Supreme Court Strengthens Exception Barring Employment Discrimination Suits Against Religious Entities

A recent U.S. Supreme Court decision has reinforced the protections afforded to religious organizations against employment discrimination lawsuits. In Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, (pdf) the Court unanimously held that the so-called “ministerial exception” included in the Americans with Disabilities Act (ADA) and other employment law statutes prevents a former religious school teacher who taught a full secular curriculum as well as a daily course on religion and regularly led students in prayer and worship – from bringing ADA claims against her employer, as she qualified as a ministerial employee even if the majority of her duties involved secular instruction.

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Supreme Court Agrees to Decide Health Care Cases

As expected, the U.S. Supreme Court has agreed to review (pdf) cases challenging the constitutionality of the Affordable Care Act. The Court accepted the appeals filed in three cases that question the validity of the healthcare reform law, and will hear more than five hours of arguments during the Court’s spring session. While the petitioners in the three cases presented a number of issues for adjudication, the Court will undertake review of the following issues only:

  • Whether the Affordable Care Act’s provisions requiring virtually all individuals to obtain health insurance or pay a penalty as of 2014 –commonly referred to as the law’s individual mandate – is constitutional. Specifically, in enacting the individual mandate, did Congress exceed its enumerated powers under the Constitution?
  • If the individual mandate is unconstitutional, do the remaining portions of the law still stand, or is the entire law rendered invalid because it is non-severable?
  • Is the law’s expansion of the Medicaid program constitutional?
  • Does the Anti-Injunction Act (AIA) bar challenges to the individual mandate?
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Supreme Court Rules in Wal-Mart's Favor, Finding Massive Class Action Inappropriate

In a decision favorable to employers, the U.S. Supreme Court has held in Wal-Mart Stores, Inc. v. Dukes (pdf) that the lower court improperly certified a massive class action lawsuit. Specifically, the Court found that the plaintiffs failed to prove that their allegations of discrimination were common to all purported class members, and therefore resolution of the matter though a class action lawsuit would be inappropriate. Similarly, the Court reasoned that their claims for monetary damages were also improperly certified for class action consideration, as such remedies are necessarily determined – and defended against – on an individualized basis.

In this case, a purported class of approximately 1.5 million current and former female employees alleged that the discretion over pay and promotion decisions exercised by their company’s local supervisors violated Title VII of the Civil Rights Act. The group did not allege that the company had any express discriminatory policy, but claimed that the local managers’ discretion resulted in more favorable treatment of men, and that this alleged discrimination was applicable to all female employees. The group sought injunction and declaratory relief, as well as backpay.

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Supreme Court Upholds Arizona Law that Sanctions Employers for Hiring Illegal Workers, Mandates Use of E-Verify

By Neil Alexander and Michael Lehet

The Supreme Court has held that an Arizona law that imposes sanctions on employers that hire unauthorized workers and requires the mandatory use of E-Verify is not preempted by federal law, and therefore valid. The Arizona law at issue – the Legal Arizona Workers Act – provides for the suspension or revocation of an employer’s business license in that state if that employer knowingly or intentionally hires an unauthorized worker. The statute also mandates the use of the E-Verify electronic verification system to check on an employee’s work eligibility. The Court’s decision in Chamber Of Commerce v. Whiting (pdf) upholding this statute opens the door for other states to enact laws that similarly impose stricter penalties on employers for immigration law violations.

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Supreme Court Sends Pension Plan Case Back to Lower Court for Reconsideration

By Susan Hoffman

The Supreme Court has issued a decision in CIGNA Corp. v. Amara, (pdf) holding unanimously that section 502(a)(1)(B) of the Employee Retirement Income Security Act (the section allowing a participant to sue for benefits under an ERISA plan) did not permit the district court to rewrite the terms of the benefit plan to reflect employee expectations arising from a summary plan description (SPD) because the SPD is not the “plan.” The Court also reasoned that because the plan can be amended only by the employer acting as settlor, and the SPD must be written and distributed by the plan administrator, it would be anomalous for the plan administrator to be able to modify the terms of the plan by erroneously describing its terms, even if – as in the instant case – the employer is also the plan administrator. Six of the Justices found, however, that another section (502(a)(3)) of ERISA might allow the lower court to reform the company’s pension plan provisions or to provide the requested benefits in the form of damages, and sent the case back for reconsideration. The two concurring Justices agreed with the remand but would not have expanded on the potential recovery that might be available under section 502(a)(3).

