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A Better Partnership


Mar 2015
March 24, 2015

Supreme Court's Recent Rulings a Mixed Bag for Employers

The U.S. Supreme Court’s 2013-2014 term was widely heralded as beneficial to business. That may be so with regard to a variety of other issues, but the term resulted in a mixed bag of decisions for employers. The decisions from the current term have so far favored employers, but the justices’ questions at oral argument suggest that several of the remaining cases will likely be decided in favor of employees.

Most of the decisions from the Supreme Court’s last term addressed very specific employment contexts – public employers, unionized employers, employers whose employment practices are guided by religious beliefs. Two decisions from the last term merit consideration by most employers:
  • In Lawson v. FMR LLC, the court held that the Sarbanes-Oxley Act’s (“SOX”) whistleblower protections apply to protect employees of privately held contractors and subcontractors of publicly traded companies, and not just to the employees of publicly traded companies. Congress enacted SOX in the wake of Enron’s collapse, in an effort to strengthen the Security and Exchange Commission’s ability to identify and punish fraud against shareholders of publicly traded companies. To encourage individuals to report suspected fraudulent activity, Congress included provisions in SOX to protect whistleblowers from retaliation. Some federal courts had interpreted the whistleblower protections to apply only to employees of publicly traded companies. The Supreme Court’s decision means that employees of privately held companies and even of individuals who work for people who are employed by publicly traded companies are protected by SOX’s whistleblower provisions. The court recognized that its decision even covered gardeners and nannies employed by individuals who work for publicly traded companies. The bottom line for employers: if your business is a contractor or subcontractor for a publicly traded company, you have an additional retaliation provision to beware of.\
  • In Sandifer v. U.S. Steel Corp., the court held that protective clothing is just a special type of clothing. Under the Fair Labor Standards Act, unionized employers do not have to pay employees for time spent putting on and taking off clothing that is essential to their jobs if the collective bargaining agreement provides that such time is not compensable. Better still, the court concluded that if the vast majority of the protective equipment falls within the definition of clothes, then the time spent putting on other items, like safety glasses, is also non-compensable. The bottom line for employers: unionized employers with collective bargaining agreements that exclude putting on and taking off protective clothing from compensable time should carefully review whether their practices fall within the court’s decision; non-unionized employers should remember that they are always required to pay for time spent putting on and taking off protective clothing and gear.
The current term includes more traditional employment cases, including two cases addressing Title VII and another case about compensable time under the Fair Labor Standards Act.
  • In Integrity Staffing Solutions, Inc. v. Busk, the court determined that workers who are required to wait up to 25 minutes after their shift to pass through security before exiting the workplace are not entitled to be paid for that time. The case arose after employees of the staffing company that provides workers at two of Amazon’s storage and order-fulfillment centers sued to be paid for time spent waiting to pass through security. Not surprisingly, Amazon requires workers to pass through airport-like security to ensure that workers were not creating their own “lightning deals.” The employees complained that because Amazon would not hire sufficient security screeners, they were stuck waiting for long periods without pay. The Supreme Court concluded that passing through security was not integral to the employees’ job, and therefore the employer was not required to pay employees for time spent passing through security. The bottom line: the court reaffirmed that employers are not required to pay employees for time spent getting to and leaving from their work stations unless the employees are engaged in activities that are integral to their jobs.
  • In M&G Polymers USA, LLC v. Tackett, the court made a decision that could provide significant financial benefits for long-time unionized employers. (See related article here)

Pending Rulings

We are waiting for decisions in the following cases, all of which will almost certainly be decided before the court ends the term at the end of June:
  • In Young v. United Parcel Service, the court will decide what the Pregnancy Discrimination Act means when it requires employers to treat pregnant employees the same as non-pregnant employees who are “similar in their ability or inability to work.” The case arose after UPS refused to provide light-duty work for a pregnant driver even though it did provide light-duty work for drivers who were injured on the job. The U.S. government argued in support of the injured worker, but was challenged by the court because UPS had adopted policies that were very similar to those adopted by the U. S. Postal Service. The case should provide employers guidance on what accommodations must be provided to pregnant workers.
  • In Mach Mining, L.L.C. v. Equal Employment Opportunity Commission, the court will decide whether the EEOC’s statutory obligation to seek conciliate cases with employers before filing suit can be reviewed by the federal courts. The EEOC is required by Title VII to seek to resolve disputes without resorting to litigation. The EEOC has frequently been accused of interpreting its obligation to be limited to sending a preposterous take-it-or-leave-it settlement demand, refusing to provide any supporting information, and declaring conciliation failed if the employer balks. The federal courts have adopted significantly different standards for reviewing whether the EEOC conciliated in good faith. The EEOC has maintained that judicial review of conciliation is inappropriate – it is the only arbiter of whether its conduct is adequate.
  • In Equal Employment Opportunity Commission v. Abercrombie & Fitch, the court will address when employers are liable for failing to hire a potential employee because they anticipate the employee will require a religious accommodation. The case arose after Abercrombie & Fitch refused to hire an applicant who wore a hijab to an interview.

Warner Norcross & Judd’s Labor and Employment Practice Group will provide analysis of the pending cases as they are decided. 

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