Roundup of Supreme Court Employment Cases -- Right Here!

by Constangy, Brooks, Smith & Prophete, LLP
Contact

All right, kiddies. My posts over the last few weeks have been juicy and entertaining. (Or as juicy and entertaining as employment law can get.) But summer is over, and it's time to buckle down.

Girl texting at school - fall.jpg

"I h8 school!"

The Supreme Court of the United States (aka "SCOTUS") began its new term this past Monday, and it will be reviewing at least four employment cases, as well as two non-employment cases that will have an impact on employment litigation. (Hat tip to Bloomberg BNA. Paid subscription required.)

Here's a rundown on the cases that the Court has agreed to hear.

Do you have to have authority to hire fire, demote, or discipline to be a "supervisor" under Title VII?

In Vance v. Ball State University, the U.S. Court of Appeals for the Seventh Circuit* said you do, but other courts have disagreed. The plaintiff in Vance alleged that she was racially harassed by two people who really were supervisors, as well as another employee who may or may not have been. This last person was really important because there wasn't much evidence that the "true" supervisors had harassed her but a lot of evidence that this third person did.

*The Seventh Circuit hears appeals from federal courts in Illinois, Indiana, and Wisconsin.

The definition of "supervisor" is important because if the harasser is not a "supervisor," then the employer is not liable unless it knew or had reason to know about the harassment and failed to act reasonably to stop it. On the other hand, if the harasser is a "supervisor," the employer is strictly liable unless it qualifies for the  "Faragher/Ellerth" defense.*

*At the end of this post, I have a quick and dirty example of how this defense works, just in case you're not familiar with it.

The Seventh Circuit affirmed summary judgment for the university, in part on the ground that this one bad lady was not a "supervisor" because she did not have authority to hire, fire, demote, or discipline the plaintiff.

Oral argument is scheduled for October 10 (Tuesday).

Can you defeat an FLSA collective action by making an offer of judgment to the only named plaintiff before the class has been certified?

(Note to class/collective action nerds: I realize I'm being sloppy by combining "class" and "collective action" terminology here, but I don't know any other way to make myself intelligible.)

Here's the story. A plaintiff sued her employer, alleging that the employer violated the Fair Labor Standards Act by deducting for meal time in which she and her co-workers were allegedly required to work. If true, this would be a no-no. The FLSA allows plaintiffs to bring lawsuits "on behalf of themselves and others similarly situated," which is what this plaintiff sought to do. This is known as a "collective action." (Class actions are a little different and are governed by different rules. That's probably all you need to know about that for now.)

After the plaintiff filed suit but before she got court approval of a collective action, the employer made what is called an "offer of judgment." This essentially means that the employer offered her everything that she could have recovered for the employer's alleged FLSA violations against her (which was $7,500).

Then the employer argued that her lawsuit should be dismissed on the ground that it was now moot, thereby also defeating many claims of all the co-workers who would otherwise have joined her collective action.

Pretty clever, huh? This is why defense lawyers get the big bucks.

A district court in Pennsylvania agreed with the defendant and dismissed the lawsuit, but the U.S. Court of Appeals for the Third Circuit* reversed, saying that this type of tactic means that a defendant could continually "pick off" named plaintiffs one by one and prevent a collective action from ever going anywhere.

*The Third Circuit hears appeals from federal courts in Delaware, New Jersey, and Pennsylvania.

"Well, duh, Your Honors, why do you think we did it?"

Anyway, the Supremes have agreed to hear the case, and oral argument is scheduled for December 3.

The_Supremes.1966.JPG"Bay-bee, bay-bee . . . where did our FLSA collective action go?"

When can a benefits plan be reimbursed from a litigation settlement?

I was really hoping my friends at Employee Benefits Unplugged would post on this, and maybe they will later, but in the meantime, I'll do my best here.

An employee was in a devastating non-work-related automobile accident and received disability benefits in the amount of $66,866. He hired a lawyer and went after the driver who was at fault, and from her and various uninsured motorist policies recovered a gross amount of $110,000.

That's why plaintiffs' lawyers get the big bucks. In this case, 40 percent of the $110,000. Without ever going to court.

Robert_Vaughn_Man_From_Uncle.JPG

"Let 'em know YOU MEAN BUSINESS."

So, really, this guy got $66,000 from his litigation settlement. But the benefits plan went after him for reimbursement of the full $66,866 that it had paid out, effectively leaving him in the hole for $866. A federal district court in Pennsylvania decided that the plan was entitled to the full amount (considering the "gross" settlement) and ordered the guy to pay up.

He appealed, and the Third Circuit reversed. According to the court, the Employee Retirement Income Security Act allows a plan to recover "appropriate equitable relief." That means there may be limits on what a plan may recover, the court said. In this case, recovering more than the employee netted would not be "appropriate." Moreover, the employee got his settlement through his own efforts -- the plan did not do anything to help him. So the Third Circuit remanded for the district court to consider what equitable relief for the plan would be "appropriate."

A joint amicus brief in support of the plan has been submitted by the U.S. Chamber of Commerce, the Society for Human Resources Management, the American Benefits Council, and the ERISA Industry Committee.