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Supreme Court Issues Pro-Arbitration Decision

By Henry Lederman

In an opinion favorable to employers who use arbitration agreements, the Supreme Court in AT&T Mobility v. Concepcion (pdf) has held that the Federal Arbitration Act (FAA) preempts a California state supreme court decision that conditioned the enforceability of a consumer arbitration agreement on the availability of class-wide arbitration. Emphasizing this country’s “liberal federal policy favoring arbitration,” the Court stated that the FAA preempts the state law rule because it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Although the facts of this case centered on commercial contracts, the Court’s decision indirectly reaffirms the validity of including class action waivers in agreements to arbitrate employment disputes. Its central premise are that the FAA requires arbitration agreements to be enforced as written, that states (whether through their courts or legislatures) cannot erect obstacles to their enforcement, and that class waivers are wholly consistent with the purposes of the FAA - expedited, informal dispute resolution.

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FLSA Anti-Retaliation Protections Apply to Oral Complaints

By Martha Keon

The FLSA provides that an employer may not:

"discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the Act], or has testified or is about to testify in such proceeding, or has served or is about to serve on an industry committee."

The meaning of the phrase “filed any complaint” has been vigorously disputed in the federal courts, resulting in circuit splits on two issues:

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Supreme Court Holds Employer Liable for Discrimination Under Cat's Paw Theory

In an opinion that potentially expands an employer’s liability in discrimination cases, the Supreme Court has found that an employer can be found liable under the Uniformed Services Employment and Reemployment Rights Act (USERRA) for the discriminatory intent of company officials who influenced – but did not make – the ultimate adverse employment decision. In Staub v. Proctor Hospital, (pdf) the Court held that an employer is liable under USERRA “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action,” and that act “is a proximate cause of the ultimate employment action.” Appellate courts have applied varying standards under this “cat’s paw” theory of imputed liability, which holds an employer accountable for the unlawful motives and actions of an official who dupes or influences an unbiased decision maker into acting unlawfully.

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Supreme Court Holds Title VII Permits Third Parties to Bring Retaliation Claims

In a decision that may subject employers to more retaliation lawsuits, the Supreme Court in Thompson v. North American Stainless (pdf) has held that under certain circumstances, a third party has standing to bring a retaliation suit under Title VII of the Civil Rights Act. In this case, the plaintiff and his fiancée worked at the same company. The fiancée filed a charge of sex discrimination against the employer with the Equal Employment Opportunity Commission (EEOC). Shortly thereafter, the company terminated the plaintiff, who subsequently filed suit alleging he had been illegally retaliated against because his fiancée had filed a discrimination complaint. A divided Sixth Circuit Court of Appeals ultimately found that Title VII “does not permit a retaliation claim by a plaintiff who did not himself engage in protected activity.” The Supreme Court disagreed, finding that because he fell within the “zone of interests” protected by Title VII, the third-party plaintiff had standing to sue.

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Supreme Court Permits Background Checks of NASA Government Contractors

Earlier this week, the United States Supreme Court in NASA v. Nelson (pdf) upheld the National Aeronautics and Space Administration’s (NASA) right to conduct reasonable background checks on the employees of government contractors. While the case focused on the scope of background checks conducted by the federal government, the Court’s ruling provides some useful guidance for private employers as well.  Continue reading this entry at Littler's Workplace Privacy Counsel.

Supreme Court Holds Medical Resident Stipends Are Subject to FICA Tax

The U.S. Supreme Court has upheld a Treasury Department rule that considers medical residents as full-time employees subject to Federal Insurance Contributions Act (FICA) payroll taxes. In Mayo Foundation v. U.S. (09-837), (pdf) the Court was asked to consider whether the stipends provided to medical residents that perform medical and patient care services for 40 or more hours per week as part of an accredited graduate medical education program are subject to FICA, commonly referred to as “Social Security” taxes, which are imposed on both employers and employees based upon wages paid. Among the many statutory exceptions to this tax requirement is the “student” exception, which exempts “service performed in the employment of. . . a school, college, or university . . . if such service is performed by a student who is enrolled and regularly attending classes at such school, college, or university.” A Treasury Department amended regulation interpreting this student exemption was issued in 2004. The amended regulation clarified, among other things, that:

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Supreme Court Hears Arguments in Arbitration Preemption Case

On Tuesday the U.S. Supreme Court heard oral arguments (pdf) in a case that could significantly impact class action litigation. The issue before the Court in AT&T Mobility v. Concepcion (09-893) is whether the Federal Arbitration Act (FAA) preempts states from conditioning the enforceability of an arbitration agreement on the availability of class-wide arbitration when that procedure is not necessary to ensure that parties to the agreement are able to vindicate their claims.

