Justia Labor & Employment Law Opinion Summaries

Articles Posted in US Supreme Court
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Babb, a VA pharmacist, filed suit under the Age Discrimination in Employment Act, 29 U.S.C. 633a(a). The district court granted the VA summary judgment, finding that Babb had established a prima facie case but that the VA had proffered legitimate reasons for the challenged actions, and that no jury could reasonably conclude that those reasons were pretextual. The Eleventh Circuit affirmed. The Supreme Court reversed. Section 633a(a) demands that federal sector personnel actions be untainted by any consideration of age. The ADEA does not require proof that a federal employment decision would have turned out differently if age had not been taken into account. If age is a factor in an employment decision, the statute has been violated. It is not anomalous to hold the federal government to a stricter standard than private employers or state and local governments. But-for causation is important in determining the appropriate remedy. To obtain reinstatement, damages, or other relief related to the end result of an employment decision, a showing that a personnel action would have been different if age had not been taken into account is necessary, but if age discrimination played a lesser part in the decision, other remedies may be appropriate. View "Babb v. Wilkie" on Justia Law

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The Immigration Reform and Control Act (IRCA) makes it unlawful to hire an alien knowing that he is unauthorized to work in the U.S., 8 U.S.C. 1324a(a)(1), (h)(3). Employers must use an I-9 form to “attest” that they have “verified” that any new employee “is not an unauthorized alien” by examining approved documents. IRCA requires all employees to complete an I–9, attest that they are authorized to work, and provide specific personal information. It is a federal crime for an employee to provide false information on an I–9 or to use fraudulent documents to show work authorization, 18 U.S.C. 1028, 1546; it is not a federal crime for an alien to work without authorization. State laws criminalizing such conduct are preempted. The I–9 forms and appended documentation and the employment verification system may only be used for enforcement of specified federal laws. Kansas makes it a crime to commit “identity theft” or engage in fraud to obtain a benefit. Unauthorized aliens were convicted for fraudulently using another person’s Social Security number on tax withholding forms that they submitted upon obtaining employment. They had used the same Social Security numbers on their I–9 forms. The Kansas Supreme Court reversed, concluding that IRCA prohibits a state from using any information contained within an I–9 as the basis for a state law identity theft prosecution of an alien who uses another’s Social Security information in an I–9. The U.S. Supreme Court reversed, rejecting the theory that no information placed on an I–9 could ever be used by any entity or person for any reason, other than the listed federal statutes. The sole function of the federal employment verification system is to establish that an employee is not barred from working in this country. The tax-withholding documents play no part in that process. Submitting withholding documents helped the defendants get jobs, but did not assist them in showing that they were authorized to work. The Kansas laws do not fall into a field that is implicitly reserved exclusively for federal regulation. Federal law does not create a unified, comprehensive system regarding the information that a state may require employees to provide. It is possible to comply with both IRCA and the Kansas statutes; the Kansas prosecutions did not frustrate any federal interests. View "Kansas v. Garcia" on Justia Law

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Newton worked on drilling platforms off the California coast. Newton was paid for his time on duty but not for his time on standby, during which he could not leave the platform. Newton filed a class action, alleging that California laws required compensation for standby time. The platforms were subject to the Outer Continental Shelf Lands Act (OCSLA), which provides that all law on the Outer Continental Shelf (OCS) is federal law; denies states any interest in or jurisdiction over the OCS; and deems the adjacent state’s laws to be federal law only “[t]o the extent that they are applicable and not inconsistent with” federal law, 43 U.S.C. 1333(a)(2)(A). A unanimous Supreme Court vacated a Ninth Circuit decision in favor of Newton. Where federal law addresses the relevant issue, state law is not adopted as surrogate federal law on the OCS. The Court rejected Newton's proposed pre-emption analysis; federal law is the only law on the OCS and there is no overlapping state and federal jurisdiction, so the reference to “not inconsistent” state laws presents only the question whether federal law has already addressed the issue. If so, state law on the issue is inapplicable. Some of Newton’s claims are premised on California law requiring payment for all standby time but federal law already addresses that issue. To the extent his OCS-based claims rely on California’s minimum wage, the Fair Labor Standards Act already provides for a minimum wage. View "Parker Drilling Management Services, Ltd. v. Newton" on Justia Law

