SCOTUS clarifies constructive discharge limitations period

The US Supreme Court today held that a federal employee’s 45-day limitations period for a constructive discharge claim begins running only after an employee resigns. Green v. Brennan (US Supreme Court 05/23/2016).

For Marvin Green, the last allegedly discriminatory act by his employer took place on December 16. The following February 9 Green announced his retirement effective March 31. Green reported an unlawful constructive discharge to an Equal Employment Opportunity counselor on March 22 – 41 days after resigning and 96 days after the last allegedly discriminatory act.

Before a federal employee can sue his employer for violating Title VII, he must, among other things, “initiate contact” with an Equal Employment Opportunity counselor at his agency “within 45 days of the date of the matter alleged to be discriminatory.”

The Supreme Court held (7-1) that the 45-day limitations period for a constructive discharge claim begins running only after an employee resigns. This is because part of the “matter alleged to be discriminatory” in a constructive-discharge claim is an employee’s resignation.

In dissent, Justice Thomas said: “Today, the majority holds that a ‘matter alleged to be discriminatory’ includes a matter that is not ‘discriminatory’ at all: a federal employee’s decision to quit his job.”

Robot “ROSS” hired by major law firm

The news this past week is that a major law firm has hired a robot to do legal research. The robot in question is ROSS. Of course, ROSS is not, in fact, a robot. ROSS is a research tool that relies on artificial intelligence.

Baker & Hostetler has “hired” ROSS to assist with research in the area of bankruptcy. The firm has approximately 50 lawyers in the bankruptcy practice, out of a total of 900 lawyers.

ROSS is the creation of Ross Intelligence, and is built upon Watson, IBM’s cognitive computer. There’s little novelty in the fact that the researcher can form queries using natural language rather than key words.

The big thing is that this is artificial intelligence. That means that ROSS improves its work based on experience. It “learns.”

Here’s how the creators explain it:

ROSS is an artificially intelligent attorney to help you power through legal research. ROSS improves upon existing alternatives by actually understanding your questions in natural sentences like – “Can a bankrupt company still conduct business?”

ROSS then provides you an instant answer with citations and suggests highly topical readings from a variety of content sources.

ROSS is built upon Watson, IBM’s cognitive computer. Almost all of the legal information that you rely on is unstructured data—it is in the form of text, and not neatly situated in the rows and columns of a database. Watson is able to mine facts and conclusions from over a billion of these text documents a second. Meanwhile, existing solutions rely on search technologies that simply find keywords.

So what can ROSS do?

  1. Provide you a highly relevant answer, not 1000s of results, to your question posed in natural language, not keywords.
  2. Monitor the law for changes that can positively/negatively affect your case, instead of flooding you with legal news.
  3. Learn the more you and other lawyers use it.
  4. Offer a simple, consistent experience across all your devices and form factors.

Some predictions:

  • ROSS will quickly branch out into legal realms other than bankruptcy.
  • Firms that use this technology will be way more competitive.
  • Other firms will rush to get this stuff. Or perish.
  • Efficiencies will reduce the need for new BigLaw lawyers. This will reduce job opportunities for the highest flyers at the most elite law schools.
  • ROSS will be exempt from time and a half for overtime.

Read more about it here:

 

Waiting on three decisions from SCOTUS

We’re watching for three more employment law decisions from the US Supreme Court before they finish their work in June.

Encino Motorcars, LLC v. Navarro

Issue: Whether “service advisors” at car dealerships are exempt under 29 U.S.C. §213(b)(10)(A) from the Fair Labor Standards Act’s overtime-pay requirements. [Opinion below] [Briefs] [Blog] [Casetext] [Blog] Oral argument April 20, 2016. [Transcript] [Audio] [Blog]

The statute exempts from overtime any “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” Service advisors aren’t specifically mentioned. The Department of Labor’s regulations have shifted over the years, most recently saying they are non-exempt.

My view of the oral arguments is that nobody on the Court seriously thinks DOL has misread the statute, so under Chevron USA v. Natural Res. Def. Council the Court probably will defer to the DOL’s most recent interpretation and uphold the 9th Circuit’s decision that service advisors are non-exempt. That would be a victory for the plaintiff-employee, and a huge victory for the DOL and other administrative agencies that want to change their formal positions on the meaning of statutes they administer.

Dollar General Corporation v. Mississippi Band of Choctaw Indians

Issue: Whether Indian tribal court has jurisdiction over an intern’s claim that the manager of a store on tribal land sexually molested him while he was working there. [Opinion below] [Briefs] [Blog] Oral argument December 7, 2015. [Transcript] [Audio]

This is a tough case to call because it’s all wrapped up in questions involving Article III, the sovereignty of Indian Tribes, and Congress’s statutes. Personally, I like the idea that anyone who chooses to conduct commercial business on tribal lands should be subject to tribal jurisdiction.

