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More US Supreme Court decisions expected to affect employers

Rich MeneghelloThe U.S. Supreme Court is kicking off a new term this month, and a number of cases will affect the world of labor and employment law. It’s tough to say how employers will be affected, but they are on a sort of winning streak.

The 2012-2013 term was a very good term for employers. In fact, of the six major decisions that will affect employers and can be categorized in the “win” or “lose” column, employers won all six: two victories each in three different categories of cases. These decisions will end up helping employers in several ways: making it easier for their lawyers to win cases that were filed against them, discouraging plaintiffs’ attorneys from bringing some of these cases in the first place, cooling off big-dollar class actions and clearing the path for more cases to be decided in business-friendly arbitrations.

Two decisions further defined the contours of Title VII of the Civil Rights Act, and in both instances the court narrowed the playing field and made it easier for employers to secure victories at the trial-court level.

In Vance v. Ball State University, the court further ensured that employers aren’t unfairly held to pay for the sins of their rogue employees who harass co-workers in violation of company policy. And in University of Texas Southwestern Medical Center v. Nassar, the court made it even more difficult for employees to win retaliation claims under Title VII, ruling that plaintiffs must prove that their protected activity was the “but for” cause of whatever adverse action that aggrieved them, rather than just one of the possible motivating factors.

In a pair of decisions this past spring, the Supreme Court further clamped down on the use of class actions as a remedy against businesses, further reducing the chances that employers will have to tangle with these costly lawsuits.

In Genesis HealthCare Corp. v. Symczyk, the court ruled that wage and hour collective action lawsuits can be defeated through some early maneuverings from defense counsel, and in Comcast Corp. v. Behrend, the court placed a burden on plaintiffs to establish reliable and admissible evidence of common injury and damages on a class-wide basis at the earliest stages of litigation.

Finally, in another pair of decisions concerning arbitration, the court held that lower trial courts cannot invalidate arbitration agreements that do not permit class-wide arbitrations (American Express v. Italian Colors Restaurant), and also that an arbitrator can permit class-wide arbitration of claims pursuant to the clear language of the agreement (Oxford Health Plans LLC v. Sutter).

So, what’s on deck for 2013-2014? The upcoming Supreme Court term promises no fewer than seven cases that will have at least some effect on all employers.

In a hot-button case with political implications, the court will grapple with the question of whether President Barack Obama’s recess appointments of three members of the National Labor Relations Board were constitutionally permissible (NLRB v. Noel Canning). If the court finds that these appointments are invalid, hundreds of NLRB decisions made by the so-called recess appointees in the past several years will be invalidated due to the lack of a quorum on the board. Now is the time to work with labor counsel to evaluate and reconsider labor relations and litigation strategies with this possible outcome in the balance.

Also, businesses that have a unionized workforce and require employees to wear any type of protective gear may be affected by the court’s decision in Sandifer v. U.S. Steel Corp. In certain circumstances, employers can be required to pay employees for time spent changing into and out of work clothes, although many union contracts agree that the time spent by employees “changing clothes” will be excluded from hours worked. This case will determine whether union agreements can trump wage and hour laws in these circumstances.

A third union-related case, Unite Here Local 355 v. Mulhall, will determine whether an employer and union violate the Labor Management Relations Act by entering into an agreement under which the employer promises to remain neutral with regard to union organizing in exchange for the union’s promise to forgo its rights to picket, boycott or otherwise put pressure on the employer’s business. If the court rules that these neutrality agreements amount to bribery, employers and unions will have to re-examine the ways in which they attempt to coexist.

The Supreme Court will once again rule on arbitration processes. In BG Group PLC v. Republic of Argentina it will decide whether the court or the arbitrator should determine whether a precondition to arbitration has been satisfied.

It will also wade into discrimination matters this term, in Madigan v. Levin, and decide whether government employees can bypass the procedures set forth in the Age Discrimination in Employment Act and go straight to court to pursue claims for age discrimination under other avenues.

The court also will tackle retaliation claims again: In Lawson v. FMR LLC it will consider whether employees of privately held contractors or subcontractors of public companies are protected from retaliation by the Sarbanes-Oxley Act. Should the court side with the workers, employers that do business with public companies will need to work with counsel to familiarize themselves with the complex regulations governing public companies.

Finally, in a key case that may affect all Employee Retirement Income Security Act plan sponsors and participants, the court will consider when a statute of limitations should begin to run for judicial review of an adverse benefits determination (Heimeshoff v. Hartford Life & Accident Insurance Co.). In this case, an employee filed a claim for long-term disability benefits under her employer’s plan, which required that any lawsuits be filed within three years after the proof of loss was due. The employee proceeded through the internal appeal process, which resulted in a final denial of benefits, but in the meantime the three-year period ran out. The employee contends that the limitations period should not begin to run until the final denial of benefits.

The court’s ruling could affect the use of a statute of limitations defense in response to claims for benefits and could have a broader effect on parties’ agreements to change limitations periods in other contexts.

Rich Meneghello is a partner in the Portland office of Fisher & Phillips LLP, which is dedicated to representing the interests of management. Contact him at or 503-205-8044, or follow him on Twitter: @pdxLaborLawyer.

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