This year, 2017-2018, the Supreme Court issued numerous cases impacting employers. Here is an overview:
Janus v. AFSCME:
The case disputed the validity of state laws permitting public sector unions to collect “fair share” or “agency” fees from represented nonmembers. Despite precedent upholding agency fee arrangements, the Supreme Court rejected stare decisis and struck down the fee arrangements stating that they violated the First Amendment. The Court held that public sector unions cannot compel nonmembers to pay fees for collective bargaining services of a union because it forces them to subsidize political speech. Our full coverage is here.
Epic Systems Corp. v. Lewis:
A hotly debated issue this year involved the validity of arbitration clauses in individual employment agreements. Justice Neil Gorsuch, writing for the Court, determined that an arbitration agreement that includes a waiver of class action claims does not violate the NLRA. This follows the Court’s recent trend of upholding arbitration agreements under the FAA.
CNH Industrial N.V. v. Reese:
CNH Industrial involved the interpretation of a collective bargaining agreement clause for health benefits. The Supreme Court held that the general durational clause unambiguously applied to retirees healthcare benefits and thus the retirees had a vested right to lifetime health benefits. The Court applied the principle that collective bargaining agreements that are not subject to more than one reasonable interpretation are not ambiguous and overturned a prior Sixth Circuit case.
Encino Motorcars, LLC v. Navarro:
The case reviewed the FLSA exemption from overtime for salesman, partsmen, or mechanics primarily engaged in selling or servicing automobiles. The defendant had exempted its service advisors whose primary duties included greeting customers and selling automobile accessories and replacement parts. The Court overturned the lower court and determined that the service advisors were in the business of servicing automobiles and thus exempt from FLSA. In the case, the Supreme Court also reduced the burden on employers in showing that employees are exempt from FLSA. Our full coverage is here.
Digital Realty Trust, Inc. v. Somers:
The Court unanimously settled a circuit split over who qualifies as a whistleblower entitled to protection under the Dodd-Frank Act’s anti-retaliation provision. It reversed the Ninth Circuit and determined that only those individuals who report violations to the Securities Exchange Commission are protected by the statute. This is in contrast to the protections provided to employees who report violations under the Sarbanes-Oxley Act, which allows for internal reporting of securities violations to qualify for anti-retaliation protections.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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