Green v. Brennan

Update on May 23, 2016: The Court ruled [here] that For federal employees, the filing period for a constructive discharge claim begins to run when an employee resigns, not at the time of an employer’s last allegedly discriminatory act giving rise to the resignation.

Issue: Whether, under federal employment discrimination law, the filing period for a constructive discharge claim begins to run when an employee resigns, or at the time of an employer’s last allegedly discriminatory act giving rise to the resignation. [Opinion below] [Briefs] [Blog] Oral argument November 30, 2015. [Transcript] [Audio]

Before suing under Title VII, a federal employee “must initiate contact with a Counselor within 45 days of the date of the matter alleged to be discriminatory or, in the case of personnel action, within 45 days of the effective date of the action.” In Green’s case, the last discriminatory act was on December 16, he announced his resignation the following February 9, and contacted an EEO counselor on March 22.

My bet is that the Supreme Court will affirm — by a lopsided margin — and hold that the clock begins to run on the date of the last alleged discriminatory action by the employer, not on the later date when the employee decides to quit or resign. Why? Simple. It is the employer’s conduct, not the employee’s conduct, that constitutes “the matter alleged to be discriminatory.”

“Plausibility” not useful in reviewing arbitration award

In Southwest Regional Council of Carpenters v. Drywall Dynamics (9th Cir 05/19/2016) the 9th Circuit has advanced its arbitration jurisprudence by declaring that “it is time for us to retire the use of ‘plausibility’ as a term to describe the courts’ role in reviewing labor arbitration awards.” A district court had vacated an arbitration award on the ground that the arbitrator’s interpretation of the parties’ agreement was not “plausible.” The 9th Circuit’s response was that it needed “once more to clarify the limited role played by courts in reviewing labor arbitration awards.”

The district court ruled that the arbitration panel’s interpretation of the contracts was not “plausible.” To me, that was just another way of saying that the district court did not agree with the arbitration panel’s interpretation of the contracts. Apparently the 9th Circuit saw things the same way I did. The take-away quote:

“the quality — that is, the degree of substantive validity — of an arbitrator’s interpretation is, and always has been, beside the point. Instead, the appropriate question for a court to ask when determining whether to enforce a labor arbitration award interpreting a collective bargaining agreement is a simple binary one: Did the arbitrator look at and construe the contract, or did he not?”

Legal analysis can get so tied up in specific words, and those words can encompass so many meanings, that courts sometimes get carried away. The 9th Circuit spent a lot of its opinion explaining a number of ways in which “plausibility” had been used. So, for now that word has been “retired.”

Defendant beats EEOC (partly) in SCOTUS attorney’s fees case

CRST Van Expedited, Inc. v. EEOC (US Supreme Court 05/19/2016): After CRST fended off a Title VII suit brought by the EEOC and recovered over $4 million in attorney’s fees in the District Court, the 8th Circuit said “No” to the attorney’s fees award because CRST did not prevail “on the merits.” CRST prevailed because the EEOC “wholly abdicated” its duty to make separate investigations, reasonable cause determinations, and conciliation attempts as to 67 women on whose behalf EEOC sued prior to bringing its sexual harassment suit against CRST. No court has decided “on the merits” of whether there was any sexual harassment.

The US Supreme Court today ruled unanimously in favor (well, partly in favor) of CRST, saying:

“The Court now holds that a favorable ruling on the merits is not a necessary predicate to find that a defendant has prevailed.”

According to Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978), a defendant can be awarded attorney’s fees in a Title VII case if it is a “prevailing party” (see Title VII Section 706(k)) and the plaintiff’s (here, the EEOC’s) claim was frivolous, unreasonable, or groundless. But Christiansburg didn’t tell us what’s required for a defendant to be a “prevailing party.”

We knew in advance that the 8th Circuit’s “on the merits” requirement wasn’t going to fly because both CRST and the EEOC told the Court that this requirement was wrong. So the Court played nice and explained why “common sense” and what “Congress intended” and what the courts have been doing all along all lead to the conclusion that an “on the merits” hurdle is bad law.

But the Court refused to decide three issues that the parties discussed at length in their briefs and at oral arguments.

(1) EEOC argued that in order to be a “prevailing party” a defendant must obtain a preclusive judgment, one that’s “with prejudice.” But Hey, the EEOC first cooked up this argument in between the certiorari stage and the merits stage in the Supreme Court. The Court suggested the argument might have been waived, and also bemoaned the “inadequate briefing on the issue.” So, they sent this issue back to the 8th Circuit to wrestle with. Oh. Come. On. CRST – in spite of the late timing – did a fine briefing job. I think they sent this back because otherwise the Court was split 4-4.

