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Supreme Court line-up: Weighty labor and employment questions raised

October 3rd, 2014  |  Pamela Wolf

When the Supreme Court begins it Fall 2014 term on Monday, October 6, it faces a line-up of labor and employment law cases that give the Justices the opportunity to substantially shape the practice area. The issues laid at the Court’s door include weighty issues such as whether the DOL must go through notice-and-comment rulemaking before changing prior regulatory interpretations and the right of courts to pass judgment on the adequacy of the EEOC’s pre-litigation conciliation efforts. The Justices will also examine the increasingly controversial question of whether time spent in employer security screens is compensable and the extent to which companies must accommodate pregnant workers in keeping with the accommodations they extend to non-pregnant workers.

Below is a brief run-down of cases that should be on the radar of labor and employment law practitioners:

DOL’s flip-flop on FLSA’s administrative exemption. Related petitions in Perez v. Mortgage Bankers Association and Nickols v. Mortgage Bankers Association ask the Court to resolve the question of whether a federal agency must engage in notice-and-comment rulemaking before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation. The petitions were brought, respectively, by the Secretary of Labor and an intervening mortgage loan officer. The Court has consolidated the petitions and slated the question for an hour of oral argument on Monday, December 1.

Below, the D.C. Circuit reversed a district court order dismissing the Mortgage Bankers Association’s challenge to a DOL Wage and Hour Division “Administrator Interpretation” concluding that mortgage loan officers were nonexempt under the FLSA (Mortgage Bankers Association v Harris, July 2, 2013, Brown, J). According to the appeals court, since the DOL’s most recent interpretation was at odds with its earlier interpretations, the agency was required to go through the notice-and-comment process.

EEOC’s duty to conciliate. In Mach Mining v. EEOC, the Justices are slated to resolve the increasingly controversial question of whether and to what extent courts may enforce the Commission’s mandatory duty to conciliate discrimination claims before filing suit. The case has not yet been set for oral argument.

The Seventh Circuit ruled that Mach Mining could not raise the EEOC’s failure to conciliate in good faith as an affirmative defense to the agency’s sex discrimination in hiring suit against the company. The decision was at odds with the rulings of other federal circuit courts. The language of Title VII, the lack of a meaningful standard for courts to apply, and the overall statutory scheme convinced the Seventh Circuit that an alleged failure to conciliate is not an affirmative defense to the merits of a discrimination suit. The Seventh Circuit also explained that finding in Title VII an implied failure-to-conciliate defense would add to that statute an unwarranted mechanism by which employers could avoid liability for unlawful discrimination.

There is a messy circuit split on the question that begs for resolution by the Court. According to the EEOC, in contrast to the Seventh Circuit, the Second, Fourth, Fifth, Sixth, Eighth, Tenth, and Eleventh Circuits have concluded that courts are permitted at least to inquire into the sufficiency of the agency’s informal conciliation efforts. However, those courts of appeals differ as to what standard the agency must meet and whether its failure to meet that standard warrants dismissal of a Title VII lawsuit on the merits.

Compensation for time spent in employer security screening. Integrity Staffing Solutions, Inc. v. Busk presents a question that employees are challenging more and more: Whether time spent in security screenings is compensable under the FLSA, as amended by the Portal-to-Portal Act? The Court will hear oral argument on Wednesday, October 8.

The petition for cert was filed by an employer that was sued by warehouse workers seeking back pay, overtime, and double damages under the FLSA for time spent in security screenings after the end of their work shifts. The employees purportedly were not compensated for up to 25 minutes spent at the end of their workday waiting to be searched and passed through metal detectors.

The district court initially dismissed the warehouse workers’ claims on the grounds that such activities were not compensable under the FLSA. But the Ninth Circuit saw it differently and reversed. As alleged, the security clearances were necessary to the employees’ primary work as warehouse employees and done for Integrity’s benefit, according to the appeals court. As a result, the employees stated a plausible claim for relief.

Integrity asserts that the Ninth Circuit’s ruling “squarely conflicts with decisions from the Second and Eleventh Circuits holding that time spent in security screenings is not subject to the FLSA because it is not ‘integral and indispensable’ to employees’ principal job activities.”

