motive.  Prior to Gross, several circuit courts (including the Ninth Circuit Court of Appeals) had applied the "mixed motive" framework in cases under the Age Discrimination in Employment Act or the Americans with Disabilities Act, even though those statutes do not incorporate a"mixed motive" framework. 

Gross is ultimately a technical case mostly of interest to employment litigators.  Gross will make it incrementally more difficult for plaintiffs to prevail in age discrimination and some other federal discrimination cases.  Employers do not need to change their current policies and practices in light of Gross - rather, employers should continue not to discriminate on the basis of age, sex or any other characteristic protected by federal, state or local law.  (Well, duh!)

Judge Sotomayor's Record Shows Even-Handed Approach to Employment Law

President Obama recently nominated Judge Sonia Sotomayor to replace outgoing Justice David Souter on the United States Supreme Court.  If you're like us, you're wondering what her nomination might mean for employment law.  While it's never easy to predict how a nominee will rule once on the Supreme Court (just ask George H.W. Bush), early indications are that Judge Sotomayor takes an even-handed approach to employment law issues.

In her 16-year career on the bench, first as a District Court Judge and then as a Judge on the Second Circuit Court of Appeals, Judge Sotomayor has been involved in over 100 opinions on employment cases.  She's ruled in favor of both employers and employees, and her decisions do not seem to be skewed one way or the other.  Click here for a list of of Judge Sotomayor's employment law decisions

If you look through this list, you'll see that she's made several rulings in favor of employers.  While some conservatives are already attacking Judge Sotomayor for "judical activism," they will find no support for those charges in her employment law record.  Assuming she takes this same approach on the Supreme Court, we can expect her to be a critical swing vote on future employment cases. 

Tomorrow:  Judge Sotomayor's Labor Record

Supreme Court Clears Pension Plan That Differentiated Pregnancy Leave Prior to the PDA

Today the U.S. Supreme Court held that an employer does not violate the Pregnancy Discrimination Act (PDA) if it pays pension benefits based in part on pre-PDA calculations that gave employees less retirement credit for pregnancy leave than for other types of medical leave.  Click here to read the Court's decision in AT&T Corp. v. Hulteen

The employer in Hulteen, AT&T, based its pension calculations on a seniority system based on years of service minus uncredited leave time.  AT&T gave less credit for pregnancy absences than it did for other types of medical leaves.  When the PDA was enacted in 1978, AT&T replaced its old plan a plan that provided the same service credit for pregnancy leave; it did not, however, make any retroactive adjustments for pre-PDA pregnancy leaves.  Some female employees, including the plaintiff Hulteen, received less credit for pre-PDA pregnancy leaves, and therefore received smaller pensions. 

The lower courts held that this violated Title VII; however, the Supreme Court reversed 7-2.  Because AT&T's pension payments accord with the terms of a bona fide, non-discriminatory seniority system, they are insulated from challenge under Title VII §703(h).  (The system was considered non-discriminatory because, prior to enactment of the PDA, an accrual rule limiting the seniority credit for time taken for pregnancy leave did not unlawfully discriminate onthe basis of sex.)

Supreme Court: Arbitration Provisions in Collective Bargaining Agreements Enforceable on Statutory Claims

Today the United States Supreme Court issued a decision of paramount importance to union employers, holding that arbitration clauses in collective bargaining agreements (CBAs) are enforceable as to statutory claims.  Click here to read the decision in 14 Penn Plaza LLC v. Pyett

In Penn Plaza, several union members asserted claims against their employer under the Age Discrimination in Employment Act, alleging that they were reassigned to different positions because of their age.  The employer moved to dismiss their suits on the basis that the CBA required union members to submit any claims of employment discrimination to binding arbitration under the CBA’s grievance and dispute resolution procedures.  Those motions were denied by the lower courts. 

In a 5-4 decision, the Supreme Court reversed, holding that a CBA provision that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.  Because employment-related discrimination claims are "conditions of employment" under the National Labor Relations Act, they are subject to mandatory bargaining.  The court also emphasized that arbitration is an adequate means to resolve statutory claims as well as alleged contract violations. 

The Penn Plaza decision reverses a long line of court cases holding that union members cannot be required to arbitrate statutory claims.  This is a great outcome for union employers, who can now require union employees to arbitrate statutory claims -- generally a more cost-effective and expedient method of resolution.  If your CBA does not contain such a provision (or if the provision does not provide for arbitration as the exclusive means to resolve statutory claims), you might want to consider proposing such a provision in your next contract negotiations. 

Supreme Court Upholds Idaho Law on Union Speech 6-3

The U.S. Supreme Court ruled earlier this week that an Idaho law banning local government employers from allowing payroll deductions for political activities does not violate unions' First Amendment free speech rights.  You can download the opinion here:  Ysursa v. Pocatello Ed. Ass'n, U.S., No. 07-869, 2/24/09).

