Posted by: Professionals In Human Resources Association (PIHRA) | October 4, 2010

Supreme Court Will Hear Several Employment Law Cases in New Term

By Allen Smith, J.D.
SHRM’s manager of workplace law content

As the U.S. Supreme Court’s new term begins Oct. 4, 2010, the court already has announced it will review several labor and employment law cases. The case with the broadest impact sounds esoteric but will fundamentally change how courts determine liability, according to Edward Brill, an attorney with Proskauer Rose in New York.

Staub v. Proctor Hospital will take a look at so-called “cat’s paw” or rubber stamp liability. Often the decision-maker for an employment decision is in a centralized HR department or higher up in operations with no personal connection to the affected employee. If the employee alleges that some lower-level biased official caused the decision, there is the question of to what extent the decision-maker was influenced by the lower-level official.

The Supreme Court’s decision in this case should resolve whether a plaintiff has to show that the biased supervisor dominated the decision-making process or whether it is enough for him or her to have influenced the decision-maker or started the ball rolling in the decision-making process, Brill noted. He expects the case will have a “profound, widespread impact on potential liability within large organizations” and said that it might “require reassessment of how decision-making is made.”

In addition, Brill has his eyes on Thompson v. North American Stainless LP, a retaliation case. In Thompson, the fiance of an employee who filed a charge with the U.S. Equal Employment Opportunity Commission (EEOC) alleged that he was terminated in retaliation for her filing of the charge. Brill said the case could “exponentially increase retaliation claims” if the court recognizes associational retaliation.

Another retaliation case before the Supreme Court this term will be Kasten v. Saint-Gobain Performance Plastics Corp. In that case, the court will review a decision from the 7th Circuit ruling that the anti-retaliation provision of the Fair Labor Standards Act does not extend to an employee who complained orally to his employer about the company’s timekeeping practices. The 7th Circuit held that while intra-company complaints that are not filed formally with any judicial or administrative body are protected activity, unwritten verbal complaints are not. An arbitration case will be before the court in AT&T Mobility v. Concepcion, where the court will examine whether the Federal Arbitration Act pre-empts California law. In this case, a lower court held that the waiver of a class action in an arbitration agreement was unconscionable under state law.

Other cases before the Supreme Court this term include NASA v. Nelson, which will review whether the National Aeronautics and Space Administration violated the constitutional right to privacy when it conducted background investigations of federal contractors. A panel of the 9th Circuit held there were enough serious questions on the privacy claim to warrant the issuance of a preliminary injunction. The panel took issue with a question about the use of illegal drugs. Brill said the court’s ruling in this case might have a “spillover effect” in the private sector.

In addition, the court will review the showing that a participant in an Employee Retirement

Income Security Act-governed plan must make to recover benefits based on an inconsistency between the summary plan description and the plan itself. At dispute in this case (CIGNA v. Amara) is whether plaintiffs are required to show “likely harm” rather than demonstrable injury. The Supreme Court also has agreed to review a federal appellate court decision that upheld an Arizona state law providing for the revocation of the business licenses of employers that knowingly hire illegal immigrants and requiring Arizona employers to use E-Verify (Chamber of Commerce of the U.S. of Am. v. Candelaria). This will be a “closely watched and significant case,” he remarked.

The court has announced that it will decide whether the Treasury Department can exclude all medical residents from an exemption from Social Security taxes provided to university students (Mayo Foundation for Medical Education and Research v. United States of America). The court still may decide to review other labor and employment law cases this term.


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