The dispute in this matter involved a consumer contract for wireless telephone services that contained both an agreement to arbitrate disputes and a class action waiver clause. In response to a putative class action filed by the Concepcions, the company sought to compel individual arbitration pursuant to the arbitration agreement and class action waiver the plaintiffs had signed.  The arbitration agreement at issue provided a number of pro-consumer terms, including the following: the company would pay all arbitration fees for non-frivolous complaints; the arbitration itself would be conducted in the county of the customer’s billing address; an allowance would be provided for the claimant to proceed in small claims court; the company would provide double the amount of attorneys’ fees and $7,500 if the ultimate arbitration award exceeded the company’s settlement offer; and a waiver of the company’s right to attorneys’ fees in the event it prevailed on the matter.

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The U.S. Supreme Court Grapples with Whether Internal Oral Complaints Are Protected Activity Under the FLSA's Anti-Retaliation Provision

The Fair Labor Standards Act (FLSA) provides that it is unlawful "to discharge or in any other manner discriminate against any employee because such employee has filed any complaint ... under or related to this Act." 29 U.S.C. § 215(a)(3). The question before the U.S. Supreme Court in Kasten v. Saint-Gobain Performance Plastics Corp., 570 F.3d 834 (7th Cir.), reh’g denied, 585 F.3d 310 (7th Cir. 2009), cert. granted, 130 S.Ct. 1890 (2010), was whether “filed any complaint” includes making an internal oral complaint.  Continue reading this entry at Littler's Wage & Hour Counsel

U.S. Supreme Court's Decision in NASA Case Could Have Significant Implications for Private Employers

This week, the U.S. Supreme Court heard oral argument in a case challenging NASA’s background checks of “low risk” private contractors working at the agency’s Jet Propulsion Laboratory (JPL). At first blush, the case does not appear to be particularly relevant to private employers given that NASA is a public employer and the appeal will turn principally on the Supreme Court’s interpretation of the federal constitutional right to information privacy applicable only to public employers. Deeper consideration suggests, however, that the Court’s decision could have significant implications for private sector employers.  Continue reading this entry at Littler's Workplace Privacy Counsel

Senate Confirms Elena Kagan's Supreme Court Nomination

As expected, the Senate on Thursday confirmed by a vote of 63 to 37 the nomination of U.S. Solicitor General Elena Kagan to be the next Supreme Court justice. President Obama named Kagan as his pick to replace retiring justice John Paul Stevens on May 10, 2010. Kagan’s confirmation process has been relatively uncontroversial. Because she has never served in a judicial capacity, her views on various topics – including labor and employment issues – could not be gleaned from past opinions. Kagan will be the fourth woman to ever serve on the high court, and historically one of three to be sitting on the nine-member bench at one time. It is largely believed that Kagan will maintain the Court’s current ideological balance. Information on Kagan’s work history, responses to hearing questions, and letters and materials sent and received in connection with her nomination can be found here.

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Supreme Court Agrees to Hear Cases Challenging Arizona Immigration Law, Third-Party Retaliation Claims

This week the U.S. Supreme Court agreed to decide two additional employment-related cases for the next judicial term. On Monday, the Court announced that it will hear arguments in Chamber of Commerce of the U.S. of Am. V. Candelaria, in which the Court of Appeals for the Ninth Circuit upheld (pdf) the Legal Arizona Workers Act, Arizona’s immigration law mandating the use of the E-Verify employment verification system, and permitting the state to suspend or revoke employers’ business licenses if they knowingly hire undocumented workers. The question before the Court is whether these requirements are preempted by federal law, and therefore invalid.

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Supreme Court Upholds Validity of Provision Delegating Contract Enforceability Authority to Arbitrator

On June 21, 2010, the United States Supreme Court ruled in favor of Rent-A-Center (“RAC”) in Rent-a-Center v. Jackson. (pdf)  In a 5-4 decision, the Supreme Court reaffirmed that the Federal Arbitration Act (FAA) permits parties to delegate authority to an arbitrator to determine whether the contract at issue is unconscionable.

When he was hired by RAC, Antonio Jackson signed an agreement to arbitrate claims arising from his employment instead of going to court. The agreement also required that any challenges to its enforceability likewise must be submitted to an arbitrator for decision. The agreement expressly stated that:

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U.S. Supreme Court Refuses to Require Arbitration Over Date of Formation of Collective Bargaining Agreement, Remands Federal Claim Against the International Union

On June 24, 2010, the U.S. Supreme Court issued a pro-employer opinion in Granite Rock, Inc. v. International Brotherhood of Teamsters, et al., (pdf) providing valuable guidance on the arbitrability of disputes over the timing of the formation of collective bargaining agreements.

The Court (7-2) held that the question of exactly when the parties formed an agreement to arbitrate certain disputes was not itself subject to resolution through arbitration. The Court also declined to recognize Granite Rock’s cause of action under Section 301 of the Labor Management Relations Act (LMRA) against the International Brotherhood of Teamsters’ (IBT) for tortious interference with a collective bargaining agreement. The Court remanded the case to the lower court to allow Granite Rock to proceed against the International on the theory that the local union was acting as the IBT’s agent when it refused to abide by the no-strike clause of the parties’ collective bargaining agreement.

