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Topic: "US Supreme Court" | Main

Supreme Court Watch: Employment law cases
October 01, 2012 by Ross Runkel at LawMemo

We will be watching three pending cases at the US Supreme Court as the Court's session opens today:

Kloeckner v. Solis
Oral argument on October 2.

The Merit Systems Protection Board (MSPB) hears appeals by federal employees regarding certain adverse actions, such as dismissals. If the employee asserts that the challenged action was the result of unlawful discrimination, that claim is referred to as a "mixed case."

Question Presented: If the MSPB decides a mixed case without determining the merits of the discrimination claim, is the court with jurisdiction over that claim the Court of Appeals for the Federal Circuit or a district court?

Vance v. Ball State Univ
Oral argument on November 26.

Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) held that under Title VII, an employer is vicariously liable for workplace harassment by a supervisor of the victim. If the harasser was the victim’s co-employee, however, the employer is not liable absent proof of negligence.

Question Presented: Whether the Faragher and Ellerth “supervisor” liability rule (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim’s daily work, or (ii) is limited to those harassers who have the power to “hire, fire, demote, promote, transfer, or discipline” their victim.

Genesis HealthCare v. Symczyk
Oral argument December 3.

Symczk sued under the Fair Labor Standards Act (FLSA) on behalf of herself and all others similarly situated. This was a section 216(b) collective action. The defendants extended an offer of judgment under Fed. R. Civ. P. 68 in full satisfaction of her alleged damages, fees, and costs - prior to her moving for conditional certification and prior to other potential plaintiffs opting in.

Question Presented: Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff's claims.


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Summary of Knox v. SEIU
June 24, 2012 by Ross Runkel at LawMemo

My summary of Knox v. SEIU at SCOTUSblog.com: Knox knocks unions on mid-year assessment for non-members.



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Mid-year union dues increase: Hudson notice required, opt-in not opt-out
June 21, 2012 by Ross Runkel at LawMemo

The US Supreme Court this morning held that "when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent."

Knox v. Service Employees Intl Union (US Supreme Ct 06/21/2012)

This is a remarkable decision for two reasons.

First, the Court has never before held that unions must issue a Hudson notice before changing the amount of dues. Hudson notices have always been based on an after-the-fact look-back based on the previous year's audited accounts.

Second, the Court has never before held that unions cannot collect fees from nonmembers unless they affirmatively opt in. The Hudson notice system has always been based on the idea that nonmembers can get an after-the-fact refund.

The union representing California public sector employees has an agency shop agreement which requires nonmembers to pay an annual fee for "chargeable" expenses - nonpolitical costs related to collective bargaining. In June 2005 the union sent out its annual Hudson notice which estimated that chargeable expenses would be 56.35% of its total expenditures. After the 30-day period that nonmembers had to object, the union announced a 25% increase to fund a broad range of political expenses, but nonmembers were given no choice as to whether they would pay into this fund.

The US Supreme Court held (7-2) that

"when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent."

The Court described this case as one involving compelled funding of the speech of other private speakers or groups, which is akin to compelled speech and compelled association. Therefore, it is subject to "exacting First Amendment scrutiny." In order to prevent the union from extracting a loan from unwilling nonmembers, the union must issue a fresh Hudson notice and must exempt nonmembers unless they opt in.

Two Justices, CONCURRING in the judgment, criticized the majority for adopting an opt-in system of fee collection which was "not contained in the questions presented, briefed, or argued."

Two Justices, DISSENTING, pointed out that unions have always been allowed to calculate each year's fee based on its expenses during the previous year. Although an imperfect system, it is not unconstitutional.



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Pharma sales reps are FLSA exempt as outside salesmen (5-4)
June 18, 2012 by Ross Runkel at LawMemo

This morning the US Supreme Court decided - on a 5-4 vote - that pharmaceutical sales representatives are "outside salesmen" and therefore exempt from overtime under the Fair Labor Standards Act. The Court also unanimously held that the Department of Labor's recently-announced contrary interpretation was entitled to exactly zero deference.

Christopher v. SmithKline Beacham (US Supreme Ct 06/18/2012)

Christopher, a pharmaceutical sales representative, sued the employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay overtime. The trial court granted the employer's motion for summary judgment and denied Christopher's motion to amend the judgment based on the trial court's failure to consider an amicus brief filed by the Secretary of the Department of Labor (DOL). The 9th Circuit affirmed. The US Supreme Court affirmed (5-4).

The job of a pharmaceutical sales representative is to try to persuade physicians to write prescriptions for products in appropriate cases. For over 70 years DOL acquiesced in an interpretation that they were "outside salesmen" who are exempt from FLSA overtime requirements. In amicus briefs filed in Circuit courts DOL took the position that a "sale" requires a "consummated transaction." In Supreme Court briefing DOL's position was that there is no "sale" unless the employee "actually transfers title."

The Court said that the DOL's new interpretation is entitled to no deference at all because it would impose massive liability for conduct that occurred before the interpretation was announced, there had been no enforcement actions suggesting the industry was acting unlawfully, DOL gave no opportunity for public comment, and the interpretation is "flatly inconsistent" with the FLSA.

