Category Archives: Supreme Court

A truly Epic failure for workers

He just turned 50 last year…

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Free speech in the workplace has been discussed heatedly in the wake of the cancellation of “Roseanne”and a new rule prohibiting NFL players from kneeling during the national anthem. Parties on both sides in the culutrue war have argued that employees don’t have freedom of the speech on the job. While that is generally true, the National Labor Relations Act gives employees some rights of speech and associationon the job. But a recent Supreme Court case could have paired back those rights.

In Epic Systems v. Lewis the United States Supreme court held in a 5-4 decision that neither the National Labor Relations Act  nor the savings clause of the Federal Arbitration Act  prevents enforcement of arbitration clauses that preclude class or collective actions against employers by their employees.

As many commentators and the dissent pointed out, the Epic decision will make it more difficult for workers to band together to address wage and hour violations. Individually, even with attorney fees available, it is not economical for employees to pursue individual cases of wage theft if those individual cases amount to a relatively small amount. An example of such a case were the so-called “donning and doffing” cases pursued against various meat packing plants in the Midwest.

Employers have won some major victories in the area of wage and hour law this Supreme Court term. Epic follows on the heels of a decision making it easier for employers to prove they are exempt from the overtime provisions of the Fair Labor Standards Act

But Epic could impact labor and employment law beyond just wage and hour law. Here are a few ways Epic could impact more than just wage and hour law. This list is not inclusive and Epic is probably worth more discussion, but I wanted to discuss the broader implications of this case and bring up lesser discussed but important implications of this case.

What is a protected concerted activity?

The National Labor Relations Act protects protected concerted activity for the mutual aid of co-workers that goes to the terms and conditions of employment. The employees argued that participating in a collective action case under the Fair Labor Standards Act. Justice Neil Gorsuch, writing for the five Justice majority, disagreed. Gorsuch wrote that the NLRA only covered activities that employees do for themselves, not class action litigation. What concerned me more, was Gorsuch’s  use of a “canon”of statutory construction to hold that seemingly broad language in the NLRA about it employees being able to engage in collective activity for “mutual aid and protection” only applied to forming labor unions and other activities related to formal collective bargaining.

This conclusion concerned me because I have long advocated for non-unionized employees to engage in collective self-help on the job to address issues like bullying  or even accommodation of a disability.  But, as the dissent points out, association rights on the job are also protected by the Norris-LaGuardia Act (NLGA) NLGA expressly provides for a right to self-organization among employees. Though the Epic court rejected NLGA as a basis for overcoming an arbitration clause, it’s broader language could still be the basis for workplace speech and assocation rights than a paired down NLRA.

That Norris-LaGuardia would serve as backstop for employee association rights would assume the Roberts/Gorsuch court is merely following some rules of statutory construction rather than imposing their own economic preferences into the law. That might not be a fair assumption. The Federal Arbitration Act explicitly excludes employment contracts from coverage. In 2001, the Supreme Court limited that exclusion from workers in the transportation industry.  Epic would appear to further limit that exclusion in contradiction to plain and clear statutory language to the contrary.

 

Can Epic be made to benefit workers?

Epic may benefit some employees. One impetus behind using arbitration clauses to prevent class action claims is to defeat class action claims on retirement plans under ERISA. However ERISA also governs short-term and long- term disability policies. Currently, short-term and  long-term disability policies very difficult to win because courts defer to insurers on how the plans are interpreted. Some employee-benefit attorneys believe that employees will have a better chance of disability claims in arbitration.  Union-side labor lawyer, Moshe Marvit has also speculated that Epic might make it easier for employees to form unions.

Many management-side attorneys are also skeptical of arbitration  which could also prevent employers from adopting arbitration clauses.

Constitutional perspectives

So how is it that the Supreme Court can ignore seemingly plain language about the Federal Arbitration Act not applying to employment disputes? The Circuit City decision from 2001, provides one clue. In Circuit City the Supreme Court used a narrow interpretation of interstate commerce to hold that the FAA only applies to transportation employees. This holding is consistent with other holdings from the Rehnquist and Roberts courts that limit that power of the federal government to regulate through the commerce clause. (12)

Though Epic doesn’t discuss state police powers under the 10th Amendment much of the case law relied upon in Epic has to do with how the FAA pre-empts state laws preventing arbitration in certain cases. Essentially the so-called “contracts clause” which prevents laws that impair the obligation of contract.  This includes state laws enacted under 10th Amendment police powers. The Supreme Court took up a contracts clause case, Sveen v. Melin, this term.  That case could also have implications in the world of employment law depending on the language of the decision and any possible concurring opinions from the likes of Justices Gorsuch, Alito or Thomas.

