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Cert granted: Is the NLRB authorized to act when only two of its five positions are filled?
November 02, 2009 by Ross Runkel at LawMemo

The NLRB has had only two Members (instead of the normal five Members) since the end of 2007. Near the end of 2007, there were still four Members, and they delegated their powers to a group of three. Everybody knew that only two of those three would be left at the end of the year.

The NLRB's position has always been that the surviving two Members are a quorum of the three to whom powers were delegated.

Employers have argued that the whole thing was a sham. On a more technical level, the argument was that the Board's delegation could not survive the loss of a quorum on the Board itself.

The 7th Circuit held that the NLRB had the statutory authority to hear cases and issue orders regarding unfair labor practice charges.

The US Supreme Court granted certiorari on November 2, 2009 to review the 7th Circuit judgment. New Process Steel v. National Labor Relations Board.

The official question presented:

Does the National Labor Relations Board have authority to decide cases with only two sitting members, where 29 U.S.C. § 153(b) provides that "three members of the Board shall, at all times, constitute a quorum of the Board"?

[Briefs]

Cert granted on Section 301 suit: tortious interference and duty to arbitrate
June 30, 2009 by Ross Runkel at LawMemo

The US Supreme Court has granted certiorari in an LMRA Section 301 case that raises issues on (1) whether an employer can state a claim of tortious interference against a union that was not a signatory to a collective bargaining agreement, and (2) the scope of the duty to arbitrate. This case will be argued in the fall.

Granite Rock v. Teamsters (Certiorari granted 06/29/2009)

The employer sued a local union and an international union under Labor Management Relations Act Section 301(a) claiming that (1) the international union tortiously interfered with a collective bargaining agreement (CBA) between the employer and the local union, and (2) the local union breached the CBA by going on strike.

The employer and the local union had reached a tentative new CBA which contained a broad arbitration clause and a no-strike clause. The employer alleged that the local union had ratified the CBA and then engaged in a strike which was in part led by a high official of the international union.

(1) The 9th Circuit held that the employer failed to state a claim against the international union because the tortious interference claim did not "arise under" the CBA between the employer and the local. The court reasoned that because the international "has no rights or duties under the agreement … [the employer’s] tortious interference claim … does not meet the requirements of section 301(a)."

(2) As to the contract claim, the parties disagreed on the date of ratification. The district court held that issues of breach and damages had to be arbitrated, but that the issue of contract ratification was for the court to decide. The 9th Circuit held that the entire dispute should go to arbitration under the contract's arbitration clause, which covered "all disputes arising under this agreement." The court held that both parties consented to arbitration; the employer by suing under the contract, and the union by moving to compel arbitration.

The US Supreme Court granted certiorari to review the 9th Circuit's judgment.

Cert granted in ERISA case
June 30, 2009 by Ross Runkel at LawMemo

The US Supreme Court has granted certiorari in an ERISA case that raises issues on (1) the extent to which a district court must defer to the views of an ERISA plan administrator and (2) the appropriate scope of appellate review. This case will be argued in the fall.

Conkright v. Frommert (Certiorari granted 06/29/2009).

Xerox employees sued their ERISA retirement Plan and administrator challenging the method used by the Plan to calculate how their current benefits are offset to reflect prior distributions. The employees claimed that the Plan violated ERISA's provisions relating to summary plan description, notice, and anti-cutback rules.

There were two appeals to the 2nd Circuit. In the first appeal, the court held that the Plan had violated ERISA in several respects, and remanded for fashioning a remedy. On remand, the district court decided upon a remedy without first remanding the case to the Plan administrator.

In the second appeal, the 2nd Circuit made two key rulings:

(1) The district court was not required to defer to the Plan administrator's views on the appropriate remedy for the ERISA violations committed by the administrator and the Plan.

(2) The court of appeals should review the district court's remedial decision for abuse of discretion. The US Supreme Court granted certiorari to review the 2nd Circuit's judgment.

The formal Questions Presented:

1. Whether the Second Circuit erred in holding, in conflict with decisions of this Court and other Circuits, that a district court has no obligation to defer to an ERISA plan administrator's reasonable interpretation of the terms of the plan if the plan administrator arrived at its interpretation outside the context of an administrative claim for benefits.

2. Whether the Second Circuit erred in holding, in conflict with decisions of other Circuits, that a district court has "allowable discretion" to adopt any "reasonable" interpretation of the terms of an ERISA plan when the plan interpretation issue arises in the course of calculating additional benefits due under the plan as a result of an ERISA violation.

[The Supreme Court denied two other petitions for certiorari arising out of the 2nd Circuit decision. Those petitions involved the effect of general releases as waivers of ERISA claims.]

City violated Title VII by discarding racially disproportionate test results (5-4)
June 29, 2009 by Ross Runkel at LawMemo

Today the US Supreme Court decided Ricci v. DeStefano (US Supreme Court 06/29/2009)

The New Haven, Connecticut fire department administered civil service tests for applicants for positions as captain and lieutenant. The examination resulted in disproportionately higher scores for white applicants than for minority applicants. The department decided not to implement the exam results for fear that doing so would put them in violation of Title VII. Therefore, positions remained unfilled. A group of white and Hispanic applicants sued claiming a violation of Title VII and of the equal protection clause. The trial court granted summary judgment for the defendants, and the 2nd Circuit affirmed.

The US Supreme Court reversed, holding that the City’s action in discarding the tests violated Title VII.

Official Syllabus:

New Haven, Conn. (City), uses objective examinations to identify those firefighters best qualified for promotion. When the results of such an exam to fill vacant lieutenant and captain positions showed that white candidates had outperformed minority candidates, a rancorous public debate ensued. Confronted with arguments both for and against certifying the test results—and threats of a lawsuit either way—the City threw out the results based on the statistical racial disparity. Petitioners, white and Hispanic firefighters who passed the exams but were denied a chance at promotions by the City’s refusal to certify the test results, sued the City and respondent officials, alleging that discarding the test results discriminated against them based on their race in violation of, inter alia, Title VII of the Civil Rights Act of 1964. The defendants responded that had they certified the test results, they could have faced Title VII liability for adopting a practice having a disparate impact on minority firefighters. The District Court granted summary judgment for the defendants, and the Second Circuit affirmed.

Held: The City’s action in discarding the tests violated Title VII.

(a) Title VII prohibits intentional acts of employment discrimination based on race, color, religion, sex, and national origin, 42 U. S. C. §2000e–2(a)(1) (disparate treatment), as well as policies or practices that are not intended to discriminate but in fact have a disproportionately adverse effect on minorities, §2000e–2(k)(1)(A)(i) (disparate impact). Once a plaintiff has established a prima facie case of disparate impace, the employer may defend by demonstrating that its policy or practice is "job related for the position in question and consistent with business necessity." Ibid. If the employer meets that burden, the plaintiff may still succeed by showing that the employer refuses to adopt an available alternative practice that has less disparate impact and serves the employer’s legitimate needs. §§2000e–2(k)(1)(A)(ii) and (C).

(b) Under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional, disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action. The Court’s analysis begins with the premise that the City’s actions would violate Title VII’s disparate-treatment prohibition absent some valid defense. All the evidence demonstrates that the City rejected the test results because the higher scoring candidates were white. Without some other justification, this express, race-based decisionmaking is prohibited. The question, therefore, is whether the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination. The Court has considered cases similar to the present litigation, but in the context of the Fourteenth Amendment’s Equal Protection Clause. Such cases can provide helpful guidance in this statutory context. See Watson v. Fort Worth Bank & Trust, 487 U. S. 977, 993. In those cases, the Court held that certain government actions to remedy past racial discrimination—actions that are themselves based on race—are constitutional only where there is a "strong basis in evidence" that the remedial actions were necessary. Richmond v. J. A. Croson Co., 488 U. S. 469, 500; see also Wygant v. Jackson Bd. of Ed., 476 U. S. 267,
277. In announcing the strong-basis-in-evidence standard, the Wygant plurality recognized the tension between eliminating segregation and discrimination on the one hand and doing away with all governmentally imposed discrimination based on race on the other. 476 U. S., at 277. It reasoned that "[e]videntiary support for the conclusion that remedial action is warranted becomes crucial when the remedial program is challenged in court by nonminority employees." Ibid. The same interests are at work in the interplay between Title VII’s disparate-treatment and disparate-impact provisions. Applying the strong-basis-in-evidence standard to Title VII gives effect to both provisions, allowing violations of one in the name of compliance with the other only in certain, narrow circumstances. It also allows the disparate-impact prohibition to work in a manner that is consistent with other Title VII provisions, including the prohibition on adjusting employment-related test scores based on race, see §2000e–2(l), and the section that expressly protects bona fide promotional exams, see §2000e–2(h). Thus, the Court adopts the strong-basis-in evidence standard as a matter of statutory construction in order to resolve any conflict between Title VII’s disparate-treatment and disparate-impact provisions.

(c) The City’s race-based rejection of the test results cannot satisfy the strong-basis-in-evidence standard.

(i) The racial adverse impact in this litigation was significant, and petitioners do not dispute that the City was faced with a prima facie case of disparate-impact liability. The problem for respondents is that such a prima facie case—essentially, a threshold showing of a significant statistical disparity, Connecticut v. Teal, 457 U. S. 440, 446, and nothing more—is far from a strong basis in evidence that the City would have been liable under Title VII had it certified the test results. That is because the City could be liable for disparate-impact discrimination only if the exams at issue were not job related and consistent with business necessity, or if there existed an equally valid, less discriminatory alternative that served the City’s needs but that the City refused to adopt. §§2000e–2(k)(1)(A), (C). Based on the record the parties developed through discovery, there is no substantial basis in evidence that the test was deficient in either respect.

(ii) The City’s assertions that the exams at issue were not job related and consistent with business necessity are blatantly contradicted by the record, which demonstrates the detailed steps taken to develop and administer the tests and the painstaking analyses of the questions asked to assure their relevance to the captain and lieutenant positions. The testimony also shows that complaints that certain examination questions were contradictory or did not specifically apply to firefighting practices in the City were fully addressed, and that the City turned a blind eye to evidence supporting the exams’ validity.

(iii) Respondents also lack a strong basis in evidence showing an equally valid, less discriminatory testing alternative that the City, by certifying the test results, would necessarily have refused to adopt. Respondents’ three arguments to the contrary all fail. First, respondents refer to testimony that a different composite-score calculation would have allowed the City to consider black candidates for then open positions, but they have produced no evidence to show that the candidate weighting actually used was indeed arbitrary, or that the different weighting would be an equally valid way to determine whether candidates are qualified for promotions. Second, respondents argue that the City could have adopted a different interpretation of its charter provision limiting promotions to the highest scoring applicants, and that the interpretation would have produced less discriminatory results; but respondents’ approach would have violated Title VII’s prohibition of race-based adjustment of test results, §2000e–2(l). Third, testimony asserting that the use of an assessment center to evaluate candidates’ behavior in typical job tasks would have had less adverse impact than written exams does not aid respondents, as it is contradicted by other statements in the record indicating that the City could not have used assessment centers for the exams at issue. Especially when it is noted that the strong-basis in-evidence standard applies to this case, respondents cannot create a genuine issue of fact based on a few stray (and contradictory) statements in the record.
(iv) Fear of litigation alone cannot justify the City’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. Discarding the test results was impermissible under Title VII, and summary judgment is appropriate for petitioners on their disparate-treatment claim. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of today’s holding the City can avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

530 F. 3d 87, reversed and remanded.

KENNEDY, J., delivered the opinion of the Court, in which ROBERTS, C.J., and SCALIA, THOMAS, and ALITO, JJ., joined. SCALIA, J., filed a concurring opinion. ALITO, J., filed a concurring opinion, in which SCALIA and THOMAS, JJ., joined. GINSBURG, J., filed a dissenting opinion, in which STEVENS, SOUTER, and BREYER, JJ., joined.

Supreme Court will hear False Claims Act qui tam case
June 22, 2009 by Ross Runkel at LawMemo

The US Supreme Court granted certiorari today in Graham County Soil & Water Conservation Dist v. United States ex rel Wilson (Certiorari granted 06/22/2009) [Details, briefs]

Karen Wilson was an employee of the Graham County Soil and Water Conservation District. She brought a qui tam suit under the federal False Claims Act against various entities alleging that they had made false claims against the United States.

In a qui tam action an individual sues in the name of the United States and is allowed to keep a portion of the proceeds. However, there must not have been a prior public disclosure of the information of alleged wrongdoing that forms the basis of the suit. If there has been a prior public disclosure of information in an “administrative ... report ... audit, or investigation,” then the district court lacks jurisdiction over the case.

The issue in this case is the scope of the "public disclosure" jurisdictional bar contained in the False Claims Act, 31 USC §§ 3729-33. The district court concluded that certain audits and reports issued by state and local governmental entities satisfied the requirements of the public disclosure bar and therefore deprived the district court of subject matter jurisdiction.

The 4th Circuit concluded that the public disclosure bar applies to federal administrative audits, reports, hearings or investigations, but not to those conducted or issued by a state or local governmental entity.

This issue has divided the circuit courts.

The US Supreme Court granted certiorari to review the judgment of the 4th Circuit.

SCOTUS - Age discrimination: Burden of proof never shifts
June 18, 2009 by Ross Runkel at LawMemo

Before today, it was quite common for courts to use Title VII's burden-shifting analysis when dealing with age discrimination (ADEA) cases.

Put that into the past. The US Supreme Court has spoken, voting 5 to 4. Gross v. FBL Financial Services (US Supreme Court 06/18/2009) [Full text] [Official Syllabus] [Briefs]

Take a discharge case as an example. In Title VII cases, the usual proof methods are that the employee first shows that there is an inference of unlawful discrimination, and then the employer has the burden of producing evidence that the discharge was for a lawful reason. Sometimes, in what are called "mixed motives" cases, the burden of proof can shift to the employer. (My explanation is hopelessly short and incomplete, I know.)

However, in an ADEA case, the rules are different because the statute is worded differently. Title VII was amended in 1991 to say an employee could win by showing that an improper consideration was "a motivating factor," but that amendment did not extend to the ADEA. The Court held that the mixed-motives proof method simply does not apply in ADEA cases.

In an ADEA case, the employee must prove that age was the "but-for" cause of the employer's action. The burden does not shift to the employer. Thus, the burden of persuasion is going to be the same in mixed-motives cases as in any other ADEA disparate treatment case.

This ruling came as a surprise because this was not the issue that was briefed and argued. The formal issue before the Court was whether an employee must present "direct" evidence in order to get a mixed motives jury instruction. But answering that question was unnecessary because the Court held that "such a jury instruction is never proper in an ADEA case."

My view:

• This will be the biggest employment law case of 2009.

• Surprised that the Court decided an issue that was not briefed and argued. 

• Not surprised that five Justices gave such weight to Congress' failure in 1991 to re-write the ADEA while re-writing Title VII. 

• Certain that Congress will amend the ADEA so as to overcome the effect of the Gross case.

Supreme Court: Mixed motives jury instruction "is never proper in an ADEA case"
June 18, 2009 by Ross Runkel at LawMemo

The US Supreme Court decided today (5-4) that a mixed motives jury instruction "is never proper in an ADEA case."

Gross v. FBL Financial Services (US Supreme Court 06/18/2009)

Gross sued claiming that his demotion was in violation of the Age Discrimination in Employment Act (ADEA), and won a jury verdict. The 8th Circuit reversed on the ground that the jury had been improperly instructed under the standard established in Price Waterhouse v. Hopkins, 490 US 228 (1989). The US Supreme Court vacated the 8th Circuit decision.

The Court said:

"The parties have asked us to decide whether a plaintiff must 'present direct evidence of discrimination in order to obtain a mixed-motive instruction in a non-Title VII discrimination case.'. Before reaching this question, however, we must first determine whether the burden of persuasion ever shifts to the party defending an alleged mixed-motives discrimination claim brought under the ADEA. We hold that it does not."

"We hold that a plaintiff bringing a disparate-treatment claim pursuant to the ADEA must prove, by a preponderance of the evidence, that age was the 'but-for' cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision. Accordingly, we vacate the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion."

The DISSENT argued that it was "particularly inappropriate for the Court, on its own initiative, to adopt an interpretation of the causation requirement in the ADEA that differs from the established reading of Title VII. I disagree not only with the Court’s interpretation of the statute, but also with its decision to engage in unnecessary lawmaking. I would simply answer the question presented by the certiorari petition and hold that a plaintiff need not present direct evidence of age discrimination to obtain a mixed-motives instruction."

SCOTUS - Seniority system trumps pre-PDA pregnancy differential
May 18, 2009 by Ross Runkel at LawMemo

Once again, the US Supreme Court has applied Title VII §703(h) to insulate from Title VII liability a current seniority system based in part on old differentials based on pregnancy.

Also, the Court said the Lilly Ledbetter Fair Pay Act of 2009 did not apply to pre-PDA differentials because they were not "discriminatory" at the time.

AT&T Corp v. Hulteen (US Supreme Court 05/18/2009)

Prior to the Pregnancy Discrimination Act (PDA), enacted in 1978, the employer based pension calculations on a seniority system that relied on years of service minus uncredited leave time, giving less retirement credit for pregnancy absences than for medical leave generally.

Upon enactment of the PDA in 1978, the employer replaced its old plan with the Anticipated Disability Plan, which provided the same service credit for pregnancy leave as for other disabilities prospectively, but did not make any retroactive adjustments for the pre-PDA personnel policies. Employee Hulteen therefore received less service credit for her pre-PDA pregnancy leave than she would have for general disability leave, resulting in a reduction in her total employment term and, consequently, a smaller pension.

The lower courts held that this violated Title VII.

The US Supreme Court reversed (7-2), holding that an employer does not necessarily violate the PDA when it pays pension benefits calculated in part under an accrual rule, applied only pre-PDA, that gave less retirement credit for pregnancy than for medical leave generally. Because the employer's pension payments accord with a bona fide seniority system's terms, they are insulated from challenge under Title VII §703(h).

The Lilly Ledbetter Fair Pay Act of 2009 did not apply to this case because the employer's pre-PDA decision not to award Hulteen service credit for pregnancy leave was not discriminatory, with the consequence that Hulteen has not been "affected by application of a discriminatory compensation decision or other practice."

Supreme Court transcript in employment discrimination case
April 22, 2009 by Ross Runkel at LawMemo

Today the US Supreme Court heard oral arguments in Ricci v. DeStefano [details, briefs].

The official transcript of the oral argument is here.

The New Haven, Connecticut fire department administered civil service tests for applicants for positions as captain and lieutenant. The examination resulted in disproportionately higher scores for white applicants than for minority applicants. The department decided not to implement the exam results for fear that doing so would put them in violation of Title VII. Therefore, positions remained unfilled.

A group of white and Hispanic applicants sued claiming a violation of Title VII and of the equal protection clause. The trial court granted summary judgment for the defendants, and the 2nd Circuit affirmed. The US Supreme Court granted certiorari to review the 2nd Circuit judgment, and heard oral arguments on April 22.

US Supreme Court: Union can waive employee's right to sue for discrimination
April 01, 2009 by Ross Runkel at LawMemo

The US Supreme Court held today (5-4) that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.

14 Penn Plaza v. Pyett (US Supreme Court 04/01/2009)

The relevant collective bargaining agreement requires union members to submit all claims of employment discrimination to binding arbitration under the CBA’s grievance and dispute resolution procedures.

A number of employees asked the union to file grievances alleging, among other things, that the employers violated the CBA’s ban on workplace discrimination by reassigning them on the basis of their age in violation of Age Discrimination in Employment Act of 1967 (ADEA). The union requested arbitration under the CBA, but later withdrew the age-discrimination claims.

The employees then filed suit claiming a violation of the ADEA; the district court denied the employers' motion to compel arbitration; the 2nd Circuit affirmed.

The US Supreme Court reversed, holding that a provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.

The Court found that employment-related discrimination claims are "conditions of employment" under the National Labor Relations Act and thus subject to mandatory bargaining. The CBA's arbitration provision must be honored unless the ADEA itself removes this class of grievances from the NLRA's broad sweep. The Court has already held (Gilmer v. Interstate/Johnson Lane (1991)) that the ADEA does not preclude arbitration of ADEA claims.

The Court rejected the argument that Alexander v. Gardner-Denver (1974) held that a CBA arbitration clause cannot waive an individual employee's right to litigate.

The DISSENT relied on Alexander v. Gardner-Denver, saying that that case held that rights conferred by Title VII cannot be waived as part of the collective bargaining process. This applies equally to the ADEA, and includes the right to a judicial forum.

But wait, there's more: The employees argued that the CBA allows the union to block arbitration of these claims altogether, thus operating as an unlawful substantive waiver of federal civil rights claims. The employers countered by arguing that the union has allowed employees to continue with the arbitration even though the union declined to participate. The Court specifically avoided reaching this issue because it was not fully briefed and was not fairly within the question presented to the Court. This clearly leaves a lot to be decided.

It could be that if the union retains total control over the arbitration process (which is normal in most cases), and if the union declines to arbitrate the individuals' statutory claims, then the employees would be able to proceed in litigation.

Arguments for a stay in Golden Gate Restaurant Assn v San Francisco
March 18, 2009 by Ross Runkel at LawMemo

Golden Gate Restaurant Association's Application for Order Staying Mandate in Golden Gate Restaurant Assn v. City of San Francisco , filed March 16, contains the following arguments:

There is a reasonable probability the Court will grant certiorari.

This case present nationally significant issues.

The opinion creates a dramatic split between circuits.

The opinion contradicts existing Supreme Court precedent.

The opinion improperly expands traditional areas of state regulation.

The opinion contradicts settled preemption law.

There is a significant probability that the District Court will be affirmed.

ERISA preempts state laws bearing a connection with or making reference to employee benefit plans.

The ordinance bears an impermissible connection with employee benefit plans in that it (a) interferes with a core area of ERISA concern, (b) interferes with uniform plan design and administration, (c) imposes recordkeeping, inspection and other burdens on plan sponsors and administrators.

The ordinance makes unlawful reference to employee benefit plans.

Restaurant owners to Supreme Court: Please help us
March 18, 2009 by Ross Runkel at LawMemo

Golden Gate Restaurant Association has filed an application [here] with US Supreme Court Justice Anthony M. Kennedy (Circuit Justice for the 9th Circuit) asking that the 9th Circuit's decision in Golden Gate Restaurant Assn v. City of San Francisco be postponed. [Docket No. 08A824]

The San Francisco Health Care Security Ordinance requires that covered employers make "required health care expenditures to or on behalf of" certain employees each quarter. "Covered employers" are employers engaging in business within the City that are either a) for profit, with an average of at least twenty employees during a quarter; or b) non-profit, with an average of at least fifty employees during a quarter.

The 9th Circuit held that this ordinance is not preempted by the Employee Retirement Income Security Act (ERISA). More specifically, the court concluded that 1) the ordinance does not create an ERISA plan; and 2) the ordinance does not "relate to" ERISA plans within the meaning of ERISA. Golden Gate Restaurant Assn v. City of San Francisco (9th Cir 10/20/2008).

Last week all of the judges in the 9th Circuit decided that they would not allow a rehearing en banc. However, there were eight judges who dissented from that order. [Order, including concurring and dissenting opinions]

My source, with thanks: SSCOTUSblog

Supreme Court accepts post-argument briefs in AT&T v Hulteen
March 02, 2009 by Ross Runkel at LawMemo

AT&T v. Hulteen [details here] was argued at the US Supreme Court on December 10, 2009. The issue involves the retroactive application of the Pregnancy Discrimination Act.

After arguments, Congress enacted the Lilly Ledbetter Act.

Both parties requested permission to file briefs relating to the impact of the Ledbetter Act, and today the Supreme Court accepted the briefs. [Order] [Links to briefs] Just a formality, of course, but an important one.

Previous post on the arguments made in these briefs is [here].

AT&T v Hulteen: One more post-argument brief on Ledbetter Act's effect on Pregnancy Discrimination Act
February 25, 2009 by Ross Runkel at LawMemo

AT&T v. Hulteen was argued at the US Supreme Court on December 10, 2008. [Details]
The issue involves the retroactive application of the Pregnancy Discrimination Act.

What effect will the Lilly Ledbetter Act have on this?

The employees have filed a new brief. [Here]
The employer has filed a new brief. [Here]

The employees' basic arguments:

• The Lilly Ledbetter Act applies here.
• The employees' claims are timely, so retroactive application is unnecessary.
• The Supreme Court should either uphold the employees in light of the Ledbetter Statute, or remand to the 9th Circuit to figure out what to do.

The employer's basic arguments:

• The employer's pre-PDA actions were lawful.
• The Lilly Ledbetter Act applies only to conduct that violated Title VII when that conduct occurred.
• The Lilly Ledbetter Act governs only when a suit may be brought.
• Because The Lilly Ledbetter Act does not apply, the Court should decide the case, and not remand to the 9th Circuit.

My bet continues to be: A remand to the 9th Circuit.

Also see comment by WorkplaceProf Blog.

AT&T v Hulteen post-argument brief on Ledbetter Act's effect on Pregnancy Discrimination Act
February 13, 2009 by Ross Runkel at LawMemo

AT&T v. Hulteen was argued at the US Supreme Court on December 10, 2008. [Details]
The issue involves the retroactive application of the Pregnancy Discrimination Act.

What effect will the Lilly Ledbetter Act have on this?

The employees in the Hulteen case have filed a new brief. [Here]

The basic arguments:

• The Lilly Ledbetter Act applies here.
• The employees' claims are timely, so retroactive application is unnecessary.
• The Supreme Court should either uphold the employees in light of the Ledbetter Statute, or remand to the 9th Circuit to figure out what to do.

My bet: A remand to the 9th Circuit.

Also see comment by WorkplaceProf Blog.