The FLSA definition of "sale" includes consignments, which do not involve a transfer of title. Although DOL regulations say that sales include the transfer of title, that does not mean a sale must include a transfer of title. The regulations also use the phrase "other disposition" which - in this unique regulatory environment - includes the work of pharmaceutical sales representatives. The representatives also bear all the exterior indicia of salesmen (average salaries exceeding $70,000, work that is difficult to standardize to a particular time frame, etc.)

The DISSENT reasoned that sales of drugs are made by pharmacists, not pharmaceutical sales representatives. The pharmaceutical sales representative neither make sales nor promote "their own sales." (The dissent agreed that the DOL's current views expressed in briefs are not entitled to any weight.)



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FMLA self-care provision is not enforceable against states - Coleman v. Maryland Court of Appeals
March 24, 2012 by Ross Runkel at LawMemo

During my days as a full time law prof teaching constitutional law and employment discrimination this question came up annually:

Exactly what is the extent of Congress' power under Section 5 of the 14th amendment? "The Congress shall have power to enforce, by appropriate legislation, the provisions of this article."

There were always two potential extreme answers:

1. The power is limited to regulating conduct that itself violates the 14th amendment.

2. The power is expansive, much like the necessary and proper clause.

Law students typically wanted to know the rule that the Court would apply in every case. Something simple. Something predictable.

I always told them that there are nine Justices, and one must understand how each individual Justice sees things, and then count up the votes.

As time went by, most of the Justices adopted the view that Congress could go beyond regulating conduct that itself violates the 14th amendment, provided that there was "congruence and proportionality" between the injury to be prevented or remedied and the means adopted to that end. This, of course, gave the Justices huge individual leeway to determine what was congruent and what was proportional. Not simple. Not predictable.

And so it was with Coleman v. Maryland Court of Appeals (US Supreme Ct 03/20/2012) with the Court splitting up into three opinions: 4-1-4.

Coleman sued his employer, an instrumentality of the State of Maryland, claiming a violation of the Family Medical Leave Act (FMLA) by denying him self-care leave. The Federal District Court dismissed the suit; the 4th Circuit affirmed. The US Supreme Court affirmed (4-1-4).

Four Justices said that in order for Congress to abrogate the states' immunity through the use of Section 5 of the 14th amendment, there must be "a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end ." In Nevada Dept of Human Resources v. Hibbs, 538 US 721 (2003), the Court upheld the portion of the FMLA that provides leave for the care of a spouse, son, daughter, or parent with a serious medical condition. However, the sex-based discrimination identified in the Hibbs case is absent with regard to the self-care provision. There is a lack of congruence and proportionality. The plurality rejected arguments that the self-care provision addresses sex discrimination and sex stereotyping, that it is a necessary adjunct to the family-care provision upheld in Hibbs, and that it helps single parents keep their jobs when they get ill.

Justice Scalia rejected the "congruence and proportionality" approach, saying that (outside of race discrimination) Congress' power under Section 5 of the 14th amendment is limited to regulating conduct that itself violates the 14th amendment.

Four DISSENTING Justices, in applying the "congruence and proportionality" approach, would hold that "the self-care provision ... validly enforces the right to be free from gender discrimination in the workplace."

How many opinions?

Well, technically four. Actually five.

  • There was the plurality opinion by Justice Kennedy, joined by Chief Justice Roberts and Justices Thomas and Alito.
  • Justice Thomas also wrote a separate concurring opinion.
  • Then, concurring in the outcome, but with alternative reasoning, an opinion by Justice Scalia.
  • The dissent by Justice Ginsburg was joined by Justices Breyer, Sotomayor, and Kagan.
  • Wait, Justices Sotomayor and Kagan did not join in on Justice Ginsburg's footnote 1, which expressed the idea (joined by Justice Breyer) that "Congress can abrogate state sovereign immunity pursuant to its Article I Commerce Clause power."

So now everything is clear, right?



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Christopher v. SmithKline Beecham - update
February 09, 2012 by Ross Runkel at LawMemo

Christopher v. SmithKline Beecham Corp. (11-204) 
  Issue: Whether pharmaceutical sales representatives were exempt from FLSA overtime-pay requirements as "outside salesmen."  

Christopher, a pharmaceutical sales representative (PSR), sued the employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay overtime. The trial court granted the employer's motion for summary judgment and denied Christopher's motion to amend the judgment based on the trial court's failure to consider an amicus brief filed by the Secretary of the Department of Labor (DOL). The 9th Circuit affirmed. The issue on appeal was whether Christopher was an "outside salesmen" exempt from the FLSA's overtime-pay requirement. The court found he was exempt. 

With respect to the Secretary's appearance as amicus supporting Christopher, the court concluded it owed no deference to the Secretary's current interpretation of the regulations and disagreed with that interpretation. The court found the regulations merely "parrot" section 3(k) of the FLSA and, as such, acquired no special authority by paraphrasing the statutory language. Gonzales v. Oregon, 546 US 243, 257 (2006). In view of many similarities between PSRs and salespeople in other fields, pharmaceutical industry norms, and the acquiescence of the Secretary over the last seventy-plus years, the court could not accord even minimal Skidmore deference to the position expressed in the amicus brief. 

[In contrast to the 9th Circuit, the 2nd Circuit adopted the Secretary's position that PSRs did not meet the requirements of the outside sales exemption "when an employee promotes to a physician a pharmaceutical that may thereafter be purchased by a patient from a pharmacy ... the employee does not in any sense make a sale." In re Novartis Wage & Hour Litigation, 611 F3d 141 (2d Cir. 2010).] 