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NLRB Cannot Act with Only Two Members, Supreme Court Holds

Potentially invalidating hundreds of National Labor Relations Board (NLRB or “Board”) decisions, the U.S. Supreme Court has held that the National Labor Relations Act (NLRA) requires that the NLRB must operate with at least three members in order to exercise its full authority. In New Process Steel v. NLRB, (pdf) the Court rejected the argument that the NLRA’s delegation and quorum clauses enable the Board to act with only two members, which it had done from January 2008 through March of this year when President Obama used the recess appointment process to add members Craig Becker and Mark Pearce to the two-member panel.

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Quon Decision Provides Useful Guidance for Private Employers While Skirting Broad Pronouncements on Employee Privacy Rights

As anticipated in Littler's Workplace Privacy Counsel's blog post describing the oral argument before the U.S. Supreme Court in City of Ontario v. Quon (pdf), the Court declined today to make any broad pronouncements concerning employee privacy rights in electronic communications using employer-issued equipment. The Court reserved expressing an opinion given the newness and evolving nature of cell phone and text message communications. Instead, the Court held that the City of Ontario Police Department did not violate the Fourth Amendment rights of a SWAT team member, Sgt. Jeff Quon, by reviewing text messages sent and received by Quon on a department-issued pager because, even assuming that Quon had a reasonable privacy expectation, the City’s review of his text messages was motivated by a legitimate work-related purpose and was not excessive in scope. Notwithstanding its narrow and fact-specific nature, the Court’s ruling still provides useful guidance for private employers.  Continue reading this entry at Littler's Workplace Privacy Counsel blog.

Supreme Court to Decide Whether FAA Preempts State Law Invalidating Arbitration Provision

The U.S. Supreme Court has agreed to determine whether the Federal Arbitration Act (FAA) preempts states from conditioning the enforceability of an arbitration agreement on the availability of class-wide arbitration when that procedure is not necessary to ensure that parties to the agreement are able to vindicate their claims. The case at issue – AT&T Mobility v. Concepcion (09-893) – concerns a consumer contract for wireless telephone services that contained both an agreement to arbitrate disputes and a class action waiver clause. While this matter deals with the viability of an arbitration provision in a consumer contract, the Supreme Court’s decision may impact such provisions in employment agreements as well.

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Supreme Court Issues Decisions in Lewis v. Chicago, Hardt v. Reliance Standard Insurance Co.

The U.S. Supreme Court on Monday issued two decisions that impact employers. One decision will make employers more vulnerable to charges of disparate impact discrimination claims; the other makes it easier for fee claimants in ERISA actions to seek attorneys’ fees. In the first case, Lewis v. City of Chicago, (pdf) the Court held that a disparate impact employment discrimination charge filed with the Equal Employment Opportunity Commission (EEOC) within 300 days of a discriminatory practice’s application – not merely the announcement of its adoption – will be deemed timely. The practical effect of this decision is that employers will now be subject to disparate impact lawsuits years after initially unchallenged policies are implemented.

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Obama Nominates Elena Kagan to Supreme Court

Elena KaganPresident Obama has named U.S. Solicitor General Elena Kagan as his pick to replace retiring Justice John Paul Stevens to the U.S. Supreme Court. If confirmed, Kagan will be the third woman to preside over the nine-justice Court, and only the fourth woman to ever serve on the bench. A Democrat, Kagan is considered to be more moderate than Justice Sonia Sotomayor, Obama’s last nominee to the Court. Additionally, because Kagan was never a judge, she has no judicial track record to scrutinize during future confirmation hearings, and thus could be considered a “safer” pick. Also, unlike Sotomayor, Kagan does not have a history of opinions in labor and employment matters, as her academic career and writings focused primarily on matters of administrative and constitutional law. Although Kagan’s confirmation is not a sure bet by any means, the Senate’s 61-31 confirmation of her as Solicitor General last year indicates that she enjoys some measure of bipartisan support.

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Supreme Court Holds that Class Arbitration is Impermissible When Agreement is Silent on the Issue

The U.S. Supreme Court has held that the Federal Arbitration Act (FAA) does not authorize arbitrators to impose class arbitration on parties to a dispute when the arbitration agreement itself is silent on the matter. In Stolt-Nielsen SA v. AnimalFeeds International Corp. (pdf) the Court found that an arbitration panel exceeded its powers under the FAA by permitting class arbitration on public policy grounds instead of identifying and applying an appropriate rule of law applicable to the situation. The Court reasoned that parties cannot be compelled to submit to class arbitration unless they have contractually agreed to do so.