Petitioner's brief in Gross v. FBL Financial
January 26, 2009 by Ross Runkel at LawMemo

The issue before the US Supreme Court is: "Must a plaintiff present direct evidence of discrimination in order to obtain a Mt. Healthy mixed-motive instruction in a non-Title VII discrimination case?"

Ever since Congress amended Title VII in the Civil Rights Act of 1991 with the intent of overruling Price-Waterhouse v. Hopkins, 490 US 228 (1989), many have wondered what the Supreme Court would do in a non-Title VII case.

In Price-Waterhouse, a plurality of the United States Supreme Court set forth the analysis applicable to "mixed motive" cases. Justice O'Connor's concurring opinion in that Title VII case is generally seen as the controlling opinion setting forth the governing rule of law. Under that analysis, in order to be entitled to a mixed-motive jury instruction, an employee must produce "direct evidence."

However, the Civil Rights Act of 1991 superseded Price-Waterhouse by making "motivating factor" (rather than "direct evidence") the touchstone for mixed-motive analysis for Title VII discrimination cases.

But what about ADEA cases, such as Gross v. FBL Financial [Details], now pending before the Court?

Today the petitioner, Jack Gross, filed his brief on the merits. Counsel of record Eric Schnapper of the University of Washington School of Law argued it exactly the way I would have - asking the Court to treat this like an ordinary run-of-the-mill evidence case in which the ordinary rules should apply.

Here's an outline of Petitioner's brief: [Full text of brief]

I. The ADEA Should Not Be Construed To Impose Any Elevated Evidentiary Standard In The Absence of An Express Statutory Direction

II. The Imposition of Elevated Evidentiary Requirements Should Be Made by Congress

A. Congress Should Determine When The Conventional Standards of Proof Should Be Modified

B. Congress Should Determine What Evidentiary Standard Should Be Substituted for The Conventional Standards

III. Special Evidentiary Standards Would Impede Enforcement of The ADEA

IV. A Direct Evidence Requirement Is Not Supported by This Court’s Decision In Price Waterhouse

V. The Decision of The Court of Appeals Is Based On A Misunderstanding of The Relationship Between Price Waterhouse and McDonnell Douglas

US Supreme Court holds that answering questions during employer's internal investigation is protected against retaliation
January 26, 2009 by Ross Runkel at LawMemo

Crawford v. Metropolitan Govt of Nashville (US Supreme Court 01/26/2008) in a unanimous decision holds that answering questions during employer's internal investigation is protected against Title VII retaliation.

Official Syllabus:

In response to questions from an official of respondent local government (Metro) during an internal investigation into rumors of sexual harassment by the Metro School District employee relations director (Hughes), petitioner Crawford, a 30-year employee, reported that Hughes had sexually harassed her. Metro took no action against Hughes, but soon fired Crawford, alleging embezzlement. She filed suit under Title VII of the Civil Rights Act of 1964, claiming that Metro was retaliating for her report of Hughes's behavior, in violation of 42 U. S. C. §2000e-3(a), which makes it unlawful "for an employer to discriminate against any ... employe[e]" who (1) "has opposed any practice made an unlawful employment practice by this subchapter" (opposition clause), or (2) "has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter" (participation clause). The court granted Metro summary judgment, and the Sixth Circuit affirmed, holding that the opposition clause demanded "active, consistent" opposing activities, whereas Crawford had not initiated any complaint prior to the investigation, and finding that the participation clause did not cover Metro's internal investigation because it was not conducted pursuant to a Title VII charge pending with the Equal Employment Opportunity Commission.

Held: The antiretaliation provision's protection extends to an employee who speaks out about discrimination not on her own initiative, but in answering questions during an employer's internal investigation. Because "oppose" is undefined by statute, it carries its ordinary dictionary meaning of resisting or contending against. Crawford's statement is thus covered by the opposition clause, as an ostensibly disapproving account of Hughes's sexually obnoxious behavior toward her. "Oppose" goes beyond "active, consistent" behavior in ordinary discourse, and may be used to speak of someone who has taken no action at all to advance a position beyond disclosing it. Thus, a person can "oppose" by responding to someone else's questions just as surely as by provoking the discussion. Nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when asked a question. Metro unconvincingly argues for the Sixth Circuit's active, consistent opposition rule, claiming that employers will be less likely to raise questions about possible discrimination if a retaliation charge is easy to raise when things go badly for an employee who responded to enquiries. Employers, however, have a strong inducement to ferret out and put a stop to discriminatory activity in their operations because Burlington Industries, Inc. v. Ellerth, 524 U. S. 742 , and Faragher v. Boca Raton, 524 U. S. 775 , hold "[a]n employer ... subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with ... authority over the employee." The Circuit's rule could undermine the Ellerth-Faragher scheme, along with the statute's " 'primary objective' " of "avoid[ing] harm" to employees, Faragher, supra, at 806, for if an employee reporting discrimination in answer to an employer's questions could be penalized with no remedy, prudent employees would have a good reason to keep quiet about Title VII offenses. Because Crawford's conduct is covered by the opposition clause, this Court does not reach her argument that the Sixth Circuit also misread the participation clause. Metro's other defenses to the retaliation claim were never reached by the District Court, and thus remain open on remand.

211 Fed. Appx. 373, reversed and remanded.

Souter, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Scalia, Kennedy, Ginsburg, and Breyer, JJ., joined. Alito, J., filed an opinion concurring in the judgment, in which Thomas, J., joined.

Locke v. Karass: Moderation at the Supreme Court
January 21, 2009 by Ross Runkel at LawMemo

A public sector local union collects a service fee from non-member employees, and sends some of that money to its national affiliate to be spent on litigation. The non-members objected, and the US Supreme Court today unanimously rejected the non-members' complaint. Locke v. Karass (US Supreme Court 01/21/2009).

Quick legal background: This is a 1st amendment issue, the concern being that an individual ought not be forced to pay for a union's political activities or for any activities that are not connected to the union's role as a collective bargaining representative. In a series of decisions, the US Supreme Court has allowed a union to charge non-members for expenses that have an appropriate relationship to collective bargaining activities.

More focused legal background: What about a local union that sends some of this money to its national affiliate? The Supreme Court has allowed this in general. Lehnert v. Ferris Faculty Assoc., 500 US 507 (1991). However, in the Lehnert case the Supreme Court couldn't collect a majority of Justices to decide how to handle funds that would be used for litigation outside of the local bargaining unit. The Court split into three factions on this issue, so there really was no "opinion by the Court" on the issue.

A moderate approach in Locke v. Karass: The Court today simply took the fundamental legal analysis that had been used before and applied it to the case. This was "moderate" because everybody on the Court rallied around one legal theory instead of breaking up in splinters, and the legal theory they followed was already well-established.

In other words: The Court did not fly off into splinters. The Court did not really plow any new ground.

Supreme Court allows local union to charge non-members for national litigation expenses
January 21, 2009 by Ross Runkel at LawMemo

Locke v. Karass (US Supreme Court 01/21/2009)

Official syllabus: 

The collective-bargaining agreement between Maine and respondent local union, the exclusive bargaining agent for certain state employees, requires nonmember employees represented by the union to pay the local a "service fee" equal to the portion of union dues related to ordinary representational activities, e.g., collective bargaining or contract administration activities. That fee does not include nonchargeable union activities such as political, public relations, or lobbying activities. The fee includes a charge that represents the "affiliation fee" the local pays to the national union. But, it covers only the part of the affiliation fee that helps to pay for the national's own chargeable activities, which include some litigation activities that directly benefit other locals or the national itself, rather than respondent local. The petitioners, nonmembers of the local, brought this suit claiming, inter alia, that the First Amendment prohibits charging them for any portion of the service fee that represents litigation that does not directly benefit the local, i.e., "national litigation." The District Court found no material facts at issue and upheld this element of the fee. The First Circuit affirmed.

Held: Under this Court's precedent, the First Amendment permits a local union to charge nonmembers for national litigation expenses as long as (1) the subject matter of the (extra-local) litigation is of a kind that would be chargeable if the litigation were local, e.g., litigation appropriately related to collective bargaining rather than political activities, and (2) the charge is reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national's resources used for costs of similar litigation on behalf of the contributing local if and when it takes place. 

(a) Prior decisions frame the question at issue. The Court has long held that the First Amendment permits local unions designated as the exclusive bargaining representatives for certain employees to charge nonmember employees a service fee as a condition of their continued employment. With respect to litigation expenses, the Court also held that a local could charge nonmembers for expenses of litigation normally conducted by an exclusive representative, including litigation incidental to collective bargaining, but said (in language that the petitioners here emphasize) that litigation expenses "not having such connection with the bargaining unit are not to be charged to objecting employees." Ellis v. Railway Clerks, 466 U. S. 435 . Later, the Court held, with respect to the chargeability of a local's payment of an affiliation fee to a national, that the local "may charge objecting employees for their pro rata share of the costs associated with otherwise chargeable activities of its state and national affiliates, even if those activities were not performed for the direct benefit of the objecting employees' bargaining unit." Lehnert v. Ferris Faculty Assn., 500 U. S. 507 . The Court added that the local unit need not "demonstrate a direct and tangible impact upon the dissenting employee's unit," although there must be "some indication that the payment [say, to the national] is for services that may ultimately inure to the benefit of the members of the local union by virtue of their membership in the parent organization." Ibid. However, the Lehnert Court split into three irreconcilable factions on the subject here at issue, payment for national litigation.

(b) Because Lehnert failed to find a majority as to the chargeability of national litigation expenses, the lower courts have been uncertain about the matter. Having examined the question further, however, the Court now believes that, consistent with its precedent, costs of such litigation are chargeable provided the litigation meets the relevant standards for charging other national expenditures that the Lehnert majority enunciated. Under those standards, a local may charge a nonmember an appropriate share of its contribution to a national's litigation expenses if (1) the subject matter of the national litigation bears an appropriate relation to collective bargaining and (2) the arrangement is reciprocal-that is, the local's payment to the national affiliate is for "services that may ultimately inure to the benefit of the members of the local union by virtue of their membership in the parent organization." 500 U. S., at 524. Logic suggests that the same standard should apply to national litigation expenses as to other national expenses, and the Court can find no significant difference between litigation activities and other national activities, the cost of which this Court has found chargeable. The petitioners' arguments to the contrary, which rest primarily on their understanding of Ellis and Lehnert, are rejected.

(c) Applying Lehnert'sstandard to the national litigation expenses at issue demonstrates that they are both appropriately related to collective bargaining activities and reciprocal, and are therefore chargeable. First, the record establishes that the kind of national litigation activity for which the local charges nonmembers concerns only those aspects of collective bargaining, contract administration, or other matters that the courts have held chargeable. No one here denies that under Lehnert this kind of activity bears an appropriate relation to collective bargaining. See, e.g., 500 U. S., at 519. Second, although the location of the litigation activity is at the national (or extraunit) level, such activity is chargeable as long as the charges are for services that may ultimately inure to local members' benefit by virtue of their membership in the national union. Ibid. Respondent local says that the payment of its affiliation fee gives locals in general access to the national's financial resources-compiled via contributions from various locals-which would not otherwise be available to the local when needed to effectively negotiate, administer, or enforce the local's collective-bargaining agreements. Because no one claims that the national would treat respondent local any differently from other locals in this regard, the existence of reciprocity is not in dispute.

498 F. 3d 49, affirmed.

BREYER, J., delivered the opinion for a unanimous Court. ALITO, J., filed a concurring opinion, in which ROBERTS, C. J., and SCALIA, J., joined.
 

No "class-of-one" equal protection for public employees
June 09, 2008 by Ross Runkel at LawMemo

Engquist v. Oregon Dept of Agriculture (US Supreme Court 06/09/2008)

Official syllabus:

Petitioner Engquist, an Oregon public employee, filed suit against respondents— her agency, her supervisor, and a co-worker—asserting, inter alia, claims under the Equal Protection Clause: She alleged she had been discriminated against based on her race, sex, and national origin, and she also brought a so-called “class-of-one” claim, alleging that she was fired not because she was a member of an identified class (unlike her race, sex, and national origin claims), but simply for arbitrary, vindictive, and malicious reasons. The jury rejected the class-membership equal protection claims, but found for Engquist on her class-of-one claim. The Ninth Circuit reversed in relevant part. Although recognizing that this Court had upheld a class-of-one equal protection challenge to state legislative and regulatory action in Village of Willowbrook v. Olech, 528 U. S. 562, the court below emphasized that this Court has routinely afforded government greater leeway when it acts as employer rather than regulator. The Court concluded that extending the class-of-one theory to the public employment context would lead to undue judicial interference in state employment practices and invalidate public at-will employment.
Held: The class-of-one theory of equal protection does not apply in the public employment context.

(a) There is a crucial difference between the government exercising “the power to regulate or license, as lawmaker,” and acting “as proprietor, to manage [its] internal operation.” Cafeteria & Restaurant Workers v. McElroy, 367 U. S. 886, 896. Thus, in the public employment context, the Court has recognized that government has significantly greater leeway in its dealings with citizen employees than in bringing its sovereign power to bear on citizens at large. See, e.g., O’Connor v. Ortega, 480 U. S. 709, 721–722. The relevant precedent establishes two main principles: First, government employees do not lose their constitutional rights when they go to work, but those rights must be balanced against the realities of the employment context. See, e.g., id., at 721. Second, in striking the appropriate balance, the Court considers whether the claimed employee right implicates the relevant constitutional provision’s basic concerns, or whether the right can more readily give way to the requirements of the government as employer. See, e.g., Connick v. Myers, 461 U. S. 138.

(b) The Court’s equal protection jurisprudence has typically been concerned with governmental classifications that “affect some groups of citizens differently than others.” McGowan v. Maryland, 366 U. S. 420, 425. Olech did recognize that a class-of-one equal protection claim can in some circumstances be sustained. Its recognition of that theory, however, was not so much a departure from the principle that the Equal Protection Clause is concerned with arbitrary government classification, as it was an application of that principle to the facts in that case: The government singled Olech out with regard to its regulation of property, and the cases upon which the Court relied concerned property assessment and taxation schemes that were applied in a singular way to particular citizens. What seems to have been significant in Olech and the cited cases was the existence of a clear standard against which departures, even for a single plaintiff, could be readily assessed. This differential treatment raised a concern of arbitrary classification, and therefore required that the State provide a rational basis for it. There are some forms of state action, however, which by their nature involve discretionary decisionmaking based on a vast array of subjective, individualized assessments. In such cases treating like individuals differently is an accepted consequence of the discretion granted to governmental officials. This principle applies most clearly in the employment context, where decisions are often subjective and individualized, resting on a wide array of factors that are difficult to articulate and quantify. Unlike the context of arm’s length regulation, such as in Olech, treating seemingly similarly situated individuals differently in the employment context is par for the course. It is no proper challenge to what in its nature is a subjective and individualized decision that it was subjective and individualized. That the Court has never found the Equal Protection Clause implicated in this area is not surprising, given the historical understanding of the at-will nature of government employment. See, e.g., Cafeteria & Restaurant Workers v. McElroy, 367 U. S. 886, 896. Recognition of a claim that the State treated an employee differently from others for a bad reason, or for no reason at all, is simply contrary to the at-will concept. The Constitution does not require repudiating that familiar doctrine. Finally, the Court is guided, as in the past, by the “common-sense realization that government offices could not function if every employment decision became a constitutional matter.” Connick, supra, at 143. If class-of-one claims were recognized in the employment context, any personnel action in which a wronged employee can conjure up a claim of differential treatment would suddenly become the basis for a federal constitutional claim. The Equal Protection Clause does not require “[t]his displacement of managerial discretion by judicial supervision.” Garcetti v. Ceballos, 547 U. S. 410, 423.

478 F. 3d 985 [9th Cir 02/08/2007], affirmed.

ROBERTS, C. J., delivered the opinion of the Court, in which SCALIA, KENNEDY, THOMAS, BREYER, and ALITO, JJ., joined. STEVENS, J., filed a dissenting opinion, in which SOUTER and GINSBURG, JJ., joined.

Supreme Court tackles political activities payroll deductions
March 31, 2008 by Ross Runkel at LawMemo

The US Supreme Court granted certiorari March 31 to decide Ysursa, Idaho Secretary of State v. Pocatello Education Association [Details, all briefs]

Formal Question Presented by the cert petition:

"Does the First Amendment to the United States Constitution prohibit a state legislature from removing the authority of state political subdivisions to make payroll deductions for political activities under a statute that is concededly valid as applied to state government employers?"

Background:

An Idaho state statute prohibits local government employers and school employers from making payroll deductions for "political activities," defined as "electoral activities, independent expenditures, or expenditures made to any candidate, political party, political action committee or political issues committee or in support of or against any ballot measure."

The 9th Circuit held that this statute is unconstitutional in that it violates the first amendment rights of the labor unions who represent the employees. The 9th Circuit reasoned that (1) the "restriction on voluntary political contributions" was a burden on political speech in that it would decrease the revenues available to the labor unions to use for political speech; (2) the law is a form of content discrimination; (3) content-based restrictions on political speech are subject to strict scrutiny; (4) the state offered no compelling interest in favor of the law.

The 9th Circuit rejected the state's attempts to have the statute analyzed under two exceptions to the strict-scrutiny standard. (1) Government can refrain from paying for speech with which it disagrees, but the State does not subsidize the payroll systems of local government. (2) Government's ability to regulate speech in a public forum (here defined as the local governments' payroll deduction programs) did not apply because neither the local workplaces nor the local payroll systems are "property of the State of Idaho."

My view: The State of Idaho (Ysursa) will win; the 9th Circuit will be reversed.

The 9th Circuit opinion was amazingly wooden, consisting of a recital and review of past decisions that were designed to resolve very different questions.

The US Supreme Court should view this case as raising a question far different from the questions raised in previous cases.

I expect the majority will hold that the State of Idaho has the power to control the payroll deduction system used by local governments and school districts, and that barring deductions for "political purposes" is a neutral (not discriminatory based on content) regulation that does not need to be justified by a "compelling state interest." They probably will point out that labor unions do not have a first amendment right to have local governments and school districts do the work of collecting political contributions for them.

If Idaho can implement its statute, the labor unions will remain free to collect money for political purposes. They just won't have the assistance of state governments and local school districts.

Chamber v. Brown predictions
March 19, 2008 by Ross Runkel at LawMemo

Chamber of Commerce v. Brown was argued this morning at the US Supreme Court. [Details; briefs] [Transcript of argument]

I have nothing better to do than make a prediction on the outcome of this important case.

My view: California (Brown) will win, 6-3 or better.
Paul Secunda's (Workplace Prof Blog) view: Chamber of Commerce will win, 6-3.

California's statute simply says that an employer that receives state funds or grants cannot spend that money "to assist, promote, or deter union organizing." Violation of that restriction, of course, carries penalties.

The Chamber argues that California's statute is preempted by two well-known preemption doctrines. California disagrees, saying that the statute acts in a neutral way to keep employers from spending state money to deter union organizing.

Today's oral argument was interesting because there was a good discussion of labor law preemption, and the distinction between the State acting in a proprietary role versus a regulatory role.

I believe the Court will surprise many onlookers by using a reasoning process that goes something like this:

1. The Court does not like facial challenges to the legality of statutes. Does not like them at all. For example: Washington State Grange v. Washington State Republican Party (March 18, 2008 ); Gonzales v. Carhart (2007).
2. The case raises serious questions of federalism and state sovereignty, which will be resolved as follows: Once a state decides to give money to a private party, the state has the power to limit what the money is spent for, even though it appears that the state is meddling with national labor policy. National labor policy does not require states to allow state funds to be used for anti-union or pro-union advocacy.
3. To the extent that California employers are concerned that the statute unduly tangles them in red tape or has a real-life effect of regulating labor relations, they can attack the statute as it has been applied.

25 words on Federal Express Corp v. Holowecki
February 27, 2008 by Ross Runkel at LawMemo

In Federal Express Corp v. Holowecki (US Supreme Court 02/27/2008) (7-2) the Supreme Court came to grips with a long-standing legal question: Whether an employee alleging discrimination gets the ball rolling (and stops the statute of limitations) by filing what the EEOC calls an "intake questionnaire." The answer is "Yes."

The Supreme Court decision in 25 words:

EEOC's "intake questionnaire" can serve as a "charge," because the statute doesn't define "charge" and EEOC regulations fill in the gaps in a reasonable way.

The Official Syllabus:

The Age Discrimination in Employment Act of 1967 (ADEA) requires that "[n]o civil action ... be commenced ... until 60 days after a charge alleging unlawful discrimination has been filed with the Equal Employment Opportunity Commission" (EEOC), 29 U. S. C. §626(d), but does not define the term "charge." After petitioner delivery service (FedEx) initiated programs tying its couriers' compensation and continued employment to certain performance benchmarks, respondent Kennedy (hereinafter respondent), a FedEx courier over age 40, filed with the EEOC, in December 2001, a Form 283 "Intake Questionnaire" and a detailed affidavit supporting her contention that the FedEx programs discriminated against older couriers in violation of the ADEA. In April 2002, respondent and others filed this ADEA suit claiming, inter alia, that the programs were veiled attempts to force out, harass, and discriminate against older couriers. FedEx moved to dismiss respondent's action, contending she had not filed the "charge" required by §626(d). Respondent countered that her Form 283 and affidavit constituted a valid charge, but the District Court disagreed and granted FedEx's motion. The Second Circuit reversed. 

Held: 

    1. In addition to the information required by the implementing regulations, i.e., an allegation of age discrimination and the name of the charged party, if a filing is to be deemed a "charge" under the ADEA it must be reasonably construed as a request for the agency to take remedial action to protect the employee's rights or otherwise settle a dispute between the employer and the employee. 

        (a) There is little dispute that the EEOC's regulations-so far as they go-are reasonable constructions of the statutory term "charge" and are therefore entitled to deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 . However, while the regulations give some content to the term charge, they fall short of a comprehensive definition. Thus, the issue is the guidance the regulations give. Title 29 CFR §1626.3 says: "charge shall mean a statement filed with the [EEOC] which alleges that the named prospective defendant has engaged in or is about to engage in acts in violation of the Act." Section 1626.8(a) identifies information a "charge should contain," including: the employee's and employer's names, addresses, and phone numbers; an allegation that the employee was the victim of age discrimination; the number of employees of the charged employer; and a statement indicating whether the charging party has initiated state proceedings. Section 1626.8(b), however, seems to qualify these requirements by stating that a charge is "sufficient" if it meets the requirements of §1626.6-i.e., if it is "in writing and ... name[s] the prospective respondent and ... generally allege[s] the discriminatory act(s)." That the meaning of charge remains unclear, even with the regulations, is evidenced by the differing positions of the parties and the Courts of Appeals on the matter.

        (b) Just as this Court defers to reasonable statutory interpretations, an agency is entitled to deference when it adopts a reasonable interpretation of its regulations, unless its position is " ' plainly erroneous or inconsistent with the regulation,' " Auer v. Robbins, 519 U. S. 452 . The Court accords such deference to the EEOC's position that its regulations identify certain requirements for a charge but do not provide an exhaustive definition. It follows that a document meeting §1626.6's requirements is not a charge in every instance. The language in §§1626.6 and 1626.8 cannot be viewed in isolation from the rest of the regulations. While the regulations' structure is less than clear, the relevant provisions are grouped under the title, "Procedures-Age Discrimination in Employment Act." A permissible reading is that the regulations identify the procedures for filing a charge but do not state the full contents of a charge.

        (c) That does not resolve this case because the regulations do not state what additional elements are required in a charge. The EEOC submits, in accordance with a position it has adopted in internal directives over the years, that the proper test is whether a filing, taken as a whole, should be construed as a request by the employee for the EEOC to take whatever action is necessary to vindicate her rights. 

        (d) The EEOC acted within its authority in formulating its request-to-act requirement. The agency's policy statements, embodied in its compliance manual and internal directives, interpret not only its regulations but also the statute itself. Assuming these interpretive statements are not entitled to full Chevron deference, they nevertheless are entitled to a "measure of respect" under the less deferential standard of Skidmore v. Swift & Co., 323 U. S. 134 , see Alaska Dept. of Environmental Conservation v. EPA, 540 U. S. 461 , whereby the Court considers whether the agency has consistently applied its position, e.g., United States v. Mead Corp., 533 U. S. 218 . Here, the relevant interpretive statement has been binding on EEOC staff for at least five years. True, the agency's implementation has been uneven; e.g., its field office did not treat respondent's filing as a charge, and, as a result, she filed suit before the EEOC could initiate conciliation with FedEx. Such undoubted deficiencies are not enough, however, to deprive an agency that processes over 175,000 inquiries a year of all judicial deference. Moreover, the charge must be defined in a way that allows the agency to fulfill its distinct statutory functions of enforcing antidiscrimination laws, see 29 U. S. C. §626(d), and disseminating information about those laws to the public, see, e.g., Civil Rights Act of 1964, §§705(i), 705(g)(3).

        (e) FedEx's view that because the EEOC must act "[u]pon receiving ... a charge," 29 U. S. C. §626(d), its failure to do so means the filing is not a charge, is rejected as too artificial a reading of the ADEA. The statute requires the aggrieved individual to file a charge before filing a lawsuit; it does not condition the individual's right to sue upon the agency taking any action. Cf. Edelman v. Lynchburg College, 535 U. S. 106 . Moreover, because the filing of a charge determines when the ADEA's time limits and procedural mechanisms commence, it would be illogical and impractical to make the definition of charge dependent upon a condition subsequent over which the parties have no control. Cf. Logan v. Zimmerman Brush Co., 455 U. S. 422 . Pp. 12-13.

    2. The agency's determination that respondent's December 2001 filing was a charge is a reasonable exercise of its authority to apply its own regulations and procedures in the course of the routine administration of the statute it enforces.