The Idaho Voluntary Contributions Act, enacted in 2003, prohibited public employees' unions from using payroll deductions to fund political activities, defined as “electoral activities, independent expenditures, or expenditures made to any candidate, political party, political action committee, or political issues committee or in support of or against any ballot measure.”  A group of unions representing state and local employees in the state sued to challenge the VCA on the basis that it unlawfully restricted unions' First Amendment Right. 

A 6-3 majority of the Supreme Court held that the VCA does not violate unions' rights:  “Idaho's law does not restrict political speech, but rather declines to promote that speech by allowing public employee checkoffs for political activities,” Chief Justice Roberts wrote for the majority. Applying rational-basis review, he found that the restriction “is reasonable in light of the State's interest in avoiding the appearance that carrying out the public's business is tainted by partisan political activity.”

With that endorsement, don't be surprised if more states (particularly right-to-work states) pass similar legislation. 

Supreme Court Broadens Scope of Title VII's Anti-Retaliation Protections

The U.S. Supreme Court issued an important decision yesterday, clarifying that employees who report discrimination in response to an employer's internal investigation are protected by the anti-retaliation provisions of Title VII.  Click here to download the case:  Crawford v. Metropolitan Government of Nashville

In Crawford, the plaintiff was interviewed as part of her employer's investigation into another employee's complaint of sexual harassment.  In response, Crawford reported harassment that she experienced.  Soon thereafter, Crawford's employment was terminated; the employer claimed the plaintiff embezzled funds, but Crawford filed a lawsuit alleging the termination was in retaliation for her participation in the investigation.  The district court dismissed Crawford's lawsuit on the grounds that, while Title VII makes it unlawful to retaliate against an employee because she "opposed" sexual harassment, Crawford did not "oppose" anything; she merely answered questions in response to an internal investigation.  

The Supreme Court reversed (9-0!), holding that "oppose" should be read broadly.  As Justice Souter wrote:

"'Oppose' goes beyond 'active, consistent' behavior in ordinary discourse, where we would naturally use the word to speak of someone who has taken no action at all to advance a position beyond disclosing it.  Countless people were known to “oppose” slavery before Emancipation, or are said to “oppose” capital punishment today, without writing public letters, taking to the streets, or resisting the government.  And we would call it 'opposition' if an employee took a stand against an employer’s discriminatory practices not by 'instigating' action, but by standing pat, say, by refusing to follow a supervisor’s order to fire a junior worker for discriminatory reasons."

What does this mean for employers?  For starters, the number of employees protected by Title VII's anti-retaliation provisions has significantly increased.  When making employment decisions -- terminations, layoffs, discipline -- employers should include passive participants in discrimination investigations in their list of "high risk" employees.  And, even though Crawford considered only Title VII, we expect courts will apply its ruling to the similar anti-retaliation provisions in other statutes as well, such as the Americans with Disabilities Act, the Age Discrimination in Employment Act, and others. 

Supreme Court to Hear Mixed-Motive Age Discrimination Case

Last week, the United States Supreme Court agreed to review Gross v. FBL Financial Services, Inc., a case involving whether a plaintiff alleging a claim under the Age Discrimination in Employment Act must present "direct evidence" of discrimination to be entitled to a mixed-motive jury instruction. 

A mixed-motive case in one where the evidence shows that an impermissible factor - such as age - was considered in making an employment decision even if the employer also based the decision on other permissible factors.  In Gross, the plaintiff prevailed after a jury trial in which the jury was instructed that it was sufficient that the plaintiff proved age was a "motivating factor" in his employer's decision to terminate his employment.  (A "motivating factor" is considered an eaiser burden of proof than "direct evidence").  The Eighth Circuit Court of Appeals reversed, holding that the "motivating factor" standard applies only to cases brought under Title VII of the Civil Rights Act of 1964 (i.e., sex, race, national origin and religious discrimination claims) and that Gross needed to prove his case with direct evidence to be entitled to a mixed-motive instruction.

Do employers need to be concerned about this case?  Not really.  This is one of those cases that means more for us lawyers than it does for our clients.  If the Court rules for Gross, it will make certain types of age discrimination marginally easier for plaintiffs, but this will not change an employer's obligation to base employment decision only on permissible factors, such as performance, and not on impermissible factors, such as age. 

Supreme Court Rejects Appeal on Aliens' Right to Vote in Union Elections

Earlier this month, the United States Supreme Court declined to review a ruling from the Court of Appeals for the District of Columbia Circuit holding that unauthorized aliens are "employees" under the National Labor Relations Act (NLRA) and therefore entitled to cast votes in a union election. 

In Agri Processor Co. v. NLRB, the employees elected the United Food and Commercial Workers Union Local 342 as their bargaining agent in 2005 election; however, the employer refused to bargain with the union on the basis that 17 of the 21 employees who cast ballots were not legally authorized to work in the United States, and therefore not "employees" under the NLRA. 

In a 2-1 decision that was affirmed by the D.C. Circuit, the National Labor Relations Board held that the certification of Local 342 was valid because the voters were employees under the NLRA even if they were hired in violation of the Immigration Reform and Control Act.  That decision will stand now that the Supreme Court has passed on its opportunity to review the case.  With the passage of the Employee Free Choice Act appearing all but certain, authorization cards signed by unauthorized alien employees will likely be held valid as well. 