For more information on this decision and its implications for employment agreements with arbitration provisions, see Littler’s ASAP: Supreme Court Rules Class Action Arbitrations Impermissible Absent Express Agreement by Henry D. Lederman.

Supreme Court to Decide When Employer is Liable for Actions of Officials Who Influence - But Do Not Make - Challenged Adverse Decision

The U.S. Supreme Court has agreed to decide when employers can be held accountable for company officials who cause or influence the outcome of an adverse employment action, but do not themselves make that decision. The case, Staub v. Proctor Hospital (09-400), will therefore resolve conflicting opinions from several circuit courts of appeal regarding when employers may be held liable for the unlawful motives and actions of an official other than the formal decision maker, often referred to as the “cat’s paw” theory of imputed liability.

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Supreme Court to Decide Whether Complaint Must be Written in Order to Be Covered under the FLSA's Anti-Retaliation Provision

U.S. Supreme Court buildingThe U.S. Supreme Court has agreed to review the Seventh Circuit’s decision in Kasten v. Saint-Gobain Performance Plastics (7th Cir. 2009), (pdf) in which that court held that an oral complaint of a violation of the Fair Labor Standards Act (FLSA) is not considered protected conduct under the Act’s anti-retaliation provision.

The case arose when manufacturer Saint-Gobain Performance Plastics Corp. (“Saint-Gobain”), after implementing a series of progressive disciplinary steps against employee Kevin Kasten for failing to follow proper punching in and out procedures, terminated his employment. Kasten alleged that he verbally complained to his supervisors and a human resources generalist that the location of the company’s time clocks was illegal. To that end, Kasten filed a lawsuit under the FLSA alleging that he was fired in retaliation for his verbal complaints. Specifically, Kasten alleged that his complaints were covered by section 215(a)(3) of the statute, which provides that:

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Supreme Court to Decide Constitutionality of Certain Background Check Questions for Federal Contractors

U.S. Supreme Court buildingThe U.S. Supreme Court has agreed to decide whether the government violates a federal contract employee’s constitutional right to informational privacy when it (a) asks in the course of a background investigation whether the employee has received counseling or treatment for illegal drug use that has occurred within the past year, and (b) when it asks the employee’s designated references for any adverse information that may have a bearing on the employee’s suitability for employment at a federal facility, when the information obtained in both scenarios is to be used for employment purposes only and is protected under the Privacy Act, 5 U.S.C. 552a. In National Aeronautics and Space Administration v. Nelson (09-530) the U.S. Court of Appeals for the Ninth Circuit disagreed with a lower court, which had found no constitutional violations. The Ninth Circuit reversed (pdf) the district court’s decision, and ordered the entry of a preliminary injunction barring the use of the forms asking the above questions for the background checks on federal contract employees working at NASA’s Jet Propulsion Laboratory (JPL), a federal research and development facility owned by the agency. The California Institute of Technology (Caltech) operates JPL pursuant to a contract with NASA. All of the positions at JPL are filled by contract employees.

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Supreme Court Applies "Nerve Center" Approach to Diversity Jurisdiction

U.S. Supreme Court buildingIn what could be hailed as a victory for employers, the U.S. Supreme Court has made it less likely that a company can be sued in state court just because it conducts business in that state. Under federal statute, a corporation is to be considered a citizen of any state in which it has been incorporated and the state where it has its principal place of business. If sued in state court, a corporation can seek to have the case moved to federal court – a move often deemed advantageous for employers – if the parties are from different states.

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Supreme Court Eases Ban on Corporate, Union Political Spending

U.S. Supreme Court buildingIn a narrowly-held decision that could have a significant impact on the 2010 mid-term elections, the Supreme Court has ruled that restrictions on political spending by corporations and unions are unconstitutional. The 5-4 decision in Citizens United v. FEC (pdf) reverses the Court’s opinion in Austin v. Michigan Chamber of Commerce and parts of McConnell v. FEC that upheld restrictions on such spending to endorse or oppose political candidates. The matter was brought by Citizens United, a conservative nonprofit group that sought to release a documentary critical of then-Senator and presidential candidate Hillary Rodham Clinton during the 2008 campaign. Citizens United challenged Federal Election Commission (FEC) rules that implemented the portions of the Bipartisan Campaign Reform Act (commonly known as the McCain-Feingold Act) that prohibits the broadcast or transmission of “electioneering communications” sponsored by corporations and unions close to elections. The U.S. District Court for the District of Columbia disagreed with Citizens United, ultimately siding with the FEC. On appeal, the Supreme Court initially heard arguments in March of 2009, but ordered a re-argument on whether the campaign finance restrictions violate the free speech clause of the First Amendment, and whether the aforementioned campaign finance cases should be overruled. In deciding these two issues in the affirmative, Justice Anthony Kennedy reasoned: “political speech must prevail against laws that would suppress it, whether by design or inadvertence,” and that “there is simply no support for the view that the First Amendment, as originally understood, would permit the suppression of political speech by media corporations.”

