Employment Law Daily recaps of the labor and employment decisions handed down by the US Supreme Court

Employment Law Daily recaps of the labor and employment decisions handed down by the US Supreme Court during its October 2009 term, as well as the non-employment rulings that promise to have a significant impact on labor and employment law
Source: CCH Workday at http://cch-workday.blogspot.com/ Reproduced with permission. Copyright© CCH 2010, All rights reserved. [Click on citation to access the opinion.]


Skilling v United States (Dkt No 08-1394). The High Court narrowed the scope of the federal criminal statute for “honest services” fraud, vacating the conviction of former Enron CEO Jeff Skilling and instructing that such indictments must be supported by evidence that the defendant had solicited or accepted bribes or kickbacks. The Court rejected the government’s construction of the statute, which would broadly proscribe the “taking of official action by the employee that furthers his own undisclosed financial interests while purporting to act in the interests of those to whom he owes a fiduciary duty.” Skilling is a welcome ruling for attorneys representing high-level corporate executives in criminal matters (June 24, 2010).


Granite Rock v Int’l B’hood of Teamsters (Dkt No 08-1214). In a 7-2 decision, the Supreme Court ruled that a dispute between Granite Rock and the Teamsters union over the ratification date of a bargaining agreement was a matter for a federal court, not an arbitrator, to decide. A court may apply the presumption of arbitrability only where a validly formed and enforceable arbitration agreement is ambiguous as to whether it covers the dispute at hand, and then may order arbitration only where the presumption of arbitrability is not rebutted, reasoned the Court. Here, whether or not the agreement was validly ratified went to the very existence of the agreement to arbitrate. However, the unanimous Court concluded that the employer’s tortious interference claim against the Teamsters was not cognizable under Section 301 of the LMRA (June 24, 2010).


Rent-A-Center, West, Inc v Jackson (Dkt No 09-497). The Supreme Court held in a 5-4 decision that under the Federal Arbitration Act, where parties to an arbitration agreement include a provision that delegates to the arbitrator the gateway question of enforceability of the agreement, if a party specifically challenges the enforceability of the particular agreement, a district court will consider the challenge, but if a party challenges the enforceability of the agreement as a whole, the arbitrator will consider the challenge (June 21, 2010).


City of Ontario v Quon (Dkt No 08-1332). Even assuming that a SWAT officer had a reasonable expectation of privacy in the text messages he sent from his work pager, the city of Ontario, California, and its police department and chief did not violate the officer’s Fourth Amendment rights by obtaining and reviewing transcripts of his text messages because the search was reasonable, the US Supreme Court held in a unanimous judgment. The Court did not resolve the officer’s privacy expectation question, however (June 17, 2010).


New Process Steel, LP v NLRB (Dkt No 08-1457). The National Labor Relations Board lacked the statutory authority to delegate its full powers to a two-member quorum, the Supreme Court ruled in a 5-4 decision, because under Section 3(b) of the National Labor Relations Act, a delegee group must have three members in order to exercise the delegated authority of the Board. The Court’s decision could potentially invalidate almost 600 cases decided by the two-member panel from December 31, 2007 until March 27, 2010 (June 17, 2010). In response to the Court’s decision, the NLRB announced July 1 that it will review 96 cases pending in the courts (six at the Supreme Court and 90 in various Courts of Appeals) that had been issued by the two-member Board; the Board decided nearly 600 decisions while operating with only two members. Each of the remanded cases will be considered by a three-member panel of the Board that will include Chairman Wilma Liebman and Board Member Peter Schaumber (who made up the two-member panel that initially ruled on each case). Consistent with Board practice, the two members not selected to preside over a particular case may nonetheless elect to participate in the case. It is unclear at this time how many of the two-member Board rulings not already challenged in the appellate courts can or will be contested and how many may now be moot.


Hardt v Reliance Standard Life Ins Co (Dkt No 09-448). An employee need not be a “prevailing party” to be eligible for an attorney’s fees award under ERISA’s fee-shifting provision (§1132(g)(1)), held the Supreme Court in a unanimous decision, finding that courts may award fees and costs to a fee claimant so long as he or she has achieved “some degree of success on the merits” (May 24, 2010).