U.S. Supreme Court to Hear Six L&E Cases This Term

The U.S. Supreme Court opened its 2008-2009 term on October 6 with six labor and employment law cases on its docket.  (For docket information and questions presented, click on the name of the case). 

  • Locke v. Karass:  may a public employee union may charge nonmembers for representational costs for litigation expenses incurred by the international union on behalf of other bargaining units?
  • Kennedy v. Plan Administrator for DuPont Savings & Investment Plan:  is a qualified domestic relations order (QDRO) is the only valid way under ERISA for a divorcing spouse to waive his or her right to the other spouse's pension benefits?
  • Crawford v. Metro. Gov't of Nashville & Davidson County:  Is an employee who cooperates with an employer-initiated investigation into alleged unlawful discrimination protected by Title VII's anti-retaliation provisions? 
  • Ysursa v. Pocatello Education Ass'n:  does an Idaho law that prohibits local government employers from allowing employee payroll deductions for political activities violate the First Amendment free speech rights of unions and their members?
  • 14 Penn Plaza LLC v. Pyett:  do employees covered by a collective bargaining agreement which providies that statutory employment discrimination claims must be pursued through the contractual grievance and arbitration procedures have a right for a court to decide their discrimination claims?
  • AT&T Corp. v. Hulteen:  must an employer give full service credit for purposes of calculating retirement benefits for pregnancy leaves taken before the Pregnancy Discrimination Act of 1978 if the plan gave full credit for other types of temporary disability leaves? 

Some of these cases (such as the Penn Plaza and Crawford cases) have the potential to make significant changes in existing law.  Stay tuned to the Stoel Rives World of Employment for developments as they occur!

Supreme Court Accepts Review of AT&T Retirement Benefits Case

Earlier this week, the U.S. Supreme Court agreed to consider whether employers may be liable under Title VII for not giving female employees full credit for pregnancy leaves in calculating retirement benefits.  AT&T Corp. v. Hulteen, U.S., No. 07-543.

The Ninth Circuit ruled last August that AT&T violated Title VII by calculating the female plaintiffs' retirement benefits based on a system which denied them credit for pregnancy leaves taken before the 1978 by the Pregnancy Discrimination Act  of 1978, while giving credit for other types of leaves.  Hard to say which way this one will go, but odds are it will be a 5-4 decision.  Stay tuned.

Big Day at the Supreme Court: Four New L&E Decisions

Today the U.S. Supreme Court issued four labor and employment-related decisions; none, however, were big surprises or substantial changes in the law.

 First, in Meacham v. Knolls Atomic Power Laboratory, the Court held 8-0 that an employer defending an Age Discrimination in Employment Act case bears the burden of proving a "reasonable factors other than age" or "RFOA" affirmative defense.  Truth be told, most defense lawyers have assumed that it was the employer's burden to prove the affirmative defense; this decision simply confirms that assumption.  Continue Reading...

Supreme Court: No "Class of One" Claims

This morning the U.S. Supreme Court struck a blow for public employers, ruling that the "class of one" theory does not apply in public employment cases. 

In Engquist v. Oregon Department of Agriculture, the plaintiff alleged that she was fired not because she was a member of a protected class (such as race, sex, age, disability, national origin, etc), but simply for "arbitrary, vindictive, and malicious reasons."  In other words, she was a "class of one" and her employer fired her because it simply didn't like her, and she claimed that termination violated her constitutional due process rights.

While other Supreme Court decisions had upheld the "class of one" theory outside of the employment context, in this case the Court concluded that extending the class-of-one theory to public employees would lead to undue judicial interference in state employment practices and invalidate public at-will employment. 

For public employers, this is good news:  had the court upheld the "class of one" theory, it would have effectively provided for lifetime employment for public employees (of course, it seems like they have that already). 

For private employers, this case is purely academic and a reminder of how good you have it:  there has never been a "class of one" theory in the private workplace (no matter how much some employees seem to think there is).

Supreme Court Expands Plaintiffs' Relief in Race and Age Discrimination Cases

On May 27, the Supreme Court held that two civil rights laws prohibitretaliation against employees who complain about discrimination, even though neither law actually mentions retaliation. In CBOCS West, Inc. v. Humphries, the Court held that a restaurant employee could sue his employer for retaliation under Section 1981 of the Civil Rights Act of 1866 -- a law that prohibits race discrimination in employment, but does not mention retaliation. In Gomez-Perez v. Potter, the Court similarly held that the federal-sector provisions of the Age Discrimination in Employment Act prohibit retaliation, even though they also are silent on retaliation. The Court reasoned that retaliation is simply another form of discrimination made unlawful by the two laws.

While Gomez-Perez applies only to federal employees, Humphries will impact private-sector employers in two ways: first, unlike Title VII, Section 1981 has no damage caps and for a plaintiff, the sky is the limit; second, while Title VII does not apply to employers with under 15 employees, Section 1981 applies to all employers regardless of size.