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).

Failing to report to work or to provide medical documents as requested supports the conclusion that the employee has abandonment the position

Failing to report to work or to provide medical documents as requested supports the conclusion that the employee has abandonment the position
McKnight v NYS Dormitory Auth., App. Div., 267 A.D.2d 708, Motion for leave to appeal denied, 94 N.Y.2d 762

Lucille M. McKnight, a New York State Dormitory Authority [SDA] employee, stopped coming to work. From time to time “she presented belated, back-dated, sketchy notes and letters from health care providers that consistently evaded SDA’s request for information” concerning her ability to work.

SDA told McKnight that either she return to work or present medical documentation that she was totally unable to perform her duties. SDA also offered to provide a “reasonable accommodation” that would allow her to resume work. Ultimately SDA wrote McKnight that if she did not return to work by January 13, 1997, or provide satisfactory medical evidence of her inability to do so, it would deem her to have abandoned her position. When McKnight failed to report as directed, SDA terminated her.

McKnight sued, complaining that SDA terminated her in bad faith and that it had denied her sick leave at half-pay after she had exhausted all of her leave credits on December 2, 1996. She also claimed that she was entitled to 12 weeks of leave under the Family Medical Leave Act [FMLA] before she could be lawfully terminated and that she had not received proper notice concerning her eligibility for FMLA leave.

Justice Harold J. Hughes ruled that, under the circumstances, SDA’s ultimatum was appropriate. He decided that McKnight had abandoned her position by failing to either report to work or provide satisfactory medical documents supporting her continued absence.

According to the ruling, McKnight’s failure complies with this directive “could serve as a legitimate basis” for SDA’s conclusion that McKnight had abandoned her position “notwithstanding [McKnight’s] continued interest in her job.”

The Appellate Division agreed and dismissed McKnight’s appeal.

Abolishment of probationer’s position prior to attaining tenure results in his or her appointment from a preferred list as a probationer

Abolishment of probationer’s position prior to attaining tenure results in his or her appointment from a preferred list as a probationer
Dickinson v Board of Education of the Deer Park Union Free School District, et al, Decisions of the Commissioner of Education, Decision No. 16,082
[Consolidated appeals: (1) reinstatement from a preferred list and (2) probationary termination]

Mary Dickinson was appointed as a remedial reading teacher by the Deer Park Union Free School District and on April 24, 2007 was granted tenure in reading effective August 31, 2007. However, on June 30, 2007 Dickinson’s was abolished and her name was placed on the district’s preferred list for a reading teacher position.

Deer Park then appointed Dickinson to a new position as a teacher of English Language Arts (“ELA”) effective September 1, 2007, a position in a separate tenure area from reading.

In March 2008 announcements were posted for anticipated vacancies for the 2008-2009 school year, including a vacancy for a reading teacher. Later that March Dickinson was notified that her position as an ELA teacher was abolished.

After learning that school board subsequently appointed another individual, Lynn Hadity, to the vacant reading teacher position Dickinson appealed, seeking reinstatement to the reading teacher position, with back pay, seniority and other benefits.

Dickinson contended that Deer Park “failed to notify her, and then recall her to the vacant reading teacher position, in violation of Education Law §3013.”

Deer Park's defense: Although it did not make any attempt to contact Dickinson directly about the vacancy, it took steps to publicize the available position and that it was Dickinson’s responsibility to notify the district of her interest in the vacant position.

The Commissioner said that “in accordance with Education Law §3013, the board placed [Dickinson’s] name on the preferred eligibility list and [Dickinson] was entitled to be appointed to any vacancy in a corresponding or similar position in the district for seven years, or on or until June 30, 2014.

Rejecting Deer Park's argument that “it was [Dickinson’s] obligation to notify the district that she was interested in the vacancy,” the Commissioner said there was “no such obligation in the Education Law.”

On the contrary, said the Commissioner, “since the district maintains the preferred eligibility list and manages vacancies, it is implicit that the district is required to make a reasonable effort to notify eligible persons of vacancies so that such persons may be afforded the opportunity to accept or decline a position.”

Finding that Deer Park “should have made a reasonable effort to directly notify [Dickinson] of the vacant position” and in failing to do so the school district violated Dickinson’s rights to reinstatement from the preferred list, the Commissioner ruled that she must be reinstated to a reading teacher position with back pay, seniority and benefits.

Accordingly, on June 23, 2009, the school board appointed Dickinson from the preferred list and placed her in a “different probationary reading position, effective July 1, 2009.” It simultaneously rescinded Dickinson’s April 24, 2007 “conditional tenure appointment … in the reading tenure area.”

At its July 28, 2009, the board voted to terminate Dickinson’s services effective August 31, 2009 and, again, Dickinson appealed to the Commissioner.

Dickinson argued that the board violated Education Law §§3013, 3020 and 3020-a when it recalled her to a probationary reading position on June 23, 2009, rescinded its prior conditional tenure appointment and terminated her services. She asked the Commissioner to void the board’s actions.

The board responded that Dickinson “was terminated prior to the attainment of tenure and that she is not entitled to the procedural protections set forth in §§3020 and 3020-a.”

Citing In Remus v. Bd. of Educ. for Tonawanda City School District, 96 NY2d 271, the Commissioner dismissed Dickinson’s appeal. In Remus, said the Commissioner, the Court of Appeals held that “a board of education resolution that grants tenure to a teacher effective on a specified future date ‘confers tenure upon the teacher only as of that specified future date.’”