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Supreme Court to Decide Whether Judge or Arbitrator Decides if Arbitration Agreement is Unconscionable

U.S. Supreme Court buildingOn Friday, the U.S. Supreme Court agreed to resolve whether a court or an arbitrator has jurisdiction to determine if an arbitration agreement is unconscionable, even when the parties to the contract have clearly and unmistakably given such authority to the arbitrator. In Rent-A-Center West, Inc. v. Jackson (No. 09-497), Antonio Jackson entered into an agreement with his employer, Rent-A-Center (RAC), in which both parties agreed to arbitrate claims arising out of the employment relationship. This agreement expressly stated that:

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Supreme Court to Clarify Who is Entitled to Attorney's Fees Under ERISA

Supreme Court buildingThe Supreme Court has agreed to decide whether the attorney's fees provision in the Employee Retirement Income Security Act (ERISA) permits courts to award such fees to prevailing parties only. In Hardt v. Reliance Standard Life Ins. Co. (No. 09-448), the Fourth Circuit, in an unpublished opinion, held that an employee who filed a claim in district court alleging that her denial of long-term disability benefits was unlawful was not entitled to an award of attorney’s fees. The lower court had agreed with the claimant and remanded the matter back to the insurance underwriter for reconsideration, which eventually granted her the benefits sought. The Fourth Circuit reasoned that only enforceable judgments on the merits and court-ordered consent decrees render a claimant a “prevailing party” for attorney’s fees purposes.

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Supreme Court Releases Revised Rules

The U.S. Supreme Court has issued revised Rules of Court that take effect February 16, 2010. According to a Court press release, (pdf) among other changes, the rule revisions:

  • reduce the number of words permitted for a Reply Brief on the Merits from 7,500 to 6,000;
  • clarify what is to be included on the cover of the Joint Appendix and require that counsel of record include an e-mail address on the cover of every document filed;
  • require a descriptive index of the appendices and citations to the United States Code whenever available;
  • clarify that only an attorney admitted to practice before the Supreme Court is permitted to file an amicus curiae brief and that extensions of time for amicus curiae briefs at the merits stage will not be allowed.
     

Supreme Court Review of Quon May Provide Important Guidance for Private Employers

The U.S. Supreme Court has agreed to review the Ninth Circuit Court of Appeal’s decision in Quon v. Arch Wireless, a case with potentially important implications for private employers. As explained in prior posts, the appellate court held that the City of Ontario Police Department violated a SWAT officer’s reasonable expectation of privacy by reviewing the content of his sexually explicit text messages, even though: (1) the messages had been sent with a Department-issued pager through a service provider under contract with the Department, and (2) the Department’s formal policy informed all SWAT officers that the Department might review their text messages. In reaching that conclusion, the Ninth Circuit relied principally on a statement by the officer in charge of the text messaging program to the SWAT officer that the Department would not review his text messages if he voluntarily paid any overage charges resulting from excessive personal use.  Continue reading at Littler's Workplace Privacy Counsel blog. 

Supreme Court Releases Opinion in Union Pacific

Picture of the U.S. Supreme CourtToday, the Supreme Court released its opinion in Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers And Trainmen General Committee of Adjustment, Central Region (pdf), which involved the ability to challenge a final decision by the National Railroad Adjustment Board (NRAB) under the Railway Labor Act (RLA). The Court declined to answer whether a final decision by the NRAB could be set aside for an alleged due process violation, instead affirming the Seventh Circuit’s granting of relief to the union challenging the NRAB’s dismissal of its arbitration petition on statutory grounds.

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Supreme Court Will Decide Legitimacy of Decisions Issued by Two-Member NLRB

The U.S. Supreme Court has agreed to decide whether the National Labor Relations Board (NLRB) has the authority to decide cases with only two sitting members. The Court has granted a petition to review the decision in New Process Steel v. National Labor Relations Board (08-1457) (pdf), in which the Court of Appeals for the Seventh Circuit upheld a two-member Board decision against a challenge claiming that two members were insufficient to constitute a quorum of the Board and therefore could not decide cases. The same day this case was decided, the U.S. Court of Appeals for the District of Columbia Circuit reached the opposite conclusion in Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB (pdf), finding that the two-member panel did not constitute a quorum. The First Circuit has weighed in on this issue as well, upholding the two-member panel’s authority to issue orders in Northeastern Land Services, Ltd. v. NLRB (pdf).  

