South Texas College of Law is now Houston College of Law

Confused? Isn’t there already a University of Houston Law Center?

The newly-named Houston College of Law says it’s “important to create a stronger association with the Law School and the nation’s fourth-largest city.” [Announcement]

The University of Houston issued the following statement:

“It has come to the University of Houston’s attention that South Texas College of Law has announced that it is changing its name to Houston College of Law.  The University of Houston Law Center has an established history of nearly 70 years in the City of Houston. The University of Houston is concerned about the significant confusion this creates in the marketplace and will take any and all appropriate legal actions to protect the interests of our institution, our brand and our standing in the communities we serve.”

Sent from Portland, Oregon on a cloudy morning – 61 degrees.

SCOTUS: Choctaws win jurisdictional battle

choctawSplitting 4-4, the US Supreme Court affirmed the 5th Circuit’s judgment that an 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. This does not set a nation-wide precedent, yet it is a victory for tribal jurisdiction within the 5th Circuit. Dollar General Corporation v. Mississippi Band of Choctaw Indians (US Supreme Court 06/23/2016).

Dollar General operates a store on the Choctaw reservation. John Doe, a 13-year-old tribe member, was working at the store as an unpaid educational intern. Doe sued Dollar General and its store manager in tribal court, claiming that the manager sexually molested him while he was working there.

The store and the manager went to federal district court seeking an injunction against tribal officials, claiming that the tribal court lacks jurisdiction. The district court held that the tribal court had jurisdiction over Dollar General because it had a consensual relationship with the tribe and with Doe. The court also held there was no tribal jurisdiction over the manager because he personally had no consensual relationship with either the tribe or Doe. The 5th Circuit (2-1) affirmed. [5th Circuit opinion] [Denial of en banc rehearing]

The case was all about tribal sovereignty, and the extent to which a tribal court has jurisdiction over a non-Indian. Its significance is well stated by the dissenting judge:

For the first time ever, a federal court of appeals upholds Indian tribal court tort jurisdiction over a non-Indian, based on a consensual relationship, without a finding that jurisdiction is “necessary to protect tribal self-government or to control internal relations.”

[For recent decisions and pending employment law cases, see US Supreme Court Watch.]

Sent from Portland, Oregon on a cloudy morning – 57 degrees.

Stereotypes: Fear of ugly divorce was direct evidence of discrimination

Robert Smith claimed he was fired because his supervisor believed Robert’s pending divorce would be “ugly” or “messy.” The New Jersey Supreme Court says this is direct evidence of a violation of New Jersey’s Law Against Discrimination (LAD), which forbids discrimination based on marital status. Robert Smith v. Millville Rescue Squad (New Jersey 06/21/2016).

The trial court found that Robert had failed to present evidence that he was terminated because he was either married or unmarried, or because he was having an affair, or any evidence that employees were treated differently based on their marital status. The court found that Robert’s proofs showed that he was terminated because management was concerned about the likelihood of an acrimonious divorce, which the court held did not give rise to a marital-status discrimination claim.

The Appellate Division reversed the dismissal of Robert’s marital-status discrimination claim, interpreting “marital status” to include the states of being separated and involved in divorce proceedings. That court determined that, based on the comments by Robert’s supervisor, Robert presented evidence that he was terminated based on negative stereotypes that the employer held about divorcing employees, and that Robert had established a prima facie case of discrimination.

The New Jersey Supreme Court unanimously held that the protection that the LAD affords against discrimination based on marital status is not limited to the state of being single or married. The LAD also prohibits discrimination against a prospective or current employee based on their status as separated, in the process of divorce, or divorced. The evidence that Robert presented at trial suggests that the employer’s animus toward divorcing persons, based on stereotypical views, affected the decision to terminate Robert’s employment, and therefore created an inference of discrimination due to Robert’s marital status.

It was really all about stereotypes. The New Jersey Supreme Court said:

The LAD prohibits an employer from imposing conditions of employment that have no relationship to the tasks assigned to and expected of an employee. It also prohibits an employer from resorting to stereotypes to discipline, block from advancement, or terminate an employee due to a life decision, such as deciding to marry or divorce. The LAD does not bar an employer from making a legitimate business decision to discipline or terminate an employee whose personal life decisions, such as a marital separation or divorce, have disrupted the workplace or hindered the ability of the employee or others to do their job. However, an employer may not assume, based on invidious stereotypes, that an employee will be disruptive or ineffective simply because of life decisions such as a marriage or divorce.

Sent from Portland, Oregon on a sunny morning – 64 degrees.