Case below:  Christopher v. SmithKline Beecham Corp (9th Cir 02/14/2011) 
Official docket sheet 
Certiorari granted: November 28, 2011. 
Oral argument: Monday, April 16, 2012. 

Questions presented in petition for certiorari:   

The outside sales exemption of the Fair Labor Standards Act exempts from the overtime requirements of the Act "any employee employed... in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary .)." 29 U.S.C. § 213(a)(1). The Secretary of Labor has implemented various regulations that "define and delimit" the outside sales exemption and, filing as amici in this and other related matters, has interpreted these regulations to find the exemption inapplicable to pharmaceutical sales representatives. A split exists between the Second and Ninth Circuits concerning whether this interpretation is owed deference and whether the outside sales exemption of the Fair Labor Standards Act applies to pharmaceutical sales representatives. 

The questions presented are: 

(1) Whether deference is owed to the Secretary’s interpretation of the Fair Labor Standards Act’s outside sales exemption and related regulations; and 

(2) Whether the Fair Labor Standards Act’s outside sales exemption applies to pharmaceutical sales representatives. 


Briefs on the merits: 



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US Supreme Court grants cert in MSPB appeal jurisdiction case
January 13, 2012 by Ross Runkel at LawMemo

Today the US Supreme Court granted certiorari in Kloeckner v. Solis (US Supreme Ct cert granted 01/13/2012)

Kloeckner appealed the Merit Systems Protection Board's (MSPB) final order of dismissal as untimely to the District of Columbia District Court, which transferred venue to the Eastern District of Missouri. The trial court dismissed on the ground that the Federal Circuit had exclusive subject matter jurisdiction. The 8th Circuit affirmed.

The jurisdictional issue turned on the meaning of the term"[c]ases of discrimination" in 5 USC Section 7703(b)(2).

The 8th Circuit held that petitions to review MSPB's final decisions must be filed in the Court of Appeals for the Federal Circuit unless the MSPB decided discrimination issues on the merits.

The 2nd and 10th Circuits hold that cases of discrimination shall be filed in district court as required by Title VII, regardless of whether the MSPB's decision was on the merits.

The US Supreme Court granted certiorari to review the 8th Circuit judgment.



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SCOTUS Argument recap: Mootness could squelch union fees case
January 13, 2012 by Ross Runkel at LawMemo

Knox v. SEIU was argued at the US Supreme Court Tuesday.

The issue is whether a public sector union must send a Hudson notice when it implements a mid-year dues and fees increase.

Another issue is whether this case is now moot.

For my recap of the oral arguments, see Argument recap: Mootness could squelch union fees case at SCOTUSblog.



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Ministerial exception bars minister's termination suit against church
January 11, 2012 by Ross Runkel at LawMemo

The US Supreme Court unanimously held that the Establishment and Free Exercise Clauses of the First Amendment bar suits brought on behalf of ministers against their churches, claiming termination in violation of employment discrimination laws.

Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (US Supreme Ct 01/11/2012)

The church employed Cheryl Perich as a "called" teacher and a commissioned minister. In addition to teaching secular subjects, Perich taught a religion class, led her students in daily prayer and devotional exercises, and took her students to a weekly school-wide chapel service. Perich led the chapel service herself about twice a year. After the church discharged Perich, the EEOC sued claiming the church discharged her in retaliation for threatening to bring a suit under the Americans with Disabilities Act (ADA). The trial court granted summary judgment for the church based on the ministerial exception; the 6th Circuit reversed on the ground that Perich was not a "minister." The Supreme Court reversed.

The Court recognizes a ministerial exception because "Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church."

Perich was a minister within the meaning of the ministerial exception. Both the church and Perich held her out as a minister. That title required significant religious training and formal commissioning. Her job duties reflected a role in conveying the church's message and carrying out its mission.

(The Court expressed no view on whether the ministerial exception bars suits other than employment discrimination suits challenging a church's decision to discharge a minister.)



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When union fees go up, must a “Hudson notice” go out?
January 05, 2012 by Ross Runkel at LawMemo

I've written an article for SCOTUSblog on Knox v. Service Employees International Union (SEIU) [here].

The US Supreme Court will hear oral arguments on January 10 on the following two questions:

(1) Whether a state, consistent with the First and Fourteenth Amendments, may condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a Hudson notice that includes information about that assessment and provides an opportunity to object to its exaction;

and

(2) Whether a state, consistent with the First and Fourteenth Amendments, may condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures.




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Arizona v United States: SCOTUS to decide preemption of state statute criminalizing unauthorized aliens who work
December 13, 2011 by Ross Runkel at LawMemo

The US Supreme Court has granted certiorari in Arizona v. United States [details, briefs]. The issue of importance in employment law is whether federal law preempts a state statute criminalizing unauthorized aliens who work.

The United States sued the State of Arizona to enjoin enforcement of a state statute that (among other things) makes it a crime

"for a person who is unlawfully present in the United States and who is an unauthorized alien to knowingly apply for work, solicit work in a public place or perform work as an employee or independent contractor in this state."

The trial court enjoined enforcement of the statute pending final decision on its constitutionality; the 9th Circuit affirmed.

