Justice Kavanaugh’s 1st opinion: Arbitration

Justice Kavanaugh’s 1st opinion: Arbitration.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

The US Supreme Court has held – unanimously – that courts must enforce an arbitration delegation clause even if the merits appear to be "wholly groundless." Henry Schein v. Archer & White (US Supreme Ct 01/08/2019) [PDF]. This is Justice Kavanaugh's first Supreme Court opinion. Eight pages.

[This is not an employment law case, yet it will have an impact on employment agreements that contain an arbitration clause.] Archer & White Sales sued Henry Schein alleging antitrust violations and seeking both money damages and injunctive relief. Schein moved to compel arbitration, citing an arbitration clause in the parties' contract. Archer & White argued that the dispute was not subject to arbitration because its complaint sought injunctive relief, at least in part, and the arbitration agreement had an exception for injunctive relief. Schein contended that because the rules governing the contract provide that arbitrators have the power to resolve arbitrability questions, an arbitrator – not the court – should decide whether the arbitration agreement applied. Lower courts held that the argument in favor of arbitration was "wholly groundless," and so the trial court could – and did – decide that the arbitration agreement did not cover this dispute. The US Supreme Court unanimously reversed.

The US Supreme Court held that the "wholly groundless" exception to arbitrability is inconsistent with the Federal Arbitration Act (FAA) and the Court's precedent. Under the FAA, arbitration is a matter of contract, and courts must enforce arbitration contracts according to their terms. The parties may agree to have an arbitrator decide not only the merits of a particular dispute, but also "gateway" questions of arbitrability. Therefore, when the parties' contract delegates the arbitrability question to an arbitrator, a court may not override the contract, even if the court thinks that the arbitrability claim is wholly groundless. "[A] court may not 'rule on the potential merits of the underlying' claim that is assigned by contract to an arbitrator, 'even if it appears to the court to be frivolous.'"

Joint Employers - the NLRB’s latest word

Joint Employers - the NLRB’s latest word.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

In 2015 the NLRB revised its joint-employer test by (1) putting the focus on whether a putative employer has the right to control the workers (even if that right is not exercised) and (2) considering indirect control (not merely direct control) as a factor. The DC Circuit has affirmed that formulation, although the case was remanded for greater articulation of the scope of "indirect" control. Browning-Ferris v. NLRB (DC Cir 12/28/2018) [PDF]

Most workers at Browning-Ferris's recycling plant are employed by a staffing company, who “has the sole responsibility to counsel, discipline, review, evaluate, determine pay rates, and terminate” the workers that it provides. When a Teamsters union petitioned to represent these workers, the NLRB decided that Browning-Ferris and the staffing company were joint-employers of the workers.

The DC Circuit held that "the right-to-control element of the Board’s joint-employer standard has deep roots in the common law. The common law also permits consideration of those forms of indirect control that play a relevant part in determining the essential terms and conditions of employment. Accordingly, we affirm the Board’s articulation of the joint-employer test as including consideration of both an employer’s reserved right to control and its indirect control over employees’ terms and conditions of employment." However, the court faulted the NLRB for failing to distinguish evidence of indirect control that bears on workers’ essential terms and conditions from evidence that simply documents the routine parameters of company-to-company contracting. Therefore, the court remanded to the NLRB for it to "explain and apply its test in a manner that hews to the common law of agency."

DISSENT: The dissent would have issued no decision at all because the NLRB is now engaged in a rulemaking process directed at precisely the issues that were decided in this case. On the merits, the dissent argued that under the common law "employees of a true independent contractor [here, the staffing company] cannot be considered employees of the company [here, Browning-Ferris] who hired the contractor." The dissent also faulted the majority for ignoring the fact that the common law of joint-employer may vary according to the nature of the business arrangement between companies.

NOTE: The NLRB is engaging in a rulemaking process regarding its joint-employer standard. Interested parties may file comments on or before Monday, January 14, 2019.

No ministerial exception for Catholic grade school teacher

No ministerial exception for Catholic grade school teacher.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

Is a fifth grade teacher at a Catholic school a “minister” for purposes of the ministerial exception? Court says “No” 2-1.