SCOTUS will decide President’s power to appoint NLRB Acting General Counsel

Once again the Supreme Court will examine the President’s power to make high-level appointments without Senate confirmation, and once again it is the NLRB that lands in the cross-hairs. NLRB v. SW General Inc (cert granted 06/20/2016) is a statutory case, not a constitutional case. The National Labor Relation Act says that the NLRB’s General Counsel is to be appointed by the President with the advice and consent of the Senate.

When a GC vacancy arose in 2010, the President appointed Lafe Solomon to serve as the Acting General Counsel, citing the authority of the Federal Vacancies Reform Act of 1998. He served from June 21, 2010 to November 4, 2013. The President twice sent Solomon’s nomination to the Senate, but ultimately he never got confirmed. So the question is whether Solomon properly served within the confines of the Federal Vacancies Reform Act.

The case comes from the DC Circuit, which held that the appointment was in violation of the FVRA and that an unfair labor practice complaint issued during his tenure was unauthorized. SW General v. NLRB (DC Cir 08/07/2015).

The NLRB’s petition for certiorari explains the problem thus:

Many important government posts must be filled by persons who are nominated by the President and confirmed by the Senate. The Federal Vacancies Reform Act of 1998 (FVRA), 5 U.S.C. 3345 et seq., provides that when such an office is vacant, its functions and duties may be performed temporarily in an acting capacity by either the first assistant to the vacant post, under Section 3345(a)(1); a Senate confirmed official occupying another office in the Executive Branch who is designated by the President under Section 3345(a)(2); or a senior official in the same agency designated by the President under Section 3345(a)(3).

Section 3345(b) of the FVRA provides as a general rule that “[n]othwithstanding subsection (a)(1),” a person who is nominated to fill a vacant office that is subject to the FVRA may not perform the office’s functions and duties in an acting capacity unless the person served as first assistant to the vacant office for at least 90 days in the year preceding the vacancy. 5 U.S.C. 3345(b).

The question presented is whether the precondition in 5 U.S.C. 3345(b)(1) on service in an acting capacity by a person nominated by the President to fill the office on a permanent basis applies only to first assistants who take office under Subsection (a)(1) of 5 U.S.C. 3345, or whether it also limits acting service by officials who assume acting responsibilities under Subsections (a)(2) and (a)(3).

Of course, this is a big deal for the NLRB and for those of us who follow the doings of the NLRB. But please note that many officials in other government agencies have served in “acting” positions in situations quite similar to the one involved in this case, so the ripple effect of the Supreme Court’s decision will be felt in many other agencies. Oral argument will be some time in the fall of 2016.

[For recent decisions and pending employment law cases, see US Supreme Court Watch.]

SCOTUS: No Chevron deference to DOL’s oscillating regulation

The Supreme Court didn’t tell us whether car dealership “service advisors” are exempt from FLSA’s overtime provisions, but the Court did remind us that deferral under Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) is not always available when an administrative agency changes its interpretation of the statute the agency administers. In Encino Motorcars, LLC v. Navarro (US Supreme Court 06/20/2016) all eight Justices agreed that no deference was warranted as to the Department of Labor’s most recent iteration of an interpretation of the Fair Labor Standards Act. But rather than giving us its interpretation of the statute, the Court (6-2) sent the case back to the 9th Circuit to do that work.

DOL’s view of whether service advisors are overtime exempt has vacillated over the years. In 1970 DOL said they were non-exempt, but that was met with a host of courts rejecting that position. So from 1978 until 2011 DOL said they were exempt. Then in an abrupt about face, a 2011 regulation said they were non-exempt.

Using familiar Chevron analysis, the 9th Circuit deferred to DOL’s new position because (1) the statute was ambiguous and (2) the regulation was reasonable.

The Supreme Court unanimously held that Chevron deference cannot be applied to the DOL’s current interpretation for two reasons: (1) The auto industry had relied on DOL’s prior interpretation since 1978 and compensation systems were negotiated and structured against that background, and (2) DOL did not give adequate reasons for its changed interpretation. As the Court put it, DOL “said almost nothing” about why it was changing its policy.

Whatever potential reasons the Department might have given, the agency in fact gave almost no reasons at all. In light of the serious reliance interests at stake, the Department’s conclusory statements do not suffice to explain its decision. [citation] This lack of reasoned explication for a regulation that is inconsistent with the Department’s longstanding earlier position results in a rule that cannot carry the force of law. [citation] It follows that this regulation does not receive Chevron deference in the interpretation of the relevant statute.

Is this high school? DOL’s “explanation” was pathetic. DOL recited that it had “carefully considered all of the comments, analyses, and arguments made for and against the proposed changes,” and then said it would not treat service advisors as exempt because “the statute does not include such positions and the Department recognizes that there are circumstances under which the requirements for the exemption would not be met.” And finally, DOL said it “believes that this interpretation is reasonable” and “sets forth the appropriate approach.” So, folks, in case you’re not paying attention, all DOL has to do is explain why it is doing what it is doing. That’s not asking much.