The United States claims that the state statute is preempted by the Immigration and Nationality Act (INA). The 9th Circuit said it was bound by its prior decision in National Center for Immigrants' Rights v. INS, 913 F2d 1350 (9th Cir 1990), which found that Congress did not intend to deter illegal immigration by incarcerating or fining employees. The court also said that 8 USC 1324a (Immigration Reform and Control Act) sets up a scheme to discourage employment of unauthorized immigrants primarily by penalizing employers. The only federal crimes for workers have to do with fraudulent statements, false or stolen documents, and perjury. Section 1324a also provides "affirmative protections to unauthorized workers, demonstrating that Congress did not intend to permit the criminalization of work." This, said the 9th Circuit, "justifies a preemptive inference that Congress intended to prohibit states from criminalizing work."

The US Supreme Court will review the 9th Circuit decision. Oral arguments will be scheduled for 2012.



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SCOTUS will hear FLSA pharma sales rep case
November 28, 2011 by Ross Runkel at LawMemo

The US Supreme Court granted certiorari this morning in Christopher v. SmithKline Beecham Corp. [Details, briefs] Oral arguments will be scheduled for Spring 2012.

The issues:

The case appears to be about whether the Fair Labor Standards Act's outside sales exemption applies to pharmaceutical sales representatives - that is, whether these representatives are unable to claim FLSA overtime.

Yet the issue of more lasting interest - and the issue that ought to attract the Court's interest - is whether deference is owed to the Secretary of Labor's interpretation of the Fair Labor Standards Act's outside sales exemption and related regulations.


Regarding the deference issue, here is how the Respondent, SmithKline, put it in their brief:

During most of the more than 70 years since enactment of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., pharmaceutical companies have employed pharmaceutical sales representatives and, consistent with Department of Labor regulations first promulgated in 1940 and reaffirmed as recently as in 2004 defining the term “sales” broadly, classified those sales representatives as exempt from the FLSA’s overtime pay requirements under the “outside sales” exemption, 29 U.S.C. § 213(a)(1). In 2009, the Department began filing amicus briefs in private civil litigation announcing its new position that sales representatives are not now and have never been exempt because they do not “sell” as that term is defined in Section 3(k) of the FLSA, 29 U.S.C. § 203(k). The United States Court of Appeals for the Ninth Circuit refused to defer to that abrupt change in position and held that sales representatives are exempt.

Background:

Christopher, a pharmaceutical sales representative (PSR), sued the employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay overtime. The trial court granted the employer's motion for summary judgment and denied Christopher's motion to amend the judgment based on the trial court's failure to consider an amicus brief filed by the Secretary of the Department of Labor (DOL). The 9th Circuit affirmed. The issue on appeal was whether Christopher was an "outside salesmen" exempt from the FLSA's overtime-pay requirement. The court found he was exempt.

With respect to the Secretary's appearance as amicus supporting Christopher, the court concluded it owed no deference to the Secretary's current interpretation of the regulations and disagreed with that interpretation. The court found the regulations merely "parrot" section 3(k) of the FLSA and, as such, acquired no special authority by paraphrasing the statutory language. Gonzales v. Oregon, 546 US 243, 257 (2006). In view of many similarities between PSRs and salespeople in other fields, pharmaceutical industry norms, and the acquiescence of the Secretary over the last seventy-plus years, the court could not accord even minimal Skidmore deference to the position expressed in the amicus brief.

[In contrast to the 9th Circuit, the 2nd Circuit adopted the Secretary's position that PSRs did not meet the requirements of the outside sales exemption "when an employee promotes to a physician a pharmaceutical that may thereafter be purchased by a patient from a pharmacy ... the employee does not in any sense make a sale." In re Novartis Wage & Hour Litig., 611 F3d 141 (2d Cir. 2010).]



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Is Knox v. SEIU union dues case moot?
November 07, 2011 by Ross Runkel at LawMemo

In the latest US Supreme Court litigation of a union's duty to provide a "Hudson notice," the union is taking the position that the case is now moot and should be dismissed.

Knox v. Service Employees Int’l Union [Details, briefs]

This case presents the question of whether a union is required - pursuant to Chicago Teachers Union v. Hudson, 475 US 292 (1986) - in addition to an annual fee notice to employees, to send a second notice when adopting a temporary, mid-term fee increase.

The mid-term fee increase in this case was designed to create a fund to be used for a "broad range of political expenses." The trial court held such a notice is required; the 9th Circuit (2-1) reversed. The US Supreme Court granted certiorari to review the 9th Circuit judgment.

The 9th Circuit majority said that the use of the prior year method to assess nonmember dues was a practical necessity because the Hudson notice must be based on audited financial statements, and any money from the mid-term fee increase used for "non-chargeable" purposes would be refunded after the current year's audit.

The 9th Circuit DISSENT argued that the annual Hudson notice was insufficient to enable nonmembers of the union to protect their First Amendment rights upon imposition of the temporary assessment. "The Union’s interest in this case is not a 'right' to nonmembers’ funds. The Union’s interest lies in receiving a fair contribution to its collective bargaining expenses. The Union has no legitimate interest, however, in collecting agency fees from nonmembers to fill its political war-chest."