        (a) Respondent's completed Form 283 contained all the information outlined in 29 CFR §1626.8, and, although the form did not itself request agency action, the accompanying affidavit asked the EEOC to "force [FedEx] to end [its] age discrimination plan." FedEx contends unpersuasively that, in context, the latter statement is ambiguous because the affidavit also stated: "I have been ... assur[ed] by [the EEOC] that this Affidavit will be considered confidential ... and will not be disclosed ... unless it becomes necessary ... to produce the affidavit in a formal proceeding." This argument reads too much into the nondisclosure assurances. Respondent did not request the EEOC to avoid contacting FedEx, but stated only her understanding that the affidavit itself would be kept confidential and, even then, consented to disclosure of the affidavit in a "formal proceeding." Furthermore, respondent checked a box on the Form 283 giving consent for the EEOC to disclose her identity to FedEx. The fact that respondent filed a formal charge with the EEOC after she filed her District Court complaint is irrelevant because postfiling conduct does not nullify an earlier, proper charge.

        (b) Because the EEOC failed to treat respondent's filing as a charge in the first instance, both sides lost the benefits of the ADEA's informal dispute resolution process. The court that hears the merits can attempt to remedy this deficiency by staying the proceedings to allow an opportunity for conciliation and settlement. While that remedy is imperfect, it is unavoidable in this case. However, the ultimate responsibility for establishing a clearer, more consistent process lies with the EEOC, which should determine, in the first instance, what revisions to its forms and processes are necessary or appropriate to reduce the risk of future misunderstandings by those who seek its assistance. 

440 F. 3d 558, affirmed. 

    KENNEDY, J., delivered the opinion of the Court, in which ROBERTS, C. J., and STEVENS, SOUTER, GINSBURG, BREYER, and ALITO, JJ., joined. THOMAS, J., filed a dissenting opinion, in which SCALIA, J., joined.

 

25 words on Sprint/United Management
February 26, 2008 by Ross Runkel at LawMemo

Lots of people held out a false hope that Sprint/United Management v. Mendelsohn (US Supreme Court 02/26/2008) would decide whether so-called "me-too" evidence could be used in a discrimination case. They hoped for a bright line to be drawn that would settle the question for all future cases.

Well, I'm sorry, but this case was not so much an employment law case as it was an evidence case. It turned on the proper role of the trial courts versus the appellate courts in applying the Federal Rules of Evidence.

Here's what I learned in law school (oh so long ago) and what this decision actually says - in 25 words:

It is the trial court that decides fact-sensitive questions on the relevance of evidence, subject to abuse-of-discretion review. Let the trial court do its job.

It took the Supreme Court only nine pages, with a unanimous decision.

Now everyone can go back to their specific cases and continue to work through the difficult questions of relevance that will - as always - turn on the specific facts of the individual case. There will not be one single answer that will fit all cases.

Supreme Court reverses "me too" evidence decision
February 26, 2008 by Ross Runkel at LawMemo

Sprint/United Management v. Mendelsohn (US Supreme Court 02/26/2008)

Official Syllabus:

In respondent Mendelsohn's age discrimination case, petitioner Sprint moved in limine to exclude the testimony of former employees alleging discrimination by supervisors who had no role in the employment decision Mendelsohn challenged, on the ground that such evidence was irrelevant to the case's central issue, see Fed. Rules Evid. 401, 402, and unduly prejudicial, see Rule 403. Granting the motion, the District Court excluded evidence of discrimination against those not "similarly situated" to Mendelsohn. The Tenth Circuit treated that order as applying a per se rule that evidence from employees of other supervisors is irrelevant in age discrimination cases, concluded that the District Court abused its discretion by relying on the Circuit's Aramburu case, determined that the evidence was relevant and not unduly prejudicial, and remanded for a new trial.

Held: The Tenth Circuit erred in concluding that the District Court applied a per se rule and thus improperly engaged in its own analysis of the relevant factors under Rules 401 and 403, rather than remanding the case for the District Court to clarify its ruling.

(a) In deference to a district court's familiarity with a case's details and its greater experience in evidentiary matters, courts of appeals uphold Rule 403 rulings unless the district court has abused its discretion. Here, the Tenth Circuit did not accord due deference to the District Court. The District Court's two-sentence discussion of the evidence neither cited nor gave any other indication that the decision relied on Aramburu or suggested that the court applied a per se rule of inadmissibility. Neither party's submissions to the District Court suggested that Aramburu was controlling. That court's use of the same "similarly situated" phrase that Aramburu used cannot be presumed to indicate adoption of Aramburu's analysis, for the District Court was addressing a very different kind of evidence here. And the nature of Sprint's argument was not that the particular evidence was never admissible, but only that such evidence lacked sufficient probative value in this case to be relevant or outweigh prejudice and delay.

(b) Because of the Tenth Circuit's error, it went on to assess the relevance of the evidence itself and conduct its own balancing of probative value and potential prejudicial effect when it should have allowed the District Court to make these determinations in the first instance, explicitly and on the record.

466 F. 3d 1223, vacated and remanded.

THOMAS, J., delivered the opinion for a unanimous Court.

Gómez-Pérez v. Potter prediction
February 19, 2008 by Ross Runkel at LawMemo

Paul Secunda has read the US Supreme Court transcript from today's oral argument in Gómez-Pérez v. Potter [Details, briefs] and concludes that the employer will win 5:4. His comments appear at the Workplace Prof Blog and at SCOTUSblog.

The issue is whether federal employees can state a claim for retaliation under the Age Discrimination in Employment Act (ADEA).

Well, I've also read the transcript. Paul is correct that the employer will win, but I don't see the case being decided by a close vote. Anything closer than 7:2 will surprise me.

Why? The ADEA sets up a dual scheme for private employers and for federal employers. Those who work for private employers have an express statutory provision that forbids retaliation. Those who work for a federal employer do not. Under the most elementary rules of statutory interpretation, this means federal employees do not have a claim for retaliation. There's no way four Justices are going to strain the language of the statute to reach the result that Gómez-Pérez wants them to reach.

Three new Supreme Court cases
February 19, 2008 by Ross Runkel at LawMemo

US Supreme Court will hear case on union's waiver of court forum for statutory claim.

14 Penn Plaza LLC v. Pyett (Certiorari granted February 19, 2008) [Details, briefs]

When employees sued claiming age discrimination, the employer filed a motion to compel them to take the case to arbitration. The employees were covered by a collective bargaining agreement which prohibited age discrimination and also said "All such claims shall be subject to the grievance and arbitration procedure [in the collective bargaining agreement] as the sole and exclusive remedy for violations." The trial court denied the motion to compel arbitration, and the 2nd Circuit affirmed. The 2nd Circuit held that "arbitration provisions contained in a [collective bargaining agreement], which purport to waive employees' rights to a federal forum with respect to statutory claims, are unenforceable."

See discussion of this case at Daily Developments in EEO Law and at ADR Prof Blog: Supreme Court hears third arbitration case this term: 14 Penn Plaza v. Pyett and at Workplace Prof Blog: Supreme Court Certs

US Supreme Court will hear case on union's use of agency fees for out-of-unit litigation.

Locke v. Karass (Certiorari granted February 19, 2008) [Details, briefs]

The Maine State Employees Association (MSEA) is the exclusive bargaining agent for certain state workers, and collects compulsory "agency fees" from non-members who are in the bargaining unit. Some of these fees are transferred to Service Employees International Union (SEIU), MSEA's national affiliate. MSEA included in its calculation of chargeable expenditures those costs of litigation (by both itself and SEIU) that was germane to collective bargaining. This meant that nonmembers contributed, through their service fees, to some litigation that was not undertaken specifically for their own bargaining unit, but rather was conducted by or on behalf of other units or the national affiliate, sometimes in other states. Included within this general category of expenditures were the salaries of SEIU's lawyers, and other costs of providing legal services to bargaining units throughout the country. Costs of litigation that was not related to collective bargaining, however, were not included in the service fees assessed to MSEA's nonmembers. The 1st Circuit held that MSEA may lawfully charge non-members for this "extra-unit litigation" so long as it is germane to the union's collective bargaining duties.

US Supreme Court will hear case on ERISA anti-alienation.

Kennedy v. Plan Administrator for Dupont Savings and Investment Plan (Certiorari granted February 19, 2008)
Decision below: 5th Cir 08/15/2007

William Kennedy's ERISA plan contained a no-alienation provision. William designated his wife Liv as the sole beneficiary. Upon their divorce, Liv agreed to be divested of all her rights. However, there was no Qualified Domestic Relations Order (QDRO). The 5th Circuit held that an ERISA Qualified Domestic Relations Order is the only valid way a divorcing spouse can waive her right to receive her ex-husband's pension benefits under ERISA.

Employment retaliation at the Supreme Court
February 18, 2008 by Ross Runkel at LawMemo

This week the US Supreme Court will hear two cases that will decide whether it is illegal for an employer to retaliate against an employee for complaining about discrimination.

It's already clear that retaliation is unlawful under Title VII, and under the private sector provisions of the Age Discrimination in Employment Act (ADEA), and other statutes I won't mention here.

The questions raised this week in two cases are

• Gómez-Pérez v. Potter (oral argument February 19) [details, briefs]

  Whether, for a federal employee, the ADEA prohibits retaliation for filing an EEO complaint.

  Gómez-Pérez sued claiming that her federal employer (the USPS) retaliated against her because she filed an equal employment opportunity complaint with her employer alleging discrimination on the basis of age. The 1st Circuit held that the ADEA does not provide a cause of action for retaliation by federal employers. Applying ADEA Section 15 (29 USC Section 633a), the 1st Circuit reasoned that the statutory prohibition against "discrimination" does not include a prohibition against retaliation. In contrast, the parallel provision (Section 623(d)) governing private employers specifically prohibits retaliation. The US Supreme Court granted certiorari to review the 1st Circuit's judgment.

• CBOCS West, Inc. v. Humphries (oral argument Febrary 20) [details, briefs]

  Whether 42 USC section 1981 provides a cause of action for retaliation.

  Humphries sued under 42 USC Section 1981 claiming that his employer discharged him in retaliation for complaining to managers about (a) disciplinary actions taken against him allegedly because of his race, and (b) the discharge of another employee allegedly because of that employee's race. Section 1981 prohibits race discrimination in "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship." There is no express mention of retaliation. The 7th Circuit held (2-1) that Section 1981 provides a cause of action for retaliation. The US Supreme Court granted certiorari to review the 7th Circuit's judgment.

A third retaliation case is on the docket, but it looks like the oral argument will be put off until October. Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee [details, briefs] - Crawford claimed she was discharged because she cooperated in her employer's investigation of sexual harassment complaints against another employee. No EEOC charge had been filed prior to the investigation. Title VII Section 704(a) protects an employee from retaliation because the employee "has opposed" an unlawful employment practice or "participated in any manner in an investigation ... under this chapter." The 6th Circuit held that Crawford was not protected by either the "opposition" clause or the "participation" clause. The US Supreme Court granted certiorari to review the 6th Circuit's judgment.

Other comments on these cases:

Workplace Prof Blog: Big Week at Supreme Court for Employment Retaliation Cases

ACS Blog: Three Retaliation Claims Cases Reach the Supreme Court: Video Excerpts (with videos)

Supreme Court takes three employment law cases
January 19, 2008 by Ross Runkel at LawMemo

US Supreme Court granted certiorari in three employment law cases on January 18, 2008)

Retaliation: Is cooperating with internal investigation protected activity?

Crawford v. Metropolitan Government of Nashville
Details, briefs: http://www.lawmemo.com/supreme/case/Crawford/

Crawford claimed she was discharged because she cooperated in her employer's investigation of sexual harassment complaints against another employee. No EEOC charge had been filed prior to the investigation. Title VII Section 704(a) protects an employee from retaliation because the employee "has opposed" an unlawful employment practice or "participated in any manner in an investigation ... under this chapter." The 6th Circuit held that Crawford was not protected by either the "opposition" clause or the "participation" clause. Her petition for certiorari presents the following question: "Does the anti-retaliation provision of section 704(a) of Title VII of the 1964 Civil Rights Act protect a worker from being dismissed because she cooperated with her employer's internal investigation of sexual harassment?"

ADEA: Burden of persuasion in establishing "reasonable factors other than age."

Meacham v. Knolls Atomic Power Laboratory
Details, briefs: http://www.lawmemo.com/supreme/case/Meacham/

The Age Discrimination in Employment Act (ADEA) prohibits employment practices that have an unjustified disparate impact on older workers, Smith v. City of Jackson, Miss., 544 U.S. 228 (2005), but also provides that it "shall not be unlawful for an employer . . . to take any action otherwise prohibited . . . where the differentiation is based on reasonable factors other than age." The question presented in the petition for certiorari is: "Whether an employee alleging disparate impact under the ADEA bears the burden of persuasion on the "reasonable factors other than age" defense, as held by the Second Circuit in this case in conflict with the decisions of other circuits and a regulation of the Equal Employment Opportunity Commission."

ERISA: Judicial review when administrator both decides claims and pays claims.

MetLife v. Glenn
Details, briefs: http://www.lawmemo.com/supreme/case/MetLife/

The Supreme Court will decide two issues: (1) Whether the Sixth Circuit erred in holding, in conflict with two other Circuits, that the fact that a claim administrator of an ERISA plan also funds the plan benefits, without more, constitutes a "conflict of interest" which must be weighed in a judicial review of the administrator's benefit determination under Firestone Tire & Rubber v. Bruch, 489 U.S. 101 (1989)? (2) If an administrator that both determines and pays claims under an ERISA plan is deemed to be operating under a conflict of interest, how should that conflict be taken into account on judicial review of a discretionary benefit determination?"

ADA accommodation case taken off Supreme Court docket
January 15, 2008 by Ross Runkel at LawMemo

Huber v. Wal-Mart Stores, Inc. has been settled by the parties, and removed from the list of cases that the Supreme Court will decide this year.

It raised an interesting issue: Whether the ADA requires an employer to reassign a disabled employee to a vacant position for which she is qualified, or merely permits the employee to apply and compete with other applicants for the vacant position.

Here is how the issue was stated in Huber's petition for certiorari:

Title I of the Americans with Disabilities Act of 1990, 42 U.S.C. § 12111 et seq. (ADA), requires employers to "mak[e] reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability." 42 U.S.C. § 12112(b)(5)(A). The statute expressly lists "reassignment to a vacant position" as a "reasonable accommodation." Id. § 12111(9)(B). The Equal Employment Opportunity Commission (EEOC) has issued regulations implementing that definition, 29 C.F.R. § 1630.2(o)(2)(ii), and it has interpreted those regulations to provide that "[t]he employee does not need to be the best qualified individual for the position in order to obtain it as a reassignment." The questions presented are:

1. If a disability prevents an employee from performing the essential functions of his or her current position, does the ADA require:

(a) that the employer reassign the employee to a vacant, equivalent position for which he or she is qualified, as the Tenth and District of Columbia Circuits have held; or

(b) that the employer merely permit the employee to apply and compete with other applicants for the vacant, equivalent position for which he or she is qualified, as the Seventh and Eighth Circuits have held?

The facts:

Pam Huber had worked as an order-filler until she became disabled. She sought, as a reasonable accommodation, reassignment to a router position which was vacant and for which she was qualified. The employer did not automatically reassign her to the router position, but required her to apply and compete with other applicants. The employer filled the router position with a non-disabled person who was the most qualified applicant, and placed Huber in a less desirable janitorial position.

Huber sued under the Americans with Disabilities Act (ADA); the trial court granted summary judgment for Huber; the 8th Circuit reversed; the US Supreme Court granted certiorari to review the 8th Circuit judgment. Now the case has been dismissed.

Huber's position was that the employer should have automatically reassigned her to the router position without requiring her to compete with other applicants. The employer's position was that it has a nondiscriminatory policy of hiring the most qualified applicant, and that giving the router position to the most qualified applicant does not violate the ADA.

Supreme Court takes "class of one" case
January 11, 2008 by Ross Runkel at LawMemo

This morning the US Supreme Court announced that it will decide whether, in the context of employment, there can be a "class of one" under the equal protection clause.

Engquist v. Oregon Dept of Agriculture [Details]

The ("liberal") 9th Circuit rejected a legal theory that many other circuits have adopted. It's the class-of-one idea that you can win an equal protection case even though you're not claiming to be in a multi-member class such as is involved in race and sex discrimination.

Enquist was laid off from her state job. She sued her public employer under several theories and won a jury verdict based on two constitutional theories and on intentional interference with contract. The 9th Circuit reversed on the equal protection claim.

Equal protection for a class of one? 9th Circuit said "No."
Engquist v. Oregon Dept of Agriculture (9th Cir 02/08/2007) (2-1 vote).

The jury found liability under the equal protection clause because the defendants "intentionally treat[ed] the plaintiff differently than others similarly situated with respect to the denial of her promotion, termination of her employment, or denial of bumping rights without any rational basis and solely for arbitrary, vindictive, or malicious reasons." This was done on a theory that Engquist was a "class of one."

The 9th Circuit held, as a matter of first impression, that a class-of-one theory is not applicable to public employees. Following Village of Willowbrook v. Olech, 528 US 562 (2000), the 9th Circuit has applied the class of one theory to regulatory land use cases, and other Circuits have applied it to public employment decisions.

The court concluded that the rights of public employees are not as broad as the rights of ordinary citizens, the need for review under equal protection analysis is "thin" due to other legal protections enjoyed by public employees, and "prohibiting arbitrary public employer actions would also upset long-standing personnel practices."

Looks like the expedited briefing schedule imposed by the Supreme Court will give them time to hear oral arguments in April, and decide the case before the summer recess.

Age discrimination, retirement plans, and the Supreme Court
January 09, 2008 by Ross Runkel at LawMemo

Today the US Supreme Court hear oral arguments in Kentucky Retirement Systems v. EEOC [Click here for briefs, link to transcript, etc.].

EEOC sued claiming that a disability-retirement-benefits plan for state and county employees violates the Age Discrimination in Employment Act (ADEA). The trial court granted summary judgment for defendants on the ground that EEOC did not establish a prima facie case; the 6th Circuit, en banc 10-4, reversed.

The KRS disability-retirement-benefits plan disqualifies employees who are still working from receiving disability-retirement benefits if they have already reached normal retirement-benefit age at the time they become disabled. The plan also calculates disability retirement benefits in such a way that an older employee who is eligible to receive disability benefits receives fewer benefits - in the form of lower monthly benefit payments - than a younger disabled employee receiving disability-retirement benefits who is similar to the older disabled employee in every relevant factor other than age.

The 6th Circuit held that (1) EEOC established a prima facie case because the plan is facially discriminatory on the basis of age and (2) when a plan is facially discriminatory a plaintiff does not need additional proof of discriminatory animus to establish a prima facie claim of disparate treatment.

The US Supreme Court granted certiorari to review the 6th Circuit's judgment.

If you want to see what Paul Secunda at Workplace Prof Blog gleaned from the transcript of the Supreme Court argument, go to Oral Argument Transcript Analysis of Kentucky Retirement Systems v. EEOC.

My view: Extremely difficult to predict the outcome, but three things make me tilt toward the EEOC's position:

1. Kentucky is relying to some extent on an argument that their plan is not "arbitrary." OK, fine. The problem with that argument is that the word "arbitrary" does not appear in the portion of the statute that EEOC relies on, so it's not really relevant whether the plan is arbitrary or not. "Arbitrary" appears in the preamble only.
2. The plan expressly uses age as a criterion. Where I come from, that makes the plan facially discriminatory on the basis of age. Any counterargument to that is really going to have to make mincemeat out of the English language.
3. All EEOC is trying to do is establish a prima facie case. If EEOC wins on that one issue, Kentucky still has the opportunity to defend its plan based on defenses that the statute allows.

Age discrimination disparate impact case heads to Supreme Court
December 22, 2007 by Ross Runkel at LawMemo

Will the US Supreme Court grant certiorari in Meacham v. Knolls Atomic Power Laboratory? [Case details] Probably, I think. Earlier this week the US Justice Department filed a brief arguing that certiorari should be granted.

The Meacham case presents the legal issue of whether it's the plaintiffs or the defendant that bears the burden of proof on an important aspect of a disparate impact age discrimination case: proving (or disproving) that the employer's decision "is based on reasonable factors other than age." That's the RFOA exception.

Knolls laid off employees during an involuntary reduction in force. Of the 31 employees laid off, 30 were over 40 years old. The workforce as a whole was 60% over 40.

Some of the laid off employees sued under the Age Discrimination in Employment Act (ADEA), using a disparate impact theory. A jury found in favor of the plaintiffs. The 2nd Circuit (by 2-1 vote) vacated the judgment of the district court and remanded the case with instructions to enter judgment for the employer. The 2nd Circuit majority held that it is the plaintiffs' burden to prove that the employer's justification is unreasonable. The dissenting judge would look at the RFOA defense as an affirmative defense as to which the employer would have the burden of persuasion.

The government's brief said:

The court of appeals held that plaintiffs raising a disparate-impact age discrimination claim bear the burden of proof with respect to the ADEA’s RFOA exception. That ruling is at odds with the text of the pertinent statutory provision, the decisions of other circuits, and agency regulations. In addition, the burden of proof on this issue is of threshold and recurring importance in ADEA disparate-impact cases. This Court’s review of the first question presented is therefore warranted.

The questions presented by the petition (filed by the losing plaintiffs):

The Age Discrimination in Employment Act (ADEA) prohibits employment practices that have an unjustified disparate impact on older workers, Smith v. City of Jackson, Miss., 544 U.S. 228 (2005), but also provides that it “shall not be unlawful for an employer . . . to take any action otherwise prohibited . . . where the differentiation is based on reasonable factors other than age.” 29 U.S.C. § 623(f)(1). The questions presented are:

1. Whether an employee alleging disparate impact under the ADEA bears the burden of persuasion on the “reasonable factors other than age” defense, as held by the Second Circuit in this case in conflict with the decisions of other circuits and a regulation of the Equal Employment Opportunity Commission.

2. Whether respondents’ practice of conferring broad discretionary authority upon individual managers to decide which employees to lay off during a reduction in force constituted a “reasonable factor other than age” as a matter of law.

Supreme Court will decide ADA accommodation case
December 08, 2007 by Ross Runkel at LawMemo

Huber v. Wal-Mart Stores, Inc (certiorari granted 12/07/2007) [Details, briefs]
Decision below: Huber v. Wal-Mart Stores, Inc (8th Cir 05/30/2007)

Pam Huber had worked as an order-filler until she became disabled. She sought, as a reasonable accommodation, reassignment to a router position which was vacant and for which she was qualified. The employer did not automatically reassign her to the router position, but required her to apply and compete with other applicants. The employer filled the router position with a non-disabled person who was the most qualified applicant, and placed Huber in a less desirable janitorial position.

Huber sued under the Americans with Disabilities Act (ADA); the trail court granted summary judgment for Huber; the 8th Circuit reversed; the US Supreme Court granted certiorari to review the 8th Circuit judgment. Oral argument probably will be scheduled for March 2008.

Huber's position is that the employer should have automatically reassigned her to the router position without requiring her to compete with other applicants.

The employer's position is that it has a nondiscriminatory policy of hiring the most qualified applicant, and that giving the router position to the most qualified applicant does not violate the ADA.

US Supreme Court will decide labor preemption case
November 20, 2007 by Ross Runkel at LawMemo

The US Supreme Court announced today that it will review the 9th Circuit's judgment in Chamber of Commerce v. Brown (certiorari granted 11/20/2007) [Details, briefs]

Oral argument is expected to be scheduled for March or April 2008.

California Gov't Code Section 16645.2(a) bars private employers who are "recipient[s] of a grant of state funds" from "us[ing] the funds to assist, promote, or deter union organizing." Similarly, Section 16645.7(a) bars "a private employer receiving state funds in excess of [$10,000] in any calendar year on account of its participation in a state program" from using such funds "to assist, promote, or deter union organizing."

Sitting en banc, the 9th Circuit held that these two sections "do not undermine federal labor policy, are not preempted by the NLRA [National Labor Relations Act] and do not violate the First Amendment." The court reasoned that (1) these sections are not preempted by the NLRA under either Machinists preemption (Lodge 76, International Assn of Machinists v. Wisconsin Employment Relations Commission, 427 US 132 (1976)) or Garmon preemption (San Diego Building Trades Council v. Garmon, 359 US 236 (1959)); and (2) these sections do not violate the 1st Amendment, because (consistent with Rust v. Sullivan, 500 US 173 (1991)) they, "like various federal acts, require[ ] only that those who accept government grant and program funds use them for the purpose for which they were given."

The "Question Presented" in the petition for certiorari:

"Is the State of California’s regulation of noncoercive employer speech about union organizing, California Assembly Bill 1889, Cal. Gov’t Code §§ 16645.2, 16645.7, preempted by federal labor law?"

Supreme Court rips EEOC
November 07, 2007 by Ross Runkel at LawMemo

It was a case that seemed dry as toast, inviting a fairly standard analysis of whether a court must defer to an administrative agency's interpretation of an undefined word in a statute. Federal Express v. Holowecki [click here for details and all briefs.]

A simple legal issue: Whether an EEOC intake form can serve as an EEOC charge.

Then it turned into a judicial pile-on, seeing which Justice could be the most critical of the way the EEOC does business.

I'll give the award to Justice Scalia. When the government's lawyer stood up to talk, the lawyer didn't get past his formal introduction before Justice Scalia jumped on him.

"JUSTICE SCALIA: Mr. Heytens, let me tell you going in that my -- my main concern in this case, however the decision comes out, is to do something that will require the EEOC to get its act in order, because this is nonsense: These regulations that are contradicted by forms; this failure to give notice, but it's okay because it's a charge anyway.