Kristen Biel was fired from her fifth grade teaching position at a Catholic school after she told her employer that she had breast cancer and would need to miss work to undergo chemotherapy. The trial court granted summary judgment to the employer on the ground that the 1st amendment's ministerial exception barred her claim under the Americans with Disabilities Act. The 9th Circuit reversed, 2-1. Biel v. St. James School (9th Cir 12/17/2018) [PDF]

The court applied the analysis in Hosanna-Tabor v. EEOC to conclude that, under the totality of the circumstances, Biel did not qualify as a "minister" for purposes of the ministerial exception.

1. The school did not hold Biel out as a minister by suggesting to its community that she had special expertise in Church doctrine, values, or pedagogy beyond that of any practicing Catholic.

2. Biel's title "Grade 5 Teacher" did not reflect any religious meaning. There was no religious component to her liberal studies degree or teaching credential, and the school had no religious requirements for her position.

3. Nothing in the record indicates that Biel considered herself a minister or presented herself as one to the community. She described herself as a teacher and claimed no benefits available only to ministers.

4. Biel taught lessons on the Catholic faith four days a week. She also incorporated religious themes and symbols into her overall classroom environment and curriculum, as the school required.

The DISSENT argued that Biel was "entrusted with teaching and conveying the tenets of the faith to the next generation." The substance reflected in her title and the important religious functions she performed outweigh her formal title and whether she held herself out as a minister.

Lawyers: Do mandatory bar dues violate the 1st amendment?

Lawyers: Do mandatory bar dues violate the 1st amendment?

Part of a series - Employment Law Case of the Week - by Ross Runkel.

The 8th Circuit brushed away a constitutional challenge to the way bar associations collect and spend dues, but the US Supreme Court ordered the 8th Circuit to reconsider the question in light of Janus v. AFSCME (US Supreme Court 2018).

Data breach: 62,000 employee personal records

Data breach: 62,000 employee personal records. Is the employer liable? Well, Duh.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

ADEA applies to local governments regardless of size

US Supreme Court: ADEA applies to local governments regardless of size.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

In a unanimous decision, the US Supreme Court holds that the Age Discrimination in Employment Act (ADEA) applies to local political subdivisions regardless of their size. This is rejection of the argument that the ADEA applies only when a political subdivisions has 20 or more employees. Mount Lemmon Fire Dist v. Guido (US Supreme Ct 11/06/2018) [PDF]

Following Congressional amendments in 1974, the ADEA has two key sentences in its definitions: (a) "The term ‘employer' means a person engaged in an industry affecting commerce who has twenty or more employees … ." (b) "The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State … ."

The Court said, "We hold … that §630(b)'s two-sentence delineation, and the expression 'also means' at the start of the second sentence, combine to establish separate categories: persons engaged in an industry affecting commerce with 20 or more employees; and States or political subdivisions with no attendant numerosity limitation."

The Court stressed the use of the phrase "also means," which appears dozens of times in the US Code, and typically carries an additive – rather than clarifying – meaning. Also, the second sentence in §630(b) pairs political subdivisions with agents, a discrete category that carries no numerical limitation. Although Title VII applies to local governments only if they meet a numerosity specification, that is a consequence of the different language Congress chose to employ.

The Supreme Court decision affirmed the 9th Circuit, and rejected contrary interpretations by the 6th, 7th, 8th, and 10th Circuits.

Class-action arbitration - Dead or Alive at the US Supreme Court?

Class-action arbitration - Dead or Alive at the US Supreme Court? Lamps Plus v. Varela, argued at the US Supreme Court on October 29.

Issue: " Whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements."

Part of a series - Employment Law Case of the Week - by Ross Runkel.

Is a taxi driver an employee or an independent contractor? How about both?

Is a taxi driver an employee or an independent contractor? How about both?

Part of a series - Employment Law Case of the Week - by Ross Runkel.

Fired for having a firearm in his truck

Fired for having a firearm in his truck in the employer's parking lot, an employee is reinstated by an arbitrator - with generous help from the 7th Circuit.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

Kentucky court refuses to enforce an arbitration agreement - again

Kentucky court refuses to enforce an arbitration agreement - again.

Part of a series - Employment Law Case of the Week - by Ross Runkel.