Motion to dismiss as moot: During the briefing stage in the US Supreme Court, the union filed a motion to dismiss on the ground of mootness. This was because the union recently sent a one-dollar bill (as nominal damages) to each class member, and offered to refund 100 percent of the fees to anyone requesting a refund. The petitioners oppose this as a "last-ditch effort."

The Supreme Court today announced that "Further consideration of respondent's motion to dismiss as moot is deferred to the hearing of the case on the merits."



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SCOTUS grants cert on federal employment jurisdiction issue
October 17, 2011 by Ross Runkel at LawMemo

This morning the US Supreme Court granted certiorari in Elgin v. The Department of the Treasury, which raises the issue of whether the Civil Service Reform Act precludes federal district court from having jurisdiction over constitutional claims for equitable relief brought by federal employees.

A federal statute bars employment in the executive branch of male citizens who failed to register for the draft. Elgin, who had been discharged from his job, sued claiming that the statute is unconstitutional. The federal district court ruled against Elgin on the merits. The 1st Circuit (2-1) affirmed on a different ground, finding that the district court lacked jurisdiction.

The 1st Circuit held that the exclusive remedy for discharge was provided by the Civil Service Reform Act (CSRA). The procedural route prescribed by the CSRA is by appeal to the Merit Systems Protection Board and, if dissatisfied with the result, appeal to the Federal Circuit, whose decisions in turn are reviewable by the Supreme Court.

The CONCURRENCE argued that the CSRA's remedial scheme did not afford Elgin meaningful review of his colorable constitutional claim for equitable relief, so that the statute did not bar Elgin from seeking relief in federal district court.

The US Supreme Court granted certiorari to review the 1st Circuit judgment. Oral arguments will be scheduled for sometime in early 2012.



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Ministerial exception - Hosanna-Tabor Evangelical Lutheran Church v EEOC
October 03, 2011 by Ross Runkel at LawMemo

On Wednesday, October 5, the US Supreme Court will hear oral arguments for the first time on the scope of the "ministerial exception." Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (US Supreme Ct oral argument 10/05/2011).

The EEOC sued the employer, asserting a retaliation claim under the Americans with Disabilities Act (ADA). The trial court dismissed the claim, based on the "ministerial exception." The 6th Circuit vacated the trial court's dismissal. The US Supreme Court granted certiorari to review the 6th Circuit judgment.

The EEOC's claim arose from the discharge of a teacher from a sectarian school, and the primary issue on appeal was whether the teacher was a "ministerial" employee subject to the ministerial exception.

The 6th Circuit observed that "the overwhelming majority of courts that have considered the issue have held that parochial school teachers ... who teach primarily secular subjects do not classify as ministerial employees for purposes of the exception."

The 6th Circuit also observed that "when courts have found that teachers classify as ministerial employees for purposes of the exception, those teachers have generally taught primarily religious subjects or had a central role in the spiritual or pastoral mission of the church."

Applying those standards, the court concluded that the teacher at issue did not fall within the scope of the ministerial exception. The court noted that the teacher taught secular subjects, and spent only forty-five minutes out of her seven hour workday on religious-oriented activities. The court reasoned, "[t]he fact that [the teacher] participated in and led some religious activities throughout the day does not make her primary function religious."



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Immunity for outside counsel?
September 28, 2011 by Ross Runkel at LawMemo

The US Supreme Court has announced that it will decide whether a private attorney retained by a city to conduct a personnel investigation is entitled to qualified immunity.

Filarsky v. Delia (US Supreme Ct cert granted 09/27/2011).

Delia was a city firefighter who was the subject of an internal affairs investigation. The City retained Steve Filarsky, a private attorney, to participate in the investigation. Filarsky conducted an administrative investigative interview at which Delia had been ordered to appear. During the interview the Fire Chief ordered Delia to produce certain materials that were at his home. While two battalion chiefs waited in a car, Delia went into his home and brought the materials out and placed them on the lawn. Delia then sued under 42 USC Section 1983 claiming a violation of his constitutional rights during the investigation.

The 9th Circuit decided that all of the individual defendants who were City employees were entitled to qualified immunity. However, the 9th Circuit decided that Filarsky was not entitled to qualified immunity because he was not an employee of the City. The court said it was bound by a previous panel decision from the 9th Circuit - Gonzales v. Spencer, 336 F3d 832 (9th Cir 2003) - and thus was "not free to follow" the contrary holding of Cullinan v. Abramson, 128 F3d 301 (6th Cir 1997).

The US Supreme Court granted certiorari on September 27, 2011 to review the 9th Circuit judgment.



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Supreme Court will decide whether union's assessment for political expenses must be preceded by Hudson notice
June 28, 2011 by Ross Runkel at LawMemo

In Knox v. Service Employees Int'l Union (US Supreme Ct cert granted 06/27/2011) the US Supreme Court will decide whether a union's assessment for political expenses must be preceded by a Hudson notice.

This case presents the question of whether a union is required - pursuant to Chicago Teachers Union v. Hudson, 475 US 292 (1986) - in addition to an annual fee notice to employees, to send a second notice when adopting a temporary mid-term fee increase. The mid-term fee increase in this case was designed to create a fund to be used for a "broad range of political expenses." The trial court held such a notice is required; the 9th Circuit (2-1) reversed.