"This whole situation can be traceable back to the agency, and I -- whoever ends up bearing the burden of it, it's the agency's fault, and this scheme has to be revised."

Read the whole transcript here.

Although the Supreme Court has no power to make the EEOC change its ways, it certainly has the ability to throw light on an administrative mess. Perhaps that will lead to change. But only if the EEOC has the political will to change.

FedEx v. Holowecki transcript
November 06, 2007 by Ross Runkel at LawMemo

Tuesday, November 6, 2007 the US Supreme Court heard oral arguments in Federal Express v. Holowecki [click here for details and all briefs.]

The transcript of the Supreme Court argument is available here.

The issue is whether filing an intake questionnaire qualifies as filing a "charge" with the EEOC. Filing a timely charge is required before taking an ADEA case to court.

Chamber v Brown at the Supreme Court
October 23, 2007 by Ross Runkel at LawMemo

I'm betting that the US Supreme Court will grant certiorari in Chamber of Commerce v. Brown, to review the 9th Circuit's 12-3 en banc decision.

Friday the US Solicitor General filed an amicus brief urging the Court to grant certiorari, and taking the position that the 9th Circuit's decision was wrong. [Click here for details and briefs.]

California Gov't Code Section 16645.2(a) bars private employers who are "recipient[s] of a grant of state funds" from "us[ing] the funds to assist, promote, or deter union organizing." Similarly, Section 16645.7(a) bars "a private employer receiving state funds in excess of [$10,000] in any calendar year on account of its participation in a state program" from using such funds "to assist, promote, or deter union organizing." 

Sitting en banc, the 9th Circuit held that these two sections "do not undermine federal labor policy, are not preempted by the NLRA [National Labor Relations Act] and do not violate the First Amendment." The court reasoned that (1) these sections are not preempted by the NLRA under either Machinists preemption (Lodge 76, International Ass'n of Machinists v. Wisconsin Employment Relations Commission, 427 US 132 (1976)) or Garmon preemption (San Diego Building Trades Council v. Garmon, 359 US 236 (1959)); and (2) these sections do not violate the 1st Amendment, because (consistent with Rust v. Sullivan, 500 US 173 (1991)) they, "like various federal acts, require[ ] only that those who accept government grant and program funds use them for the purpose for which they were given." 

This case has the perfect ingredients for a grant of certiorari:

• There is a split of authority among the lower courts.


• The case involves fundamental legal issues that are important on a national scale:


• Whether California has interfered with employers' rights of free speech (either under the 1st amendment or Section 8(c) of the NLRA).


• Whether California has a right to control the use of funds that employers receive from the state.


• Whether federal legislation (the National Labor Relations Act) preempts the state statute.

It may be another month or so before the Court decides whether to take this case. If it does, then it will be more months before an oral argument, and then more time before a decision.

For more discussion of this case:

• SCOTUSblog: Government Recommends Grant in No. 06-939, Chamber of Commerce v. Brown


• Workplace Prof Blog: Solicitor General Recommends Supreme Court Hear Challenge to State Financial Accountability Acts
  

Supreme Court denies motion to dismiss ERISA case
September 25, 2007 by Ross Runkel at LawMemo

LaRue v. DeWolff, Boberg & Associates, Inc. (motion denied 09/25/2007)
Order: http://www.supremecourtus.gov/orders/courtorders/092507pzr.pdf
Details: http://www.lawmemo.com/supreme/LaRue/

This case raises the issue of whether ERISA permit a participant to bring an action to recover losses attributable to his account in a “defined contribution plan” that were caused by fiduciary breach.

The respondent filed a motion to dismiss on the ground of mootness because the plan participant has withdrawn all his funds from the account.

The US Supreme Court denied the motion.

Supreme Court will decide benefit plan age discrimination case
September 25, 2007 by Ross Runkel at LawMemo

Kentucky Retirement Systems v. EEOC (certiorari granted 09/25/2007)
Details: http://www.lawmemo.com/supreme/Kentucky/

EEOC sued claiming that a disability-retirement-benefits plan for state and county employees violates the Age Discrimination in Employment Act (ADEA).

The trial court granted summary judgment for defendants on the ground that EEOC did not establish a prima facie case; the 6th Circuit, en banc 10-4, reversed.

The KRS disability-retirement-benefits plan disqualifies employees who are still working from receiving disability-retirement benefits if they have already reached normal retirement-benefit age at the time they become disabled. The plan also calculates disability retirement benefits in such a way that an older employee who is eligible to receive disability benefits receives fewer benefits - in the form of lower monthly benefit payments - than a younger disabled employee receiving disability-retirement benefits who is similar to the older disabled employee in every relevant factor other than age.

The 6th Circuit held that (1) EEOC established a prima facie case because the plan is facially discriminatory on the basis of age and (2) when a plan is facially discriminatory a plaintiff does not need additional proof of discriminatory animus to establish a prima facie claim of disparate treatment.

The US Supreme Court granted certiorari to review the 6th Circuit's judgment.

Supreme Court will decide 42 USC Section 1981 retaliation case
September 25, 2007 by Ross Runkel at LawMemo

CBOCS West, Inc. v. Humphries (certiorari granted 09/25/2007)
Details: http://www.lawmemo.com/supreme/CBOCS/

Humphries sued under 42 USC Section 1981 claiming that his employer discharged him in retaliation for complaining to managers about (a) disciplinary actions taken against him allegedly because of his race, and (b) the discharge of another employee allegedly because of that employee's race.

The 7th Circuit held (2-1) that 42 USC Section 1981 provides a cause of action for retaliation.

The US Supreme Court granted certiorari to review the 7th Circuit's judgment.

Supreme Court will decide federal employer ADEA retaliation case
September 25, 2007 by Ross Runkel at LawMemo

Gómez-Pérez v. Potter (certiorari granted 09/25/2007)
Details: http://www.lawmemo.com/supreme/Gomez-Perez/

Gómez-Pérez sued claiming that her federal employer (the USPS) retaliated against her because she filed an equal employment opportunity complaint with her employer alleging discrimination on the basis of age.

The 1st Circuit held that the Age Discrimination in Employment Act (ADEA) does not provide a cause of action for retaliation by federal employees.

Applying ADEA Section 15 (29 USC Section 633a), the 1st Circuit reasoned that the statutory prohibition against "discrimination" does not include a prohibition against retaliation.

The US Supreme Court granted certiorari to review the 61st Circuit's judgment.

Union loses "opt-in" agency fee case
June 14, 2007 by Ross Runkel at LawMemo

It does not violate the First Amendment for a State to require its public-sector unions to receive affirmative authorization from a nonmember before spending that nonmember’s agency fees for election-related purposes.

So says a unanimous US Supreme Court in Davenport v. Washington Education Association, decided June 14, 2007.

Washington State allows public-sector unions to charge nonmembers an agency fee equivalent to membership dues and to have the employer collect that fee through payroll deductions. An initiative approved by state voters (§760) requires a union to obtain the nonmembers’ affirmative authorization before using their fees for election-related purposes. The Washington Supreme Court thought this "opt in" requirement was an unconstitutional burden on the union's first amendment rights.

The US Supreme Court recognized that the state was creating a content-based speech regulation. However, the Court upheld §760 by applying precedents dealing with election campaign finance restrictions.

The basic reasoning:

• The union has this money only because the state granted to the union "the power to tax" members of the bargaining unit.
• "As applied to public-sector unions, §760 is not fairly described as a restriction on how the union can spend “its” money; it is a condition placed upon the union’s extraordinary state entitlement to acquire and spend other people’s money."
• The state placed a reasonable, viewpoint-neutral limitation on the use of these funds.
• The state did not impermissibly distort the marketplace of ideas.

"Me too" case at the Supreme Court
June 11, 2007 by Ross Runkel at LawMemo

Ellen Mendelsohn claimed Sprint fired her because of her age during a company-wide reduction in force. She lost a jury trial. Mendelsohn claims that the trial court improperly excluded testimony from other former Sprint employees that they experienced similar discrimination during the same reduction in force.

The 10th Circuit held that because this evidence was excluded, Mendelsohn did not have a full opportunity to present her case to the jury. Therefore, the 10th Circuit ordered a new trial.

The US Supreme Court granted certiorari on June 11, 2007 to review the 10th Circuit's judgment. Sprint/United Management Company v. Mendelsohn. [Details; certiorari briefs]

The Question Presented by the certiorari petition:

This case presents a recurring question of proof in employment discrimination cases: whether a district court must admit "me, too" evidence - testimony, by non-parties, alleging discrimination at the hands of persons who played no role in the adverse employment decision challenged by the plaintiff.

The Tenth Circuit panel majority held that a court commits reversible error by excluding "me, too" evidence. This decision conflicts with those of other circuits. Specifically, four circuits have held "me, too" evidence wholly irrelevant. Five circuits have that "me, too" evidence may be excluded under Federal Rule of Evidence 403. Granting certiorari will resolve the conflict between the circuit courts of appeals on this important question of law.

Oral arguments will be scheduled for October 2007 or later.

Paul Secunda at Workplace Prof Blog is predicting that Sprint will win this one.

ERISA sponsor wins fiduciary argument
June 11, 2007 by Ross Runkel at LawMemo

What are the fiduciary duties when an ERISA plan sponsor terminates the plan?

If a company's union proposes merging the to-be-terminated plan into a pre-existing multi-employer plan, does the sponsor have a fiduciary duty to give this fair consideration? No, according to Beck v. PACE International Union, decided by a unanimous Court on June 11, 2007.

The reason is simple: Merger is not a permissible method of terminating a plan. The ERISA statute, as interpreted by the Pension Benefit Guaranty Corporation, does not permit merger as a method of termination because merger is an alternative to (rather than an example of) plan termination.

My view: I thought it would come out this way, but was not expecting such reliance on the Pension Benefit Guaranty Corporation's interpretation. Just another example of the Court granting strong deference to the interpretation of a federal administrative agency.

Home care workers lose FLSA case
June 11, 2007 by Ross Runkel at LawMemo

Home care workers don't get overtime or minimum wage coverage under the Fair Labor Standards Act (FLSA) due to an old regulation put out by the federal Department of Labor.

Today the US Supreme Court upheld the validity of that regulation. Long Island Care at Home Ltd v. Coke.

The regulation provides an exemption FLSA for workers who are “companionship” workers “employed by an … agency other than the family or household using their services.”

The Court said that the Labor Department's power to administer a congressionally created program necessarily requires the making of rules to fill any “ ‘gap’ ” left, implicitly or explicitly, by Congress. This is the rule established by Chevron USA Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 . When an agency fills such a gap reasonably, and in accordance with other applicable (e.g., procedural) requirements, that result is legally binding.

My view: This case is consistent with the Chevron USA approach. It reinforces the importance of regulations adopted by federal agencies.

The message is that changes have to come from the agencies themselves rather from the courts. And the agencies are in the hands of the executive branch. You know, the President.

EEOC intake questionnaire at the Supreme Court
June 04, 2007 by Ross Runkel at LawMemo

Can an EEOC intake questionnaire be treated as a formal "charge"?

The US Supreme Court granted certiorari on June 4, 2007 in Federal Express Corporation v. Holowecki, which will answer that question. The case will be briefed and argued in October 2007 or later.

In order to file a suit under the Age Discrimination in Employment Act (ADEA), a plaintiff must first file a "charge" with the Equal Employment Opportunity Commission (EEOC).

The 2nd Circuit held that plaintiff Patricia Kennedy satisfied the requirement of filing a "charge."

What she filed was an EEOC Intake Questionnaire plus a four-page verified affidavit detailing her claims of age discrimination. The EEOC did not assign a case number, did not investigate or attempt to resolve the matter, and did not notify the employer.

The 2nd Circuit held that Kennedy's filing (1) contained the information required by the statute and by the EEOC's interpreting regulations, and (2) demonstrated Kennedy's intent to activate the EEOC's administrative process.

The formal Question Presented by the petition for certiorari:

Whether the Second Circuit erred in concluding, contrary to the law of several other circuits and implicating an issue this Court has examined but not yet decided, that an "intake questionnaire" submitted to the Equal Employment Opportunity Commission ("EEOC") may suffice for the charge of discrimination that must be submitted pursuant to the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. ("ASEA"), even in the absence of evidence that the EEOC treated the form as a charge or the employee submitting the questionnaire reasonably believed it constituted a charge.

There is a significant split of authority among the federal circuit courts as to exactly what it means to file an EEOC "charge."

Some Reflections on the Ledbetter Decision
May 29, 2007 by Ross Runkel at LawMemo

"Some Reflections on the Ledbetter Decision" is the title of Paul Secunda's post at Workplace Prof Blog. He argues that today's decision in Ledbetter v. Goodyear Tire & Rubber Co (US Supreme Court 05/29/2007) was wrong.

Professor Secunda has an excellent analytical eye, and has a thoughtful and generous nature, so I enjoy jousting with him.

I thought the decision was correct, and was surprised only by the fact that four Justices didn't think so.

Paul is quite correct when he says that the main question is: "Is pay discrimination a discrete act like a termination or failure to promote or is it more like a cumulative series of individual events like hostile work environment sexual harassment?"

I jump off Paul's wagon when he says pay discrimination decisions are more like hostile environment claims than they are like a discrete act such as a termination or demotion. Quoting Paul: "As with hostile work environment sexual harassment claims, individual pay decisions by themselves do not have the obvious discriminatory intent that discrete acts such as terminations or failures to promote do."

Not so. In the Ledbetter case, a pay decision was made once a year, and then implemented via paychecks. One single decision. In a hostile environment case, the claim by its very nature involves a cumulation of several events that have to be added together before the environment is sufficiently hostile for a claim to arise.

It's the difference between "wham" (pay raise) and "drip, drip, drip" (hostile environment).

I think Paul and the Supreme Court dissenters have shifted the focus to the difficulty of discovery. If everyone else's pay rate is a secret, then of course it is difficult to discove a discriminatory pay increase. But the same is true in many discharge and promotion cases. It often is difficult to discover that one gender or race has been treated differently than another, and then difficult to discover the reason for the different treatment. That has never had any effect on the statute of limitations.

Ledbetter loses pay discrimination case
May 29, 2007 by Ross Runkel at LawMemo

Title VII's statute of limitations begins when a discriminatory pay decision was made and communicated to the employee, and does not start over with each later paycheck.

So says the US Supreme Court in a 5-4 decision announced this morning.
Ledbetter v. Goodyear Tire & Rubber Co (US Supreme Court 05/29/2007)

Lilly Ledbetter claimed her employer paid her a smaller salary than it paid male co-workers because of her sex. Her periodic paychecks were based on annual salary reviews, which she claimed were made with discriminatory intent. A jury awarded damages to Ledbetter based on a series of salary decisions going back 19 years. The 11th Circuit reversed and ordered that Ledbetter's complaint be dismissed. The US Supreme Court affirmed.

The Supreme Court held that Title VII's statute of limitation period (180 or 300 days) begins to run when "each allegedly discriminatory pay decision was made and communicated to her." The Court rejected Ledbetter's argument that each subsequent paycheck was a separate act of discrimination, and her argument that the most recent decision was unlawful because it carried forward intentionally discriminatory disparities from prior years.

My view: This is the correct decision, following the reasoning that I predicted back in November.

Dayton v. Hanson - appeal dismissed
May 27, 2007 by Ross Runkel at LawMemo

As I expected, the Supreme Court dismissed the "appeal" in Office of Senator Mark Dayton v. Hanson on May 21, 2007. So the lower court decision remains undisturbed.

Hanson sued his ex-employer - the Office of Senator Mark Dayton. The Dayton folks argued that the suit had to be halted for fear of violating the constitution's speech or debate clause, but the DC Circuit said things could go forward.

The Office of Senator Mark Dayton filed an appeal to the US Supreme Court. That was cute trick. Most cases get to the Supreme Court by writ of certiorari, and the Court gets to pick and choose which of those cases it will allow in the door. But if a case properly gets to the Court on appeal, then the Court has no choice and must decide it.

Very few cases fit into the "appeal" category, and this was not one of them.

Here is what I predicted, and exactly what came about:

First, there is a jurisdictional question. This an "appeal," rather than a certiorari case. A small number of cases from the circuit courts qualify for "appeal," and this is not one of them. So the appeal will be dismissed for lack of jurisdiction at the Supreme Court level.

Second, the Court can, if it wishes, treat the appeal papers as if they were certiorari papers and then go ahead and grant certiorari - in which case they would have jurisdiction. I expect the Court will not do that. The decision below was not wrong, there is no split of authority among the circuits, and the whole dispute really is not particularly important.

Davenport v WEA developments
May 17, 2007 by Ross Runkel at LawMemo

Washington state law requires unions to get pre-expenditure permission (an "opt in" requirement) from non-members before using their agency shop payments for political purposes.

The US Supreme Court is poised to decide whether the Washington State Supreme Court erred by holding that law unconstitutional as an abridgement of free speech. Davenport v. Washington Education Association.

Now the Washington legislature has amended the statute to be more favorable to the union. So the impact of the US Supreme Court's decision will apply only to expenditures that pre-dated the amendment.

On May 11, 2007 the Washington State Legislature amended the statute by adding one sentence that clarifies the meaning of the word "use." The statutory amendment:

A labor organization does not use agency shop fees when it uses its general treasury funds to make such contributions or expenditures if it has sufficient revenues from sources other than agency shop fees in its general treasury to fund such contributions or expenditures.

All parties have filed supplementary briefs within the past few days. All briefs are here.

BCI Coca-Cola v EEOC dismissed
April 11, 2007 by Ross Runkel at LawMemo

One of the biggest employment law cases of the year will be dismissed from the US Supreme Court's docket by agreement of the parties.

BCI Coca-Cola Bottling v. EEOC [Details]

BCI discharged Peters, who is black, for insubordination. EEOC claimed that BCI discriminated on the basis of race because similarly situated white and Hispanic employees were treated less harshly. The discharge decision was made by a human resources manager based on information provided by Peters' immediate supervisor plus a review of Peters' personnel record. The HR manager did not know Peters was black. The supervisor not only knew Peters’ race but allegedly had a history of treating black employees unfavorably and making disparaging racial remarks in the workplace. The 10th Circuit held that this case should go to trial.

The case was to be argued on April 18. That argument will be cancelled.

Thanks to, and more details from, SCOTUSblog - Job bias case to be dismissed.

Supreme Court cases pending
April 08, 2007 by Ross Runkel at LawMemo

Four employment law cases are pending at the US Supreme Court.

Oral arguments have been held in the first two. Arguments in the second two will be held April 16 and 18.

Here they are, with links to Supreme Court Times's details, blog commentaries, and predictions.

1. Ledbetter v. Goodyear Tire & Rubber Co (Title VII: Statute of limitations for discriminatory decision followed by periodic paychecks) [Blog] Predicted winner: Goodyear
2. Davenport v. Washington Education Association (Fair share union fees; statute requiring "opt in" before union can spend on political matters) [Blog] Predicted winner: Davenport
3. Long Island Care at Home Ltd v. Coke (FLSA: Validity of DOL rule exempting home care workers who are employed by an outside agency) [Blog] Predicted winner: Long Island Care at Home
4. BCI Coca-Cola Bottling Co v. Equal Employment Opportunity Commission (Title VII: Liability when unbiased HR official relies on information from allegedly biased supervisor) [Blog] Predicted winner: EEOC

FLSA at the Supreme Court
March 30, 2007 by Ross Runkel at LawMemo

The Supreme Court will decide the validity of a DOL regulation exempting certain home care workers from the Fair Labor Standards Act (FLSA).

Long Island Care at Home Ltd v. Coke will be argued at the US Supreme Court April 16, 2007. [Details]

Employee: Evelyn Coke. Her job was to provide "companionship services" for individuals who were not able to care for themselves. She worked in private homes.

Employer: Long Island Care at Home Ltd, which hires employees like Coke and assigns them to work in private homes.

Statute: The FLSA has an exemption for employees engaged in "companionship services." If Coke had been paid by the families, then she clearly would not get FLSA coverage.

Regulation adopted by Department of Labor: A 30-year-old regulation says that the statutory exemption applies even if Coke is paid by an outside agency.

2nd Circuit decision: The circuit court held that DOL's regulation cannot be enforced because it was not entitled to deference under the rules of Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), or Skidmore v. Swift & Co., 323 U.S. 134 (1944).

My prediction: Coke will lose; the DOL regulation will be enforced.

The legal issue is whether the courts must defer to the DOL's regulation. The 2nd Circuit held that the regulation is not entitled to deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), because it is an interpretive rather than a legislative regulation.

I think that's legally wrong. The statute left a gap, DOL had authority to fill the gap, and DOL filled it after notice-and-hearing procedures. The 2nd Circuit made a big deal out of where this regulation was positioned - under the heading "Interpretation" - but that misses the point. The real question is whether DOL intended the regulation to govern the conduct of private parties as opposed to being merely guidance for its own internal purposes. This was not a mere guideline for DOL employees; it was intended to regulate private conduct. Therefore, courts must defer to DOL under Chevron even if the regulation is inconsistent with other DOL regulations (which it is).

If I'm wrong on Chevron deference and the Court applies Skidmore v. Swift & Co. instead, then Coke should win because DOL's explanation of the regulation is not persuasive at all.

Whistleblower loses Supreme Court case
March 27, 2007 by Ross Runkel at LawMemo

What did he know, and when did he know it?

James Stone thought his ex employer was cheating the government. So he sued under the False Claims Act, hoping to get a chunk of money for his efforts.

One problem. Stone had to be an "original source" of information provided to the government. The US Supreme Court held (6-2) that he was not. Rockwell International Corp v. United States (US Supreme Court 02/27/2007)

Stone predicted that Rockwell's system for creating solid "pondcrete" blocks from toxic pond sludge and cement would not work because of problems in piping the sludge. However, Rockwell successfully made such blocks and discovered "insolid" ones only after Stone was laid off in 1986. In 1989, Stone filed a qui tam suit under the False Claims Act, which prohibits submitting false or fraudulent payment claims to the United States. In order to bring a qui tam suit, one must be an "original source" - one who "has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action … based on the information."

Stone did not allege that his predicted defect caused the insolid blocks. Intead, he alleged that the pondcrete failed because a new foreman used an insufficient cement-to-sludge ratio.

Stone's knowledge fell short. The only false claims found by the jury involved insolid pondcrete discovered after Stone left his employment. Thus, he did not know that the pondcrete had failed; he predicted it. And his prediction was a failed one, for Stone believed the piping system was defective when, in fact, the pondcrete problem would be caused by a foreman's actions after Stone had left the plant.

Supreme Court will decide ERISA fiduciary case.
January 21, 2007 by Ross Runkel at LawMemo

Do ERISA fiduciary duties apply when a plan administrator decides to terminate a plan? Are there fiduciary duties as to the implementation of the termination?

The US Supreme Court announced January 19 that it will take up Beck v. PACE International Union, and a decision is expected by the end of June. [Details]

When Crown Vantage Inc went into bankruptcy its board of directors served as the administrator of Crown's 18 defined benefit pension plans. The board began considering terminating the plans by purchasing annuities. PACE, representing employees covered by 17 plans, recommended as an alternative that the plans be merged with a pre-existing multi-employer plan.

The board went forward with its termination decision by purchasing annuities for 12 plans.

PACE brought adversary proceedings in bankruptcy court claiming that Crown's board breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by failing to give adequate consideration to the merger proposal.

The bankruptcy court agreed.
Beck, the trustee in bankruptcy, appealed to the district court which affirmed.

The 9th Circuit affirmed, holding that

1. The decision to terminate the plan was a business decision not subject to ERISA fiduciary obligations
2. The implementation of the decision was discretionary in nature and subject to ERISA fiduciary obligations
3. Crown's board breached its fiduciary duty by failing to adequately investigate the proposed merger

The US Supreme Court granted certiorari on January 19 to review the 9th Circuit judgment.

The formal question presented to the Supreme Court:

"Whether a pension plan sponsor’s decision to terminate a plan by purchasing an annuity, rather than to merge the pension plan with another, is a plan sponsor decision not subject to ERISA’s fiduciary obligations."

Ash v. Tyson tries a comeback
January 18, 2007 by Ross Runkel at LawMemo

Less than a year after the US Supreme Court remanded Ash v. Tyson Foods to the 11th Circuit, the case is trying to make a comeback. [Details]

Plaintiffs have filed a petition for certiorari, and the case is on the Court's conference calendar for January 19.

And the petitioners' Reply Brief points to extensive plagiarism (my word) in which the 11th Circuit copied from the defendant's brief, and "reproduces even the typographical and grammatical errors." An Appendix to the Reply Brief sets out a detailed comparison of the brief and the opinion.

A manager called an African-American supervisor "boy," and the 11th Circuit said that could not be evidence of racial animus because the comment was not "black boy." The Supreme Court told the 11th Circuit to be a bit more realistic about the context of the word "boy" rather than categorically excluding it as evidence of pretext in a Title VII case. The 11th Circuit took another look and decided that "boy" in context could not have had any racial significance.

As evidence of pretext in a Title VII case two black employees had evidence that their qualifications were better than the qualifications of the folks that actually got the promotions they sought. The 11th Circuit said this evidence could not be used unless "the disparity in qualifications is so apparent as virtually to jump off the page and slap you in the face." The Supreme Court thought that was "unhelpful and imprecise" and sent the case back for some true legal reasoning. The 11th Circuit then applied the rule that "disparities in qualifications must be of such weight and significance that no reasonable person, in the exercise of impartial judgment, could have chosen the candidate selected over the plaintiff for the job in question."

My view:

The qualifications issue badly needs Supreme Court review. Courts that follow some form of the "slap in the face" test (even when dressed up in fancy legal lingo) have got it backwards. It's for the jury to make any inferences about evidence unless no reasonable juror could make the inference. The 11th Circuit's test selects one type of pretext evidence for special treatment, and that evidence never gets to a jury.