Lewis v City of Chicago (Dkt No 08-974). An employee who does not file a timely EEOC charge challenging the adoption of a practice still may assert a Title VII disparate impact claim in a timely EEOC charge challenging the employer’s later application of that practice as long as the employee alleges each of the elements of a disparate impact claim, the Supreme Court ruled in a unanimous opinion (May 24, 2010).


Stolt-Nielsen S.A. v AnimalFeeds Int’l Corp (Dkt No 08-1198). In a commercial arbitration case that has implications for class-wide arbitration of employment disputes, the US Supreme Court ruled in a 5-3 decision that imposing class arbitration on parties that have not agreed to authorize class arbitration is inconsistent with the Federal Arbitration Act (April 27, 2010).


Perdue v Kenny A (Dkt No 08-970). An attorney’s superior performance can result in enhanced attorney’s fees but only in extraordinary circumstances, held the Supreme Court in a 5-4 decision; the Court affirmed its position that attorney’s fees based on a lodestar calculation, under federal fee-shifting statutes, can be enhanced in certain situations. The lodestar calculation is used to award attorney’s fees and is based on reasonable hours worked and a reasonable hourly rate. The Court’s decision has broad implications for the award of fee enhancements under more than 100 federal laws, including fees in employment discrimination and wage-hour cases (April 21, 2010).


Conkright v Frommert (Dkt No 08-810). In a 5-3 decision, the Supreme Court held that where Xerox’s pension plan provisions gave the plan administrator the power to construe disputed terms, a federal district court should have deferred to the administrator’s reasonable interpretation of the disputed provisions (April 21, 2010).


Graham County Soil and Water Conservation Dist v US ex rel Wilson (Dkt No 08-304). An internal audit and a state agency report were “public disclosures” of wrongdoing under the False Claims Act’s public disclosure bar, which prohibits individual qui tam actions if the alleged fraud has already been disclosed by certain administrative reports, audits or investigations, the Supreme Court held, overruling the Fourth Circuit’s holding that only federal administrative reports may trigger the FCA’s public disclosure bar. The ruling ultimately will have little traction: the Patient Protection and Affordable Care Act included whistleblower provisions that beefed up the FCA clause at issue. Because the amendment was not retroactive, however, it could not save the employee whistleblower here (March 30, 2010).


Hertz Corp v Friend (Dkt No 08-1107). A corporation’s principal place of business is the place where its officers direct, control, and coordinate its activities, a unanimous Supreme Court ruled, adopting a “nerve center” test for determining corporate citizenship and rejecting a “plurality of business activities” approach for analyzing whether diversity jurisdiction exists (February 23, 2010).


Citizens United v Federal Election Comm’n (Dkt No 08-205). The Supreme Court struck down a federal campaign finance reform law that restricted corporate spending on election campaigns. The constitutionally impermissible provision had applied to labor unions as well, although union spending was not directly at issue in this case. While the decision did not expressly lift the campaign spending curb for unions, Court observers have suggested that it did so by implication (January 21, 2010).


Mohawk Industries, Inc v Carpenter (Dkt No 08-678) Resolving a circuit split, a unanimous Supreme Court ruled that a discovery order requiring Mohawk Industries to compel information related to a shift supervisor’s interview with its outside counsel during an internal investigation into a separate RICO class action, as well as information related to the company’s later decision to fire him, did not qualify for immediate appeal by the company until a final judgment had been entered in the underlying action. Mohawk was the first opinion issued in the High Court’s new term and it was also the first opinion written by Supreme Court Justice Sonia Sotomayor (December 8, 2010).


Union Pacific RR. Co v Locomotive Eng’rs and Trainmen Gen Comm of Adjustment, Central Region (Dkt No 08-604). The National Railroad Adjustment Board erred when it dismissed five employee grievances for lack of jurisdiction because the union did not submit evidence of prearbitration union-employer “conferencing” as required by the Railway Labor Act, a unanimous Supreme Court ruled; the conference requirement was not jurisdictional but merely a “procedural rule,” and the Board erred in presuming it had the authority to declare such a rule to be a jurisdictional requirement. Neither the RLA nor its procedural rules “could plausibly be read to require, as a prerequisite to the NRAB’s exercise of jurisdiction, submission of proof of conferencing,” wrote the Court. Thus, the NRAB erred in refusing to hear the grievances “on the false premise that it lacked power to hear them.” (December 8, 2010).