Anyhow, the case goes back to the 9th Circuit to decide afresh. Well, almost afresh. Justices Thomas and Alito opined that service advisors are exempt. And Justices Ginsburg and Sotomayor provided some support for them being non-exempt. That leaves four Justices who prefer to say nothing about the ultimate merits of the case.

[For recent decisions and pending employment law cases, see US Supreme Court Watch.]

NLRB’s election rule upheld in 5th Circuit

Pushing back objections from builders and contractors associations in Texas, the 5th Circuit has upheld the NLRB’s amended procedures for determining whether a majority of employees wish to be represented by a union for purposes of collective bargaining. Associated Builders and Contractors of Texas v. NLRB (5th Cir 06/10/2016)

The new rule is intended to decrease the time preceding union elections, and allows for employees to take a vote on union representation as soon as eleven days after a petition for representation is filed.

Most importantly, the new rule —

  • defers employer challenges to voter eligibility issues until after an election is held,
  • removes the standard twenty-five day delay that normally occurs between the time a regional director directs an election and the actual election,
  • requires expanded disclosure of employee contact information.

The objectors argued that the new rule violated both the Administrative Procedures Act and the National Labor Relations Act. The 5th Circuit seemed to have little difficulty dismissing these challenges.

Sent from Portland, Oregon on a cloudy afternoon – 63 degrees.

Exotic Dancers are employees, not independent contractors

You know the words and the tune for this song, so there are no surprises here. Dance clubs want exotic dancers (aka strippers) in the clubs but don’t want to bother with minimum wages, tax deductions and other pesky government regulations. So the clubs call the dancers “independent contractors” rather than “employees.” The clubs pay nothing; the dancers work solely off of tips from patrons. And the dancers bring lawsuits. In the latest, the 4th Circuit held that the dancers were employees under the Fair Labor Standards Act. McFeeley v. Jackson Street Entertainment (4th Cir 06/08/2016).

The court examined the “economic realities” of the relationship between the dancers and the clubs. The touchstone of the “economic realities” test is whether the worker is “economically dependent on the business to which he renders service or is, as a matter of economic [reality], in business for himself.” Application of the test turns on six factors:

  • (1) [T]he degree of control that the putative employer has over the manner in which the work is performed;
  • (2) the worker’s opportunities for profit or loss dependent on his managerial skill;
  • (3) the worker’s investment in equipment or material, or his employment of other workers;
  • (4) the degree of skill required for the work;
  • (5) the permanence of the working relationship; and
  • (6) the degree to which the services rendered are an integral part of the putative employer’s business.

As is often true, the main factor that tipped the scales was control, control, control. The clubs really had a lot of control over the dancers’ schedules, dress, behavior, and fees charged.

Sent from Portland, Oregon on a cloudy morning – 57 degrees.

Macy’s “micro-unit” OK’d by 5th Circuit

A storm of criticism came from employer-side folks back in July 2014 when the NLRB approved an election for a bargaining unit made up solely of cosmetics and fragrance employees at a Macy’s retail store. That was Macy’s Inc. (NLRB 07/22/2014). Now the 5th Circuit has enforced the Board’s order. Macy’s v. NLRB (5th Cir 06/02/2016).

So there are 41 employees who work in the cosmetics and fragrances department, and there are ten other departments. The NLRB found that the cosmetics and fragrances department was an “appropriate” bargaining unit. Macy’s thought the unit should include all employees in the whole store. We all know what’s really going on here. The United Food and Commercial Workers Union was able to gain the interest of a majority of the cosmetics and fragrances employees, but could not get a majority of the whole store. So the union went for the smaller unit – what some folks have been calling a “micro-unit.”

The legal test is pretty clear. The NLRB is allowed to approve an appropriate unit, even if some other unit might be more appropriate. So it wasn’t enough for Macy’s to point out that a larger unit was more appropriate. Although there has been a long history of the Board holding that a storewide unit is “presumptively appropriate” within the retail industry, the Board has said that it has

“over time, developed and applied a standard that allows a less-than-storewide unit so long as that unit is identifiable, the unit employees share a community of interest, and those employees are sufficiently distinct from other store employees.”

What if both the smaller unit and the store-wide unit are appropriate? The 5th Circuit explained –

In such a situation, the Board determined that its precedent requires the proponent of the larger unit to demonstrate that all employees “share ‘an overwhelming community of interest’ such that there ‘is no legitimate basis upon which to exclude certain employees from it.’”

In case you didn’t read that carefully, what it really means is that an employer will find it nearly impossible to prove that the smaller unit is not appropriate.

All of this is the natural outcome from Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), enforced sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013).