Last week, the U.S. Supreme Court issued two decisions concerning whether particular issues had to be decided by an arbitrator or in federal court.  One care arose in the traditional area of labor arbitration between companies and unions; the second arose in the ever-growing area of employer-imposed arbitration agreements on regular employees.

In the first, Granite Rock v. International Brotherhood of Teamsters, the Court ruled for the company, as ScotusBlog describes:

The parties had reached a collective bargaining agreement (CBA), but they disagreed about both when the CBA was formed and who should decide that question.  Today the Court, in an opinion by Justice Thomas, held that a court, rather than an arbitrator, should decide when the CBA was formed.  The Court explained that under the CBA, arbitration is required only when a dispute “arise[s] under” the agreement – which a dispute over when the CBA was formed does not.  The Court also held that the lower court properly declined to recognize a new federal common-law cause of action against the parent international union, which – according to the employer – tortiously interfered with the CBA.

In the second, Rent-a-Center v. Jackson, the Court sided with the employer, and held that the issue of unconscionability (a challenge to whether the arbitration agreement is valid in the first place), was to be decided by the arbitrator, as Workplace Prof Blog describes:

The Court held the issue was governed by the separability doctrine of Prima Paint: an arbitration agreement is assailable only if the arbitration agreement itself — not the overall agreement of which the arbitration is a part — is assailable on state-contract law grounds.  So far, so good for Jackson — until today, this separability doctrine has been applied only when an arbitration agreement was part of a broader (“container”) agreement that was not related to arbitration — e.g., an arbitration provision in a consulting-services contract or in a larger employment contract.  Jackson’s unconscionability argument was directed squarely at his arbitration agreement.

Today, however, the Court extended Prima Paint to hold that the arbitration agreement itself can be the container contract, and that unconscionability arguments must be directed toward specific provisions of the arbitration agreement.  Jackson’s unconscionability arguments, the Court held, were directed at the arbitration agreement generally, and therefore could not be grounds for voiding the arbitration agreement as a whole.

Read the whole post for its insightful analysis of how the Court erred, once again stretching the law to give a victory to employers over employees.

Categories: Judicial Decisions Tags: Arbitration Agreement, Case Commentary, CBA, Labor and Employment, Labor Arbitration, Teamsters, Unions, US Supreme Court

Two labor and employment decisions were released by the U.S. Supreme Court this past week.  In the first, City of Ontario v. Quon, the Court unanimously held (with Scalia concurring separately) that the government employer’s search of employee text messages was reasonable under the Fourth Amendment.  Unlike private employers, public employers are constrained (somewhat) by the Fourth Amendment’s restrictions on searches and seizures in the workplace.  In this case, the city got a private company to release the full text messages of police officers because of their overuse of the texting plan.  Several messages were inappropriate and resulted in employee discipline.  Based on these particular facts, the Court found the search lawful, though it declined to articulate broader standards for public employer searches, especially of new electronic media.  More analysis found here and here.

In the second case, New Process Steel v. NLRB, the Court resolved the circuit split regarding whether the National Labor Relations Board could lawfully act with a two-member quorum because the three vacancies on the board had gone unfilled for so long.  A 5-4 majority (Stevens surprisingly joining 4 conservatives) rejected the Board’s argument, and held that the NLRA required 3 members to act.  The hundreds of decisions issued by the two-member board will probably have to be re-reviewed, though one hopes this could be expedited now that two of the vacancies have been filled by President Obama.  Board decisions can take a long time even extra without this delay, often to the detriment of workers and unions seeking to organize and bargain.  More analysis is here and here.

Categories: Judicial Decisions Tags: Case Commentary, Fourth Amendment, Labor and Employment, Labor Board, NLRA, NLRB, Text Messages, Unions, US Supreme Court, Workplace Privacy

On May 24, the Supreme Court issued two employment-related opinions.  The first, Lewis v. Chicago, concerned the filing deadline for disparate impact discrimination cases under Title VII.  The black firefighter plaintiffs in the case sought to challenge a written test used for determining promotions.  The question is whether their statute of limitations began running when the test was scored, or when the test results were actually used to determine promotion decisions.  Reversing the Seventh Circuit, the Court unanimously held (Scalia writing) that it was the latter because it was the use of the test results that could constitute an “employment practice” challengable under Title VII.  The case likely will return to the trial court, where the plaintiffs had originally won before the appeals.  Additional coverage is here.

The second case, Hardt v. Reliance Standard Life Insurance Co., concerns when plaintiffs in ERISA actions can receive attorneys’ fees for succeeding in their case.  ERISA (Employee Retirement Income Security Act) is the statue that governs employee benefits plans.  In this case, the plaintiff challenged the insurance company’s denial of her long-term disability benefits, and after a court found she would likely prevail, the insurance company awarded her the benefits.

In a nearly unanimous opinion (Thomas writing) reversing the Fourth Circuit, the Court held that a party who seeks to recover attorney’s fees in an ERISA case does not need to be a “prevailing party.”  Instead, a court may award fees and costs under the statute if the claimant has achieved “some degree of success on the merits.”  Thus, the trial court here was correct in awarding the plaintiff attorneys’ fees for basically succeeding in obtaining her benefits.  More coverage here and here.