(2) The Court also refused to decide whether CRST’s judgment was in fact with prejudice. I winced at the oral arguments on this point because the record of nine years of litigation simply did not make it clear. And you can’t expect the Supreme Court to do this kind of work. It’s a court of review, and usually not the first-decider.

(3) The 8th Circuit never weighed in on whether the EEOC’s actions were frivolous, unreasonable, or groundless. So that issue had to be sent back to the 8th Circuit. Again, this is not something the Supreme Court should decide without guidance from a lower court.

Justice Thomas concurred and also wrote separately. He thinks Christiansburg is “dubious precedent” because it sets up a dual standard for plaintiffs and defendants in Title VII cases. A prevailing plaintiff “ordinarily is to be awarded attorney’s fees in all but special circumstances,” but a prevailing defendant is to be awarded fees only “upon a finding that the plaintiff’s action was frivolous, unreasonable, or without foundation.”

My prediction is that the singular holding (defendants don’t need to prevail “on the merits”) will be applied across the board in nearly all statutes (not just Title VII) that have attorney’s fees provisions.

For greater detail, see my post on SCOTUSblog: Opinion analysis: Title VII defendants can recover attorney’s fees without prevailing “on the merits”

Overtime coverage will change over time

Almost lost in all the chatter about the new overtime rule is the fact that it is now indexed and will automatically change every three years. The new salary level is $913 per week ($47,476 per year). This is pegged at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South. Every three years the salary level will change as the earnings of full-time salaried workers change. The new total annual compensation level for highly compensated employees (HCEs) is $134,004. This is pegged at the 90th percentile of earnings of full-time salaried workers nationally.

Historically, changes in the salary levels have been infrequent and bound up in political wrangling. Each time there was a change, it required a new regulation – with all the heavy bureaucracy and political maneuvering that goes with it. Over the past four decades (!) the salary level was changed only once.

Strength test excluded women. Please pay $1.85 million.

OFCCP has determined that a federal food service contractor systematically discriminated against 926 qualified women seeking entry-level warehouse laborer jobs. The contractor does not admit liability, but has settled for $1.85 million and agreed to stop using a pre-hire strength test. [DOL news release]

The contractor had hired six females and nearly 300 males, and that made OFCCP wonder what was going on. It turns out the contractor was using a strength test to screen applicants. The majority of women weren’t passing the strength test, which used Isokinetic Testing technology to match the physical capability of the applicants with the physical demands of the jobs. No healthcare professional was involved in administering or interpreting the test. And – bottom line – the test was not fully validated.

An OFCCP spokesperson said:

 “As for specific lifting requirements, there were none. Rather, the test measured upper and lower body resistance.”

The company did not use a lifting test. For a warehouse labor job. Gotta wonder why.

The settlement agreement requires the contractor to pay out $1.85 million to about 920 applicants, and to hire 37 of them when openings arise.

NLRB looks at jurisdiction over non-teachers at religious school

Should the NLRB continue its practice of asserting jurisdiction over secular, non-teaching employees of religiously affiliated organizations? Extend the test articulated in Pacific Lutheran University, 361 NLRB No. 157 (2014)? Or something else? Those are the questions the Board will be deciding in the Islamic Saudi Academy case. [Order in Islamic Saudi Academy]

The Islamic Saudi Academy, a private school for grades K-12 in Alexandria, Virginia, clearly is a religious school – providing a religious educational environment. An NLRB Regional Director has decided that the NLRB cannot exercise jurisdiction over the school’s teachers, but can exercise jurisdiction over its non-teaching employees.

It all started with NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979), holding that schools operated by a church to teach both religious and secular subjects are not within the NLRB’s jurisdiction, but that case really applied only to teachers. Then we got Pacific Lutheran University, 361 NLRB No. 157 (2014), which pushed the envelope a bit. In that case the NLRB said the Board will not decline to exercise jurisdiction over a unit of faculty members at a school claiming to be a religious institution unless the school demonstrates that it:

(1) holds itself out as providing a religious educational environment,

and

(2) holds out the petitioned-for faculty members as performing a specific role in creating or maintaining the school’s religious educational environment.

The Regional Director in the Islamic Saudi Academy case [Regional Director’s Order] applied these same principles to non-teachers, and decided that

  1. “The Employer holds itself out as providing a religious educational environment”
  2. “The evidence does not establish that the Employer holds out non-teaching employees as performing a specific religious function”

So yesterday the Board granted a request to review the Regional Director’s decision. [Order in Islamic Saudi Academy] And now begins the sluggish process of moving to a decision by the NLRB itself. By the time that happens the Board’s makeup will have changed. [See Shrinking membership at the NLRB] There are now only four Members (three Democrats and one Republican), and in August a Democrat Member’s term will expire which will bring the Board down to three Members. A lot of politics at the level of President and Senate will need to play out before the Board is back up to five Members, and there is no telling whether they will wait for that to take place.