SCOTUS to decide pregnancy case

Certiorari granted in Young v. United Parcel Service.

Peggy Young was a pregnant UPS employee whose doctor advised that she be restricted as to how much weight she could lift. Her job required lifting, so UPS refused to allow her to work. Also, UPS refused to allow her to do light duty work. Young sued UPS, and lost.

UPS provides light duty work to employees who have on-the-job-injuries or are entitled to accommodation under the ADA or have lost their DOT certification, but not to employees who are unable to do their regular jobs due to being pregnant.

The 4th Circuit followed the majority view of the lower courts: Where a policy treats pregnant workers and nonpregnant workers alike, the employer has complied with the Pregnancy Discrimination Act.

The issue in Young v. United Parcel Service is:

Whether, and in what circumstances, the Pregnancy Discrimination Act requires an employer that provides work accommodations to non-pregnant employees with work limitations to provide work accommodations to pregnant employees who are “similar in their ability or inability to work.”

I think the majority view is wrong, but I’m not sure the Supreme Court will agree with me.

Oral argument will be scheduled for October 2014 or later.

[For a list of current employment law cases, see US Supreme Court Watch.]

Harris v. Quinn: An anti-Abood manifesto

Abood’s analysis is “questionable.”

The basic holding in Harris v. Quinn (US Supreme Court 06/30/2014) is that the first amendment bars collection of union agency fees from Illinois homecare personal assistants who do not want to join or support the union. This was a 5-4 decision.

Illinois has a system under which private customers control most of their personal assistants’ employment relationship (hiring, firing, training, supervising, and disciplining) but the state pays the wages. A union represents all these personal assistants, and has a collective bargaining agreement with the state which includes a “fair share” clause that requires the personal assistants to pay a fee to the union. Such fair share clauses are common throughout both public sector and private sector collective bargaining, and historically have been upheld when challenged on first amendment grounds.

In Harris v. Quinn the Court saw these employees as not being “full-fledged public employees.” As such, the Court declined to apply its prior case – Abood v. Detroit Bd. of Ed., 431 U. S. 209 (1977) – which upheld fair share clauses in the public sector.

Technically, the decision did not overrule Abood. Yet the majority laid out a set of reasons why it believes Abood‘s analysis is “questionable.”

Here is the majority’s anti-Abood manifesto:

  • Abood relied on Railway Employes v. Hanson, 351 U. S. 225 (1956), but Hanson‘s first amendment analysis was “thin.”
  • Abood relied on Machinists v. Street, 367 U. S. 740 (1961), but Street was a private sector case.
  • The Abood Court fundamentally misunderstood Hanson‘s narrow holding.
  • Abood failed to appreciate the difference between public sector union speech and private sector union speech.
  • Abood failed to appreciate the conceptual difficulty in public sector cases of distinguishing union expenditures for collective bargaining from those designed for political purposes.
  • Abood did not anticipate the administrative problems involved in classifying union expenditures as chargeable and non-chargeable
  • Abood did not anticipate the practical problems that arise from the heavy burden facing objecting nonmembers wishing to challenge the union’s actions.
  • The Abood Court’s critical “labor peace” analysis rests on the unsupported empirical assumption that exclusive representation in the public sector depends on the right to collect an agency fee from nonmembers.

Public sector unions ought to be trembling today.

[For a list of current employment law cases, see US Supreme Court Watch.]

Noel Canning: Actually a big win for the President

Bad case for the NLRB. Not so bad for the President.

The headlines are saying “Presidential recess appointments were unconstitutional.” True. And unanimous. Three appointments to the NLRB were made in such a way as to violate the Recess Appointments Clause of the constitution. NLRB v. Noel Canning (US Supreme Court 06/26/2014).

Yet the President won on two major points.

Noel Canning challenged an order of the NLRB on the ground that the Board lacked a quorum because three of the five Board members had been invalidly appointed. On December 17, 2011 the Senate passed a resolution providing for a series of “pro forma session[s],” with “no business . . . transacted,” every Tuesday and Friday through January 20, 2012. The President appointed three Board members between two of those pro forma sessions.

So the US Supreme Court explained how the Recess Appointments Clause works:

  1. Recess appointments are OK during intra-session recesses as well as inter-session recesses. By 5:4 vote, this rejected the view of the DC Circuit. An important Presidential win.
  2. The phrase “vacancies that may happen during the recess of the Senate” applies both to vacancies that first come into existence during a recess and to vacancies that initially occur before a recess but continue to exist during the recess. By 5:4 vote, this rejected the view of the DC Circuit. An important Presidential win.
  3. Generally, an intra-session recess must be at least 10 days long in order for the President to make a recess appointment. This is what made the appointments unconstitutional in this case, because the recess was only for three days.