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Supreme Court to Decide Statute of Limitations Issue in Disparate Impact Employment Discrimination Case

The Supreme Court has agreed to decide whether the deadline for filing a disparate impact employment discrimination claim under Title VII of the Civil Rights Act should be 300 days after a discriminatory practice is announced or after it is implemented. In the case at issue – Lewis v. City of Chicago – the City of Chicago administered a written test to 26,000 firefighter applicants. The results of this test were divvied up by score into three levels: “well qualified,” “qualified,” and “not qualified.” Only about 11 percent of the 1,782 applicants who fell into the “well qualified” category were African American. Although applicants whose scores landed them in the “qualified” tier would be placed on the eligible list for the jobs since they passed the exam, shortly after the scores were announced the City reported that it expected to hire only about 600 of the 1,782 “well qualified” applicants, leading the remaining job hopefuls to believe they would not be hired. The actual hiring process took several months.

A class of approximately 6,000 African American applicants who fell into the “qualified” category filled suit against the City over a year later, claiming that the test had a disparate impact on minority candidates. A federal judge in Chicago initially ruled in favor of the plaintiffs. The Seventh Circuit reversed this decision last year, finding that the plaintiffs failed to file a claim with the Equal Employment Opportunity Commission (EEOC) within the statutorily-prescribed 300 days of the announcement of the test results. According to the Seventh Circuit, “[t]he first injury in this case was the classification of the black applicants as merely ‘qualified’ on the basis of a test that they contend was discriminatory.” The court therefore rejected the plaintiff’s argument that the discriminatory event was the application of the test results – i.e., the failure to hire the affected African American candidates. The Seventh Circuit also rejected the plaintiff’s “continuing violation” theory, explaining that “the statute of limitations begins to run upon injury (or discovery of the injury) and is not restarted by subsequent injuries.”

In their petition for Supreme Court review, the plaintiffs allege that the circuits are split on this issue of timeliness. The Second, Fifth, Ninth, Eleventh, and District of Columbia circuits, they claim, have held that each time an employer relies on a facially neutral policy that disparately impacts a protected class constitutes a new violation of Title VII. The Third and Sixth circuits, in contrast, have held that a claim ripens when the employees or applicants become aware of the alleged discriminatory practice.

The outcome of this case will be significant. If the Supreme Court agrees with the firefighter applicants, an employer might be subject to a disparate impact discrimination lawsuit years after an initially unchallenged policy is adopted.

Senate Committee Will Examine Pro-Employer Supreme Court Decisions

Senator Patrick Leahy (D-VT), chairman of the Senate Judiciary Committee, announced on Tuesday that his committee will hold a hearing to examine two U.S. Supreme Court decisions that benefit employers. The hearing, “Workplace Fairness: Has the Supreme Court Been Misinterpreting Laws Designed to Protect American Workers from Discrimination,” will undertake a review of the Court’s 2001 decision in Circuit City Stores v. Adams, which extended the scope of the Federal Arbitration Act (FAA) to cover employment contracts, and thus sanctioned certain mandatory pre-dispute arbitration agreements, and the more recent opinion in Gross v. FBL Financial Services, Inc. (pdf), which toughened an employee’s burden of proof in bringing a mixed-motive discrimination claim under the Age Discrimination in Employment Act (ADEA). 

Among the witnesses scheduled to testify at the October 7 hearing is the plaintiff in Gross v. FBL Financials Services, Inc. The Court in this case held that a plaintiff bringing an ADEA claim must show by a preponderance of the evidence that age was the “but for” cause of the employer’s adverse employment decision. Unlike in Title VII discrimination cases, an employer does not need to prove that it would have made the same decision regardless of age, even if the employee were to produce some evidence that age may have been a contributing factor in the decision. In July, Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, criticized this decision and also called for a committee hearing to examine its repercussions. Both Miller and Leahy have likened Gross to Lilly Ledbetter v. Goodyear Tire, a pay discrimination case that was subsequently overruled by the Lilly Ledbetter Fair Pay Act, signed into law earlier this year. Following next week’s hearing, it is possible that legislation to overturn the Supreme Court’s opinion in Gross will be introduced. Bills aimed at invalidating mandatory, predispute arbitration agreements validated by the Circuit City decision have already been introduced this session, but have thus far received little attention.

Sonia Sotomayor Confirmed as Next Supreme Court Justice

As anticipated, the Senate by a vote of 68-31 has confirmed the nomination of Sonia Sotomayor to replace Justice David Souter on the U.S. Supreme Court. The floor debate had been largely considered ceremonial, as the Senate Judiciary Committee cleared her nomination last Tuesday by a margin of 13-6, primarily along party lines. Sen. Lindsey Graham (R-SC) was the only Republican to approve her nomination. In recent days, a number of Republican Senators have joined Graham in his support of Sotomayor, which made today’s floor vote somewhat anticlimactic.