Concluding that under the circumstances, Dickinson’s tenure never took effect because she had been laid off prior to "the effective date of her tenure," the Commissioner ruled that when Dickinson was recalled to a reading teacher position in June 2009, “she was a probationary employee and not entitled to the procedural protections of §§3013, 3020 and 3020-a.”

The decision is posted on the Internet at: http://www.counsel.nysed.gov/Decisions/volume49/d16082.htm

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Out-of-title work

Out-of-title work
Macrae v Dolce, Appellate Division, 2nd Dept., 249 A.D.2d 476

City of White Plains firefighters brought an Article 78 action contending that the City was requiring them to regularly perform out-of-title work by serving as fire lieutenants in violation of Section 61.2 of the Civil Service Law. Section 61.2 bars out-of-title work except “during the continuance of a temporary emergency situation....”

Although the City persuaded the Supreme Court to dismiss the petition on the grounds that Macrae had failed to exhaust his administrative remedy “as required by their collective bargaining agreement,” the Appellate Division reversed the lower court’s action.

Article XVIII, the contract clause relied on by Supreme Court in making its determination, tracked the exception set out in Section 61.2 and provided that “no firefighter shall be ordered or required to perform outside of his job description except in an emergency situation.”

The Appellate Division said that this clause “was not intended to cover [Macrae’s] claim that firefighters are regularly required to perform the duties of fire lieutenant duties.” Accordingly, Macrae’s claim is outside the scope of the grievance procedure set out in the collective bargaining agreement and thus it was not necessary to “proceed to arbitration” before commencing this Article 78 proceeding.

Significantly, the Appellate Division noted that “... when the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and the parties’ reasonable expectations.”

Further, a court may not under the guise of construction, write into a contract conditions that were not included by the parties, nor may it construe contract language so as to distort the contract’s apparent meaning.

The error of the Supreme Court was that it viewed Article XVIII as requiring Macrae to file a contract grievance and arbitrate the claims. Because the alleged out-of-title work assignments were characterized as being “regularly assigned” to firefighters rather than the result of an “emergency situation,” the Appellate Division ruled that the firefighters were not compelled to “exhaust their administrative remedy” - here arbitration - before proceeding with this motion for a “declaratory judgment.”

The matter was returned to Supreme Court for its further consideration, including “the entry of an appropriate declaration.”

A union is not required to carry every grievance to the highest level to satisfy its duty of fair representation

A union is not required to carry every grievance to the highest level to satisfy its duty of fair representation
Delsante v CSEA Local 1000, AFSCME AFL-CIO, 2010 NY Slip Op 51145(U), decided on June 15, 2010, Supreme Court, Richmond County, Judge Judith N. McMahon [Not selected for publication in the Official Reports.]

Camille Delsante was serving her probationary period. After she received her first "Probationary Progress Report," which indicated that her time and attendance was unsatisfactory, she submitted her resignation stating that "I hereby offer my resignation from my position with the New York State Office of Parks, Recreation and Historic Preservation to seek other employment effective August 6th, 2008."

Kalliopi Zervos, a CSEA Labor Relations Specialist, met with Delsante to discuss her resignation and subsequently met with the Department's Associate Personnel Administrator, Joseph Lescinski, in an effort to resolve the dispute and possibly negotiate a rescission of the resignation.
After reviewing Delsante’s personnel record, Lescinski said that the appointing authority “would not rescind the resignation.” Zervos then advised Delsante that because of her probationary status she could not further pursue any grievance.

Delsante, contending that CSEA breached the duty of fair representation by failing to pursue a claim on her behalf, sued the union. In rebuttal, CSEA argued that it had fully represented Delsante but because of her probationary status the collective bargaining agreement limited the options for pursuing her claim. Accordingly, CSEA argued that it did not act in bad faith in not pursuing Delsante's claim.

Although Judge McMahon dismissed Delsante’s petition as untimely, she noted that although “academic,” Delsante’s petition would have been dismissed on the merits as CSEA “did not act arbitrary, discriminatory or in bad faith in addressing Delsante's claims.”

The court noted that with respect to claims based upon the alleged breach of a duty of fair representation, the charging party must establish that the union acted "deliberately invidious, arbitrary and founded in bad faith." Here, said the court, CSEA established that it pursued the avenues available to assist Delsante in her grievance but because of her probationary status, the options were limited pursuant to the CSEA Collective Bargaining Agreement Article §33.1 which specifically states "[t]he disciplinary procedure provided herein is not applicable to review the removal of an employee from a probationary appointment".

Significantly, CSEA demonstrated that its representative met with Delsante; spoke with Mr. Lescinski in an effort to negotiate her reinstatement; and wrote a letter on her behalf but, again, because of her probationary status any further grievance options were limited.

Citing Garvin v. NYS Pub. Employment Relations Bd., 168 AD2d 446, Judge McMahon said "a union is not required to carry every grievance to the highest level, and the mere failure on the part of a union to proceed to arbitration with a grievance is not, per se, a breach of its duty of fair representation.”

The court granted CSEA’s motion for summary judgment, dismissing Delsante’s petition in its entirety.

The decision is posted on the Internet at:
http://www.courts.state.ny.us/reporter/3dseries/2010/2010_51145.htm