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Loos sued BNSF under the Federal Employers’ Liability Act for injuries he received while working at BNSF’s railyard. A jury awarded him $126,212.78, ascribing $30,000 to lost wages. BNSF asserted that the lost wages constituted “compensation” taxable under the Railroad Retirement Tax Act (RRTA) and asked to withhold $3,765 of the $30,000. The district court and the Eighth Circuit rejected the requested offset. The Supreme Court reversed. A railroad’s payment to an employee for work time lost due to an on-the-job injury is taxable “compensation” under the RRTA. RRTA refers to the railroad’s contribution as an “excise” tax, 26 U. S. C. 3221, and the employee’s share as an “income” tax, section 3201. Taxes under the RRTA and benefits under the Railroad Retirement Act, 45 U.S.C. 231, are measured by the employee’s “compensation,” which both statutes define as “any form of money remuneration paid to an individual for services rendered as an employee.” The Court noted similar results under the Federal Insurance Contributions Act and the Social Security Act. View "BNSF Railway Co. v. Loos" on Justia Law

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Oliveira is a driver for a trucking company, under an agreement that calls him an independent contractor and contains a mandatory arbitration provision. Oliveira filed a class action alleging that the company denies its drivers lawful wages. The company invoked the Federal Arbitration Act, arguing that questions regarding arbitrability should be resolved by the arbitrator. The First Circuit and Supreme Court agreed that a court should determine whether the Act's section 1 exclusion applies before ordering arbitration. A court’s authority to compel arbitration under the Act does not extend to all private contracts. Section 2 provides that the Act applies only when the agreement is “a written provision in any maritime transaction or a contract evidencing a transaction involving commerce.” Section 1 provides that “nothing” in the Act “shall apply” to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The sequencing is significant. A “delegation clause,” giving the arbitrator authority to decide threshold questions of arbitrability is merely a specialized type of arbitration agreement and is enforceable under sections 3 and 4 only if it appears in a contract consistent with section 2 that does not trigger section 1’s exception. Because “contract of employment” refers to any agreement to perform work, Oliveira’s contract falls within that exception. At the time of the Act’s 1925 adoption, the phrase “contract of employment” was not a term of art; dictionaries treated “employment” as generally synonymous with “work," not requiring a formal employer-employee relationship. Congress used the term “contracts of employment” broadly. View "New Prime Inc. v. Oliveira" on Justia Law

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Plaintiffs alleged that the Mount Lemmon Arizona Fire District terminated their employment as firefighters in violation of the Age Discrimination in Employment Act (ADEA). The District responded that it was too small to qualify as an “employer” under the ADEA, which provides that “‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees . . . . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State” 29 U.S.C. 630(b). The Supreme Court ruled in favor of the plaintiffs. Section 630’s two-sentence delineation and the expression “also means” establish separate categories: persons engaged in an industry affecting commerce with 20 or more employees and states or political subdivisions with no attendant numerosity limitation. Reading section 630(b) to apply to states and political subdivisions regardless of size gives the ADEA broader reach than Title VII, but this disparity is a consequence of the different language Congress chose to employ. The Court noted that the Equal Employment Opportunity Commission has, for 30 years, interpreted the ADEA to cover political subdivisions regardless of size, and a majority of the states impose age discrimination proscriptions on political subdivisions with no numerical threshold. View "Mount Lemmon Fire District v. Guido" on Justia Law

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If a union is designated as the exclusive representative of Illinois public sector employees it represents even those who do not join; individual employees may not be represented by another agent or negotiate directly with their employer. Nonmembers are required to pay an “agency fee,” a percentage of the full union dues to cover union expenditures attributable to activities “germane” to the union’s collective bargaining activities, but may not cover the union’s political and ideological projects. The union sets the agency fee annually and sends nonmembers notices explaining the basis for the fee. Janus, a state employee represented by a public-sector union, challenged the constitutionality of the state law authorizing agency fees. The Seventh Circuit affirmed the dismissal of his suit. The Supreme Court reversed, overruling its 1977 holding, “Abood,” as inconsistent with First Amendment principles. Illinois law compelled nonconsenting workers to subsidize the speech of other private speakers and cannot be justified by asserted interests in “labor peace,” which can readily be achieved through less restrictive means, or in avoiding “the risk of free riders,” because unions are willing to represent nonmembers without agency fees. Interests in bargaining with an adequately funded agent and improving the efficiency of the workforce do not suffice; unions can be effective without agency fees. The union speech at issue does not cover only matters of private concern but covers critically important public matters such as the state’s budget crisis, taxes, and collective bargaining issues related to education, child welfare, healthcare, and minority rights. The government’s proffered interests must, therefore, justify the heavy burden of agency fees on nonmembers’ First Amendment interests. They do not. The uncertain status of Abood, known to unions for years; Abood's lack of clarity; the short-term nature of collective-bargaining agreements; and the ability of unions to protect themselves if an agency-fee provision was crucial to operations, undermine the force of reliance on that decision. States and public-sector unions may no longer extract agency fees from nonconsenting employees. View "Janus v. State, County, and Municipal Employees" on Justia Law