The U.S. Department of Justice has also submitted an amicus brief. It does not support either side, but according to Bloomberg BNA, argued "that courts retain power under the common-fund doctrine to equitably apportion attorneys' fees, so the Third Circuit's decision should be partially affirmed."

Oral argument is scheduled for November 27.

Well, anyway, here's a link if you care.

The fourth employment case involves which court should hear the claim of discrimination and retaliation claims brought by a federal government employee. I don't think many of my readers are federal employees, so I'll just link to the Eighth Circuit* decision that the SCOTUS will hear for anyone who may be interested. Argument on this one was held this past Tuesday (October 2).

*The Eighth Circuit hears appeals from federal district courts in Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.

Two non-employment cases with big implications for employers

Fisher v. University of Texas. The Supreme Court will hear arguments in Fisher v. University of Texas, in which an undergraduate applicant is challenging the university's admissions standards. The student, who is white and who has since graduated from Louisiana State University, contends that the school's admissions standards violate her rights under the Equal Protection Clause of the U.S. Constitution. A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit* upheld the university's use of race as a factor in selecting applicants for acceptance. The student petitioned for rehearing by the full Fifth Circuit, and nine judges voted against rehearing the case while seven voted in favor of it. Five of those seven joined in a strongly-worded written dissent from the decision not to rehear the case.

*The Fifth Circuit hears appeals from federal courts in Louisiana, Mississippi, and Texas.

The American Bar Association supports the University, as do the NAACP, the Lawyers Committee for Civil Rights Under Law, and the National Women's Law Center, and others.

The plaintiff/student has the support of three members of the U.S. Commission on Civil Rights, the Center for Individual Rights, the Mountain States Legal Foundation, the Pacific Legal Foundation, the Asian American Legal Foundation, and others.

The Equal Employment Advisory Council, an employers' group, has not supported either side but in its amicus brief, according to Bloomberg BNA, has "urged the court not to issue a decision that makes it more difficult for federal contractors to comply with government-mandated affirmative action requirements" or "maintain successful voluntary diversity initiatives."

Oral argument is scheduled for this Tuesday (October 10). The University of Texas School of Law has a great website with links to all of the briefs and decisions in this case, as well as any other related material you might care to read.

Comcast Corp. v. Behrend. This is an antitrust case in which the SCOTUS will decide what type of evidence must be considered in certifying a class action under Rule 23 of the Federal Rules of Civil Procedure. Comcast has challenged a Third Circuit decision affirming certification of a class of current and former cable subscribers.

What does this have to do with employment, you ask? Well, Wal-Mart v. Dukes was a sex discrimination class action brought under Title VII. (The linked article links to the actual decision.) In the summer of 2011, the Supreme Court found that the case could not proceed as a nationwide class action because there wasn't enough "commonality" among the members of the putative class. (The women were claiming discrimination in virtually all aspects of employment, and the class consisted of more than a million members. Meanwhile, Wal-Mart had a corporate policy prohibiting discrimination and delegated employment decisions to the store-management level, which meant that there were hundreds of thousands of decisionmakers.)

Since Dukes, the federal courts have been struggling the parties' burdens of proof in determining whether a putative class has sufficient "commonality" to proceed, what evidence should be considered, and what weight the evidence should be given. The Supreme Court's Comcast decision, scheduled for oral argument on November 5, is expected to provide some welcome clarification.

Photo credits: Clipart.com (girl texting at school), Wikimedia Commons.

DON'T FORGET! If you want my quick explanation of Faragher/Ellerth (not that you need it), read on!

A quick and dirty on the Faragher/Ellerth defense to harassment claims

Let's say Susie's boss likes to tell her dirty jokes every day when she comes to work, and his behavior is unwelcome to Susie. Susie has been sexually harassed, right? Probably so.

Let's say that Susie's company has a tough no-harassment policy written in plain English, and a well-deserved reputation for being serious about addressing allegations of harassment without retaliating against the complaining employees. Moreover, Susie's company conducts annual harassment training for management and employees, and all new hires are required to go through the training before they start work.

Susie suffers in silence, despite having been through harassment training and having copies of the no-harassment policy posted all over the workplace. One day, she decides she's had enough, and she quits. Then she files an EEOC charge against the company.

Under Faragher/Ellerth, the company would be strictly liable for the supervisor's harassment unless (1) Susie didn't suffer a "tangible job detriment," like a termination, demotion, pay cut, etc.; and (1) the company could prove that it had measures in place to prevent harassment and address it when it occurred, and (2) Susie unreasonably failed to avail herself of those measures.

In this example, Susie's employer would probably not be liable for the boss's bad behavior because (1) Susie did not suffer a "tangible job detriment"; and (1) the company had a good policy and  training, and took complaints seriously and addressed them, and (2) Susie never complained about her boss's behavior to Human Resources or anyone else. In other words, she unreasonably failed to avail herself of the company's remedial measures. So the company should win this case.

 

Written by:

Constangy, Brooks, Smith & Prophete, LLP
Contact
more
less

Constangy, Brooks, Smith & Prophete, LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!