The "boy" question is a serious one. However, I think the 11th Circuit is probably right in saying that the plaintiffs did not produce the right kind of evidence to show that the word was being used in its nasty and insulting sense.

Original 11th Circuit decision.
Supreme Court decision.
Second 11th Circuit decision.
Petition for certiorari.
Petitioners' Reply Brief (containing Appendix)

Union dues and the 1st amendment
January 10, 2007 by Ross Runkel at LawMemo

A union defeat is in the air at the US Supreme Court in Davenport v. Washington Education Association.

A public sector union collects money from nonmembers, as required by a collective bargaining agreement backed up by a state statute.

The state statute says the union can spend the money for political purposes only if the nonmember first "affirmatively authorizes" it.

The union wants to spend the money first, subject to a possible refund later on.

The Supreme Court of the State of Washington ruled in favor of the union, saying the statute requiring nonmembers to "opt in" was a violation of free speech.

I have previously said I thought the sate court was wrong. Davenport v. Washington Education Association - Review granted.

Paul Secunda at Workplace Prof Blog has collected some extracts from today's oral argument at the Supreme Court: Analysis of Oral Transcript in Davenport Supreme Court Union Fees Case. He concludes that there are no more than two Justices who might vote in favor of the union.

Norfolk Southern v. Sorrell
January 10, 2007 by Ross Runkel at LawMemo

In a FELA case the employer's negligence and the employee's contributory negligence are judged by the same causation standard. The Supreme Court said so today.

Norfolk Southern Railway Co. v. Sorrell (US Supreme Court 01/10/2007)

And what is that standard? The Court refused to say.

In an otherwise boring case, the Court spent three pages explaining that Norfolk Railway tried to "smuggle" in a new issue that was not covered by the grant of certiorari.

Norfolk petitioned the Court to decide whether the same standard of negligence must apply to both plaintiffs and defendants. Once at the Court, Norfolk pushed for a decision on what that standard should be.

Unimpressed, the Court said "Norfolk is not only enlarging the question presented, but taking a position on that enlarged question that is contrary to the position it litigated below." Ouch. Don't do that.

The certiorari petition presented a more limited question, and that is the question the Court decided. No more.

Four Justices wrote two concurring opinions expressing the view that the standard is well settled by previous decisions.

My view: Correct decision. As I said elsewhere, "I can't see why any of the Justices would disagree" that the standards are the same. Norfolk Southern Railway Co. v. Sorrell - preview and prediction.

Supreme Court takes on FLSA case
January 06, 2007 by Ross Runkel at LawMemo

Must a court defer to Department of Labor regulations interpreting the Fair Labor Standards Act (FLSA) as excluding domestic employees employed by a home care agency?

This is the second time the Supreme Court has taken a look at this case.

The case: Long Island Care at Home Ltd v. Coke [Details, decisions, etc.] Certiorari granted January 5, 2007.

Coke sued her employer under the Fair Labor Standards Act (FLSA) claiming entitlement to minimum wage and overtime. The trial court granted the employer's motion for judgment on the pleadings. The 2nd Circuit reversed in part; the US Supreme Court remanded for reconsideration in light of Department of Labor's December 2005 Wage and Hour Advisory Memorandum; the 2nd Circuit adhered to its original decision. The US Supreme Court granted certiorari to review the 10th Circuit decision.

FLSA Section 213(a)(15) exempts employees engaged in "babysitting services" and "companionship services." The exemption applies to "any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary [of Labor]) ...." Department of Labor (DOL) regulation 29 CFR Section 552.109(a) applies the exemption to "[e]mployees who are engaged in providing companionship services, as defined in Section 552.6, and who are employed by an employer or agency other than the family or household using their services."

The 2nd Circuit held that this regulation is not entitled to deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), because it is an interpretive rather than a legislative regulation. The 2nd Circuit also held that this regulation is not entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), because it was inconsistent with Congress' purpose and with other regulations and with previous DOL positions, and insufficiently explained by DOL.

The formal Questions Presented in the Supreme Court are:

1. Whether the Second Circuit erred in refusing to give deference under Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), to a thirty-year-old Department of Labor regulation - a regulation that has twice been upheld by the Tenth Circuit - on the ground that, even though it was promulgated under express grants of legislative authority and after full notice-and-comment rulemaking, the regulation was contained in a subpart headed “Interpretations.”

2. Whether, in holding that a longstanding Department of Labor regulation was not persuasive and thus undeserving of any deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), the Second Circuit erred by failing to address the governing provisions of the Fair Labor Standards Act and by declining to give any weight to the Department’s interpretation of its own regulations.

Supreme Court takes up "cat's paw" case
January 06, 2007 by Ross Runkel at LawMemo

It's called "cat's paw." A human resources manager decides to fire an employee she doesn't know, based mainly on information from a supervisor. The supervisor has a history of racism. So the question is whether the employer is insulated from liability because the manager didn't know the employee was black.

The case: BCI Coca-Cola Bottling Co v. EEOC, certiorari granted January 5, 2007. [Details, case below, etc.]

EEOC claimed that BCI discharged Stephen Peters in violation of Title VII. The trial court granted summary judgment for BCI; the 10th Circuit reversed. The US Supreme Court granted certiorari to review the 10th Circuit decision.

BCI discharged Peters, who is black, for insubordination. EEOC claimed that BCI discriminated on the basis of race because similarly situated white and Hispanic employees were treated less harshly. The discharge decision was made by a human resources manager based on information provided by Peters' immediate supervisor plus a review of Peters' personnel record. The HR manager did not know Peters was black. The supervisor not only knew Peters’ race but allegedly had a history of treating black employees unfavorably and making disparaging racial remarks in the workplace.

The formal Question Presented in the Supreme Court is:

"Under what circumstances is an employer liable under federal anti-discrimination laws based on a subordinate’s discriminatory animus, where the person(s) who actually made the adverse employment decision admittedly harbored no discriminatory motive toward the impacted employee."

Paycheck discrimination and the Supreme Court
November 27, 2006 by Ross Runkel at LawMemo

Ledbetter v. Goodyear Tire & Rubber Co is being argued at the US Supreme Court today. [Details, briefs]

Lilly Ledbetter retired after 19 years at the Goodyear company. Then she claimed her employer paid her a smaller salary than it paid male co-workers because of her sex. Her periodic paychecks were based on annual salary reviews.

A jury awarded damages to Ledbetter based on a series of salary decisions going back 19 years.
The 11th Circuit reversed and ordered that Ledbetter's complaint be dismissed.

The problem was with the statute of limitations, which requires an employee to file an EEOC charge within 180 days after an alleged Title VII violation "occurred."

The 11th Circuit held that her claim was time barred because she could not prove intentional discrimination in either (1) the one decision during the limitations period or (2) the last decision preceding the limitation period.

The 11th Circuit said: "We conclude that in the search for an improperly motivated, affirmative decision directly affecting an employee's pay, the employee may reach outside the limitations period created by her EEOC charge no further than the last such decision immediately preceding the start of the limitations period. We do not hold that an employee may reach back even that far; what we hold is that she may reach no further."

My view: It's hard to see how Ledbetter can win this one.

The case really turns on when a violation occurs. Typically this is when the employer has made a decision and then acted on that decision. Once a violation occurs, then the employee has 180 days to file.

I think there are three logical choices for how the Title VII statute of limitations works in the case of paychecks:

1. A violation occurs when the employer makes a decision, and if the employee does not file a charge within 180 days of the decision then no future claim can be based on that decision. That's Goodyear's view.
2. A violation occurs with each paycheck, and the employee can claim that the amount of each paycheck was based on discriminatory decisions made years ago. That's Ledbetter's view.
3. A violation occurs when the employer makes a decision and the decision is communicated to the employee, typically by way of the next paycheck. This is the view advanced by the United States in its amicus brief.

#3 is the way the statute of limitations works in cases involving discharge, failure to hire, failure to promote. I think it works the same way here. Ledbetter says there should be a different approach for paychecks. If so, the statute needs to be reworded.

Ledbetter v. Goodyear brief for petitioner
September 07, 2006 by Ross Runkel at LawMemo

The petitioner's brief was filed in the US Supreme Court today in Ledbetter v. Goodyear Tire & Rubber.

The issue is "Whether and under what circumstances a plaintiff may bring an action under Title VII of the Civil Rights Act of 1964 alleging illegal pay discrimination when the disparate pay is received during the statutory limitations period, but is the result of intentionally discriminatory pay decisions that occurred outside the limitations period."

Petitioner's Brief
Joint Appendix

Ledbetter claimed her employer paid her a smaller salary than it paid male co-workers because of her sex. Her periodic paychecks were based on annual salary reviews. A jury awarded damages to Ledbetter based on a series of salary decisions going back 19 years. The 11th Circuit reversed and ordered that Ledbetter's complaint be dismissed.

The 11th Circuit held that her claim was time barred because she could not prove intentional discrimination in either (1) the one decision during the limitations period or (2) the last decision preceding the limitation period.

The 11th Circuit said: "We conclude that in the search for an improperly motivated, affirmative decision directly affecting an employee's pay, the employee may reach outside the limitations period created by her EEOC charge no further than the last such decision immediately preceding the start of the limitations period. We do not hold that an employee may reach back even that far; what we hold is that she may reach no further.

The US Supreme Court will review the 11th Circuit decision during its 2006 Term which begins in October.

Thanks to SCOTUSblog for the brief.

US Supreme Court Docket # 06-1
July 09, 2006 by Ross Runkel at LawMemo

The first US Supreme Court certiorari petition of the 2006-2007 session is an employment law case: Averill Park Central School District v. Cioffi, Docket number 06-1.

I don't see the Court being interested in this one. They decide only about 75 cases each year, out of thousands of petitions, and there needs to be a good reason to pick one case out of the many.

The case involves a public school teacher (and athletic director) who spoke out about a serious hazing incident to his employer - the school board. He claims his job was abolished because of this, so he sued claiming retaliation in violation of the 1st amendment.

The 2nd Circuit looked at the case (Cioffi v. Averill Park Central School District (2nd Cir 04/04/2006)) and concluded that the teacher was speaking out on a matter of public concern, and that he had 1st amendment protection. In passing, the 2nd Circuit distinguished the case from Garcetti v. Ceballos (US Supreme Court 05/30/2006), even though Garcetti had not yet been decided.

The Supreme Court might summarily remand for reconsideration in light of the Garcetti decision, but don't expect to see a full-blown decision on this one.

Supreme Court roundup
July 05, 2006 by Ross Runkel at LawMemo

The US Supreme Court is in recess. Here are the Court's employment law cases for the 2005-2006 Term:

*** Cases Decided ***

• Retaliation - "Could well dissuade a reasonable worker" definition of retaliation.

• Title VII - 15-employee threshold is not jurisdictional.

• Proof of bias - "Boy" can be probative of racial bias.

• Comparing qualifications - "Slap you in the face" test is rejected.

• FLSA - Pre-shift waiting time not compensable, all other time is compensable.

• 1st amendment - Statements made pursuant to employee's official duties are not protected.

• 1st amendment - Schools cannot exclude military recruiters without losing federal funds

• ERISA - ERISA Plan can get reimbursement after participant recovers a settlement from a third-party.

• Jurisdiction - No federal court jurisdiction for health plan's reimbursement case (5-4).

• 42 USC Section 1981 - Individual who was not a contracting party has no standing to sue under 42 USC 1981.

• Bankruptcy - Workers comp premiums have no bankruptcy priority (6-3).

• RICO - Employee v. employer RICO case sent back to 11th Circuit.

• Federal Employees - Civil Service Reform Act jurisdiction case sent back to the 9th Circuit.

*** Case Pending ***

• Title VII statute of limitations - How does Title VII's 180-days statute of limitations apply to periodic paychecks alleged to be discriminatory?

*** Cases Decided ***

Retaliation - "Could well dissuade a reasonable worker" definition of retaliation.

Burlington Northern v. White (06/22/2006)
http://www.lawmemo.com/docs/us/white/

The issue was whether two employer actions were of the type forbidden by Title VII's anti-retaliation section. (a) White was working as a fork lift operator, and the employer changed her duties to standard track laborer. (b) Later, the employer suspended White without pay for 37 days. After she filed a grievance, the employer reinstated her and gave her full back pay. The Court held: (1) Title VII's anti-retaliation provision [Section 704] "does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace." (2) The anti-retaliation provision "covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. In the present context that means that the employer’s actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination."

Title VII - 15-employee threshold is not jurisdictional.

Arbaugh v. Y & H Corp (02/22/2006)
http://www.lawmemo.com/docs/us/arbaugh/

Title VII defines an "employer" as an employer that has 15 or more employees. The Court held that Title VII's 15-employee threshold does not determine federal court subject matter jurisdiction. It is a matter going to the merits of a Title VII claim, so it must be raised by the defendant no later than the end of the trial.

Proof of bias - "Boy" can be probative of racial bias.

Comparing qualifications - "Slap you in the face" test is rejected.

Ash v. Tyson Foods (02/21/2006)
http://www.lawmemo.com/docs/us/ash/

Two African-Americans claimed they were denied promotions because of their race. (1) There was evidence that the plant manager (the decisionmaker) referred to each of the employees as "boy." The 11th Circuit held that use of "boy" alone (without adding "white" or "black") was not evidence of racial animus. The Supreme Court said this was error because "The speaker's meaning may depend on various factors including context, inflection, tone of voice, local custom, and historical usage." (2) The employees submitted evidence that their qualifications were better than the two whites that were promoted. This evidence was designed to prove pretext. The 11th Circuit's rule is: "Pretext can be established through comparing qualifications only when 'the disparity in qualifications is so apparent as virtually to jump off the page and slap you in the face.'" The Supreme Court said that this visual image "is unhelpful and imprecise." The Court rejected the 11th Circuit's standard without suggesting what the proper standard is.

FLSA - Pre-shift waiting time not compensable, all other time is compensable.

IBP, Inc v. Alvarez; Tum v. Barber Foods (11/08/2005)
http://www.lawmemo.com/docs/us/ibp/

In the meat cutting industry employees must wear special protective clothing. The daily pattern is that employees (1) wait to pick up and don the clothing, (2) don the clothing, (3) walk to the individual work station, (4) work, (5) walk back to where they started, (6) wait to doff the clothing, (7) doff the clothing. The issue was whether the walking and waiting time was compensable time under the Fair Labor Standards Act (FLSA) and the Portal-to Portal Act. The Court held that the pre-shift waiting-to-don time was not compensable, and that all other time was compensable.

1st amendment - Statements made pursuant to employee's official duties are not protected.

Garcetti v. Ceballos (05/30/2006) (5-4)
http://www.lawmemo.com/docs/us/garcetti/

Ceballos, a deputy DA, sued his employer claiming retaliation in violation of the 1st amendment. Ceballos wrote a memorandum to his supervisor in which he claimed that a deputy sheriff had lied in an application for a search warrant. Ceballos claimed that he was demoted in retaliation for this. The Court held that Ceballos was not speaking "as a citizen," and his statement has no constitutional protection. "The controlling factor in Ceballos' case is that his expressions were made pursuant to his duties." "We hold that when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline."

1st amendment - Schools cannot exclude military recruiters without losing federal funds

Rumsfeld v. Forum for Academic and Institutional Rights (03/06/2006)
http://www.lawmemo.com/docs/us/forum/

The Solomon Amendment requires that colleges and universities that receive federal funds must treat military recruiters no differently than they treat other recruiters. Most law schools have policies against discrimination on the basis of sexual preference, and many prohibit military recruiters because of the military's position on gay and lesbian personnel. In response, the government threatens to cut off federal funds for the entire university of which the law school is part. The Court held that the Solomon Amendment does not violate the 1st amendment.

ERISA - ERISA Plan can get reimbursement after participant recovers a settlement from a third-party.

Sereboff v. Mid Atlantic Medical Services (05/15/2006)
http://www.lawmemo.com/docs/us/sereboff/

After an ERISA Plan paid about $75,000 to the Sereboffs to cover medical expenses connected to accident-related injuries, the Sereboffs recovered $750,000 in a settlement with a third-party tortfeasor, and placed those funds into an investment account. The Plan sued the Sereboffs to get reimbursed for the benefits it had paid. The Plan sued under ERISA Section 502(a)(3) which allows a Plan to recover "other equitable relief." The Court held that the Plan could recover because there was a constructive trust or equitable lien on a specifically identifiable fund, and the type of relief sought by the plan administrator was "equitable" in nature. 

Jurisdiction - No federal court jurisdiction for health plan's reimbursement case (5-4).

Empire HealthChoice v. McVeigh (06/15/2006)
http://www.lawmemo.com/docs/us/empire/

Under the Federal Employees Health Benefits Act, the US Office of Personnel Management (OPM) negotiates health benefit plans for federal employees. OPM contracts with Blue Cross to provide a nationwide health plan, and Empire administers the plan in New York. McVeigh's decedent was injured and received medical benefits under the plan, and later McVeigh recovered a settlement against third parties who allegedly caused the injuries. Empire sued McVeigh in federal court seeking reimbursement, and asserting jurisdiction under 28 USC Section 1331 (actions arising under the laws of the United States). The Court held that federal courts do not have jurisdiction under Section 1331. Empire's claim was based on provisions in the contract between OPM and Blue Cross, and is governed by state law. Empire's claim is not a creature of federal law.

42 USC Section 1981 - Individual who was not a contracting party has no standing to sue under 42 USC 1981.

Domino's Pizza v. McDonald (02/22/2006)
http://www.lawmemo.com/docs/us/dominos/

McDonald's wholly-owned corporation entered into contracts with Domino's, and McDonald claimed that Domino's terminated its contracts because of McDonald's race. The suit was brought under 42 USC Section 1981. The Court held that a plaintiff who lacks any rights under an existing contractual relationship with the defendant, and who has not been prevented from entering into such a contractual relationship, cannot bring suit under 42 USC Section 1981.

Bankruptcy - Workers comp premiums have no bankruptcy priority (6-3).

Howard Delivery Service v. Zurich American Ins (06/15/2006)
http://www.law.cornell.edu/supct/html/05-128.ZS.html

An employer went bankrupt, owing unpaid workers compensation insurance premiums to its insurer. The Court held that workers compensation premiums were not unpaid "contributions to an employee benefit plan" under 11 USC Section 507(a)(4), and thus were not entitled to a priority in bankruptcy.

RICO - Employee v. employer RICO case sent back to 11th Circuit.

Mohawk Industries v. Williams (06/05/2006)
http://www.lawmemo.com/docs/us/mohawk/

The Court did not decide this case, and remanded it to the 11th Circuit for reconsideration in light of Anza v. Ideal Steel Supply Corp (US Supreme Court 06/05/2006) - http://supct.law.cornell.edu/supct/html/04-433.ZS.html.

Federal Employees - Civil Service Reform Act jurisdiction case sent back to the 9th Circuit.

Whitman v. Department of Transportation (06/05/2006)
http://www.lawmemo.com/docs/us/whitman/

The Supreme Court said that the 9th Circuit was correct in saying that the Civil Service Reform Act does not confer federal court jurisdiction. However, 28 USC Section 1331 confers jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." Therefore, the question is not whether the Civil Service Reform Act confers jurisdiction, but whether it removes the jurisdiction granted by Section 1331. This, in turn, may require findings as to whether Whitman's allegations state a "prohibited personnel practice." The Court remanded for consideration of this issue, and suggested several other issues that may be addressed on remand.

*** Case Pending ***

Title VII statute of limitations - How does Title VII's 180-days statute of limitations apply to periodic paychecks alleged to be discriminatory?

Ledbetter v. Goodyear Tire & Rubber (No. 05-1074)
Decision below: Ledbetter v. Goodyear Tire & Rubber (11th Cir 08/23/2005)
http://caselaw.lp.findlaw.com/data2/circs/11th/0315264p.pdf

Ledbetter claimed her employer paid her a smaller salary than it paid male co-workers because of her sex. Her periodic paychecks were based on annual salary reviews over a period of several years. The 11th Circuit held that her claim was time barred because she could not prove intentional discrimination in the one decision during the limitations period or the last decision preceding the limitation period. The US Supreme Court will review the 11th Circuit decision during its 2006 Term which begins in October.

Burlington Northern v. White - Title VII retaliation - analysis
June 22, 2006 by Ross Runkel at LawMemo

What kind of employer actions can be retaliation under Title VII? Burlington Northern v. White (US Supreme Court 06/22/2006) gives these answers.

Basic rule:

"We conclude that the anti-retaliation provision [Section 704] does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace. We also conclude that the provision covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. In the present context that means that the employer's actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination."

• No link to employment is needed.

  Unlike Title VII's basic anti-discrimination section (703), the anti-retaliation section (704) has different language and a different purpose. Section 703 prohibits discrimination with respect to conditions of employment, but Section 704 has "no such limiting words." Section 703 prevents injuries based on who people are (based on sex, race, etc.), while Section 704 is based on what people do (e.g., filing an EEOC charge or complaining to management). Limiting Section 704 retaliation to employer actions that are work-related or employment-related would not achieve Section 704's purpose.

  Examples:

  • Rochon v. Gonzales, 438 F. 3d 1211 (DC Cir 2006). Retaliation against FBI agent took the form of the FBI's refusal, contrary to policy, to investigate a death threat against the agent.
  • Berry v. Stevinson Chevrolet, 74 F. 3d 980 (10th Cir 1996). Employer filed false criminal charges against a former employee.
• Material adverse action. In order to "separate significant from trivial harms," the Court requires the employee to show that the employer's action was "materially adverse." This will exclude "petty slights or minor annoyances."
• Reaction of a reasonable employee. The Court adopted an objective standard, so an individual employee's "unusual subjective feelings" will not be relevant. The focus is on the materiality of the employer's action and "the perspective of a reasonable person in the plaintiff's position."

  Examples:

  • Changed job duties. In the Burlington case, the employer changed the employee's duties, however the duties were still within her job description. The job description did not matter. What mattered was that the new job was dirtier, harder, less prestigious, and perceived by other employees as being worse.
  • Temporary suspension. In the Burlington case, the employee was suspended for 37 days, and then reinstated with back pay. The Court said a reasonable employee would find a month without a paycheck to be a "serious hardship."
  • Schedule change. Might not matter to many employees, but "may matter enormously to a young mother with school age children."
  • Refusal to invite to lunch. Usually trivial, but exclusion from a weekly training lunch might well deter a reasonable employee from complaining.

My view: This Court understands how to read a statute.

Burlington Northern v. White - Title VII retaliation has broad definition
June 22, 2006 by Ross Runkel at LawMemo

The US Supreme Court has adopted a broad definition of retaliatory actions under Title VII, interpreting Section 704 as applying to actions that "could well dissuade a reasonable worker from making or supporting a charge of discrimination."

The Court said:

We conclude that the anti-retaliation provision [Section 704] does not confine the actions and harms it forbids to those that are related to employment or occur at the workplace. We also conclude that the provision covers those (and only those) employer actions that would have been materially adverse to a reasonable employee or job applicant. In the present context that means that the employer’s actions must be harmful to the point that they could well dissuade a reasonable worker from making or supporting a charge of discrimination.

Burlington Northern v. White (US Supreme Court 06/22/2006).

Workers compensation is not an employee benefit plan
June 15, 2006 by Ross Runkel at LawMemo

When Howard Delivery Service went bankrupt, it owed Zurich American Insurance $400,000 on account of unpaid workers compensation insurance premiums.

Zurich filed a creditor's claim, asserting that the premiums were entitled to priority on the ground that they were unpaid "contributions to an employee benefit plan" under 11 USC Section 507(a)(4).

The US Supreme Court held (6-3) that workers compensation premiums fall outside the priority allowed by Section 507(a)(4). Howard Delivery Service v. Zurich American Ins (US Supreme Court 06/15/2006)

Employment Law Memo notified its readers about this case on 06/15/2006, shortly after it was decided.

The Supreme Court said such premiums are more appropriately bracketed with liability insurance premiums (e.g., motor vehicle, fire and theft) than with contributions made for fringe benefits that complete a pay package (e.g., pension plans, group health, life, disability).

Interesting logic: The primary reason is that workers compensation regimes provide something for employees (payments for injuries) and also something for employers (avoiding tort litigation and large judgments).

The dissent's logic: workers compensation insurance qualifies as an "employee benefit plan" because it clearly provides benefits to employees.

Interesting combination of Justices:

Majority: Ginsburg, Roberts, Stevens, Scalia, Thomas, Breyer.
Dissent: Kennedy, Souter, Alito.

Supreme Court picks its own issues
June 08, 2006 by Ross Runkel at LawMemo

Did you notice that the US Supreme Court decided two employment law cases on Monday by making them turn on an issue that the litigants did not present to the Court?

Whitman v. Department of Transportation (US Supreme Court 06/05/2006):

The litigants thought the issue was whether the Civil Service Reform Act confers federal court jurisdiction. That was the issue decided by the 9th Circuit, and that's what the parties briefed and argued. After the arguments, the Court ordered the parties to file supplemental briefs. When the case was decided, the Court said that everybody got the issue backwards (my term). The question was not whether the Civil Service Reform Act confers jurisdiction, but whether it removes the jurisdiction granted by 28 USC Section 1331.

Further, the Court indicated that this issue depended in part on whether the employee's allegations state a "prohibited personnel practice." Although both parties had already agreed that it did, the Court said it would not allow the parties to agree to jurisdiction, so that issue now has to be resolved afresh.

Mohawk Industries v. Williams (US Supreme Court 06/05/2006):

The litigants focused on whether a corporation could be an "association-in-fact" for purposes of civil RICO. I should make clear that Williams' attorney complained to the Supreme Court that this issue had not been raised properly, so I was not surprised that the Court dismissed the writ of certiorari "as improvidently granted."

