Employment Law Observer

On June 13, 2024, the U.S. Supreme Court, in Starbucks Corp. v. McKinney (National Labor Relations Board), No. 23-367, rejected the arguments of the National Labor Relations Board (the “Board”) to relax the standard that a district court must employ in deciding whether to implement injunctive relief under Section 10(j) of the National Labor Relations Act (the “Act”). 

The United States Supreme Court's recent decision in Viking River Cruises v. Moriana, No. 20–1573 (June 15, 2022) benefits California employers as it will make it easier for them to enforce arbitration agreements related to claims under California's Private Attorneys General Act (PAGA) and limit class actions and quasi-class actions.

The battle over Scabby the Rat took another turn on July 21, 2021, when the National Labor Relations Board issued its anticipated decision and order in International Union of Operating Engineers, Local 150 and Lippert Components, Inc.

There is an ongoing tension between the National Labor Relations Board (the "Board") and employers who seek to expand the use of an arbitration forum to resolve employment disputes. The U.S. Supreme Court has continued to endorse the idea that arbitration is both an important part of national labor policy and a reasonable alternative to litigation in court for employment-related disputes. As the Board issues new opinions and interprets guidance from the Supreme Court, employers are in a position to gain better insight and avoid problematic drafting mistakes in arbitration agreements.

A recent decision by a three judge panel of the federal D.C. Circuit Court of Appeals highlights potential pitfalls for successor employers who want to establish new compensation terms. In First Student, Inc., the D.C. Circuit panel concluded the employer in that case was a "perfectly clear" successor under existing precedent of the National Labor Relations Board (NLRB) because it intended to offer employment to the all of the employees of the unionized predecessor who met minimum criteria. The concept of a perfectly clear successor first was raised by the United States Supreme Court in NLRB v. Burns International Security Services, Inc.. In that decision, the Supreme Court noted that in certain circumstances it is "perfectly clear that the new employer plans to retain all of the employees in the unit," and the employer then is obligated to bargain with the union before making unilateral changes to wages, benefits, and other mandatory terms or conditions of employment.

The National Labor Relations Board (NLRB) recently provided guidance in Cordúa Restaurants, Inc., 368 NLRB No. 43, for employers seeking to require employees to sign class action and collective action waivers in arbitration agreements when facing litigation. By way of background, the U.S. Supreme Court previously held in Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018), that agreements containing class action and collective action waivers, and provisions stipulating that employment disputes be resolved by individualized arbitration, do not violate the National Labor Relations Act. As a result, the Court held that these agreements must be enforced as written to follow the Federal Arbitration Act (the "Act"). In Cordúa Restaurants, the NLRB was faced with two issues of first impression in the post-Epic Systems era: (1) whether the Act prohibits employers from circulating such agreements in response to employees opting in to a collective action; and (2) whether the Act prohibits employers from threatening to discharge an employee who refuses to sign a mandatory arbitration agreement. The NLRB held that both actions were consistent with Epic Systems and were not forbidden under the Act. The Cordúa Restaurants decision provides significant opportunity for employers to revise arbitration agreements to preclude participation in these multi-party litigations and require that employees sign these agreements.

On June 3, 2019, the Supreme Court of the United States made a ruling that employers and their legal counsel need to be aware of. In Fort Bend County v. Davis, the Supreme Court ruled that the charge-filing requirements for EEOC discrimination claims filed under Title VII, including that Act's scope of charge and filing rules, are not jurisdictional and instead are claims processing rules which can be waived by a defendant if not timely raised in federal court proceedings. This decision resolves a split among multiple federal Circuit Courts which have confronted the issue.

Last year, the U.S. Supreme Court (SCOTUS) handed employers a major win in Epic Systems v. Lewis, when it ruled that employees must submit claims to arbitration on an individualized basis when their employment agreements require it, even when those claims could be brought as class or collective action under federal legislation. More recently, in Lamps Plus Inc. et al. v. Frank Varela, SCOTUS addressed the issue of whether a worker can pursue class arbitration when an arbitration agreement does not explicitly address class arbitration. By a 5-4 vote, the court said class arbitration is also barred in such circumstances, holding that "[u]nder the Federal Arbitration Act, an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration[.]"