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

The 9th Circuit said that the use of the prior year method to assess nonmember dues was a practical necessity because the Hudson notice must be based on audited financial statements, and any money from the mid-term fee increase used for "non-chargeable" purposes would be refunded after the current year's audit.

The DISSENT argued that the annual Hudson notice was insufficient to enable nonmembers of the union to protect their First Amendment rights upon imposition of the temporary assessment. "The Union’s interest in this case is not a 'right' to nonmembers’ funds. The Union’s interest lies in receiving a fair contribution to its collective bargaining expenses. The Union has no legitimate interest, however, in collecting agency fees from nonmembers to fill its political war-chest."



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Supreme Court will decide whether FMLA's self-care leave provision abrogated states' 11th amendment immunity
June 28, 2011 by Ross Runkel at LawMemo

In Coleman v. Maryland Court of Appeals (US Supreme Ct cert granted 06/27/2011) the US Suprme Court will decide whether the FMLA's self-care leave provision abrogated states' 11th amendment immunity.

Coleman sued the state employer, asserting a claim for violation of the "self-care" provision of the Family and Medical Leave Act (FMLA). The trial court dismissed the claim on the basis of 11th Amendment immunity. The 4th Circuit affirmed.

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

The 4th Circuit held that states are immune from suit for violation of 29 USC Section 2612(a)(1)(D) (the "self-care" provision) of the FMLA. In Nevada Department of Human Resources v. Hibbs, 538 US 721 (2003), the US Supreme Court held that states are not immune from claims based on alleged violations of Section 2612(C) (which entitles employees to leave for the care of family members). Hibbs "determined that Congress had enacted the FMLA in response to 'the States' record of unconstitutional participation in, and fostering of, gender-based discrimination in the administration of leave benefits.'"

The 4th Circuit also noted, however, that "preventing gender discrimination was not a significant motivation for Congress in including the self-care provision."



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SCOTUS: FELA plaintiff need not prove proximate cause; "played any part" instruction is approved (5-4)
June 23, 2011 by Ross Runkel at LawMemo

The US Supreme Court today held that "FELA does not incorporate 'proximate cause' standards developed in nonstatutory common-law tort actions." Thus, FELA defendants are not entitled to a jury instruction that says that there must be a "direct relation between the injury asserted and the injurious conduct alleged."

CSX Transportation v. McBride (US Supreme Ct 06/23/2011)

McBride, a locomotive engineer with CSX Transportation, an interstate railroad, sustained a debilitating hand injury while switching railroad cars. He filed suit under the Federal Employers' Liability Act (FELA), which holds railroads liable for employees' injuries "resulting in whole or in part from [carrier]negligence." McBride alleged that CSX negligently (1) required him to use unsafe switching equipment and (2) failed to train him to operate that equipment. A verdict for McBride would be in order, the District Court instructed, if the jury found that CSX's negligence "caused or contributed to" his injury. The District Court declined CSX's request for additional charges requiring McBride to "show that ... [CSX's] negligence was a proximate cause of the injury" and defining "proximate cause" as "any cause which, in natural or probable sequence, produced the injury complained of." Instead, relying on Rogers v. Missouri Pacific R. Co., 352 US 500 (1957), the court gave the Seventh Circuit's pattern FELA instruction: "Defendant 'caused or contributed to' Plaintiff's injury if Defendant's negligence played a part - no matter how small - in bringing about the injury." The jury returned a verdict for McBride.

On appeal, CSX renewed its objection to the failure to instruct on proximate cause, now defining the phrase to require a "direct relation between the injury asserted and the injurious conduct alleged." The appeals court, however, approved the District Court's instruction and affirmed its judgment for McBride. Because Rogers had relaxed the proximate cause requirement in FELA cases, the court said, an instruction that simply paraphrased Rogers' language could not be declared erroneous.

The US Supreme Court affirmed (5-4), holding that "FELA does not incorporate "proximate cause" standards developed in nonstatutory common-law tort actions. The charge proper in FELA cases ... simply tracks the language Congress employed, informing juries that a defendant railroad caused or contributed to a plaintiff employee's injury if the railroad's negligence played any part in bringing about the injury.

The DISSENT would require a plaintiff to prove proximate cause. "The test the Court would substitute - whether negligence played any part, even the slightest, in producing the injury - is no limit at all. It is simply 'but for' causation."

My view: As the majority points out, this result will have something near zero impact on the outcome of actual cases tried in the courts.



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1.5 million member Wal-Mart class cannot be certified
June 20, 2011 by Ross Runkel at LawMemo

Today the US Supreme Court held that a class of 1.5 million Wal-Mart employees cannot be certified as a Title VII class action suit. Wal-Mart Stores v. Dukes (US Supreme Court 06/20/2011).

Current and former Wal-Mart employees sought judgment against the company for injunctive and declaratory relief, punitive damages, and backpay, on behalf of themselves and a nationwide class of some 1.5 million female employees, because of Wal-Mart's alleged discrimination against women in violation of Title VII. They claim that local managers exercise their discretion over pay and promotions disproportionately in favor of men, which has an unlawful disparate impact on female employees; and that Wal-Mart's refusal to cabin its managers' authority amounts to disparate treatment. The District Court certified the class, finding that respondents satisfied Federal Rule of Civil Procedure 23(a), and Rule 23(b)(2)'s requirement of showing that "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." The Ninth Circuit substantially affirmed.