The surprise was that the Court then remanded the case for reconsideration in light of Anza v. Ideal Steel Supply Corp (US Supreme Court 06/05/2006). That was a surprise because Anza raised the question of whether the defendant's substantive statutory violation was the proximate cause of the plaintiff's injury. Proximate cause wasn't briefed at all by the parties in the Mohawk case.

How to explain this?

My theory is that the Court is searching for ways to decide cases in such a way as to maximize the probability of getting a unanimous or near-unanimous vote.

I applaud the Court for its goal. After all, the Court issued a unanimous opinion in an abortion case in January. Ayotte v. Planned Parenthood (US Supreme Court 01/18/2006).

I thought the Court was right on the money in Whitman, because the litigants lost sight of how the basic jurisdiction statute works.

I thought the Court acted in a bizarre manner in Mohawk when it sent the case back to decide an issue that wasn't even on the horizon.

Mohawk Industries v. Williams - Wow, what happened?
June 05, 2006 by Ross Runkel at LawMemo

In US Supreme Court arguments in April, the big issue was whether a corporation (Mohawk, the employer) could be part of a RICO "enterprise" known as an association-in-fact enterprise.

Today the Court announced that it would not decide that question. Mohawk Industries v. Williams (US Supreme Court 06/05/2006).

Instead, the Court sent the case back to the 11th Circuit for reconsideration in light of Anza v. Ideal Steel Supply Corp (US Supreme Court 06/05/2006).

In the Mohawk case, Williams and other hourly employees alleged that their employer's violation of the immigration laws allowed the employer to depress wages for its legal hourly employees, in violation of the federal RICO statute.

In the Anza case, the Supreme Court held that a RICO plaintiff alleging mail fraud must prove that the alleged violation was the proximate cause of the plaintiff's injury, which requires "some direct relation between the injury asserted and the injurious conduct alleged."

Ideal Steel Supply Corp and National Steel Supply were competitors. Ideal claimed that National failed to charge sales tax to cash-paying customers and filed false tax returns by mail, creating a chain of events that caused a decrease in Ideal's business and market share. The Supreme Court held that a RICO plaintiff alleging mail fraud must prove that the alleged violation was the proximate cause of the plaintiff's injury, which requires "some direct relation between the injury asserted and the injurious conduct alleged."

If the Anza case is applied to the facts of the Mohawk case, it would seem that plaintiffs have to prove that Mohawk's alleged violation of the immigration laws was the proximate cause of a reduction in wages for Mohawk's employees.

OK, that's fine, because the RICO statute clearly requires that.

What I fail to understand is why the Supreme Court remanded on that specific issue, when the arguments (both oral arguments and in briefs) did not deal with it.

I think I see why the Court did not want to decide the issue of whether a corporation can be part of an "association-in-fact" enterprise. After all, it wasn't argued in the 11th Circuit, and was virtually conceded in the trial court. The Supreme Court doesn't like to spend its time resolving such issues.

OK, lawyers, dust off your "proximate cause" notes from law school.

Garcetti v. Ceballos - Employee speech loses constitutional protection (5-4)
May 30, 2006 by Ross Runkel at LawMemo

No surprise as to the outcome. Dramatic statement as to the constitutional rule.

In Garcetti v. Ceballos (US Supreme Court 05/30/2006) the Court said:

We hold that when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.

Ceballos, a deputy DA, sued his employer claiming retaliation in violation of the 1st amendment.

Ceballos wrote a memorandum to his supervisor in which he claimed that a deputy sheriff had lied in an application for a search warrant. Ceballos claimed that he was demoted in retaliation for this.

The US Supreme Court held that Ceballos was not speaking "as a citizen," and his statement has no constitutional protection. None at all.

Because Ceballos' speech had no constitutional protection, there was no need to apply the balancing test used in Pickering v. Board of Educ., 391 US 563 (1968) and Connick v. Myers, 461 US 138 (1983).

Employment Law Memo notified its readers about this case shortly after it was decided on 05/30/2006.

Four Justices wrote three DISSENTING opinions arguing that Ceballos' speech should not be categorically excluded from 1st amendment protection, and that a balancing test should be applied.

Other comments on the Garcetti v. Ceballos case:

• Workplace Prof Blog: Garcetti v. Ceballos Decided; Public Employee Free Speech Takes a Hit
• SCOTUSblog: Today's Opinion and Order List
• New York Times: Justices, 5-4, Limit Whistleblower Suits

Whitman v. Department of Transportation - more briefs
May 22, 2006 by Ross Runkel at LawMemo

Waiting for a decision in Whitman v. Department of Transportation? Keep waiting. The US Supreme Court heard arguments on December 5, then asked the parties to file supplemental briefs "addressing the applicability of Darby v. Cisneros, 509 U.S. 137 (1993)."

Here are the briefs, filed May 15, 2006:

• For Petitioner Whitman
• For Respondent Dept of Transportation

[Previous briefs]

Whitman's federal court suit claimed that the Federal Aviation Administration (his employer) tested him for substance abuse disproportionately, and thus violated the first amendment and the federal statute on mandatory drug testing. The 9th Circuit held that federal courts had no subject matter jurisdiction, and the US Supreme Court is reviewing that decision.

The 9th Circuit reasoned that the FAA Management System, including certain provisions of the Civil Service Reform Act (CSRA), governs FAA employees' employment rights and generally does not allow federal court suits. The CSRA requires collective bargaining agreements to include procedures for resolving "grievances," and defines "grievance" broadly to include Whitman's claims. Before 1994 CSRA provided that the collectively bargained procedures "shall be the exclusive procedures for resolving grievances."

The 1994 amendment provided that the collectively bargained procedures "shall be the exclusive administrative procedures for resolving grievances." [emphasis added.]

Although the Federal and 11th Circuits have held that the 1994 amendment established an employee's right to seek a judicial remedy, the 9th Circuit said those cases are wrong because the 1994 amendment "does not constitute an express grant of federal court jurisdiction."

ERISA - Sereboff, sanity, and the Supreme Court
May 21, 2006 by Ross Runkel at LawMemo

In a 9-0 opinion, the US Supreme Court breathed a bit of sanity into ERISA. Sereboff v. Mid-Atlantic Medical Services (05/15/2006). The case also says a lot about Chief Justice Roberts.

The Sereboff fact were simple:

• The Sereboffs were insured under Mid-Atlantic's ERISA-regulated medical plan. The Sereboffs were involved in an auto accident, and the plan paid them about $75,000 to cover medical expenses. The Sereboffs recovered $750,000 from the third party that caused the accident.
• The medical plan provided that in such circumstances the insured (the Sereboffs) had to pay back the amount the plan had paid on account of the injuries. Mid-Atlantic sued to recover the money.

The legal issue was whether the relief requested Mid-Atlantic was "equitable" relief under Section 502(a)(3)(B) of ERISA's civil action provision.

The Court side-stepped a lot of arcane law dealing with distinctions between "law" and "equity." The Court viewed the case as involving an "equitable lien" based on an agreement, and that lien was on specifically identifiable funds that were under the Sereboffs' control. Therefore, the relief sought was "equitable," and the Sereboffs have to pay back the $75,000.

This opinion is a tribute to Chief Justice Roberts, who wrote it. It was unanimous. The reasoning was simple. The opinion was short - 11 pages, two footnotes.

Two good extended discussions:

Workplace Prof Blog - Sereboff and the Future of ERISA Remedies

SCOTUSblog - Monday’s Decision in Sereboff v. Mid-Atlantic Medical Services

Whitman v. Dept of Transportation - Supreme Court requests more briefs
May 02, 2006 by Ross Runkel at LawMemo

Whitman v. Department of Transportation (US Supreme Court Docket No. 04-1131) raises the issue of whether the Civil Service Reform Act confers federal court jurisdiction. The case was argued on December 5, 2005, and today the Supreme Court asked counsel to file more briefs.

Here's the Court's order:

Counsel are directed to file supplemental briefs addressing the applicability of Darby v. Cisneros, 509 U.S. 137 (1993), to this case. The briefs, not to exceed 15 pages, are to be filed with the Clerk and served upon opposing counsel on or before 3 p.m., Monday, May 15, 2006.

About the case:

Whitman sued in federal court claiming his employer, the Federal Aviation Administration, disproportionately tested him for substance abuse in violation of the first amendment and the federal statute on mandatory drug testing. The trial court held it had no subject matter jurisdiction; the 9th Circuit affirmed; the US Supreme Court granted certiorari to review the 9th Circuit decision.

Decision below: Whitman v. Department of Transportation (9th Cir 08/30/2004).

The 9th Circuit reasoned that the FAA Management System, including certain provisions of the Civil Service Reform Act (CSRA), governs FAA employees' employment rights and generally does not allow federal court suits. The CSRA requires collective bargaining agreements to include procedures for resolving "grievances," and defines "grievance" broadly to include Whitman's claims.

Before 1994 CSRA provided that the collectively bargained procedures "shall be the exclusive procedures for resolving grievances." The 1994 amendment provided that the collectively bargained procedures "shall be the exclusive administrative procedures for resolving grievances."

Although the Federal and 11th Circuits have held that the 1994 amendment established an employee's right to seek a judicial remedy, the 9th Circuit said those cases are wrong because the 1994 amendment "does not constitute an express grant of federal court jurisdiction."

Mohawk v. Williams - more on oral argument
April 27, 2006 by Ross Runkel at LawMemo

SCOTUSblog has quite a nice recap of the oral arguments on April 26, written by Kevin Russell, a partner at Goldstein & Howe.

Today's Argument in Mohawk Industries, Inc. v. Williams

Here's a tiny portion:

Based on argument, it was difficult to tell where a majority of the Court will come out on the RICO issues presented by this case -- namely, whether a corporation can ever be part of an association-in-fact enterprise and, if so, whether plaintiffs had alleged enough here to establish that the defendant corporation was participating in an enterprise with its outside recruiters when it hired illegal workers, rather than simply conducting its own affairs.

My previous comments on this case:

Mohawk Industries v. Williams oral argument

Mohawk v. Williams: RICO meets employment law

Mohawk Industries v. Williams oral argument
April 26, 2006 by Ross Runkel at LawMemo

Mohawk Industries v. Williams pits employees against employer in a civil RICO case. I wrote an article about this case - "Does RICO apply when a corporation allegedly contracts with a recruiter to obtain illegal employees?" for the ABA's print publication Supreme Court Preview. After today's US Supreme Court argument I've scoured the press for hints on the outcome.

The case: Employees claim that Mohawk violated the Racketeer Influenced and Corrupt Organizations (RICO) Act by forming an association with outside employee recruiters with the purpose of violating the immigration statutes.

Main issues:

• Can a corporation (Mohawk) be part of a separate RICO enterprise known as an "association-in-fact" or is the concept of association-in-fact limited to associations of individuals (that is, humans)?

  This hinges on interpreting Section 1961(4):

  "enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity; [emphasis added]

• Did the employees properly plead that Mohawk was conducting the affairs of the separate enterprise, as opposed to conducting its own affairs?

The action at the Supreme Court:

On the issue of a corporation being part of an association-in-fact:

• Justices Ginsburg and Scalia: Suggested the Court might not consider this issue because Mohawk did not argue it in the 11th Circuit proceedings.
• Justice Alito: Pressed the big question. Why does the definition of "enterprise" use the word "includes" instead of "means"?
• Justice Scalia: Suggested that the word "union" modifies the word "individuals," which clearly excludes corporations.

On the issue of Mohawk conducting its own affairs:

• Justice Breyer: Wonders whether it is wise to "RICO-ize vast amounts of commercial activities."
• Chief Justice Roberts: Thinks the employees could have easily gone after Mohawk on a theory of conspiracy rather than RICO.
• Justice Scalia: Doesn't want to delve into the minds of corporations, figuring out whether they are conducting their own affairs or the affairs of a separate enterprise.
• Justice Souter: Providing employees with false documents is not a normal activity of a corporation.

"Adverse employment action" argument in Supreme Court
April 11, 2006 by Ross Runkel at LawMemo

In the most important employment law case of the year, the US Supreme Court hears arguments in Burlington Northern v. White on Monday, April 17. Issue: What's an adverse employment action in a retaliation case?

I've looked at the briefs, and we're going to see a great argument. The issue is of extraordinary importance. Often an employee loses on the merits of a claim for sex discrimination or race discrimination, but can win on a claim that the employer retaliated for filing an EEOC charge or for complaining.

In a regular discrimination suit or a harassment suit brought under Title VII Section 703, it's clear that the employee must prove that the employer took an action that has an effect on terms and conditions of employment - firing, transfer to a job with significantly different responsibilities, significant change in benefits, etc.

Retaliation suits come under Section 704. Is the standard different? We'll see.

History of Burlington Northern v. White: A jury found in White's favor on her claim of retaliation for filing an EEOC charge. The en banc 6th Circuit affirmed the verdict. The issue was whether two actions were adverse employment actions under Title VII Section 704.

• (1) White was working as a fork lift operator, and the employer transferred her to work as a standard track laborer.
• (2) Later, the employer suspended White without pay for 37 days. After she filed a grievance, the employer reinstated her and gave her full back pay.

Lower courts are in disarray, adopting various standards for deciding whether there has bee an adverse employment action. There are main three standards:

• Ultimate employment decision. It has to be a discharge or failure to promote. Can't be lesser items such as lateral transfers, temporary suspensions. Burlington likes this one, and says the Court should adopt the same test it used in Burlington Industries v. Ellerth, 524 US 742 (1998).
• Materially adverse change. The 6th Circuit used this one in the decision below.
• Reasonably likely to deter employees from engaging in protected activity. The EEOC likes this one.
• White is pushing for an "any retaliatory act" test, but probably would settle for the "reasonably likely to deter" test.

I've previously explained why I think the test in Section 704 should be much more employee-friendly than the Section 703 test. In a nutshell: (1) The text of 704 simply forbids discrimination, while 703 forbids discrimination with respect to terms and conditions of employment. (2) Section 704 is designed to protect the system (courts, EEOC, and employees who protest) against employer interference, which is more important than protecting an individual employee from an employer's race or sex discrimination.

No matter which test the Court adopts, the facts have to applied. Burlington makes some interesting arguments:

• White was re-assigned from driving a lift truck to doing track work. That cannot possibly be an adverse employment action because doing track work was part of her job description and was what she was hired to do. My view: The Court should look at what actually took place rather than the formal description of the employee's job.
• White was suspended and then reinstated with back pay, all under the system set up in a collective bargaining agreement. Following a collectively bargained process should not be considered an adverse employment action. My view: A contract with a union should not insulate an employer from Title VII liability.

Here's what the Court's job boils down to:

• Decide whether Section 704 "discrimination" means the same thing as it does in Section 703.
• If it means something less, then what does it mean?
• Figure out a way for lower courts to screen out allegations involving minor inconvenience or bruised egos.

Mohawk v. Williams: RICO meets employment law
April 03, 2006 by Ross Runkel at LawMemo

Employees of Mohawk Industries, Inc. sued claiming a RICO violation. The case is in the US Supreme Court, set for argument on April 26.

The Court will decide whether the employees' complaint states a claim. Mohawk denies any illegality, and none has been proved. It's just a question of whether the allegations, if true, would make out a RICO violation.

The employees' complaint alleges:

• Mohawk entered into contracts with outside recruiters with the purpose of violating the Immigration and Nationality Act.
• The Mohawk-recruiter combination is a separate RICO "enterprise." Specifically, it is an "association-in-fact."
• Mohawk participated in the affairs of the enterprise.

Mohawk's response is:

• A corporation cannot be part of an association-in-fact enterprise.
• The enterprise is not "separate" because Mohawk was simply performing internal functions (hiring employees) through the use of an agent.
• Mohawk was conducting its own affairs, not the affairs of the separate enterprise.

[Read the briefs]

Both the trial court and the 11th Circuit ruled in favor of the employees, and that ruling is contrary to a similar case from the 7th Circuit: Baker v. IBP, Inc., 357 F.3d 685 (7th Cir.), cert. denied, 125 S. Ct. 412 (2004).

The most interesting question raised in this case is whether a corporation can be part of an association-in-fact. The statutory definition of a RICO enterprise goes like this:

"enterprise" includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity;

Let your eyes rest on the phrase "individuals associated in fact," and consider the fact that an "individual" clearly means a natural person (a human being) and does not mean a corporation.

So how can the employees succeed in arguing that a corporation can be one of these? And why is the United States government backing them up (via an amicus brief and a short oral argument)?

The employees say that "individuals associated in fact" is just an example, and that Congress did not write out a complete and exclusive list. To demonstrate this, they focus on the word "includes" in the definition. Lots of other definitions use the word "means." The employees say that "means" signals a complete list and "includes" signals a list of examples.

Mohawk points out one definition that uses the phrase "including, but not limited to," which demonstrates that Congress knew how to make it clear that a definition was just a list of examples. Mohawk also points out a few RICO definitions that use the word "includes" but obviously contain exclusive lists.

Interesting argument on how to read a statute.

The employees' Supreme Court brief makes the fascinating claim that Mohawk should not be allowed to argue the point about corporations being part of an association-in-fact, claiming that Mohawk conceded this point in the trial court and did not properly raise it in the petition for certiorari.

Mohawk has a couple of other arguments that sound less promising.

One is that the combination of Mohawk plus the recruiters is not a separate enterprise because the recruiters are simply Mohawk's agents. That argument probably fails for lack of statutory support and lack of support in the cases.

Another is that Mohawk wasn't conducting the affairs of the separate enterprise; it was conducting its own internal affairs (hiring employees).

Sereboff v. Mid Atlantic: Will ERISA plan get reimbursement from plan participants
March 25, 2006 by Ross Runkel at LawMemo

Where I come from an insurance company should get reimbursed when its pay-out gets replaced by a judgment from a third-party tortfeasor. But that's because I don't write statutes that distinguish between equitable relief and legal relief. Congress did just that in ERISA, so we have a split among the circuits on this.

The US Supreme Court will figure it all out in Sereboff v. Mid Atlantic Medical Services, which will be argued on March 28, 2006. Go here for briefs and the lower court opinion.

An ERISA Plan paid about $75,000 to two participants (the Sereboffs) to cover medical expenses connected to accident-related injuries. The Sereboffs recovered $750,000 in a settlement with a third-party tortfeasor, and placed those funds into an investment account. The Plan then sued the Sereboffs to get reimbursed for the benefits it had paid. The Plan sued under ERISA Section 502(a)(3) which allows a Plan to recover "other equitable relief."

The Sereboffs argued that the Plan could not recover because it was seeking "legal" rather than "equitable" relief, citing Great-West Life v. Knudson, 534 US 204 (2002). The Knudson facts were similar except that under the terms of the settlement the proceeds went into a trust for the medical care of one of the Knudsons.

The 4th Circuit held that the Plan was seeking "equitable" relief within the meaning of Great-West Life v. Knudson, and allowed the suit to go forward. The US Supreme Court will be reviewing the 4th Circuit decision.

Supreme Court re-argument on employee speech
March 19, 2006 by Ross Runkel at LawMemo

A rare event: The US Supreme Court will hear a second argument in Garcetti v. Ceballos - a significant employee free speech case.

This case was argued on October 12, 2005, and the Court ordered that it be re-argued on March 21, 2006. The main intervening event was the retirement of Justice O'Connor and the appointment of Justice Alito. The conventional wisdom is that the Court was split 4-4, and needs Justice Alito's vote to break the tie.

Richard Ceballos, a deputy district attorney, sued his employer (the County) and his supervisors claiming they retaliated against him in violation of the 1st amendment.

Ceballos wrote a memorandum to his supervisor in which he claimed that a deputy sheriff had lied in an application for a search warrant. Ceballos claimed that he was demoted in retaliation for this. The trial court granted summary judgment for the individual defendants on the ground of qualified immunity. The 9th Circuit reversed. The US Supreme Court granted certiorari to review the 9th Circuit decision.

The 9th Circuit concluded that the individual defendants were not entitled to qualified immunity because "the law was clearly established that Ceballos' speech addressed a matter of public concern and that his interest in the speech outweighed the public employer's interest in avoiding inefficiency and disruption."

A concurring 9th Circuit judge argued that the 9th Circuit's jurisprudence in this area of law is wrong. He would hold that public employees are not protected by the 1st amendment when their speech is uttered in the course of carrying out their employment obligations. That is because Connick v. Myers, 461 US 138 (1982), requires that the public employee be speaking "as a citizen," which the judge says Ceballos was not.

• Decision below: Ceballos v. Garcetti (9th Cir 03/22/2004)
• Supreme Court briefs and transcript of first argument

US Supreme Court unanimously upholds Solomon Amendment
March 06, 2006 by Ross Runkel at LawMemo

The United States Supreme Court held unanimously that the Solomon Amendment is constitutional. Rumsfeld v. Forum For Academic and Institutional Rights (US Supreme Court 03/06/2006).

(1) The Court held that the Solomon Amendment provides that in order for a law school and its university to receive federal funding, the law school must offer military recruiters the same access to its campus and students that it provides to the nonmilitary recruiter receiving the most favorable access.

(2) The Court held that the Solomon Amendment is constitutional. Although there are limits to Congress' ability to place conditions on the receipt of federal funds, a funding condition cannot be unconstitutional if it could be imposed directly. This condition was one that Congress could have imposed directly without violating the 1st amendment.

The Solomon Amendment regulates conduct, not speech. (a) Although law schools must send emails and distribute fliers if they provide that service to other recruiters, these elements of speech are incidental to the statute's regulation of conduct, and cannot be compared to forcing students to pledge allegiance to the flag or forcing a Jehovah's Witness to display a motto on his license plate. (b) Schools are not "speaking" when they host interviews and receptions on campus. Nothing about recruiting suggests that law schools agree with the recruiters' speech. Law schools are not restricted as to what they can say about the military's policies. (c) This case is not like the flag burning cases because the conduct here is not so inherently expressive, and even if this were expressive conduct the Solomon Amendment would be constitutional under the flag burning cases.

The Solomon Amendment does not violate the law schools' freedom of expressive association. The statute does not require the schools to accept members it does not desire (distinguishing the case where a statute required the Boy Scouts to accept a homosexual scoutmaster). Recruiters are not part of the school. Students and faculty are free to voice their disapproval of the military's message.

Opinion by Chief Justice Roberts. Justice Alito did not participate.

42 USC Section 1981 limited to contracting parties
February 22, 2006 by Ross Runkel at LawMemo

Domino's Pizza v. McDonald (US Supreme Court 02/22/2006): The US Supreme Court holds (unanimously) that a plaintiff who lacks any rights under an existing contractual relationship with the defendant, and who has not been prevented from entering into such a contractual relationship, cannot bring suit under 42 USC Section 1981.

Domino's Pizza had several contracts with JWM Investments, a corporation. McDonald, an black man, was an officer and the sole shareholder the JWM corporation. McDonald personally was not a party to the contracts. McDonald sued Domino's claiming that Domino's terminated its contracts with JWM because of racial animus toward him. The suit was brought under 42 USC Section 1981 which provides that "All persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens." The trial court dismissed the suit, saying McDonald did not have standing because he was not a party to the contracts. The 9th Circuit reversed, saying "the same discriminatory conduct can result in both corporate and individual injuries." The US Supreme Court reversed the 9th Circuit decision.

Supreme Court: "Slap you in the face" is the wrong test
February 21, 2006 by Ross Runkel at LawMemo

Plaintiff's superior qualifications, compared to the employee who got the job, can be evidence of pretext in a Title VII case. The US Supreme Court now has rejected the 11th Circuit's requirement that the difference in qualifications must be so great that they "slap you in the face."

Poetic imagery, but not a proper legal standard.

Two African-Americans were superintendents who were denied promotions, and sued claiming race discrimination in violation of Title VII and 42 USC Section 1981. They prevailed in a jury trial; the trial court granted the employer a new trial; the 11th Circuit affirmed in part and reversed in part. The US Supreme Court granted certiorari and remanded the case, without even hearing oral arguments.

The employees submitted evidence that their qualifications were better than the two whites that were promoted. This evidence was designed to prove pretext. The 11th Circuit's rule (also the 5th Circuit's) is: "Pretext can be established through comparing qualifications only when 'the disparity in qualifications is so apparent as virtually to jump off the page and slap you in the face.'" US Supreme Court said that this visual image "is unhelpful and imprecise." The Court rejected the 11th Circuit's standard without suggesting what the proper standard is.

Ash v. Tyson Foods (US Supreme Court 02/21/2006).

Supreme Court - "Boy" can be probative of racial bias
February 21, 2006 by Ross Runkel at LawMemo

If a manager refers to a black employee as "boy," is that evidence of racial animus?

The 11th Circuit thought not, unless "boy" was modified by some obviously racial adjective such as "black" or "white." Thankfully, the US Supreme Court has a better grip on reality. Ash v. Tyson Foods (US Supreme Court 02/21/2006)

Two African-Americans were superintendents who were denied promotions. They sued claiming race discrimination in violation of Title VII and 42 USC Section 1981. The 11th Circuit decision went against them. The US Supreme Court granted certiorari and remanded the case in a per curiam decision, without hearing oral argument.

There was evidence that the plant manager (the decisionmaker) referred to each of the employees as "boy." The 11th Circuit held that use of "boy" alone (without adding "white" or "black") was not evidence of racial animus. The US Supreme Court said this was error because "The speaker's meaning may depend on various factors including context, inflection, tone of voice, local custom, and historical usage."

US Supreme Court re-argument in employee speech case
February 17, 2006 by Ross Runkel at LawMemo

The US Supreme Court has ordered that Garcetti v. Ceballos (Docket No. 04-473) be re-argued. This case was argued in October. Since then, Justice Alito has replaced Justice O'Connor.