After considerable anticipation, the U.S. Supreme Court today agreed to hear three cases involving questions of whether Title VII's prohibition against sex discrimination encompasses discrimination on the basis of sexual orientation and gender identity.

The United States Supreme Court recently handed workers a rare victory in New Prime Inc. v. Oliveira. The Supreme Court ruled that transportation workers engaged in interstate commerce—including those labeled as independent contractors—are exempt from the Federal Arbitration Act (FAA) and thus cannot be compelled to undergo mandatory arbitration.  As a result of this decision, employers in the transportation industry will have to review their existing arbitration policies and assess whether or not they comply with applicable local, state, and federal laws.

In a recent 8-0 decision, the U.S. Supreme Court upheld a Ninth Circuit Court of Appeals decision holding the Age Discrimination in Employment Act (ADEA) applies to public employers of any size.

The United States Supreme Court recently handed the defense bar a useful tool in stemming the tide of class action lawsuits. In the area of employment law, claims for violations of federal wage and hour laws, violations of state and local regulations governing employees, and systemic workplace discrimination are prone to class action claims.

The United States Supreme Court issued its long-anticipated decision in Janus v. American Federation of State, County and Municipal Employee Council 31 on June 27, 2018.  The five to four majority held that requiring public-sector employees who are not union members to pay union agency fees violates the First Amendment.  In the final paragraphs of the majority opinion, the Court made it clear that in the context of a public sector employer-union relationship, non-member employees in the bargaining unit must provide express consent before union dues can be deducted from their paychecks.  Janus' implications for public employers are wide-ranging. However, the immediate question that unionized public-sector employers must address is how to administer existing agency fee provisions in collective bargaining agreements and distinguish between union members and non-members, whose express consent is now required before union dues can be deducted from their paychecks.  It is important to note that this decision is grounded in constitutional principles and only applies to public sector unionized employees.

The United States Supreme Court ruled earlier this week that employees must submit claims to arbitration on an individualized basis when their employment agreements require it, even when those claims could be brought as class or collective action under federal legislation such as the Fair Labor Standards Act. Writing for the majority, Justice Neil Gorsuch held that parties to an arbitration agreement are bound by their agreement, as the Federal Arbitration Act envisioned. The Court cited the long history of supporting private arbitration agreements as an efficient and cost-effective means of handling disputes between parties, including parties to an employment agreement who have a dispute over wages.

The US Supreme Court recently issued a five-four decision addressing whether service advisers of a car dealership fell within the automobile sales exemption. While the opinion may not seem particularly helpful for businesses that do not sell cars, a deeper reading reveals that it is a positive case for employers.

On February 21, 2018, the U.S. Supreme Court ruled that provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that protect whistleblowers from being fired, demoted, or harassed by their employers only apply to people who actually make a report of a violation of the federal securities laws to the Securities and Exchange Commission. The Dodd-Frank Act established a whistleblower program that was designed to motivate individuals to report securities laws violations to the SEC by providing whistleblowers with incentives and protections. Individuals who voluntarily report information to the SEC may be entitled to a cash award of 10 to 30% of the monetary sanctions collected in enforcement actions, and they are protected from retaliation by their employers for having provided that information.

The U.S. Supreme Court held in Green v. Brennan that the statute of limitations for a constructive discharge begins to run on the date of resignation, not the date of the employer’s last discriminatory act, resolving a circuit split. As a result, in determining the deadline for filing a charge of discrimination with the EEOC, constructive discharge cases will be treated the same way as actual discharge cases.

In a 5-3 decision, the United States Supreme Court affirmed the Ninth Circuit’s decision in Campbell-Ewald Co. v. Gomez, holding that an unaccepted settlement offer or offer of judgment providing for an individual plaintiff complete relief does not moot a class action complaint, resolving a split among circuits. However, the Court limited its holding by declining to address “whether the result would be different if a defendant deposits the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.” The Court’s dissenting opinions and concurring opinions suggest actual tender would moot the plaintiff’s claim.

Note: Though the Supreme Court's decision in Obergefell v. Hodges (issued today) does not directly implicate an employment issue, the opinion represents a significant shift in U.S. culture and society, and therefore is likely of import to many employers. Thus, we share a summary of the opinion.