Justices’ Labor Docket Light but Significant

From Labor & Employment on Bloomberg Law

September 25, 2017

By Jay-Anne B. Casuga

The U.S. Supreme Court will return Oct. 2 to a slim docket of labor and employment cases, but the issues the justices will decide are significant for businesses and employees.

One set of cases involves class action waivers in arbitration agreements, where two government agencies have taken opposing stances in the same proceeding. The other focuses on an agency’s definition of a whistle-blower under a federal financial law.

Apart from resolving the issues presented, those two sets of cases could have far-reaching implications for workplace law, attorneys told Bloomberg BNA. They both will shed light on how the current court will deal with the government’s shifting statutory interpretations and the level of deference the judicial branch must give to those agency viewpoints.

“An interesting thing to watch is how the government’s changes in position will play out in terms of how the cases are presented and argued,” said Rae T. Vann, a partner with NT Lakis in Washington, which represents employers. Vann is also general counsel of the Center for Workplace Compliance. The employers’ association, formerly known as the Equal Employment Advisory Council, has filed friend-of-the-court briefs in more than 100 employment cases that have gone before the high court in the past two decades.

Justices Clarence Thomas and Neil Gorsuch in the past have been critical of what they view as undue judicial deference to agencies’ interpretation of laws they administer. Whether they can convince other justices to narrow the level of deference afforded to agencies remains to be seen, said Collin O’Connor Udell, of counsel at Jackson Lewis in Hartford, Conn. Udell’s practice focuses on Supreme Court litigation.

“This is something that everyone’s going to be watching,” Udell said.

Arbitration Class Waivers First Up

Arguably, the highest profile labor issue the justices will consider in the upcoming term involves class action waivers in arbitration agreements.

The court will hear oral argument Oct. 2 in three consolidated cases on the enforceability of arbitration agreements that bar employees from pursuing employment-related claims in class or collective actions—either in court or arbitration.

More specifically, the justices will determine whether such agreements prohibit workers’ rights to band together in “concerted” activity in violation of the National Labor Relations Act.

“The class arbitration cases alone make it a pretty meaty term from a labor and employment standpoint,” Vann said.

The consolidated cases are: NLRB v. Murphy Oil USA, Inc., Epic Systems Corp. v. Lewis, and Ernst & Young LLP v. Morris (No. 16-307) .

Another “fascinating” aspect of the cases is that two different government agencies have taken “polar opposite” views on the same issue, professor Michael Foreman, director of the Civil Rights Appellate Clinic at Penn State Law, told Bloomberg BNA.

The National Labor Relations Board will defend its position that such class action waivers are unlawful. The Trump administration’s Justice Department, however, has backed employers, arguing that the Federal Arbitration Act and high court precedent strongly favor the validity and enforcement of arbitration agreements that include class waivers.

Which agency will the justices listen to?, Foreman asked. Or will the agencies “cancel each other out?”

Two government agencies on opposite sides of an issue also cropped up recently with the Equal Employment Opportunity Commission and the Justice Department on whether a federal civil rights law prohibits sexual orientation discrimination. The justices could very well take up that issue in the near future.

Defining a Whistle-Blower Under Dodd-Frank

The justices also will determine which employees classify as whistle-blowers under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The case is Digital Realty Trust, Inc. v. Somers (No. 16-1276). Arguments haven’t yet been scheduled.

Two federal appeals courts have agreed with the Securities and Exchange Commission that the law protects workers who file charges with the agency, as well as employees who internally raise concerns within their companies about possible securities violations.

But one appeals court said the Dodd-Frank Act’s plain language defines whistle-blowers as only those who report to the SEC. It said the agency’s rules impermissibly expanded that definition.

The case is “a real sleeper with potentially enormous consequences for employers,” depending on how the justices interpret the statutory text and whether they give any weight to the SEC’s interpretation, Vann said.

The Supreme Court in the past has been protective of, and sometimes broadened, employees’ ability to bring retaliation claims under discrimination, wage-and-hour, and whistle-blower laws.

It’ll be interesting to see whether the court will continue to follow that line of cases, Foreman said.

Deadlines for Bias Lawsuits, Appeals on Tap

On the labor and employment periphery are a pair of procedural cases that address deadlines for filing lawsuits or appealing dismissals.

Both will affect employers and employees, Udell said. But unlike Murphy Oil and Digital Realty Trust, the two procedural cases are neutral in that they have no political overtones, she said.

In Artis v. D.C. (No. 16-460), the justices will consider how long workers can wait to file a state court lawsuit alleging discrimination or retaliation after a federal trial court has dismissed their federal bias clams and declined to rule on the state law claims.

Federal and state appeals courts are split on the filing deadline. Some say employees must file their state court bias lawsuits within 30 days of the federal court dismissal, regardless of how long the state deadline might be. Others provide workers with more than 30 days to file the new state court lawsuits if state law permits a longer period.

Oral argument in Artis is scheduled for Nov. 1.

Additionally, the justices in Hamer v. Neighborhood Housing Services of Chicago (No. 16-658) will address whether federal trial courts can extend deadlines for appealing their decisions.

The U.S. Court of Appeals for the Seventh Circuit said federal rules of appellate procedure prohibit a federal court from granting extensions of more than 30 days. But the employee in that case successfully petitioned the justices to decide whether federal appeals courts can nevertheless decide the merits of an appeal if there are good reasons to excuse a late filing.

Oral argument in Hamer is scheduled for Oct. 10.

Employment Implications in Cake Case?

One high-profile, non-employment case on the court’s docket may also have some workplace implications, attorneys said.

The justices will consider whether a Colorado bakery can refuse on religious grounds to make a cake for a same-sex wedding. The case is Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission ( No. 16-111).

The Justice Department has supported the argument that the bakery should be exempt from the state’s public accommodation law based on the constitutionally protected rights of free speech and free exercise of religion. Colorado law prohibits businesses from denying accommodation or services to people based on sexual orientation.

The government’s stance on religious exemptions could have implications in the employment context, such as in the area of workplace discrimination, Foreman said.

For example, an employer could attempt to use a religious exemption to avoid liability for discriminating against workers based on sexual orientation or gender identity. That was a concern raised by employee advocates when Trump issued an executive order earlier this year that partly instructed the attorney general to provide guidance to all agencies on “interpreting religious liberty protections in Federal law.”

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editors responsible for this story: Terence Hyland at thyland@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.


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