Employment Law Observer

On June 29, 2023, the U.S. Supreme Court, in a 6-3 decision, held that the race-conscious admissions systems used by Harvard College (Harvard) and the University of North Carolina (UNC) are unconstitutional, prohibiting the consideration of an applicant's race when making an admission decision. The practice of considering an applicant's race when making an admission decision had previously been recognized by the court as lawful for 45 years.

On June 29, 2023, the U.S. Supreme Court issued Groff v. Dejoy, a ground-breaking decision that changes a long-recognized standard for religious accommodations in the workplace. This new interpretation effectively expands an employer's obligation to provide religious accommodations. For years, appellate courts recognized an employer's authority to reject a religious accommodation merely by showing it creates a de minimus burden on the employer or co-workers. With this decision, the Court rejected the routine application of the de minimus standard in favor of one where the employer must show the "accommodation would result in substantial increased costs in relation to the conduct of its particular business" if rejected. Now an employer must make an individualized assessment as to the impact of the accommodation, taking into account the employer’s nature, size, and resources. Even where the requested accommodation would result in substantially increased costs, the employer is obligated to evaluate the feasibility of alternative accommodations.

In deciding Morgan v. Sundance, Inc., the U.S. Supreme Court has resolved a circuit split, answering the question of whether a party must show prejudice when arguing that the opposing party waived its right to compel arbitration. Previously, all federal circuit courts except the Seventh and D.C. Circuits used an arbitration-specific waiver rule that requires a showing of prejudice. The Supreme Court has now eliminated this requirement.

On June 3, 2021, the U.S. Supreme Court issued its opinion in Van Buren v. U.S. addressing a long-standing circuit split on employee computer access limits under the Computer Fraud and Abuse Act (CFAA). For many years the federal courts struggled with and disagreed over how to interpret the CFAA provisions that impose criminal and civil liability on a person who "intentionally accesses a computer without authorization or exceeds authorized access." 18 U.S.C. §1030(a)(2). The phrase "exceeds authorized access" is defined by the CFAA as follows: "To access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter." 18 U.S.C. §1030(e)(6). Unlike the typical employment scenario, the Van Buren case involved a police officer who used his access to a law enforcement database to search a license plate in exchange for $5,000.00 that was offered to him as part of a planned FBI investigation. The police officer was charged with a felony violation of the CFAA based on the allegation that his license plate search violated the "exceeds authorized access" provision of the CFAA. 18 U.S.C. §1030(a)(2). Specifically, the government's case against the police officer was that he used his authorized access to the license plate database for "an improper purpose" that included "any personal use." Van Buren, p. 4, citing App. 17. After the police officer was convicted by a jury, he was sentenced to 18 months in prison. On appeal the Eleventh Circuit affirmed by holding that the police officer had violated the CFAA by his action in accessing the law enforcement database for an "inappropriate reason." Van Buren v. U.S., 940 F.3d 1192, 1208 (9th Cir. 2019).

Historically, there has been a "push and pull" between the National Labor Relations Board (Board) and employers over mandatory arbitration agreements and class action waivers. Although most of the disputes have been resolved by recent SCOTUS jurisprudence, the Board remains concerned with restrictions in arbitration agreements that limit the ability of employees to file unfair labor practice charges before the Board if employees believe their Section 7 rights have been violated.

In a historic 6-3 decision, the Supreme Court of the United States held that an employer who discriminates against an employee merely for being gay or transgender violates Title VII. 590 U. S. ____ (2020). This landmark decision provides LGBTQ+ employees across the nation protection from termination or other employment discrimination because of their LGBTQ+ status. The Supreme Court's decision resolved three cases: Altitude Express v. Zarda; Bostock v. Clayton County, Georgia; and R.G. & G.R. Harris Funeral Homes Inc. v. EEOC. Justice Gorsuch delivered the opinion in which Justices Roberts, Ginsberg, Breyer, Sotomayor, and Kagan joined. Justice Alito filed a dissenting opinion, in which Justice Thomas joined. Justice Kavanaugh also filed a dissenting opinion.

In a unanimous decision issued on March 23, 2020, the United States Supreme Court held that a but-for causation standard applies to claims brought under Section 1981 of the Civil Rights Act of 1866. The Supreme Court also noted that this standard applies throughout the litigation process, including the initial pleading stage.

For the last 150 years, the "motivating factor" standard of proof test was the pinnacle of what a plaintiff had to meet to prove allegations of racial discrimination in the workplace. However, the U.S. Supreme Court recently heard oral arguments in a case that will hold the "motivating factor" test to a much higher "but for" standard of proof in order to prevail in a racial discrimination suit. A decision in this case could have far-reaching effects on both the employment and economic sectors.

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[.]"

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 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.

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.