Three ways to make sense of Masterpiece Cakeshop

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

The Supreme Court’s decision in Masterpiece Cakeshop was not as harmful to LGBT rights or civil rights laws in general as feared.  In fact, Masterpiece was cited by the Arizona Court of Appeals in upholding a Phoenix municipal ordinance prohibiting LGBT discrimination in public accommodation.

But court watchers were left scratching their collective heads by the mixed signals sent by the court. Given a week to digest the decision and read over the commentary, I think Masterpiece is understandable in the broader context of other decisions made by the Roberts court. I think three trends explain Masterpiece: 1) The Court’s favor of protected status over protected activity) 2 skepticism of the “administrative state” and 3) the use of federal supremacy by the court to rein in progressive-leaning states and cities.

Protected Status > Protected Activity

Sexual orientation and gender identity are considered a type of protected class. Sometimes theses these statuses are protected expressly, like they are in state and municipal laws, or they are covered by sex as held by many federal courts. Civil rights laws protect everyone based on various protected statuses such as race, nationality, religion, sex, disability and age. Everybody is covered by multiple protected classes. Protected class discrimination is fairly non-controversial because most people agree that someone should not be discriminated against based on immutable traits like race or sex. Sexual orientation and gender identity are just additional protected classes that would apply some people.

This isn’t to say that LGBT rights are universally accepted. The fact there are so many litigated cases, like Masterpiece, based on direct evidence of discrimination should be proof of that statement. But even in conservative-leaning states like Nebraska, business interests have pushed to expand anti-discrimination laws to LGBT individuals in an effort to have cities and states be seen as “open for business”. That’s part of the reason that Omaha, like Phoenix, has a municipal ordinance prohibit discrimination based on sexual orientation and gender identity.   The Materpiece decision could be very persusasive to a Nebraska court hearing a challenge to Omaha’s laws prohibting discrimination agains the LGBT community.

Business looks less favorably upon protected activities than protected statuses. These are activities that individuals cannot be sanctioned for or retaliated against for engaging. From a business point of view the most problematic problematic activity is engaging in unionization or striking. Striking has re-emerged as a popular tactic for workers in the wake of teachers strikes and a possible strike by UPS drivers. The Supreme Court generally takes a business-friendly view on protected activity. In Epic, the court took a narrow view of what constituted protected concerted activity under the National Labor Relations Act. Earlier this term, in Somers v. DRT,  the court narrowed the definition of a whistleblower under Dodd-Frank. The split between how the court treats protected activities and protected statuses became apparent to me in 2013 when the court decided the landmark LGBT civil rights case Windsor in the same term they decided Nassar which raised the burden of proof for employees in Title VII retaliation cases. The same split between protected activity and protected activity is apparent in 2018 with Epic and Somers contrasted with Masterpiece.

Dislike of the Administrative State

The reason why Jack Phillips “won” Masterpiece was because of negative comments about religion made by a lone commissioner on the Colorado Commission on Human Rights. Phillips was being civilly charged by state administrative agency. The  Roberts court, Justices Gorsuch, Thomas and Alito in particular, are skeptical of the role of  administrative agencies on separation of powers grounds. That skepticism was evidenced by Justice Gorsuch’s comments about the National Labor Relations Board in Epic. ThIS terrm the court also heard what could be a close case about whether the Securities and Exchange Commission can use Administrative Law Judges to punish misconduct in the securities industry that could have broad — if not disruptive — implcations. If nothing else, Masterpiece is a bench slap to an administrative agency.

I also believe that Masterpiece could have a chilling effect on state and local human rights commissions.  I have served on the Lincoln Commission on Human Rights since 2014.  Even before Masterpiece was decided, commissioners were given a memo describing the concerns expressed by Justice Kennedy in oral arguments in Masterpiece about the comments made by the Colorado Civil Rights Commissioner. Civil rights commissioners often engage in spirted discussions about what constitutes unlawful discrimination in a particular case. It would be unfortunate if Masterpiece lead commissioners to self-censor over fears that those comments could be used by the parties they believe could be engaged in unlawful discrimination.