Pregnancy accommodations. In Young v. United Parcel Service, Inc., the Justices are asked to determine the extent to which employers must accommodate pregnant employees in light of accommodations extended to other workers. Specifically, the question for review is: “Whether, and in what circumstances, an employer that provides work accommodations to nonpregnant employees with work limitations must provide work accommodations to pregnant employees who are ‘similar in their ability or inability to work.’” The case is scheduled for oral argument on Wednesday, December 3.

The petition for cert was filed by an employee who became pregnant during a leave of absence to receive in vitro fertilization, but found when she tried to return to work, UPS would not accommodate her 20-pound weight-lifting restriction. The question presented is “exceptionally important,” according to the petition, which points to a recent observation by the EEOC’s General Counsel: “[d]iscrimination against pregnant women and caregivers potentially affects every family in the United States.”

The Fourth Circuit held that the UPS policy providing light-duty work only to employees who had on-the-job injuries, employees with disabilities accommodated under the ADA, and employees who had lost Department of Transportation (DOT) certification was not direct evidence of pregnancy-based sex discrimination. Nor could a pregnant employee who was unable to work during her pregnancy because of a lifting restriction establish a prima facie case of pregnancy discrimination because the court agreed that she was not similarly situated to employees with work-related injuries, ADA disabilities, or those who had lost DOT certification.

Employer knowledge of need for religious accommodation. On October 2, the Supreme Court agreed to review the Tenth Circuit’s decision in EEOC v Abercrombie & Fitch Stores, Inc. involving what kind of “actual knowledge” an employer must have to be on notice that a religious accommodation is required. After losing its argument in the Tenth Circuit that proof by any means of an employer’s knowledge of an existing conflict between an employee’s religious practice and the employer’s workplace policy is enough for purposes of a prima facie religious accommodation case, the EEOC filed its petition for certiorari this summer. Ironically, the clothing retailer already had agreed to modify the policy last fall.

The EEOC had prevailed in the district court, which granted summary judgment to the EEOC finding that Abercrombie & Fitch violated Title VII by failing to provide a reasonable religious accommodation to a Muslim woman’s wearing of a headscarf, or “hijab.” Almost exactly one year ago, the Tenth Circuit reversed, finding Abercrombie was entitled to summary judgment as a matter of law because there was no genuine issue of material fact that the prospective employee never informed the store prior to its hiring decision that she wore her “hijab” for religious reasons and that she needed an accommodation for that practice due to a conflict with Abercrombie’s clothing policy.

Other pending petitions. Other cases of interest to labor and employment practitioners include:

  • M&G Polymers USA, LLC v. Tackett, set for oral argument on Monday, November 10. The case presents the question whether, when construing CBAs in LMRA cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest and thus continue indefinitely.
  • Department of Homeland Security v. MacLean, slated for oral argument on Tuesday, November 4. The Justices are asked to determine whether certain statutory protections in the Whistleblower Protection Act that are inapplicable when an employee makes a disclosure “specifically prohibited by law” can bar an agency from taking enforcement action against an employee who intentionally discloses Sensitive Security Information.
  • Dart Cherokee Basin Operating Company v. Owens, scheduled for oral argument on Tuesday, October 6, places an important procedural question before the Justices: Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or is alleging the required “short and plain statement of the grounds for removal” enough?

Opening conference. The High Court held its opening conference on Monday, September 29. Following that conference, the Justices granted the petition for cert in EEOC v Abercrombie and Fitch Stores, Inc. and dismissed as improvidently granted Public Employees’ Retirement System of Mississippi v. IndyMac, a case that questioned whether filing of a putative class action serves, under the American Pipe rule, to satisfy the three-year time limitation in Sec. 13 of the Securities Act with respect to the claims of putative class members. Other pending petitions raise questions regarding the requirements of the test to determine compensable work under the FLSA when health and safety matters are at issue, ERISA’s anti-retaliation protections in the wake of unsolicited complaints to management, and whether a granted transfer request can be an adverse action in Title VII and ADEA discrimination cases, as well as several arbitration-related issues.