[For a list of current employment law cases, see US Supreme Court Watch.]

10th Circuit nixes gay marriage ban

Strict scrutiny applies.

Today, for the first time, a federal court of appeals has held that “A state may not deny the issuance of a marriage license to two persons, or refuse to recognize their marriage, based solely upon the sex of the persons in the marriage union.”

The case is Kitchen v. Herbert (10th Circuit 06/25/2014), decided on a 2-1 vote.

Applying “strict scrutiny” because the case involves the “fundamental right” to marry, the majority rejected every justification advanced by the State of Utah.

The dissent would apply “rational basis” rather than strict scrutiny, and hold that Utah’s ban on same-sex marriage is “rationally related to (1) responsible procreation, (2) effective parenting, and (3) the desire to proceed cautiously in this evolving area.”

The court put its decision on hold pending a petition to the US Supreme Court for a writ of certiorari.

Gentry R.I.P. Class arbitration waiver enforced

FAA preempts California’s unconscionability rule.

Gentry v. Superior Court, 165 P3d 556 (California 2007), was a 21st century vestige of judicial hostility toward arbitration agreements. This week the California Supreme Court, under intense pressure from the US Supreme Court, finally caved in to the principle that federal law (the Federal Arbitration Act (FAA) of 1925) requires enforcement of an arbitration agreement’s clause that disallows class arbitration proceedings.

Iskanian v. CLS Transportation (California Supreme Court 06/23/2014) overruled Gentry.

Iskanian sought to bring a class action lawsuit on behalf of himself and similarly situated employees for his employer‘s alleged failure to compensate its employees for, among other things, overtime and meal and rest periods. Iskanian had entered into an arbitration agreement that waived the right to class proceedings.

The California Supreme Court ruled that a state’s refusal to enforce such a waiver on grounds of public policy or unconscionability is preempted by the FAA.

Under Gentry:

“[W]hen it is alleged that an employer has systematically denied proper overtime pay to a class of employees and a class action is requested notwithstanding an arbitration agreement that contains a class arbitration waiver, the trial court must consider the factors discussed above: the modest size of the potential individual recovery, the potential for retaliation against members of the class, the fact that absent members of the class may be ill informed about their rights, and other real world obstacles to the vindication of class members‘ right to overtime pay through individual arbitration. If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for the employees alleged to be affected by the employer‘s violations, it must invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’”

However, in AT&T Mobility LLC v. Concepcion, 131 SCt 1740 (US Supreme Court 2011) the US Supreme Court made clear that

even if a state law rule against consumer class waivers were limited to “class proceedings [that] are necessary to prosecute small-dollar claims that might otherwise slip through the legal system,” it would still be preempted because states cannot require a procedure that interferes with fundamental attributes of arbitration “even if it is desirable for unrelated reasons.”

So where does that leave us? There is a huge debate going on as to whether waivers of class arbitration are a good thing or a bad thing, and whether or not employers are taking unfair advantage of employees, and whether arbitration of employment disputes is better or worse (for whom? Employees? Employers?) than litigation. But where we are left is that we are dealing with the Federal Arbitration Act (FAA), which dates back to 1925, and with the current US Supreme Court’s interpretation of that federal statute.

As is true with all federal statutory matters, those who want change in the law should look to Congress.

SCOTUS: Can’t fire public employee for testifying under subpoena

Employee “spoke as a citizen on a matter of public concern.”

As I predicted [here], the US Supreme Court held that a public employee who testifies in court (at least when that’s not part of his normal job duties) has 1st amendment protection against being fired for giving that testimony. This is true even though the testimony involved things the employee learned in the course of his employment. Lane v. Franks (US Supreme Court 06/19/2014).

What I did not predict was that the Court was unanimous on this issue.

The reasoning is really pretty simple.

  • Sworn testimony in judicial proceedings is a quintessential example of citizen speech.
  • The speech itself was not part of the employee’s job duties, and it doesn’t matter that the speech concerned things the employee learned on the job.
  • The speech involved “a matter of public concern” in that it involved corruption in a public program and misuse of state funds.
  • The employer had nothing on its side of the ledger. No evidence that the testimony was false or erroneous. No showing that confidential information was unnecessarily disclosed.

Oh, Yes. Qualified immunity.

I also predicted [here] that the Court would grant qualified immunity to the official that did the firing. This is for the simple reason that the law was not then clear in his federal Circuit.