Categories: Judicial Decisions Tags: Attorney Fees, Case Commentary, Disparate Impact, ERISA, Fourth Circuit, Labor and Employment, Long-term Disability Benefits, Racial Discrimination, Statute of Limitations, Title VII, US Supreme Court

Although the Surpreme Court issues opinions throughout its term, many come out towards the back end of the term, which concludes in June.  In the last couple of weeks, the Court has issued several decisions which touch on employment law:

In Conkirght v. Frommert, the 5-3 majority upheld the company’s denial of pension benefits to former employees.  Write-up here.

In Perdue v. Kenny A., the 5-4 majority rejected the trial court’s calculations of the appropriate amount of attorneys’ fees for the prevailing plaintiff in a civil rights case.  Write-up here.

In Stolt-Nielsen v. AnimalFeeds, a similar 5-3 majority rejected class action arbitration in this commercial case.  Down the line, there might be some applicability to employer-employee arbitration agreements.  Write-up here.

Categories: Judicial Decisions Tags: Arbitration, Attorney Fees, Case Commentary, Civil Rights, Class Actions, ERISA, Labor and Employment, Pension Benefits, US Supreme Court

The Fourth Circuit has recently published two labor law opinions, the first concerning whether an arbitrator exceeding his authority in resolving a grievance, and the second concerning whether to uphold a decision of the two-member National Labor Relations Board.

In PPG Industries v. ICWUC/UCFW, the union had filed a grievance because the company had failed to pay bonuses as set forth in the Bonus Plan to workers who had gone on strike.  At issue was whether the term “actively employed” in the Bonus Plan encompassed striking workers.  The arbitrator found that it did.  Courts must uphold the decisions of labor arbitrators unless they have exceeded their authority.  As the arbitrator here reasonably interpreted the Bonus Plan, his decision was upheld by the court.

In Naricott Industries v. NLRB, the Fourth Circuit considered the propriety of the two-member Board.  Because replacements for three of the NLRB’s board members have not been approved by Congress for quite some time, the Board has been operating with a two-member quorum.  As long as those two members can agree, the Board has been issuing decisions.  Whether the two-member board is actually authorized to act under the NLRA has been litigated in several circuits.  Two circuits have ruled that it is proper, while the DC Circuit has ruled that it is not.  The Fourth Circuit joined the majority, following the interpretation espoused by the Board as well as DOJ.  In any event, the Supreme Court will soon make a final decision on this issue.  In the remainder of the opinion, the court upheld the Board’s conclusion that the company had committed unfair labor practices by actively assisting an effort to decertify the union, and its order requiring the company to bargain with the union.

Categories: Judicial Decisions Tags: Arbitration, Case Commentary, Fourth Circuit, ICWUC, Labor and Employment, NLRA, NLRB, UFCW, Unions, US Supreme Court

At the 25th Annual North Carolina/South Carolina Labor and Employment Law CLE held in Charleston, South Carolina, Jonathan Harkavy will present his 2008-09 annual review of the Supreme Court’s employment law cases.  His paper is entitled Supreme Court of the United States Employment Law Commentary, 2008 Term.

Summary: The 2008 Term of the Supreme Court of the United States, forged in volatile economic times and framed on a changing political palette, not only reaffirmed the Court’s interest in employment-related cases, but also revealed a growing institutional confidence in shaping employment law. While a fully coherent approach to employment disputes continued to elude the Court, it was not for lack of trying, as the Justices decided nearly a dozen cases treating some aspect of the employment relationship. Notably, these cases, many of which were determined by closely divided votes, mirror a deep philosophical fracture portrayed more broadly across the spectrum of the Court’s work. All in all, therefore, the 2008 Term was one of high interest for both the employment bar and the general public, as well as one of considerable consequence for workers, employers, and labor organizations.

Read more…

Categories: News of the Firm Tags: Articles, Case Commentary, Constitutional Law, Jonathan Harkavy, Labor and Employment, NCBA, Presentation, US Supreme Court

At the 24th Annual North Carolina/South Carolina Labor and Employment Law CLE held in Asheville, Jonathan Harkavy presented his 2007-08 annual review of the Supreme Court’s employment law cases.  His paper is entitled Supreme Court of the United States Employment Law Commentary, 2007 Term.

Summary: The 2007 Term of the Supreme Court of the United States provided fresh and persuasive evidence of the centrality of work in our lives and the significance of employment law in our jurisprudence during this first decade of the new century. Nearly one out of four civil cases on the Court’s opinion docket involved disputes concerning some aspect of employer-employee relations. How the law regulates and affects the employment relationship thus continued to find detailed, if not fully coherent, expression in the Court’s opinions during the 2007 Term. This paper first reviews the term’s decisions arranged largely by subject matter. The italicized paragraphs preceding and following the cases offer some personal commentary on the decisions and their likely impact on workers, employers, and their lawyers, and more generally on our employment laws. Following this term’s cases are brief summaries of the grants of certiorari in employment-related cases for the 2008 Term. The paper concludes with a brief observation about the structure of federal employment law in the wake of the Court’s recent decisions.

Categories: News of the Firm Tags: Articles, Case Commentary, Constitutional Law, Jonathan Harkavy, Labor and Employment, NCBA, Presentation, US Supreme Court