The US Supreme Court reversed, finding that (1) certification of the class was not consistent with Rule 23(a), and (2) the backpay claims were improperly certified under Rule 23(b)(2).

(1) Under Rule 23(a), plaintiffs cannot prove "common questions of law or fact." Plaintiffs wish to sue for millions of employment decisions at once, but there was no "significant proof that an employer operated under a general policy of discrimination." Wal-Mart's announced policy forbids discrimination and has penalties for violations. Plaintiffs' only evidence of a general discrimination policy was a sociologist's analysis asserting that Wal-Mart's corporate culture made it vulnerable to gender bias, but he could not estimate what percent of the decisions might be determined by stereotypical thinking. Wal-Mart's policy gives local managers discretion, but it is unlikely that all managers would exercise their discretion in a common way without some common direction. Plaintiffs' attempt to show such direction by means of statistical and anecdotal evidence fell short.

(2) Under Rule 23(b)(2), the backpay claims were improperly certified. Rule 23(b)(2) applies only when a single, indivisible remedy would provide relief to each class member. Individualized monetary claims belong instead in Rule 23(b)(3), with its procedural protections of predominance, superiority, mandatory notice, and the right to opt out. Plaintiffs' argument that backpay claims do not "predominate" over their claims for injunctive and declaratory relief is rejected because such an interpretation has no basis in the Rule's text and does violence to the Rule's structural features.

Four Justices partially DISSENTED as to the Rule 23(a) issue, arguing that the majority "imports into the Rule 23(a) determination concerns properly addressed in a Rule 23(b)(3) assessment."



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SCOTUS: ERISA relief is possible without showing detrimental reliance
May 16, 2011 by Ross Runkel at LawMemo

Today's decision in CIGNA Corp v. Amara (US Supreme Ct 05/16/2011):

After CIGNA converted its traditional defined benefit pension plan to a cash balance plan, it issued a summary plan description (SPD) to plan participants. Amara brought a class action claiming that CIGNA's notice of the changes was improper, particularly because the new plan in certain respects provided them with less generous benefits. The District Court held for Amara; the 2nd Circuit affirmed. Although CIGNA argued that the plaintiffs failed to show injury, the District Court found that the participants had shown "likely harm". The District Court then (a) reformed the new plan and (b) ordered CIGNA to pay benefits accordingly.

The US Supreme Court unanimously vacated the 2nd Circuit judgment, and made two significant holdings:

(1) Although ERISA §502(a)(1)(B) did not give the District Court authority to reform CIGNA's plan, relief is authorized by §502(a)(3), which allows a participant, beneficiary, or fiduciary "to obtain other appropriate equitable relief" to redress violations of ERISA "or the [plan's]terms." Section 502(a)(1)(B) speaks to enforcing a plan's terms, not changing them. And the District Court was not enforcing the SPD because statements in the SPD "do not themselves constitute the terms of the plan for purposes of §502(a)(1)(B)."

(2) Because §502(a)(3) authorizes "appropriate equitable relief" for violations of ERISA, the relevant standard of harm will depend on the equitable theory by which the District Court provides relief, which it will do on remand. Potential equitable theories include estoppel, reformation, and surcharge. If the remedy is equivalent to estoppel, a showing of detrimental reliance must be shown. If the remedy is reformation, equity courts did not insist on a showing of detrimental reliance. If the remedy is surcharge, there must be a showing of actual harm, which may come from detrimental reliance or from the loss of a right protected by ERISA. To obtain relief via surcharge, a plan participant or beneficiary must show that the violation caused injury, but need show only actual harm and causation, not detrimental reliance.



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Fatal inconsistency in Wal-Mart Stores v. Dukes?
March 29, 2011 by Ross Runkel at LawMemo

At oral arguments this morning [read the transcript] in Wal-Mart Stores v. Dukes some of the Justices revealed a potentially fatal flaw in the employees' argument.

The case involves questions about whether a huge Title VII sex discrimination class action can go forward as a class action rather than as a series of individual cases.

The employees are arguing that a nationwide class is proper because there is a centralized corporate employment policy. At the same time the employees complain that individual store managers have too much discretion in making employment decisions.

Justice Kennedy said to the employees' lawyer:

. . . your complaint faces in two directions. Number one, you said this is a culture where Arkansas knows, the headquarters knows, everything that's going on. Then in the next breath, you say, well, now these supervisors have too much discretion. It seems to me there's an inconsistency there, and I'm just not sure what the unlawful policy is.

Justice Skalia followed this with:

I'm getting whipsawed here. On the one hand, you say the problem is that they were utterly subjective, and on the other hand you say there is a -- a strong corporate culture that guides all of this. Well, which is it? It's either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do.

My view:

I think the Court should allow trial courts to exercise a wide swath of discretion (in either direction) on certifying a class action.

But the employees in this case really have got themselves in a contradictory position.

I'm expecting a 5-4 or 6-3 decision in favor of Wal-Mart. And I'm being foolish predicting anything the Supreme Court might do.



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SCOTUS to hear "ministerial exception" case
March 28, 2011 by Ross Runkel at LawMemo

Today the US Supreme Court granted certiorari in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC to decide whether the "ministerial exception" applies to teacher at a religious elementary school.