Federal supremacy over states and cities

Jack Phillips succeeded in making a first amendment argument that the Colorado Commission on Civil Rights violated his freedom of religion by making impermissible comments about his religion. Phillips resorted to federal law to strike down a decision made by the state agency of a progressive-leaning state. Much of the arbitration case law that supported the Epic decision was based on the Federal supremacy of  the Federal Arbitration Act over state laws that  prohibited arbitration. Many of these state laws were passed by “blue” states such as California. By overruling a decision made by the Colorado Commssion on Civil Rights, the Roberts court was able to assert some measure of federal supremacy over a progressive-leaning state.

Gorsuch, Chevron and Workplace Law

Judge Gorsuch

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Employers and their attorneys are widely hailing President Trump’s nomination of 10th Circuit Court of Appeals Judge Neil Gorsuch to the U.S. Supreme Court. Part of the reason that management-side lawyers are praising Gorsuch is his position on Chevron deference. Gorsuch’s views on Chevron could affect how workplace laws are interpreted and how they apply to workers.

Chevron deference is a legal rule that a court will give the benefit of the doubt about the interpretation of the law to how the executive agency charged with enforcing that law understands the law. Gorsuch has criticized Chevron on separation of powers basis, stating that Chevron deference gives too much power to the executive branch at the expense of the legislative and judiciary branches. Recently, government agencies have been interpreting employment laws in a way that is more favorable toward employees. Recent rules issued by the Equal Employment Opportunity Commission regarding the Americans with Disabilities Act are a prime example.

Many workers who get hurt on the job are told that they must come back to work with no restrictions. Chevron deference could be a powerful legal tool for workers faced with such policies. The new EEOC regulations on the ADA outlaw 100-percent-healed policies or policies that require plaintiffs to return to work without restrictions. In the EEOC guidance on the issue, the EEOC cites Kaufman v. Peterson Health Care VII, LLC 769 F. 3d 958 (7th Cir. 2014) as an example of policies that they believe to be unlawful under ADAAA. This case represents a subtle but real shift from current 8th Circuit law as stated in Fjellestad v. Pizza Hut of America, 188 F. 3d 949, 951-952 (8th Cir. 1999) where the 8th Circuit joined other federal circuits that held that failure to engage in an interactive process in accommodating a disability was not per se discrimination, and that there was no duty to engage in the interactive process. The EEOC’s interpretations of the new regulations still require that a plaintiff be able to perform the essential functions of the job with or without reasonable accommodation.

But as indicated by Kaufman, courts may be less likely to dismiss cases before trial, or in legal terminology, to grant summary judgment, on the issue of whether a plaintiff could perform the essential functions of the job with or without accommodation if the defendant does not engage in an interactive process or summarily decides that an employee should not be allowed to return without restrictions.

The fact that there is a split between regional appellate courts, a so-called circuit split, over “100 percent healed” policies increases the chances that the U.S. Supreme Court will decide whether 100-percent-healed policies violate the ADA. Another issue where there is a circuit split that the U.S. Supreme Court will decide is the legality of mandatory arbitration clauses in employment agreements.

Many workers unwittingly give up their rights to have employment-law disputes heard in court when they agree to mandatory arbitration clauses as a term of employment. In D.R. Horton Inc., 357 N.L.B. No 184 (2012) the National Labor Relations Board ruled that mandatory arbitration clauses prohibited Fair Labor Standards Act collective action cases because they interfered with protected concerted activity under 29 U.S.C. §157 and 29 U.S.C. § 158. In Lewis v. Epic Systems, 823 F. 3d 1147, 1154 (7th Cir. 2016), the 7th Circuit struck down a mandatory arbitration clause partly based on giving Chevron deference to the NLRB’s decision in D.R. Horton. The 9th Circuit agreed with the 7th Circuit in Morris v. Ernst and Young, LLP, No 13-16599 (Aug. 22, 2016). Unfortunately for plaintiffs, the 8th Circuit disagreed with the D.R. Horton decision in Owen v. Bristol Care, 702 F. 3d 1050 (8th Cir. 2013).

If confirmed, Gorsuch would be unlikely to give much weight to the opinions of the EEOC or NLRB in interpreting employment laws. Chevron deference is an unpopular concept with pro-business conservatives. Recently, the GOP-controlled House of Representatives passed legislation that, if enacted, would abolish Chevron deference.

Conversely, Chevron deference is a popular concept with progressive employee and civil-rights advocates, as it allowed the Obama administration to expand employee protections in the face of a hostile Congress. But with the advent of the Trump administration and his immigration policies, progressives have a newfound appreciation for separation of powers.