Order for re-argument | Transcript of first oral argument (10/12/2005) | Decision below: Ceballos v. Garcetti (9th Cir 03/22/2004)

Ceballos sued his employer (the County) and his supervisors claiming they retaliated against him in violation of the 1st amendment. Ceballos wrote a memorandum to his supervisor in which he claimed that a deputy sheriff had lied in an application for a search warrant. Ceballos claimed that he was demoted in retaliation for this. The trial court granted summary judgment for the individual defendants on the ground of qualified immunity. The 9th Circuit reversed. The US Supreme Court granted certiorari on February 28, 2005 to review the 9th Circuit decision.

The 9th Circuit concluded that the individual defendants were not entitled to qualified immunity because "the law was clearly established that Ceballos' speech addressed a matter of public concern and that his interest in the speech outweighed the public employer's interest in avoiding inefficiency and disruption." A concurring 9th Circuit judge argued that the 9th Circuit's jurisprudence in this area of law is wrong. He would hold that public employees are not protected by the 1st amendment when their speech is uttered in the course of carrying out their employment obligations. That is because Connick v. Myers, 461 US 138 (1982), requires that the public employee be speaking "as a citizen," which the judge says Ceballos was not.

Arbaugh v. Y & H Corp argument
January 11, 2006 by Ross Runkel at LawMemo

SCOTUSblog has an extended discussion of the ins and outs of the arguments in Arbaugh v. Y & H Corp, where the question is whether Title VII's 15-employee threshold is a matter of federal court jurisdiction or merely another element going to the merits. Tomorrow's Argument in Arbaugh v. Y & H Corporation.

Here's just one paragraph:

As an Amicus Curiae supporting the petitioner, the United States emphasizes, among other arguments, that neither Y & H nor the circuit courts holding the fifteen-employee requirement to be jurisdictional had provided a persuasive reason for why § 701(b) should be thought to limit the jurisdiction of the federal courts. The United States critiques each of the four arguments offered for such a holding, including the Third Circuit's argument under the canon of avoidance (notably, even the Third Circuit rejected this argument after outlining it).

Is Title VII 15-employee threshold jurisdictional?
January 10, 2006 by Ross Runkel at LawMemo

I don't see how Title VII's definition of what "employer" means can be construed as a limitation on federal court jurisdiction. Yet several Circuits have so held, and the US Supreme Court will hear oral arguments tomorrow on this question.

Part of the definition of "employer" is that the employer have 15 or more employees. In this case, size does matter. Smaller employers simply are excluded from the reach of the statute.

Title VII has all sorts of definitions: "employer," "employee," "labor organization," etc. These definitions are designed to identify what entities are within the statute. Title VII's definitions are not written in jurisdictional terms. I'm talking here about the plain language of a statute.

The US Government's brief [see all briefs here] agrees with me. (Wow!)

Jenifer Arbaugh sued in federal court under Title VII and state tort law. After a jury verdict for Arbaugh, the trial court granted summary judgment for the defendants and vacated the verdict because the defendant corporation did not employ 15 or more employees and thus was not an "employer" under Title VII. The 5th Circuit affirmed.

The US Supreme Court granted certiorari to review the 5th Circuit decision.

The 5th Circuit held that Title VII's 15-employee threshold determines federal court subject matter jurisdiction, and is not merely a matter going to the merits of a Title VII claim.

If this is jurisdictional, then it can be raised for the first time at any time (even after verdict, or on appeal), and it means that the federal court has zero jurisdiction over the state law claim as well. If it's a matter of the merits, then it has to be raised in a timely manner and decided just like any other factual issue.

The Courts of Appeals are split on this issue. Courts holding it is jurisdictional are the 4th, 6th, 9th, 10th, and 11th Circuits. Courts holding it is non-jurisdictional are the 2nd, 7th, and Federal Circuits.

Arbaugh v. Y & H Corp (Docket No. 04-944)
Oral argument January 11, 2006
Decision below: Arbaugh v. Y & H Corp (5th Cir 08/02/2004)
Briefs: http://www.lawmemo.com/docs/us/arbaugh/

For a related law review article, see Jurisdiction and Merits at Ross' Employment Law Reviews.

Employee vs. employer civil RICO
December 13, 2005 by Ross Runkel at LawMemo

If an employer conspires with a recruiter to employ and harbor illegal workers, does that violate RICO?

The US Supreme Court will decide this question in Mohawk Industries v. Williams (No. 05-465), certiorari granted 12/12/2005, decision below: Williams v. Mohawk Industries (11th Cir 06/090/2005)

Williams and other hourly employees alleged that the employer's widespread and knowing employment and harboring of illegal workers allowed the employer to depress wages for its legal hourly employees and to discourage workers compensation claims - all in violation of the federal RICO statute. The trial court denied the employer's motion to dismiss; the 11th Circuit affirmed; the US Supreme Court granted certiorari to review the 11th Circuit decision.

Plaintiffs alleged that the employer conspired with recruiting agencies to hire and harbor illegal workers.

The key issue is whether plaintiffs alleged an "enterprise" that has a "common purpose."

• The 11th Circuit concluded that the "enterprise" is the association-in-fact between the employer and the third-party recruiters.
• As for the "common purpose," the complaint alleged that the recruiters and the employer share the common purpose of "obtaining illegal workers for employment by [the employer]" with the same objective of reducing the wages paid to the employer's hourly workers
• The 11th Circuit said, "Because the complaint clearly alleges that the members of the enterprise stand to gain sufficient financial benefits from [the employer's] widespread employment and harboring of illegal workers, the plaintiffs have properly alleged a 'common purpose.'"

The 7th Circuit reached a contrary conclusion on similar facts, concluding that the entities in the enterprise did not have a common purpose (the employer wants to pay lower wages and the recruiters want to be paid more for services rendered). Baker v. IBP (7th Cir 02/04/2004).

Non-contracting party standing: 42 USC 1981
December 07, 2005 by Ross Runkel at LawMemo

42 USC Section 1981 forbids race discrimination in a contractual relationship. Does a non-contracting party have standing to sue for a violation?

Assume this: ABC Corporation has a contract with XYZ Corporation. XYZ is wholly owned by John McDonald, who is black. ABC terminates the contract because of McDonald's race.

• Question 1: Can XYZ recover damages against ABC? (I suppose so, but that's not the question I want to address.)
• Question 2: Can McDonald recover damages against ABC? Another way to ask that: Does McDonald have "standing" to sue when he was not a party to the contract?

The US Supreme Court heard oral arguments on December 6 on Question 2 in Domino’s Pizza, Inc. v. John McDonald. [Summary and briefs]

SCOTUSblog summarizes the arguments here: Recap of Yesterday’s Argument: Domino’s Pizza, Inc., et al. v. John McDonald

My view:

• The Court has to figure out what Congress intended when it wrote the original version of the statute over 100 years ago.
• In those days hardly anybody (hardly any lawyers, that is) thought that a contract suit could be brought by anybody other than the two corporations that signed the contract. I think a majority of the Court will grab that idea to conclude that Congress never intended for non-contracting parties to have rights under Section 1981.
• Some of the Justices have sympathy for McDonald's situation, but the Justices' personal desires should not get in the way of interpreting Congressional intent.
• Another point: McDonald chose to do business through the corporate form. That provided him with certain advantages, such as limited liability. The disadvantage is that he's not a party to any contracts entered into by his corporation.

Solomon amendment will survive
December 06, 2005 by Ross Runkel at LawMemo

After today's oral argument at the US Supreme Court, it seems beyond doubt that the Solomon Amendment will survive attempts to have it declared unconstitutional.

Law schools that oppose the military's position on gays and lesbians have taken the position that military recruiters should not be allowed on campus. The Solomon Amendment says that to do that means a cut-off of certain federal funds. (Trust me, it's a lot of money.)

I have thought that the law schools' argument was weak: that they have a first amendment right to take federal money and also refuse to allow military recruiters.

A good description of the oral argument, from SCOTUSblog: Solomon Amendment likely to survive

"Adverse employment action" reaches Supreme Court
December 05, 2005 by Ross Runkel at LawMemo

What's an "adverse employment action" in a retaliation case? The US Supreme Court said on December 5 that it will decide that question in Burlington Northern v. White (Docket No 05-529).

Sheila White claimed her employer retaliated against her because she filed an EEOC charge. A jury agreed. The 6th Circuit (en banc - 13 judges) affirmed. The unhappy employer has persuaded the US Supreme Court to take a look.

The issue was whether two actions were adverse employment actions under Title VII.

• White was working as a fork lift operator, and the employer transferred her to a job as a standard track laborer


• Later, the employer suspended White without pay for 37 days. After she filed a grievance, the employer reinstated her and gave her full back pay.

The 6th Circuit explained that in order to succeed in a retaliation case the employee must prove that there was an "adverse employment action." Although some courts have said that Title VII applies only to an employer's "ultimate employment decision" such as hiring, granting leave, discharging, promoting, and compensating, the 6th Circuit joined the majority of circuits in rejecting that test.

The 6th Circuit also rejected the test included in the EEOC Guidelines: "any adverse treatment that is based on a retaliatory motive and is reasonably likely to deter a charging party or others from engaging in protected activity."

The test adopted by the 6th Circuit distinguishes between (a) situations in which there is "a materially adverse change in the terms of her employment" and (b) situations involving a "mere inconvenience or an alteration of job responsibilities" or a "bruised ego."

Under the 6th Circuit's test, the suspension was an adverse employment action because it is "not trivial" and involves more than a "mere inconvenience" or "bruised ego." The job transfer was an adverse employment action even though both jobs were paid the same. The laborer job was more arduous, dirtier, and carried less prestige, and the trial court characterized it as a demotion.

CONCURRENCE: Although the 6th Circuit was unanimous as to the above result, five judges (out of 13) took the position that the court should adopt the standard proposed by the EEOC: "reasonably likely to deter [employees] from engaging in protected activity." This would be more consistent with the statutory language, Congressional intent, and Supreme Court case law.

Decision below: White v. Burlington Northern (6th Cir en banc 04/14/2004)

Solomon amendment tested in US Supreme Court
December 04, 2005 by Ross Runkel at LawMemo

Does the 1st amendment protect schools from losing federal funds when they refuse to allow military recruiters? The US Supreme Court hears oral arguments on that question on December 6 in Rumsfeld v. Forum For Academic and Institutional Rights (No. 04-1152).

• The Solomon Amendment allows the Secretary of Defense to deny grants to any university that prohibits on-campus recruitment by the military.
• Most law schools have policies against discrimination on the basis of sexual orientation, and refuse to allow the use of school resources for recruiting by employers who engage in sexual orientation discrimination - including the military.
• The government response has been to threaten withdrawal of funding - not just for the law school, but for the whole university.
• A group of schools sued to enjoin the application of the Solomon Amendment on the ground that it impairs the 1st amendment rights of the schools.
• The trial court refused to issue a temporary injunction.
• The 3rd Circuit reversed, holding that the schools were likely to prevail on their first amendment arguments.
• The US Supreme Court granted certiorari to review the 3rd Circuit decision.

Decision below: Forum v. Rumsfeld (3rd Cir 11/29/2004)
Briefs: http://www.lawmemo.com/docs/us/forum/

42 USC 1981 suit by non-contracting party
December 04, 2005 by Ross Runkel at LawMemo

Does a person who was not a contracting party have standing to sue under 42 USC 1981? The US Supreme Court will hear arguments on that question on December 6 in Domino's Pizza v. McDonald (No. 04-0593).

Federal Circuit Courts have provided conflicting answers.

Here's what happened in the 9th Circuit:

• Domino's Pizza had entered into several contracts with JWM Investments, a corporation.
• McDonald, an African-American, was an officer and the sole shareholder the JWM corporation.
• McDonald personally was not a party to the contracts.
• McDonald sued Domino's claiming that Domino's terminated its contracts with JWM because of race.
• The suit was brought under 42 USC Section 1981 which provides that "All persons within the jurisdiction of the United States shall have the same right ... to make and enforce contracts ... as is enjoyed by white citizens."
• The trial court dismissed the suit, saying McDonald did not have standing because he was not a party to the contracts.
• The 9th Circuit reversed, saying "the same discriminatory conduct can result in both corporate and individual injuries."
• The US Supreme Court granted certiorari to review the 9th Circuit decision.

Decision below (unpublished): McDonald v. Domino's Pizza (9th Cir 06/18/2004)

Briefs: http://www.lawmemo.com/docs/us/dominos/

Federal employees' access to federal courts
December 04, 2005 by Ross Runkel at LawMemo

The US Supreme Court hears oral arguments December 5 in Whitman v. Department of Transportation (No. 04-1131).

Whitman sued in federal court claiming his employer, the Federal Aviation Administration, disproportionately tested him for substance abuse in violation of the first amendment and a federal statute. The trial court held it had no subject matter jurisdiction; the 9th Circuit affirmed; the US Supreme Court granted certiorari to review the 9th Circuit decision.

The 9th Circuit reasoned that the Civil Service Reform Act (CSRA) generally does not allow federal court suits. The CSRA requires collective bargaining agreements to include procedures for resolving "grievances" such as Whitman's claims. Before 1994 CSRA provided that the collectively bargained procedures "shall be the exclusive procedures for resolving grievances." The 1994 amendment added one word: "shall be the exclusive ADMINISTRATIVE procedures for resolving grievances." The 9th Circuit said the amendment "does not constitute an express grant of federal court jurisdiction."

Decision below: Whitman v. Department of Transportation (9th Cir 08/30/2004)
Briefs: http://www.lawmemo.com/docs/us/whitman/

Sereboff v. Mid Atlantic Medical; law vs. equity
November 28, 2005 by Ross Runkel at LawMemo

The US Supreme Court once again has decided to resolve the question of an ERISA Plan's ability to get reimbursement from a participant who recovered a settlement from a third party. The Court announced November 28 that it will decide this issue in Sereboff v. Mid Atlantic Medical Services - a case from the Fourth Circuit Court of Appeals.

An ERISA Plan paid about $75,000 to Plan participants Joel and Marlene Sereboff for accident-related benefits. The Sereboffs then recovered $750,000 from the tortfeasors in settlement of a personal injury claim. The Plan then sued the Sereboffs to get reimbursed for the medical benefits it had paid.

The Plan sued the Sereboffs under ERISA Section 502(a)(3), which allows a Plan to recover "other equitable relief." The Sereboffs defended on the ground that the Plan was seeking "legal" relief which a Plan cannot recover under Section 502(a)(3).

The trial court held for the Plan, and the 4th Circuit affirmed. Mid Atlantic Medical v. Sereboff (4th Cir 05/04/2005).

It all goes back to Great-West Life & Annuity Insurance Co. v. Knudson, decided by the US Supreme Court in 2002. In Knudson, with somewhat similar facts, the Supreme Court characterized the Plan's claim as "legal" rather than "equitable," and therefore held that the Plan could not recover under 502(a)(3). Of particular importance was the Court's statement that "the term 'equitable relief' refers to those categories of relief that were typically available in equity."

Knudson facts: The Plan paid money to the Knudsons to cover medical expenses connected to an injury. The Knudsons recovered money from a tortfeasor. The settlement agreement provided that the proceeds would go into a trust for Janette Knudson’s medical care.

Sereboff facts: The Plan paid money to the Sereboffs to cover medical expenses connected to an injury. The Sereboffs recovered money from a tortfeasor. The settlement proceeds were disbursed to the Sereboffs, who placed them into their investment accounts.

The Fourth Circuit distinguished the Knudson case, which concluded that the Plan was really seeking to "impose personal liability" on the Knudsons "for a contractual obligation to pay money." The main points:

• The Plan seeks to recover funds that are specifically identifiable.
• The funds belong in good conscience to the Plan.
• The funds are within the possession and control of the Serboffs.

Donning and doffing: IBP v. Alvarez; Tum v. Barber Foods
November 08, 2005 by Ross Runkel at LawMemo

The Supreme Court, in a unanimous opinion, held that the Fair Labor Standards Act (FLSA) requires that employees be paid wages for the time they spend walking to their work stations from the place where they put on required protective clothing. Employees also must be paid for the whole day, including time spent waiting to take off the clothing, and the day ends when they take off the protective clothing. However, there is no requirement that employees be paid for time spent waiting to put on the first piece of protective clothing.

IBP v. Alvarez; Tum v. Barber Foods (US Supreme Court 11/08/2005)

Employees working in meat-packing and chicken-cutting plants must wear special protective clothing. They show up at the plant and wait (sometimes in line) to don (put on) the clothing. Then they walk to their individual workstations. At the end of the shift they walk back to a locker room, perhaps do some waiting, and then doff (take off) the protective clothing.

What's paid and what's not under the Fair Labor Standards Act (FLSA) and Portal-to-Portal Act?

• Initial pre-shift pre-donning waiting time: Not.
• Donning time: Paid.
• Walking to the work area: Paid.
• Walking back from the work area: Paid.
• Waiting to doff: Paid.
• Doffing: Paid.

Solomon amendment case briefs
October 30, 2005 by Ross Runkel at LawMemo

Rumsfeld v. Forum For Academic and Institutional Rights is the Solomon Amendment case which will be argued in the US Supreme Court on December 6.

• The government has filed its Reply Brief for the Petitioners.


• We also have a collection of other briefs.

Here is the official "QUESTION PRESENTED"

The Solomon Amendment, 10 U.S.C. 983(b)(1), as amended by the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375, Div. A., Tit. V, Subtit. F, § 552(a) to (d), 118 Stat. 1911, withholds specified federal funds from institutions of higher education that deny military recruiters the same access to campuses and students that they provide to other employers. The question presented is whether the court of appeals erred in holding that the Solomon Amendment likely violates the First Amendment to the Constitution and in directing a preliminary injunction to be issued against its enforcement.

Supreme Court transcripts
October 26, 2005 by Ross Runkel at LawMemo

Transcripts of US Supreme Court oral arguments are available for the following two employment cases:

• IBP, Inc. v. Alvarez and Tum v. Barber Foods transcript. Argued 10/03/2005. Issue: Is time spent walking to the worksite after donning protective clothing compensable under the FLSA and Portal-to-Portal Act? IBP, Inc. v. Alvarez and Tum v. Barber Foods briefs.
• Garcetti v. Ceballos transcript. Argued 10/12/2005. Issue: Does the 1st amendment protect a deputy district attorney who wrote a memo to his supervisor alleging that a deputy sheriff lied on a search warrant application? Garcetti v. Ceballos briefs.

Internal whistleblowing and the first amendment
October 12, 2005 by Ross Runkel at LawMemo

What 1st amendment protection - if any - surrounds a public employee who "blows the whistle" internally as part of that employee's duties?

That's my statement of the issue in Garcetti v. Ceballos, argued today in the US Supreme Court.

Ceballos sued his employer (the County) and his supervisors claiming they retaliated against him in violation of the 1st amendment. Ceballos wrote a memorandum to his supervisor in which he claimed that a deputy sheriff had lied in an application for a search warrant. Ceballos claimed that he was demoted in retaliation for this. The trial court granted summary judgment for the individual defendants on the ground of qualified immunity. The 9th Circuit reversed, saying "the law was clearly established that Ceballos' speech addressed a matter of public concern and that his interest in the speech outweighed the public employer's interest in avoiding inefficiency and disruption."

The real question is whether Ceballos was speaking "as a citizen," within the meaning of Connick v. Myers, 461 US 138 (1982). The employer argued that public employees are not protected by the 1st amendment when their speech is uttered in the course of carrying out their employment obligations.

My view: The 9th Circuit was wrong. Either Ceballos gets no 1st amendment protection at all, or he gets so little that the employer wins in the "balancing" process. Otherwise the courts will become the supervisors of all manner of things employees say to their supervisors. Speaking out to the public is one thing. What an employee says to the supervisor warrants little or no constitutional protection.

According to SCOTUSblog's report on today's oral arguments, there is an easy majority in support of the public employer.

Supreme Court arguments in FLSA case
October 04, 2005 by Ross Runkel at LawMemo

I'm a daily reader of SCOTUSblog which keeps tabs on everything happening at the US Supreme Court. For a nice report on the oral arguments dealing with the interplay between the Fair Labor Standards Act (FLSA) and the Portal-to-Portal Act, see Yesterday's Oral Arguments in IBP v. Alvarez and Tum v. Barber Foods.

According to the writer (not unbiased, as she helped write the employees' brief), "The Supreme Court seemed to regard precedent as requiring the compensation of meat-processing workers for time spent ... waiting in line and walking between equipment stations in order to retrieve and return required sanitary and safety gear."

I still think the case is too close to call.

US Supreme Court: Preview of Employment Law Cases
September 30, 2005 by Ross Runkel at LawMemo

Employment Law cases I'm watching as the United States Supreme Court begins its 2005-2006 Term of Court:

IBP, Inc v. Alvarez; Tum v. Barber Foods
Issue: Is time spent walking to the worksite after donning protective clothing compensable under the FLSA and Portal-to-Portal Act?
Decisions below: Alvarez v. IBP, Inc. (9th Cir 08/05/2003); Tum v. Barber Foods (1st Cir 03/10/2004)
Summary and briefs
Argument date: October 3, 2005

Garcetti v. Ceballos
Issue: Does the 1st amendment protect a deputy district attorney who wrote a memo to his supervisor alleging that a deputy sheriff lied on a search warrant application?
Decision below: Ceballos v. Garcetti (9th Cir 03/22/2004)
Summary and briefs
Argument date: October 12, 2005

Whitman v. Department of Transportation
Issue: Does Civil Service Reform Act confer federal court jurisdiction?
Decision below: Whitman v. Department of Transportation (9th Cir 08/30/2004)
Summary and briefs
Argument date: December 5, 2005

Rumsfeld v. Forum For Academic and Institutional Rights
Issue: Does the 1st amendment protect schools from losing federal funds when they refuse to allow military recruiters? (The Solomon Amendment case)
Decision below: Forum For Academic and Institutional Rights v. Rumsfeld (3rd Cir 11/29/2004)
Summary and briefs
Argument date: December 6, 2005

Domino's Pizza v. McDonald
Issue: Does individual who was not a contracting party have standing to sue under 42 USC 1981?
Decision below: McDonald v. Domino's Pizza (9th Cir 06/18/2004) (unpublished)
Summary and briefs
Argument date: December 6, 2005

Arbaugh v. Y & H Corp
Issue: Is Title VII's 15-employee threshold jurisdictional?
Decision below: Arbaugh v. Y&H Corp (5th Cir 08/02/2004)
Summary and briefs
Argument date: Postponed until January 2006

US Supreme Court argument on whether walking and waiting time are compensable
September 30, 2005 by Ross Runkel at LawMemo

Update: Supreme Court decided this case November 8, 2005.
IBP, Inc v. Alvarez; Tum v. Barber Foods
Oral Argument: October 3, 2005
Decisions below: Alvarez v. IBP, Inc. (9th Cir 08/05/2003); Tum v. Barber Foods (1st Cir 03/10/2004)
Briefs

In these consolidated cases, the Circuit Courts ruled that the employers violated the Fair Labor Standards Act (FLSA) by not paying for time employees spent donning and doffing specialized protective clothing before beginning work, at the end of work, and during unpaid lunch break.

The Supreme Court will be reviewing a narrower issue: whether waiting and walking time is compensable. Waiting time is time waiting in line to punch a time clock or to acquire protective clothing. Walking time is the time spent walking from the place where the gear is donned to the place where the work is done, and back.

• The 9th Circuit held that employees should be paid for all the time from the moment they began donning the protective gear at the beginning of the day until they doffed it at the end of the day, including the time spent walking to and from the locker room and the work station, and ruled that this time was not excluded as preliminary or postliminary activities under the Portal-to-Portal Act.
• The 1st Circuit held that the Portal-to-Portal Act specifically excluded this "walking time" from being compensable.

My view: Too close to call.

Cert petition on post-termination hearing
August 10, 2005 by Ross Runkel at LawMemo

Yesterday Tom Goldstein of Goldstein & Howe (and SCOTUSblog contributor) filed a petition for writ of certiorari [here]. The petition states the following QUESTION PRESENTED:

In Cleveland Board of Education v. Loudermill, 470 U532 (1985), this Court held that tenured state employees have a right under the Due Process Clause to notice and a hearing before they are terminated. The courts of appeals are divided over the following question:

Does the failure to provide the pre-termination hearing required under Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985), no longer violate the Due Process Clause if denial of the hearing also contravenes state law and state law provides a post-termination remedy?

Employment Law Memo had this to say about the Court of Appeals decision:

Public employee's due process claim was barred by "Parratt-Hudson" doctrine.

Hadfield v. McDonough (1st Cir 05/11/2005)
http://laws.findlaw.com/1st/042020.html

Hadfield sued the public employer, alleging violation of his 1st Amendment and 14th Amendment (deprivation of property interest without due process) rights. The trial court granted summary judgment in favor of the employer. The 1st Circuit affirmed. The court concluded political affiliation was an appropriate requirement for Hadfield's job. The court also concluded that Hadfield's due process claim was barred by the "Parratt-Hudson" doctrine.

The Parratt-Hudson doctrine arises from Parratt v. Taylor, 451 US 527 (1981), and Hudson v. Palmer, 468 US 517 (1984). It shields a public entity from a federal due process claim where the denial of process was caused by the random and unauthorized conduct of government officials and where the state has provided adequate post-deprivation remedies to correct the random and unauthorized acts. Applying the Parratt-Hudson doctrine, the court determined that Massachusetts provided a sufficient post-deprivation remedy and that Hadfield chose not to avail himself of that remedy.

US Supreme Court roundup
June 28, 2005 by Ross Runkel at LawMemo

The US Supreme Court has ended its 2004-2005 session. Here's a list of employment cases decided and pending. Pending cases will be argued and decided in the next session beginning in October. For details on these cases see Supreme Court Review: 2004-2005 Employment Law Cases.

