Monday, October 5, 2015, marked the beginning of this year’s term of the United States Supreme Court. This year, the Supreme Court has already granted review in several employment-related cases. A brief summary of some of these cases and how the Court’s decision may impact employers is provided below.
TYSON FOODS V. BOUAPHAKEO, (14-1146) (Decision below: 765 F.3d 791 (8th Cir. 2014))
The Supreme Court has been asked to decide whether a class action may be certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, (i) where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample, or (ii) where the class contains hundreds of members who were not injured and have no legal right to any damages.
The plaintiff employees alleged that Tyson failed to compensate them fully for time spent donning and doffing personal protective equipment and walking to and from their workstations. There were differences in how much time each employee spent on these tasks, and there were employees who did not spend any uncompensated time on these tasks.
This case is of great interest to employers who risk exposure to class or collective action claims for unpaid wages and employment discrimination. The Supreme Court may build upon its position (articulated in previous cases) that certification requirements are stringent and that differences between individual class members cannot be ignored or treated lightly, by applying those principles to the damages element of wage claims. Caselaw interpreting the procedural requirements for maintaining a class or collective action may ultimately impact the viability of class and collective action claims under local, state, and federal overtime laws and other employment laws.
GREEN V. BRENNAN, POSTMASTER GEN., (14-613) (Decision below: 760 F.3d 1135 (10th Cir. 2014))
The Court has been asked to consider whether, under federal employment discrimination law, the filing period for a constructive discharge claim begins to run when an employee resigns, or at the time of an employer's last allegedly discriminatory act giving rise to the resignation. There is a sharp split among the United States Courts of Appeals on this issue.
Employment discrimination plaintiffs must generally exhaust their administrative remedies prior to filing a lawsuit. To exhaust administrative remedies, plaintiffs must file a Charge of Discrimination with the EEOC or appropriate agency within a prescribed number of days following the date of an alleged discriminatory act. In Green, the 10th Circuit found that some act of discrimination by an employer, rather than just an employee’s resignation, must occur within the limitations period for a constructive discharge plaintiff to appropriately exhaust administrative remedies. Because Green had filed a Charge of Discrimination more than 45 days (the limitations period for federal employees) after the date of any alleged discriminatory act, his claim was time-barred (even though Green had resigned during the limitations period).
If the Supreme Court affirms the 10th Circuit, some employees will have a more limited time to bring constructive discharge claims.
FRIEDRICHS V. CALIFORNIA TEACHERS ASSOC., (14-915) (Decision below: 2014 WL 10076847 (9th Cir. Nov. 18, 2014))
The parties have asked the Court to answer the following questions concerning public-sector union agency fees:
- Whether Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977), should be overruled and public-sector "agency shop" arrangements invalidated under the First Amendment.
- Whether it violates the First Amendment to require public employees to affirmatively object to subsidizing nonchargeable speech by public-sector unions, rather than requiring that employees affirmatively consent to subsidizing such speech.
The underlying case involves California public school districts and agency-shop arrangements that may be established between the labor organizations that represent the districts’ employees and the school districts. The arrangements require that all employees be required to either join the union or pay their fair share of service fees, referred to as an “agency fee” (usually the same amount as union dues). Under California law, the unions’ use of agency fees is limited to activities “germane” to collective bargaining. Each year the unions send a notice to all non-members setting forth both the agency fee and the non-chargeable portion of the fee applicable to activities that are not germane to collective bargaining. If non-members do not want to pay the non-chargeable portion, they must notify the union after receipt of the notice. The plaintiffs in Friedrichs allege that the agency-shop arrangement violates their rights to free speech and association under the First and Fourteenth Amendment to the United States Constitution by requiring them to make financial contributions to support unions and requiring them to participate in “opt out” procedures to avoid making financial contributions in support of non-chargeable union expenditures.
This case is of interest to public employers with a workforce subject to agency-shop arrangements. The Court’s ruling may ultimately impact the existence of labor unions and the unions’ power in such workplaces.
MHN GOVERNMENT SERVICES V. ZABOROWSKI, (14-1458) (Decision Below: 601 Fed. Appx. 461 (9th Cir. 2014))
The parties dispute whether California’s arbitration-only severability rule is preempted by the Federal Arbitration Act (“FAA”). MHN Government Services (“MHN”) moved to compel arbitration after being sued for alleged violations of the Fair Labor Standards Act for failing to pay proper overtime compensation. The California district court found that the multiple aspects of the arbitration provision were either procedurally or substantively unconscionable. Under California’s applicable severance principles, the court declined to sever the unconscionable portions of the arbitration provision as they caused the entire agreement to be permeated with unconscionability. The Ninth Circuit Court of Appeals affirmed.
This case is of relevance to California employers because it addresses whether California’s applicable severability principles are preempted in favor of the FAA. More specifically, given the mandates of the FAA, the Court must determine whether the California severability principles are impermissibly unfavorable to arbitration particularly when the arbitration agreements contain express severability provisions. The Supreme Court’s decision will determine whether California and other states with similar principles will be brought in line with the prior opinions of the Supreme Court and four other courts of appeals.