Sotomayor will be the first Hispanic woman to hold a seat on the high court. Sotomayor has spent the majority of her career in the public sector, most notably as an appointed judge to the Court of Appeals for the Second Circuit and the District Court for the Southern District of New York. Sotomayor’s opinions in labor and employment matters have tended to favor plaintiffs/employees more often than not. In particular, Sotomayor was part of the three-member Second Circuit panel that affirmed the lower court’s opinion in Ricci v. DeStefano, the reverse discrimination decision that was recently overturned by the Supreme Court. It is expected that Sotomayor will continue what is often termed her predecessor’s moderate to liberal approach to case interpretation as a member of the Supreme Court.

Congress Will Hold Hearing on Gross v. FBL Financial Services Decision

As we predicted, Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, has announced that he intends to hold a hearing regarding the U.S. Supreme Court’s decision in Gross v. FBL Financial Services, which was issued on June 18.  In Gross, the Court held that a plaintiff bringing a claim under the Age Discrimination in Employment Act (ADEA) must show by a preponderance of the evidence that age was the “but for” cause of the employer’s adverse employment decision. An employer does not have to prove that it would have made the same decision regardless of age, even if the employee produces some evidence that age may have been a contributing factor in the decision. Thus, the Court decided, the burden-shifting framework in mixed motive Title VII cases does not apply to age discrimination claims under the ADEA.

Although a positive ruling for employers, Miller criticized this decision in a press release, stating: “The Supreme Court’s ruling will make it even more difficult for workers to stand up for their basic rights in the workplace. A narrow majority of the Supreme Court has once again overturned decades of precedent and congressional intent and sided with powerful corporate interests on a workplace discrimination case.” He further warned that “[l]ike with the Lilly Ledbetter case, Congress may be forced to clarify the law’s intent so we can prevent the damage this decision will have on workers’ civil rights.” The Lilly Ledbetter Fair Pay Act – which was signed into law in January – expressly overturned the Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc. by extending the time period in which employees can assert pay discrimination claims. Therefore, expect the introduction of legislation aiming to amend the ADEA to effectively nullify the Gross opinion, and make it easier for a plaintiff to bring successful disparate impact age discrimination claims against employers.

Supreme Court Holds for Firefighters in Reverse Discrimination Case

The City of New Haven’s failure to use test results that would have disqualified any African American firefighters from receiving a promotion was discriminatory against the white and Hispanic test takers who received qualifying scores, and was therefore unlawful under Title VII of the Civil Rights Act, according to the U.S. Supreme Court in Ricci v. DeStefano. (pdf)  In this closely decided and much-anticipated decision, the Court held that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.”

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Burden Shifting "Mixed-Motive" Framework Does Not Apply to ADEA Cases, Supreme Court Holds

In a 5-4 decision delivered by Justice Clarence Thomas, the U.S. Supreme Court in Gross v. FBL Financial Services, Inc. (pdf) has held that a plaintiff bringing a claim under the Age Discrimination in Employment Act (ADEA) must show by a preponderance of the evidence that age was the “but for” cause of the employer’s adverse employment decision, and that an employer need not show that it would have made the same decision regardless of age, even if the employee produces some evidence that age may have been a contributing factor in the decision. Thus, the burden-shifting framework in mixed motive Title VII cases does not apply to age discrimination claims under the ADEA.

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Obama Nominates Sonia Sotomayor as Next Supreme Court Justice

President Obama announced this morning that Sonia Sotomayor is his pick to replace U.S. Supreme Court Justice David Souter when he steps down next month. Sotomayor is the first Hispanic woman to be nominated to the high court, and is considered by some conservatives to be an activist judge with left-leaning tendencies. The daughter of Puerto Rican parents, Sotomayor is a judge on the Second U.S. Circuit Court of Appeals. Before serving on the Second Circuit, Sotomayor worked as a trial judge and prosecutor. As an appellate judge, Sotomayor has issued decisions on a number of employment-related cases, more often than not siding with the plaintiffs. Scotusblog has posted an in-depth analysis of Sotomayor’s appellate opinions in civil cases.

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Supreme Court Issues Decision in AT&T Corp. v. Hulteen

The U.S. Supreme Court has held that an employer does not necessarily violate the Pregnancy Discrimination Act (PDA) when it pays pension benefits calculated in part under an accrual rule – applied prior to the PDA’s enactment – that gave less retirement credit for pregnancy than for medical leave generally. The Court in AT&T v. Hulteen (pdf) further held that the benefit calculation rule used by the employer in this case was part of a bona fide seniority system that insulated it from a Title VII challenge.

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Supreme Court Upholds Arbitration Clause

In an opinion released today, the U.S. Supreme Court in 14 Penn Plaza L.L.C v. Pyett held that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate Age Discrimination in Employment Act (ADEA) claims is enforceable as a matter of federal law.

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