Cases decided:

• ADEA allows disparate impact claims (5-3); employees lose on the merits

  Smith v. City of Jackson (03/30/2005)

• False Claims Act retaliation claim statute of limitations is the most analogous state statute
  Graham County Soil v. US ex rel Wilson (06/20/2005)
• Title IX allows private right of action for retaliation (5-4).
  Jackson v. Birmingham Board Of Education (03/29/2005)
• Plaintiffs must pay tax on that portion of a settlement that went to attorneys as a contingent fee.
  Commissioner v. Banks (01/24/2004)
• Making and selling sexually explicit video is not expression on a matter of public concern.
  San Diego v. Roe (12/06/2004)

Cases pending:

• Does Civil Service Reform Act confer federal court jurisdiction?

  Whitman v. Department of Transportation
  Decision below: Whitman v. Department of Transportation (9th Cir 08/30/2004)

• Is Title VII's 15-employee threshold jurisdictional?
  Arbaugh v. Y & H Corp
  Decision below: Arbaugh v. Y&H Corp (5th Cir 08/02/2004)
• Does the 1st amendment protect schools from losing federal funds when they refuse to allow military recruiters? (The Solomon Amendment case)
  Rumsfeld v. Forum For Academic and Institutional Rights
  Decision below: Forum For Academic and Institutional Rights v. Rumsfeld (3rd Cir 11/29/2004)
• Does the 1st amendment protect a deputy district attorney who wrote a memo to his supervisor alleging that a deputy sheriff lied on a search warrant application?
  Garcetti v. Ceballos
  Decision below: Ceballos v. Garcetti (9th Cir 03/22/2004)
• Is time spent walking to the worksite after donning protective clothing compensable under the FLSA and Portal-to-Portal Act?
  Tum v. Barber Foods
  Decisions below: Tum v. Barber Foods (1st Cir 03/10/2004); Alvarez v. IBP, Inc. (9th Cir 08/05/2003)

Employment Law Memo subscribers will get a same-day report when the Supreme Court decides these pending cases.

Cert granted on Civil Service Reform Act
June 27, 2005 by Ross Runkel at LawMemo

The US Supreme Court granted certiorari on June 27 to review a 9th Circuit holding that the federal Civil Service Reform Act "does not confer federal court jurisdiction over statutory and constitutional claims concerning employment-related matters within the scope of the negotiated grievance procedures of a federal employee's collective bargaining agreement." Whitman v. Department of Transportation (Docket No. 04-1131).

Terry Whitman claimed his employer, the Federal Aviation Administration, disproportionately tested him for substance abuse in violation of the first amendment and the federal statute on mandatory drug testing.

First Whitman filed a charge with the Federal Labor Relations Agency, but the FLRA said his claim was not within its jurisdiction. FLRA said his recourse was through the grievance procedures of his collective bargaining agreement.

Whitman did not pursue the grievance procedure of the collective agreement.

Whitman sued the FAA in federal district court, and that court said it had no subject matter jurisdiction. The 9th Circuit agreed. Whitman v. Department of Transportation (9th Cir 08/30/2004).

The 9th Circuit's reasoning:

• The FAA Management System, including certain provisions of the Civil Service Reform Act (CSRA), governs FAA employees' employment rights and generally does not allow federal court suits.
• The CSRA requires collective bargaining agreements to include procedures for resolving "grievances," and defines "grievance" broadly to include Whitman's claims.
• Before 1994 CSRA provided that the collectively bargained procedures "shall be the exclusive procedures for resolving grievances." The 1994 amendment provided that the collectively bargained procedures "shall be the exclusive administrative procedures for resolving grievances."
• Although the Federal and 11th Circuits have held that the 1994 amendment established an employee's right to seek a judicial remedy, those cases are wrong because the 1994 amendment "does not constitute an express grant of federal court jurisdiction."

Interesting that Whitman represented himself in the 9th Circuit and is now represented by Thomas C. Goldstein of Goldstein & Howe, a firm that specializes in representing clients before the US Supreme Court.

False Claims Act retaliation claim statute of limitations
June 20, 2005 by Ross Runkel at LawMemo

The US Supreme Court says the statute of limitations for False Claims Act retaliation claims is the most analogous state statute. Graham County Soil v. US ex rel Wilson (US Supreme Court 06/20/2005).

Wilson sued under the federal False Claims Act (FCA) claiming her employer retaliated against her for alerting federal officials to purported fraud and for cooperating with the ensuing investigation. The trial court dismissed the suit as untimely under the state's 3-year statute of limitations; the 4th Circuit reversed, applying the FCA's 6-year limitation period; the US Supreme Court reversed.

The US Supreme Court held: The appropriate statute of limitations in a False Claims Act retaliation case is the most closely analogous state statute, not the 6-year period stated in the FCA.

My view: (1) Typically state statutes of limitations will be shorter than six years. (2) Plaintiffs often join a retaliation claim with a qui tam action in the Government's name (hoping to collect a portion of the ill-gotten gains). The qui tam claim will governed by the federal six-years statute of limitations.

Tum v. Barber Foods - Petitioners' brief
May 16, 2005 by Ross Runkel at LawMemo

Petitioning employees have filed their US Supreme Court brief [pdf] in Tum v. Barber Foods, which will be argued next fall.

Quoting from the brief:

QUESTIONS PRESENTED

This Court has held that employees are entitled to compensation under the Fair Labor Standards Act, as amended by the Portal-to-Portal Act, for the time their employer requires them to spend donning and doffing health and safety equipment.

The Questions Presented are:

1. Are employees entitled to compensation for the time they must spend walking to and from required health and safety equipment distribution stations?

2. Are employees entitled to compensation for time they must spend waiting to receive equipment at required health and safety equipment distribution stations?

Courtesy of SCOTUSBlog, one of whose authors, Thomas Goldstein of Goldstein & Howe, is counsel of record for petitioners. Tom says, "Kevin Russell worked heavily on the case with a team from the Stanford Supreme Court Litigation Clinic - Rachel Kovner, Michael Mongan, and Julia Lipez."

Is 15-employee threshold jurisdictional?
May 16, 2005 by Ross Runkel at LawMemo

Federal circuit courts have long been split on the question of whether Title VII's 15-employee threshold determines federal court subject matter jurisdiction, or is merely a matter going to the merits of a Title VII claim.

The US Supreme Court says it will review the question. Arbaugh v. Y & H Corp (Docket No. 04-944), certiorari granted 05/16/2005, Decision below: Arbaugh v. Y&H Corp (5th Cir 08/02/2004)

Arbaugh sued in federal court under Title VII and state tort law. She worked at the Moonlight Cafe in New Orleans, and claimed that one of the owners of the corporation subjected her to a sexually hostile environment. A jury returned a verdict for Arbaugh.

Now get this. After the jury verdict, the defendants moved to dismiss for lack of subject matter jurisdiction, citing Title VII's definition of an "employer" and pointing out that the defendant corporation did not employ 15 or more employees and thus was not an "employer" under Title VII. The trial court converted the motion to a motion for summary judgment, and granted the motion. So, case dismissed for lack of subject matter jurisdiction.

The 5th Circuit affirmed, holding that Title VII's 15-employee threshold determines federal court subject matter jurisdiction, and is not merely a matter going to the merits of a Title VII claim. The US Supreme Court granted certiorari to review the 5th Circuit decision.

The Courts of Appeals are split on this issue.

Courts holding it is jurisdictional are the 4th, 6th, 9th, 10th, and 11th Circuits. Courts holding it is non-jurisdictional are the 2nd, 7th, and Federal Circuits.

Military recruiting issue goes to Supreme Court
May 02, 2005 by Ross Runkel at LawMemo

On May 2, 2005 the US Supreme Court agreed to decide "Whether the court of appeals erred in holding that the Solomon Amendment's equal access condition on federal funding likely violates the First Amendment to the Constitution and in directing a preliminary injunction to be issued against its enforcement?" Rumsfeld v. Forum For Academic and Institutional Rights (Docket No. 04-1152).

Lots of details at SCOTUSBlog: Court to rule on "Solomon Amendment"

Many law schools have tried to exclude military recruiters, and the government response has been to threaten withdrawal of funding - not just for the law school, but for the whole university. The law involved is the "Solomon Amendment."

Many schools have policies against discrimination on the basis of sexual preference, and refuse to allow the use of school resources for recruiting by employers who engage in sexual preference discrimination - including the military.

The 3rd Circuit held (2-1) that the law schools were likely to prevail on their first amendment arguments, and were entitled to a preliminary injunction against enforcement of the Solomon Amendment. Forum For Academic and Institutional Rights v. Rumsfeld (3rd Cir 11/29/2004). The 3rd Circuit issued a stay pending review by the Supreme Court.

My view: I'm doubtful that there are five justices that will agree with the 3rd Circuit. Schools remain free to teach and to say whatever they like, and to hire faculty on whatever basis they like. Any restriction on free speech (or association) seems quite incidental, especially when weighed against the Congress' powers regarding the spending power and the powers relating to war and the military.

Military recruiting issue goes to Supreme Court
May 02, 2005 by Ross Runkel at LawMemo

On May 2, 2005 the US Supreme Court agreed to decide "Whether the court of appeals erred in holding that the Solomon Amendment's equal access condition on federal funding likely violates the First Amendment to the Constitution and in directing a preliminary injunction to be issued against its enforcement?" Rumsfeld v. Forum For Academic and Institutional Rights (Docket No. 04-1152).

Lots of details at SCOTUSBlog: Court to rule on "Solomon Amendment"

Many law schools have tried to exclude military recruiters, and the government response has been to threaten withdrawal of funding - not just for the law school, but for the whole university. The law involved is the "Solomon Amendment."

Many schools have policies against discrimination on the basis of sexual preference, and refuse to allow the use of school resources for recruiting by employers who engage in sexual preference discrimination - including the military.

The 3rd Circuit held (2-1) that the law schools were likely to prevail on their first amendment arguments, and were entitled to a preliminary injunction against enforcement of the Solomon Amendment. Forum For Academic and Institutional Rights v. Rumsfeld (3rd Cir 11/29/2004). The 3rd Circuit issued a stay pending review by the Supreme Court.

My view: I'm doubtful that there are five justices that will agree with the 3rd Circuit. Schools remain free to teach and to say whatever they like, and to hire faculty on whatever basis they like. Any restriction on free speech (or association) seems quite incidental, especially when weighed against the Congress' powers regarding the spending power and the powers relating to war and the military.

Supreme Court gets 42 USC 1981 case
April 25, 2005 by Ross Runkel at LawMemo

Section 1981 prohibits race discrimination in the formation, termination, and performance of contracts. Can a person who is not a contracting party recover under 1981?

That's what the US Supreme Court will decide in Domino's Pizza v. McDonald, Docket No. 04-593, certiorari granted April 25, 2005.

The allegations were: McDonald, an African American, was the president and main shareholder of JWM, a corporation. JWM entered into contracts with Domino's. Domino's made it difficult or impossible for JWM to perform, propelling JWM into bankruptcy. JWM and Domino's settled. McDonald sued Domino's under Section 1981 claiming financial and emotional loss. He claimed that the downfall of JWM was caused by racial discrimination on the part of Domino's. The allegation have not been proved. The trial court granted summary judgment for the Domino's.

The 9th Circuit reversed, saying that McDonald, even though he personally had no contractual relationship with Domino's, had standing to sue Domino's for alleged injuries that he personally suffered. The 9th Circuit's decision (06/18/2004) was not reported. See 2004 WL 1380296.

The 9th Circuit relied on its earlier case Gomez v. Alexian Bros. Hosp., 698 F.2d 1019 (9th Cir 1983). The Circuits are split on this theory. See Guides Ltd v. Yarmouth Group, 295 F.3d 1065 (10th Cir 2002).

ADEA allows disparate impact claims - sort of
March 30, 2005 by Ross Runkel at LawMemo

The US Supreme Court has endorsed using disparate impact theory in ADEA cases, but now we have to go back and relearn all the pre-1991 cases. Smith v. City of Jackson (US Supreme Court 03/30/2005).

Older cops sued the City claiming that a new pay plan gave them lower raises than younger cops got. Reason? The City granted proportionately more money to officers with less than five years' service in an attempt to bring starting salaries up to the regional average. The 5th Circuit said the plaintiffs must lose because the ADEA categorically disallows disparate impact claims. The US Supreme Court affirmed the judgment for the City on totally different grounds: the ADEA does allow disparate impact claims, but the plaintiffs lost on the merits.

Disparate impact theory got its wings in Griggs v. Duke Power, 401 US 424 (1971), a Title VII case. Those wings got clipped in Wards Cove v. Atonio, 490 US 642 (1989). Wards Cove says that plaintiffs are "responsible for isolating and identifying the specific employment practices that are allegedly responsible for any observed statistical disparities." Congress then adopted the Civil Rights Act of 1991 which codified disparate impact theory and made things a bit easier for plaintiffs - at least in Title VII cases. But Congress never amended the ADEA the way it amended Title VII.

The ADEA and Title VII are identical in one respect.

ADEA Section 4(a)(2) is the same as Title VII Section 703(a)(2) except for substituting "age" for "race, color, religion, sex, or national origin." From that similarity in statutory text the Court concluded that the ADEA does permit employees to use the disparate impact theory.

But there are two huge differences between Title VII and the ADEA.

Unlike Title VII, the ADEA significantly narrows its coverage via the "RFOA" provision which permits any "otherwise prohibited" action "where the differentiation is based on reasonable factors other than age."

Applying the RFOA provision, the Court said "the disparate impact is attributable to the City's decision to give raises based on seniority and position. Reliance on seniority and rank is unquestionably reasonable given the City's goal of raising employees' salaries to match those in surrounding communities." Thus, the City's decision was based on a "reasonable factor other than age." There may have been other reasonable ways, including ways that did not have a disparate impact on older workers, but unlike the business necessity test, "the reasonableness inquiry includes no such requirement."

Law teachers will be pleased to learn that pre-1991 cases are now relevant to ADEA disparate impact analysis. Why? The 1991 Civil Rights Act overruled those cases for Title VII litigation, but not as they relate to the ADEA.

For ADEA cases, the Court will apply its pre-1991 interpretation of Title VII's identical language, most notably the interpretation in Wards Cove v. Atonio, 490 US 642 (1989). Wards Cove says that plaintiffs are "responsible for isolating and identifying the specific employment practices that are allegedly responsible for any observed statistical disparities," and the employees in this case have failed to do so. They did "little more than point out that the pay plan at issue is relatively less generous to older workers than to younger workers. They have not identified any specific test, requirement, or practice within the pay plan that has an adverse impact on older workers."

My view: (1) Employees can use disparate impact theory, but must sharpen their analysis and proof to fit the Court's pre-1991 cases interpreting Title VII. (2) Employers will easily win many cases under the RFOA provision because it only needs to be "reasonable" rather than a matter of "business necessity." Almost by definition, distinctions based on length of service or on rank will be reasonable.

Whistleblowing Assistant DA gets to US Supreme Court
February 28, 2005 by Ross Runkel at LawMemo

The Supreme Court has another chance to tell the 9th Circuit how the 1st amendment works for public employees. Assistant DA Richard Ceballos sent a memo to his supervisor alleging that a sheriff deputy lied on a search warrant. Ceballos later filed suit claiming his superiors retaliated against him for this.

The last time the Supreme Court had a public employee 1st amendment case from the 9th Circuit the Justices reversed the 9th Circuit without even hearing oral arguments. Ouch. That was San Diego v. Roe (12/06/2004) [full text pdf] in which a police officer was discharged for selling videos of himself masturbating. The 9th Circuit actually thought that was protected by the US constitution. The Supreme Court's per curiam decision (a rare item) said it was "not a close case."

Now comes Garcetti v. Ceballos - certiorari granted February 28, 2005. [9th Circuit decision pdf] The 9th Circuit went through the drill of asking (1) whether Ceballos' speech was a matter of public concern [YES] and, if so, (2) whether his interests outweighed the public employer's interest [YES].

The real question? Whether his speech lacks constitutional protection because it was uttered in the course of carrying out his employment obligations.

9th Circuit Judge Diarmuid O'Scannlain, in a concurring opinion, argued that the 9th Circuit's jurisprudence in this area is flat wrong. (He couldn't know that the Roe case would be summarily reversed.) He traces it all to Roth v. Veteran's Administration, 856 F.2d 1401 (9th Cir 1988), in which the court said that when a public employee speaks on matters of public importance, that speech automatically comes within the definition of a matter of public concern.

My view: The 9th Circuit's Roe decision was off the wall. Its Ceballos decision seems to lose track of what the 1st amendment is for. It is not to protect employees in the conduct of their day-to-day employment duties. Perhaps there should be laws to protect assistant DAs from getting demoted when they tell the boss that a police officer rigged a search warrant. I could vote for that. But a constitutional right? I don't think so.

Supreme Court resources
February 28, 2005 by Ross Runkel at LawMemo

I like to keep track of US Supreme Court labor and employment law cases. Here are some resources I suggest:

Article on recently decided and pending employment cases: Supreme Court Review: Current Employment Law Cases.

Article on employment cases during the 2003-2004 term of court: U.S. Supreme Court Employment Law Decisions: The Good, The Bad, And The Ugly.

List of pending cases.

Briefs filed in pending cases.

Transcripts of oral arguments in pending cases.

Recent decisions [Official web site] [Cornell's LII web site]

email bulletins [Cornell] [Willamette Law Online]

SCOTUSblog

Last but not least: Employment Law Memo sends email reports on Supreme Court labor and employment decisions on the same day they are decided. [Try it]

Are walking and waiting time compensable?
February 22, 2005 by Ross Runkel at LawMemo

The US Supreme Court granted certiorari in two cases that will decide whether time spent walking from the locker room to the work area, after donning special protective gear, is compensable under the FLSA.

IBP, Inc. v. Alvarez and Tum v. Barber Foods.

Employees in meat packing plants wear a lot of protective gear. For much of it, the employer and the government require that it be worn. Employees spend time donning and doffing this gear. Both the 1st and 9th Circuits agree they must be paid for that time.

But what about the time spent walking from the locker room to the place where the real work begins, and time spent waiting to put this gear away? The circuit courts split, with the 9th Circuit saying it must be compensated, and the 1st Circuit saying it need not be compensated.

It all has to do with whether this is within the FLSA's "changing clothes" exception, and whether the time is excluded by the Portal-to-Portal Act because it is preliminary or postliminary activity.

For the lower court decisions:
Alvarez v. IBP, Inc. (9th Cir 08/05/2003) [Full text pdf]
Tum v. Barber Foods (1st Cir 03/10/2004) [Full text]

Does disparate impact theory apply in age discrimination cases?
February 01, 2005 by Ross Runkel at LawMemo

In Smith v. Jackson, Mississippi the US Supreme Court will decide whether the disparate impact theory of proof can be applied in a case arising under the Age Discrimination in Employment Act (ADEA).

Plaintiffs were City police officers and dispatchers over the age of 40 who claimed that the City's performance pay plan granted substantially larger pay increases to employees under age 40. Under the pay plan, employees with five or fewer years of tenure received proportionately greater raises when compared to their former pay than those with more than five years of tenure. Plaintiffs offered statistical proof that average pay increases differed by age and older employees received smaller raises than younger employees. The trial court held that the disparate impact theory could not be used in an ADEA case; the 5th Circuit affirmed [Full text pdf]. The US Supreme Court is reviewing the 5th Circuit decision [Briefs], and heard oral arguments [Transcript pdf] on November 3, 2004.

Circuit courts are split on this issue. Those allowing use of the disparate impact theory are the 2nd, 8th, and 9th. Those not allowing the disparate impact theory are the 1st, 5th, 7th, 10th, and 11th.

It all started with Griggs v. Duke Power, 401 US 424 (1971). The employer required a high school diploma for entry into certain jobs. This requirement disqualified Blacks at a much higher rate than Whites. The US Supreme Court held that once the plaintiffs proved this "disparate impact," then the burden shifted to the employer to justify the practice by showing job relatedness or business necessity.

Griggs was a Title VII case. Smith is an ADEA case. The statutes are similar in one major respect: the primary prohibitory language is virtually identical. Of course, the plaintiffs latch onto that, plus an EEOC regulation that recognizes disparate impact.

On the other hand, the ADEA contains a clause that is similar to the Equal Pay Act (EPA). The ADEA has a specific exception for "where the differentiation is based on reasonable factors other than age" (RFOA), similar to the EPA's exception for "any factor other than sex." The Supreme Court has said there can be no disparate impact claims brought under the EPA, and that was in large part because of the "any factor other than sex" language. This favors the employer's position, and is the backbone of many lower court decisions.

An interesting twist is whether the Older Workers Benefit Protection Act (OWBPA) should be read as making the RFOA an affirmative defense rather than a redefinition of liability. NELA makes a great argument along this line in its amicus brief [brief pdf].

Finally, there is the fact that the Civil Rights Act of 1991 amended Title VII to make clear that disparate impact claims could be brought under Title VII, but made no such amendment to the ADEA. I think that will be irrelevant because the Court should not interpret Congress' non-action as evidence of Congressional intent.

Plaintiffs pay tax on portion of settlement that went to attorneys
January 24, 2005 by Ross Runkel at LawMemo

The US Supreme Court held this morning that plaintiffs must pay tax on that portion of a settlement that went to attorneys as a contingent fee. Commissioner v. Banks (US Supreme Court 01/24/2004).

Former employees sued their former employers claiming various legal theories under state law and federal law. In each case settlements were reached. The employees filed federal income tax returns that excluded from income that portion of the settlements that the plaintiffs had to pay to their attorneys under contingent fee agreements. The Internal Revenue Service said these amounts should have been included as taxable income, and the Tax Court agreed. The 6th Circuit and the 9th Circuit both reversed, holding that these amounts were not part of the plaintiffs' taxable income. The US Supreme Court unanimously reversed, holding that plaintiffs must pay tax on that portion of the settlement that went to attorneys as a contingent fee.

The Court relied on two basic taxation principles. (1) "Gross income" as defined by the Internal Revenue Code includes "all income from whatever source derived" which means all economic gains not otherwise exempted. (2) A taxpayer cannot exclude an economic gain from gross income by assigning the gain in advance to another party. The Court held that the contingent fee agreement should be viewed as an anticipatory assignment to the attorney of a portion of the client's income from any litigation recovery.

One of the employee-taxpayers brought claims under federal statutes that authorize fee awards to prevailing plaintiffs' attorneys. He argued that the anticipatory assignment principle would be inconsistent with the purpose of statutory fee shifting provisions. The Court did not address these claims because the fee paid to his attorney was calculated solely on the basis of the private contingent fee contract. There was no court-ordered fee award, and no other indication that the fee paid to the attorney was in lieu of statutory fees.

The American Jobs Creation Act of 2004 amended the Internal Revenue Code [read amendment] to allow a tax deduction for amounts a plaintiff pays for attorney fees and court costs in connection with an action involving a claim of "unlawful discrimination" as defined by the Act. The new statute applies only to fees and costs paid after October 22, 2004.

Private action for retaliation under Title IX?
January 19, 2005 by Ross Runkel at LawMemo

In Jackson v. Birmingham Board of Education the US Supreme Court will decide whether Title IX provides a private cause of action for retaliation against a man because he complained about alleged sex discrimination against women.

The 11th Circuit held in favor of the employer. The US Supreme Court heard oral arguments on November 30, 2004. We're waiting for the decision.

Roderick Jackson, a girls' basketball coach, sued under Title IX of the Education amendments of 1972 claiming he was removed from his coaching position because he complained about practices he believed discriminated against his girls' basketball team in violation of Title IX. The trial court dismissed the action; the 11th Circuit affirmed. The 11th Circuit held that Title IX does not provide a private cause of action for individuals who suffer retaliation for complaining about gender discrimination suffered by others. The US Supreme Court granted certiorari to review the 11th Circuit's decision. Decision below: Jackson v. Birmingham Board of Education (11th Cir 10/21/2002). [Briefs and argument transcripts]

A lot of organizations have filed amicus briefs in support of Mr. Jackson: the United States government, the NEA, AAUP, and a whole bunch of sports organizations. Trouble is they don't get to vote; only the Justices do.

The employer's argument is simple: Title IX's language prohibits discrimination but does not prohibit retaliation. Administrative regulation that seem to support Jackson are not entitled to deference because there is no ambiguity in the statute. Jackson has no standing under the regulations as they are written. And Jackson's case is controlled by Alexander v. Sandoval (US Supreme Court 04/24/2001), which held that there is no private right of action for violation of disparate impact regulations promulgated under Title VI.

Jackson's argument is a bit more complex: Although Title IX does not expressly prohibit retaliation, retaliation is included in the concept of "discrimination." Administrative regulations adopted by the Department of Education and the Department of Justice prohibit retaliation against a person because that person has filed a sex discrimination complaint. Neither Title IX itself nor the regulations makes a distinction on the basis of whether the underlying discrimination that is complained about was directed at the complainant (here, Jackson) or someone else (here, the girls' basketball team). Alexander v. Sandoval has no application because it was limited to the question of whether Title VI created a private action to enforce disparate impact regulations.

My sense is that the Supreme Court is reluctant to imply causes of action into statutes and regulations. Their job is to carry out the will of Congress, whether or not the outcome is one they like. The regulations prohibit discrimination (which fairly can include retaliation) "because he has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding or hearing under this part." One problem for Jackson's side is that what he did was complain to his supervisors. Other statutes that expressly forbid retaliation typically include two types: "participation" (which the regs cover) and "opposition" (which the regs do not cover). Jackson's fact pattern does not seem to fit the regulation. In addition, there is the problem of whether the regulations go beyond the bounds of the statute in the first place.

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