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Labor and employment cases on Supreme Court docket

October 5th, 2010  |  Connie Eyer

The Supreme Court opened its October 2010-11 term yesterday with several labor and employment cases on the docket. First up is NASA v Nelson ( Dkt No 09-530), in which the Court will consider the extent to which the federal government may inquire into the backgrounds of federal contractors’ employees without violating their constitutional rights to privacy. In NASA, at issue is whether the federal government may ask an employee of a federal contractor, in the course of a background investigation, whether the employee has received counseling or treatment for illegal drug use within the past year, if the employee’s response is to be used for employment purposes only, and is protected under the federal Privacy Act.  Oral argument is scheduled for Tuesday, October 5.

In Kasten v Saint-Gobain Performance Plastics ( Dkt No 09-834), the Supreme Court next will review a Seventh Circuit ruling that held an employee who made a verbal complaint did not engage in protected conduct under the FLSA’s anti-retaliation provision. The question presented: “Is an oral complaint of a violation of the Fair Labor Standards Act protected conduct under the anti-retaliation provision, FLSA, Sec. 215(a)(3)?” In the petition for cert, the employee contended “the Seventh Circuit adopted an unprecedented interpretation of the antiretaliation provision of the Fair Labor Standards Act, holding that that provision does not protect a worker who complains orally — in person or by telephone — about a violation of the Act.” Oral argument in Kasten will be heard on Wednesday, October 13.

Staub v Proctor Hospital ( Dkt No 09-400) involves a US Army reservist who relied on the “cat’s paw” theory of liability in his USERRA suit. The Seventh Circuit, in March 2009, reversed a district court’s $57,640 judgment for the reservist, an angiography technologist at a hospital, and defined, for the first time, the division of labor between the jury and court when a “cat’s paw” theory is invoked: a court cannot admit evidence of a nondecisionmaker’s animus unless it has first determined whether a reasonable jury could find the nondecisionmaker exerted a “singular influence” over the ultimate decisionmaker.  The question presented to the Court: “In what circumstances may an employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision?” The Seventh Circuit’s decision conflicts with the decisions of all but one of the 11 other courts of appeal to have addressed the issue. Oral argument is scheduled for Tuesday, November 2.

In Mayo Foundation for Medical Educ and Research v United States ( Dkt No 09-837), the Court granted cert to consider whether medical residents are qualified for the student FICA exception and to resolve a split in the circuits on the issue. A district court had ruled medical residents at the university, like those at Mayo, are “students” within the meaning of the statutory student exemption. However, the Eighth Circuit reversed, determining that the federal government could categorically exclude all medical residents, and other full-time employees, from the definition of “student” in 26 USC Sec. 3121(b)(10), which exempts from Social Security taxes “service performed in the employ of a school, college, or university” by a “student who is enrolled and regularly attending classes at such school, college, or university.”  The High Court will hear argument in the case on Monday, November 8.

In Cigna Corp v Amara ( Dkt No 09-804), the  Supreme Court will hear an appeal of a cash balance pension case in which CIGNA was ordered to remedy its failure to disclose “wear-aways” to employees by providing the full value of the old benefits plus the value of their cash balance benefits. In October 2009, the Second Circuit upheld a district court decision finding CIGNA violated ERISA’s disclosure rules under ERISA Sec. 204(h) and ordering limited remedies. ERISA Section 204(h) requires a plan administrator to notify participants within “a reasonable time” before the effective date of any plan amendment that significantly reduces the rate of future benefit accrual. The district court originally ruled that the manner in which CIGNA implemented the cash balance transition was unlawful as a result of CIGNA’s materially misleading notices and disclosures in its summary plan descriptions.  Oral argument is scheduled for Tuesday, November 30.

The Court will decide in Thompson v North American Stainless ( Dkt No 09-291), an associational retaliation case, whether Title VII prohibits retaliation against a person closely associated with an employee who engaged in protected activity under the Act. In this case, a male plaintiff was found to have no Title VII reprisal claim based on allegations that he was fired shortly after his  fiancée (and coworker) filed an EEOC sex bias charge against their employer.  Oral argument in Thompson will occur on Tuesday, December 7.

In Chamber of Commerce v Whiting ( Dkt No 09-115), the Supreme Court is entering the nationwide debate over immigration reform, agreeing to review whether the Legal Arizona Workers Act, which suspends and revokes the business licenses of employers that intentionally or knowingly employ workers who are not authorized to work in the United States, is preempted by federal immigration law.  Oral argument is scheduled for Wednesday, December 8.

In USA ex rel Kirk v Schindler Elevator ( Dkt No 10-288), Schindler Elevator filed a petition asking the Supreme Court to address the issue of “Whether a federal agency’s response to a Freedom of Information Act request is a `report’ or an `investigation’ within the meaning of the False Claims Act’s public disclosure bar.” The Supreme Court granted certiorari in the case just last week. In a case of first impression on an issue dividing the federal circuits, the Second Circuit held that the use of a document obtained in response to a FOIA request as the basis for a False Claims Act claim does not automatically trigger the FCA’s jurisdictional bar; the bar is triggered only when the document itself is a “congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation” that reflects the government’s own efforts to compile information to serve its own investigative or analytic needs. Accordingly, the appeals court held the employer’s allegedly false VETS 100 filings and its lack of filings during certain years, as disclosed to a qui tam plaintiff through a FOIA request, were not enumerated sources and did not bar the plaintiff’s qui tam action. Oral argument has not yet been scheduled.

Kagan recuses herself. Associate Justice Elena Kagan, newly sworn in as its newest member, will sit out several of the Supreme Court’s employment law cases during her rookie year. Kagan has recused herself from the majority of pending employment law cases on the docket, having weighed in previously on these matters as solicitor general in the Obama administration. Kagan will not take part in deliberations in NASA, Kasten, Staub, Mayo Foundation, Thompson, Chamber of Commerce, and Schindler.

Review sought in Wal-Mart class action. Wal-Mart Corp has asked the Supreme Court to review the Ninth Circuit’s ruling in Dukes v Wal-Mart, allowing a massive sex discrimination class action suit to proceed and rejecting the company’s contention that the class size was too large. Most High Court observers expect that the retail giant’s cert petition will be granted. The questions presented are: (1) Whether claims for monetary relief can be certified under FRCP 23(b)(2) — which by its terms is limited to injunctive or corresponding declaratory relief — and if so, under what circumstances; and (2) Whether the certification order conforms to the requirements of Title VII, the Due Process Clause, the Seventh Amendment, the Rules Enabling Act, and FRCP 23.