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Congress adopted the Railroad Retirement Tax Act of 1937 in response to the Great Depression, federalizing private railroad pension plans. Private railroads and their employees pay a tax based on employees’ incomes; the federal government provides employees a pension often more generous than the social security system supplies employees in other industries. At the time of the Act’s adoption, railroads compensated employees not just with money but also with food, lodging, and railroad tickets. Railroads typically did not count these in-kind benefits when calculating an employee’s pension; neither did Congress in its new statutory pension scheme. Nor did Congress seek to tax these in-kind benefits, defining “compensation” as “any form of money remuneration.” Some railroads subsequently adopted employee stock option plans. The Supreme Court held that employee stock options are not taxable “compensation” under the Railroad Retirement Tax Act because they are not “money remuneration.” When Congress adopted the Act, “money” was understood as currency “issued by [a] recognized authority as a medium of exchange.” While stock can be bought or sold for money, it is not usually considered a medium of exchange. Congress wanted to tax monetary compensation in any of the many forms an employer might choose but did not want to tax things, like stock, that are not money. Congress knew the difference between “money” and “all” forms of remuneration and chose to use the narrower term in the context of railroad pensions. View "Wisconsin Central Ltd. v. United States" on Justia Law

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Despite employment contracts providing for individualized arbitration to resolve employment disputes, employees sought to litigate Fair Labor Standards Act claims through collective actions. The Federal Arbitration Act generally requires courts to enforce arbitration agreements, but the employees argued that its “saving clause” removes that obligation if an arbitration agreement violates some other federal law and that the agreements violated the National Labor Relations Act (NLRA). The National Labor Relations Board ruled that the NLRA effectively nullifies the Arbitration Act in such cases. The Supreme Court disagreed. The Arbitration Act requires courts to enforce the arbitration terms the parties select, 9 U.S.C. 2-4. The saving clause allows courts to refuse to enforce arbitration agreements only on grounds that exist for the revocation of any contract, such as fraud, duress, or unconscionability. The NLRA, which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . . , and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” 29 U.S.C. 157, does not mention class or collective actions nor indicate a clear and manifest wish to displace the Arbitration Act. The catchall term “other concerted activities” should be understood to protect the things employees do in exercising their right to free association in the workplace. The Board’s interpretation of the Arbitration Act, which it does not administer, is not entitled to Chevron deference. View "Epic Systems Corp. v. Lewis" on Justia Law

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Encino Motorcars' current and former service advisors sought backpay under the Fair Labor Standards Act (FLSA) overtime-pay requirement, 29 U.S.C. 213(b)(10)(A). The requirement exempts “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles, trucks, or farm implements.” The Supreme Court reinstated the dismissal of the suit. Service advisors are “salesm[e]n . . . primarily engaged in . . . servicing automobiles." The ordinary meaning of “salesman” is someone who sells goods or services, and service advisors “sell [customers] services for their vehicles,” Service advisors are also “primarily engaged in . . . servicing automobiles.” “Servicing” can mean either “the action of maintaining or repairing” or “[t]he action of providing a service.” Service advisors satisfy both definitions. They meet customers; listen to their concerns; suggest repair and maintenance services; sell new accessories or replacement parts; record service orders; follow up with customers as services are performed; and explain the work when customers return for their vehicles. While service advisors do not spend most of their time physically repairing automobiles, neither do partsmen, who are “primarily engaged in . . . servicing automobiles.” The Ninth Circuit invoked the distributive canon—matching “salesman” with “selling” and “partsman [and] mechanic” with “[servicing]” but the word “or” is “almost always disjunctive.” Using “or” to join “selling” and “servicing” suggests that the exemption covers a salesman primarily engaged in either activity. FLSA gives no textual indication that its exemptions should be construed narrowly. View "Encino Motorcars, LLC v. Navarro" on Justia Law