Also, employee advocates probably will not like many of the new rules and regulations issued by Trump appointees such as Labor Secretary nominee Larry Puzder. A prospective abolition of Chevron could be helpful to challenging rules made by a Trump administration. An example from the last Republican administration is instructive. In 2007, the U.S. Supreme Court in Long Island Care at Home Ltd. v. Coke, 551 U.S. 158 (2007) gave Chevron deference to Bush administration rules to exclude home health aides from coverage under the FLSA. It was nine years later that the rule was overturned, giving Chevron deference to Obama administration rules regarding home health aides and the FLSA.

Can I Get Fired For Filing Bankruptcy?

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Low and middle income people are the last people to benefit from any economic recovery. For many economic recovery means a return to work the opportunity to put their household finances in order with steady income provided by a job. Unfortunately unpaid debts often mean that employees get garnished  or even having to file bankruptcy.

Congress intended for bankruptcy to allow for people to get a fresh start so they prohibited discrimination based on bankruptcy and even let employees sue employers for such discrimination. But this law is not as strong as other laws prohibiting discrimination on factors such as race or sex for two reasons.

First of all, your status as a debtor in bankruptcy must by the sole cause of job loss. Discrimination is difficult enough to prove already under either a motivating factor or proximate cause standardsole cause is more exacting than even the difficult proximate cause standard. If your employer has any other legitimate reason to fire you besides your bankruptcy, then a court will likely find the termination was lawful. The only way for an employee to preserve any type of discrimination case is not to give the employee a reason to terminate them because of their poor performance , attendance or poor attitude. But even good employees can get fired legitimate reasons such as restructuring and economicreasons.

Secondly most courts do not believe that bankruptcy discrimination prohibits employers from failing to hire employees based on bankruptcy.

Title VII and most state anti-discrimination laws state that a failure to hire based on certain protected categories is unlawful activity.

Finally in any discrimination claim, the employer needs to be aware of your protected status. In a bankruptcy discrimination case this means that your employer had to have known about your bankruptcy status prior to firing you. Some employees get fired because  employer doesn’t want to deal with a garnishment.  Most people, me included, think that such an action is wrong or unfair. But unless your employer knows that garnishment is linked to your bankruptcy status, then firing you based on that garnishment is legal  – unless the garnishment is a cover or pre-text for another unlawful reason.

I would encourage anyone reading this post to contact their U.S. Senator or Congressperson and ask them to change the bankruptcy discrimination statute to mirror other federal anti-discrimination laws such as Title VII.

Why Overturning DOMA Is a Win for Employee Rights

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Regardless of your opinion on the issue of gay rights, Wednesday’s U.S. Supreme Court decision overturning the Defense of Marriage Act is a win for workplace fairness.

The constitutional authorization for most federal fair-employment laws is based on the guarantees of equal protection of the law based on the Fifth and 14th Amendments to the U.S. Constitution and the right of Congress to regulate interstate commerce clause. In his opinion overturning DOMA, Justice Anthony Kennedy found that DOMA violated the Fifth and 14th Amendment rights of gays and lesbians. He reaffirmed the role of the Fifth and 14th Amendments in preventing discrimination.

Kennedy’s opinion is important because in last summer’s blockbuster Supreme Court decision upholding the Affordable Care Act, Chief Justice John Roberts undercut the interstate commerce clause as a justification for passing federal legislation. Conceivably, corporate opponents of workplace fairness laws could point to Roberts’ decision in the Affordable Care Act as a way to argue that federal workplace fairness laws are unconstitutional. However Wednesday’s decision in the DOMA case means that workplace fairness laws still have clear and strong constitutional support.

The DOMA decision is a bright spot in a Supreme Court session that has otherwise been pretty bleak for employees. My opinion is that as a result of recent Supreme Court decisions, more and more fair-employment cases will be brought in state court. The decision in DOMA is still relevant to state law discrimination and retaliation claims. Most states have equal protection clauses in their state constitutions. The reasoning supporting the DOMA decision supports state fair-employment statutes. I believe this is true even for fair employment claims based on retaliation. As Justice Ruth Bader Ginsberg pointed out in her dissent in Nassar, retaliation is a form of discrimination. In other words, if you have been fired in retaliation for filing a workers’ compensation claim, your constitutional rights have been violated. If the Supreme Court had decided DOMA differently, employees would have a weaker argument that a retaliatory discharge violated their equal protection rights.