"The U.S. Supreme Court issued a few important labor and employment law decisions in 2008."
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2008
U.S. Supreme Court Decisions
Labor & Employment Law
By Christopher W. Olmsted
Below is a brief summary of significant labor and employment law decisions issued by the U.S. Supreme Court in 2008.
Federal Arbitration Act
Preston v. Ferrer
In Preston v. Ferrer, the Supreme Court held that the Federal Arbitration Act preempts state law.
The Supreme Court held that the Federal Arbitration Act ("FAA") overrules state laws declaring that certain disputes must be resolved by a state administrative agency. In this case, a party sought to bring a claim before the California Labor Commissioner, despite an arbitration agreement calling for arbitration of disputes. The Court noted that it had ruled consistently that the FAA was "a national policy favoring arbitration" when parties contract to settle disputes in that manner, and that it "foreclose[s] state legislative attempts to undercut the enforceability of arbitration agreements.
Section 1981 Discrimination Claims
CBOCS West Inc. v. Humphries
Although employees in federal law discrimination cases tend to rely upon Title VII of the Civil Rights Act of 1964, other federal laws also grant employee rights. In CBOCS West, Inc. v. Humphries, the Supreme Court analyzed the Civil Rights Act of 1866. The Court considered whether the Act’s first section, now codified as 42 U.S.C. 1981, guaranteeing equality in the right to make a contract, forbids employer retaliation against an individual who complains of discrimination against others.
In CBOCS, a black manager at a Cracker Barrel restaurant filed suit under Section 1981, alleging he was fired after complaining about discrimination against other black mid-level managers. Section 1981, passed during Reconstruction, provides that “[a]ll persons within the jurisdiction of the United States shall have the same right to make and enforce contracts … as enjoyed by white citizens.” CBOCS argued to the Court that this language prohibits adverse treatment of citizens on the basis of race but that retaliating against someone who has complained about discrimination is not race discrimination within the meaning of the Act.
The Court ruled that Section 1981 does encompass retaliation claims. As a result of this decision, employers should expect to see more Section 1981 claims. Retaliation was of course already illegal under Title VII, but Section 1981 is attractive to litigants because it does not limit damages (unlike Title VII) and employees need not exhaust EEOC remedies to pursue such claims.
EEOC Administrative Procedure
Federal Express Corp. v. Holowecki
The federal Age Discrimination in Employment Act of 1967 (ADEA) requires that “[n]o civil action . . . be commenced . . . until 60 days after a charge alleging unlawful discrimination has been filed with the Equal Employment Opportunity Commission” (EEOC), 29 U. S. C. §626(d), but does not define the term “charge.”
In Holowecki, an employee filed an EEOC Form 283 Intake Questionnaire and accompanying affidavit alleging that Fed Ex had instituted a number of policies and practices that discriminated based on age. However, she did not file an EEOC Form 5 Charge of Discrimination before suing. Fed Ex claimed that she did not follow EEOC protocol and sued too soon. The Court rejected the defense. It found that the EEOC rules were ambiguous, and concluded that the material submitted in this case did constitute a “charge.”
For employers, the downside to this ruling is that the employee’s failure to follow EEOC protocol may, in some circumstances, not provide a defense to lawsuits. Additionally, in some instances, employers may be deprived of early notice and the opportunity to informally resolve allegations before litigation.
Federal Employees
Gomez-Perez v. Potter
The Court ruled that the Age Discrimination in Employment Act of 1967 (ADEA), 29 U. S. C. §633a(a)—which requires that “[a]ll personnel actions affecting employees . . . at least 40 years of age . . . be made free from any discrimination based on age” prohibits retaliation against a federal employees who complain of age discrimination. Federal law already protected private employees from such retaliation.
ADEA Employer Defenses
Meacham v. Knolls Atomic Power Laboratory
When a layoff disproportionately impacts employees 40 or older, there is no age discrimination under the federal ADEA where the layoffs were based on “reasonable factors other than age.” In disparate impact age discrimination cases, is it the burden of the employee to show the absence of reasonable factors other than age, or is it the employer’s burden to establish these factors? Knolls conducted layoffs in connection with a reduction in force. Of the 31employees selected for layoff, 30 were age 40 or older. One of the employees laid off claimed that the company’s selection criteria had an adverse impact on older workers. The Court decided the employer must prove its decision was not age-based, but rather was predicated on “reasonable factors other than age.”
More Legal Update articles.
Download entire January Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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