[Details, briefs]

The Equal Employment Opportunity Commission (EEOC) sued the employer, asserting a retaliation claim under the Americans with Disabilities Act (ADA). The trial court dismissed the claim, based on the "ministerial exception" to the ADA. The 6th Circuit vacated the trial court's dismissal.

The ministerial exception is codified in the ADA (42 USC Section 12113(d)), but it is rooted in the 1st Amendment and has been applied to Title VII and other employment discrimination statutes. The EEOC's claim arose from the discharge of a teacher from a sectarian school, and the primary issue on appeal was whether the teacher was a "ministerial" employee subject to the ministerial exception. The 6th Circuit noted that "[t]he question of whether a teacher at a sectarian school classifies as a ministerial employee is one of first impression for this Court."

The 6th Circuit observed that "the overwhelming majority of courts that have considered the issue have held that parochial school teachers ... who teach primarily secular subjects do not classify as ministerial employees for purposes of the exception." The 6th Circuit also observed that "when courts have found that teachers classify as ministerial employees for purposes of the exception, those teachers have generally taught primarily religious subjects or had a central role in the spiritual or pastoral mission of the church." Applying those standards, the court concluded that the teacher at issue did not fall within the scope of the ministerial exception. The court noted that the teacher taught secular subjects, and spent only forty-five minutes out of her seven hour workday on religious-oriented activities. The court reasoned, "[t]he fact that [the teacher] participated in and led some religious activities throughout the day does not make her primary function religious."

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

Question presented in petition for certiorari:

The federal courts of appeals have long recognized the "ministerial exception," a First Amendment doctrine that bars most employment-related lawsuits brought against religious organizations by employees performing religious functions. The circuits are in complete agreement about the core applications of this doctrine to pastors, priests, and rabbis. But they are evenly divided over the boundaries of the ministerial exception when applied to other employees. The question presented is:

Whether the ministerial exception applies to a teacher at a religious elementary school who teaches the full secular curriculum, but also teaches daily religion classes, is a commissioned minister, and regularly leads students in prayer and worship.



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Supreme Court upholds liability in cat's paw case
March 01, 2011 by Ross Runkel at LawMemo

Staub v. Proctor Hospital (US Supreme Court 03/01/2011): Corporate liability can based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision. [Details

The US Supreme Court held today that "if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA."

Staub was a military reservist. His immediate supervisor (Mulally) and Mulally's supervisor (Korenchuk) were hostile to his military obligations. Mulally gave Staub a disciplinary warning, and later Korenchuk reported to the employer's human resources vice president (Buck) that Staub had violated the terms of the warning. Buck reviewed Staub's file and decided to fire him. Staub claimed that Mulally had fabricated the allegation underlying the warning out of hostility to his military obligation.

A jury found the employer liable and awarded Staub damages, but the 7th Circuit reversed, holding that the employer was entitled to judgment as a matter of law because the decisionmaker had relied on more than Mulally's and Korenchuk's advice in making her decision. The Supreme Court reversed.

The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), which forbids an employer to deny "employment, reemployment, retention in employment, promotion, or any benefit of employment" based on a person's "membership" in or "obligation to perform service in a uniformed service" ... and provides that liability is established "if the person's membership ... is a motivating factor in the employer's action."

Applying the background of general tort law and agency law, the Court said, "it is axiomatic under tort law that the exercise of judgment by the decisionmaker [Buck] does not prevent the earlier agent's action (and hence the earlier agent's discriminatory animus) from being the proximate cause of the harm.

The Supreme Court remanded, leaving open the possibility that the trial court's jury instruction was harmless error.



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Novartis v. Lopes - cert denied in FLSA case
February 28, 2011 by Ross Runkel at LawMemo

This morning the US Supreme Court denied certiorari in Novartis Pharmaceuticals Corp v. Lopes and in Schering Corp v. Kuzinski. [Details]

Plaintiffs, pharmaceutical sales representatives, in a class action sued the employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay overtime. The trial court granted the employer's motion for summary judgment. The 2nd Circuit reversed.

Plaintiffs did not sell drugs, visiting physicians to encourage prescriptions of the employer's products and providing drug samples and information. The issue was whether the plaintiffs were outside salesmen or administrative employees exercising discretion and independent judgment, both exempt from the FLSA.

The 2nd Circuit thought it clear that the regulations, defining the term "sale" as involving a transfer of title and explained in the Preamble to the 2004 Final Rule as obtaining a commitment to buy, and defining and delimiting the term "outside salesmen" in connection with an employee's efforts to promote the employer's products, did far more than merely parrot the language of the FLSA. The court granted "controlling" deference to the Department of Labor Secretary's interpretations of her regulations, which the court found were not inconsistent or plainly erroneous with the regulations. The 2nd Circuit concluded the plaintiffs were not outside salesmen. With respect to the administrative exemption, the court noted that the Secretary stated that the regulations required a showing of a greater degree of discretion, and more authority to use independent judgment in matters of significance, than the employer allowed the plaintiffs.

The 2nd Circuit found it appropriate to defer to the Secretary's interpretation, even though it was advanced for the first time in an amicus brief.

[Ed. Note: The 9th Circuit reached the opposite conclusion in Christopher v. SmithKline (9th Cir 02/14/2011), finding that pharmaceutical sales representatives were exempt from FLSA overtime-pay requirements as "outside salesmen."]




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