What the Supreme Court’s 2017-2018 Term

Means For Employers

David B. Weisenfeld, J.D. Anthony J. Oncidi, Esq.

XpertHR Legal Editor Proskauer Rose LLP

Former US Supreme Ct. Correspondent Heads Labor and Employment

New Providence, NJ Group in Los Angeles, CA

July 19, 2018

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Justice Kennedy Calls It a Career

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What will this mean for employers?

Tony, the last time we had a vacancy there was almost an entire term with an

8-member Supreme Court. Do you think it will be that drawn out this time?

• If that happens, would it limit the number of

employment cases Court agrees to hear?

Eight is Enough?

Supreme Court Goes Shorthanded

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• In 2016-2017 term, almost nothing happened because Court had 4-4 split

• But with Justice Neil Gorsuch aboard for the full term this year was different

• Supreme Ct. waded into disputes affecting mandatory arbitration, unions,

whistleblowers

• Practical implications—pro-employer term

• Court majority consistently sided with businesses

Pro-Employer Term After Year “Hiatus”

• Supreme Ct. ruled 5-4 for employer upholding arbitration clause

• Appears to be big win for employers

Big takeaway from the ruling?

Epic Systems v. Lewis, May 21, 2018

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Upholds

arbitration

clause

Could affect 25

million

employment

contracts

Can compel

employees

to arbitrate

individually

Class Actions Limited in Arbitration

• Case arose in context of wage and hour case, but does it go further?

• Could an employer use these arbitration clauses to guard against sexual

harassment class actions for instance? Other implications?

• Justice Ginsburg in dissent suggested majority had resurrected “yellow

dog” contracts that employees must sign as a condition of beginning

work. Thoughts?

• While decision benefits employers, it’s possible not everything will be positive

• Chicago employment attorney said on XHR podcast it could lead plaintiffs’

attorneys to file individual arbitrations claims early and more often

• Called it potentially “death by 1,000 cuts”

• Tony, do you see that as a realistic possibility? Could this be a case of “be

careful what you wish for”?

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More Epic Systems v. Lewis

• Controversial Lilly Ledbetter ruling in 2007

• Court held each paycheck received did not constitute a discrete discriminatory

act, even if prior discrimination led to the pay disparity

• Led to congressional action—Lilly Ledbetter Act in 2009

• Justice Ginsburg seemed to be urging Congress to follow suit

• Depending on what happens in November election, how likely is legislative

action?

Thoughts?

Congressional Action on Horizon?

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• Unions a bit in decline

• 28 states have right-to-work laws

• Supreme Ct. ruled states/public sector unions may no longer collect fees

from non-union employees who object to paying them

• Another 5-4 ruling along ideological lines

• Overturned more than 40 years of settled labor law

• Nearly happened two years ago in a similar case, but Justice Scalia’s death led

to a 4-4 tie in Friedrichs

• Scalia’s successor, Justice Gorsuch, authored the Janus opinion

Dealing a Blow to UnionsJanus v. AFSCME, June 27, 2018

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• Involved claims of Illinois employee who refused to join union because he

opposed many of its positions (including those taken in collective bargaining)

• Unions had been allowed to collect dues from all employees so long as used for

collective bargaining, contract administration or grievance adjustment purposes

• This employee was required to pay monthly agency fee

• Justice Samuel Alito wrote, “Employees must choose to support the union

before anything is taken from them.”

• Otherwise would violate employees’ free speech rts.

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Janus Ruling

What makes this ruling so significant?

• In dissent, Justice Elena Kagan said majority’s ruling will wreak havoc on

entrenched contractual arrangements

• Could lead to labor contracts being invalidated

• Is that too strong? How much credence do you give that?

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Janus Significance

Held

• Ct. ruled unanimously that employee must provide info. about securities law

violations to the SEC in order to be protected from retaliation

• Sarbanes-Oxley Act of 2002 applies to all employees who report misconduct to

the SEC, any other federal agency or an internal supervisor

• Dodd-Frank (2010) enacted in wake of Wall Street financial crisis, defines

whistleblower as a person who provides info. relating to securities law violation

What Happened

• Digital Realty VP claimed company fired him shortly after he reported suspected

securities law violations to senior management

• Never told SEC prior to his termination

• Plaintiff did NOT qualify as a whistleblower

Limiting Corporate Whistleblowers

Digital Realty Trust v. Somers

February 21, 2018

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What’s the takeaway for employers from this ruling?

• Plaintiff, a former company v.p., argued that having such a limited

“whistleblower” definition would allow misconduct to go unpunished

• Also leaves professionals at risk of retaliation for complying with internal

company reporting obligations

Could this have a chilling effect on high-level employees from coming

forward in light of what happened to Somers?

More: Digital Realty v. Somers

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Whistleblower

Gay Rights

Masterpiece Cakeshop v. Colorado Civil Rights Comm.

June 4, 2018

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• Colorado bakery owner refuses to make wedding cake for gay couple

• Said he was willing to sell “other items” to them but that making a cake for gay

wedding violated his religious beliefs

• Supreme Ct. ruled 7-2 for owner

Justice Kennedy authored opinion

who has been gay rights champion in

Obergefell v. Hodges and Windsor

Tony, how come the Court sided

with the bakery owner?

• Held—Colo. Commission was intolerant of the bakery owner’s religious beliefs

• Motive for his refusal to serve was based on sincere religious convictions

• Baker’s action occurred before Colorado recognized same-sex marriage

• Court did say gay persons shouldn’t be subj. to indignities in seeking services

Is this ruling limited to this case or does it send signals for the future?

Supreme Ct. has still yet to rule on whether Title VII protects sexual

orientation in employment realm. What would potential Justice Kavanaugh

mean?

More: Masterpiece Theater

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Religious objections

were protected

expression

One commissioner

compared it to

defenses of slavery

• Another 5-4 ruling

• Broadens overtime pay exemptions to cover car dealership “service advisors”

• Should make it easier for more employers to claim OT exemptions

• Overtime always such a big issue, what’s the lesson from this ruling?

April 2, 2018

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Encino Motorcars v. Navarro--FLSA

• California Supreme Ct. adopted “ABC Test” for determining independent

contractor status

• MD and DE already follow this test

• The “ABC Factors”:

1. The worker is free from control and direction of the hirer in connection with

the performance of the work;

2. Performs work outside the usual course of hiring entity’s business; and

3. Is customarily engaged in an independently established trade, occupation or

business of the same nature as the work performed for the hiring entity

Is this the end for most IC arrangements?

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Dynamex Operations West v. Superior Court, April 30, 2018

Dynamex: California Supreme Ct.

• Supreme Ct.’s next term starts in October

What’s a big unresolved issue affecting employers/HR that is crying out for

review?

Will some issues thought to be “settled” be revisited?

What’s Coming Up/On Deck Circle

Fall 2018

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Fire Away

Inquiring Minds Want to Know:

Questions

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David B. Weisenfeld, J.D. Anthony J. Oncidi, Esq.

XpertHR Legal Editor Proskauer Rose LLP

Former US Supreme Ct. Correspondent Heads Labor and Employment

New Providence, NJ Group in Los Angeles, CA

@DavidWeisenfeld

July 19, 2018

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