[For a list of current employment law cases, see US Supreme Court Watch.]

Lane v. Franks: Fired for testifying under subpoena

1stPublic employee claims discharge was for compelled court testimony.

Lane v. Franks is the big first amendment employment case for this year. The US Supreme Court heard oral arguments on April 28. [Transcript]

Facts: Lane, as part of his community college job, uncovered evidence that a legislator was engaged in some corrupt activities. Later, Lane was subpoenaed to testify in a federal criminal trial involving the legislator. When Lane got laid off or terminated from his job, he sued Franks, president of the college, claiming he lost his job because he testified. This, he claimed, was retaliation in violation of the 1st amendment.

Legal background: Garcetti v. Ceballos, 547 US 410 (2006), is famous for holding that a public employee who speaks or writes as part of that employee’s job duties enjoys no 1st amendment protection. The employer can fire that employee for speaking or writing. The reasoning is that the employee was not speaking or writing as a citizen.

Speaking as a citizen?

One issue in Lane v. Franks is whether a public employer is free to fire an employee for giving truthful subpoenaed testimony. The 11th Circuit said yes. Lane v. Central Alabama Community College (11th Cir 07/24/2013) (unpublished). It’s important to note that the content of Lane’s testimony was all derived out of the performance of his job. Yet testifying was not one of his job duties. So that’s the twist in this case. Testifying was not a job duty, but the content of the testimony was all about what Lane discovered as part of his job duties. The gut issue here is whether Lane was speaking as a citizen or as an employee.

It seems pretty simple to me. When an employee is subpoenaed to testify in criminal court, that employee is speaking as a citizen. (Police officers are possibly a different question because testifying is party of an officer’s job duties.)

Qualified immunity?

Another issue is whether the defendant is entitled to qualified immunity. This turns on whether Lane’s first amendment right (assuming it exists) was clearly established at the time he lost his job. Well, it most certainly was not.

Outcome?

Prediction: On the first amendment issue, Lane was speaking as a citizen, so he gets first amendment protection. On the qualified immunity issue, the law was not clearly established, so Lane loses after all. It’s possible the Court will not even decide the “main” first amendment issue if Lane is going to lose on the immunity issue. Just my prediction, folks. We’ll see in the next few months.

[For a list of current employment law cases, see US Supreme Court Watch.]

Northwestern grant-in-aid scholarship football players are “employees”

American Football 2Paid players are primarily employees, not primarily students.

An NLRB Regional Director has ruled that grant-in-aid scholarship football players at Northwestern University are “employees” and has directed that an NLRB election be held.

[Decision]

The NLRB Regional Director made these basic findings:

  • The players perform services for employer’s (University’s) benefit.
  • The players receive compensation for these services.
  • The pay is not financial aid.
  • The players are subject to the employer’s control.
  • The players are employees under common-law definitions.
  • The players are not primarily students.
  • The players are not temporary employees.

This is the beginning of what is sure to be a long litigation battle.

SCOTUS: Severance payments subject to FICA taxes

taxes-ficaIt should come as no surprise that the US Supreme Court unanimously decided that severance payments made to involuntarily terminated employees are subject to FICA taxes.

United States v. Quality Stores (US Supreme Court 03/25/2014).

[For a list of current employment law cases, see US Supreme Court Watch.]

Arbitration deference on an international scale

arbFamiliar rules, applied to a treaty rather than a contract.

Today’s SCOTUS case: BG Group v. Republic of Argentina (US Supreme Court 03/05/2014).

This case involves an investment treaty between the United Kingdom and Argentina. The treaty authorizes a party to submit a dispute to a local court, and permits arbitration “where, after a period of eighteen months has elapsed from the moment when the dispute was submitted to [that] tribunal . . . , the said tribunal has not given its final decision.”

A dispute arose between BG Group and Argentina. BG Group commenced arbitration without first going to a local Argentine court. Argentina balked, saying the arbitrators had no jurisdiction because BG Group had not complied with the local litigation requirement.

The arbitration panel concluded that it had jurisdiction because Argentina’s conduct (such as enacting new laws that hindered recourse to its judiciary by firms in BG Group’s situation) had excused BG Group’s failure to comply with the local litigation requirement.

The US Supreme Court, applying familiar rules, upheld the arbitrators.

The presumption is that courts decide whether the parties agreed to arbitrate (which they clearly did here), and arbitrators decide procedural preconditions to arbitration (such as time limits and – in this case – the local litigation requirement and whether that requirement was excused).

A totally unsurprising conclusion to a $185 million case.

[For a list of current employment law cases, see US Supreme Court Watch.]