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Keep your eyes on these labor and employment Supreme Court cases

by Judith E. Kramer

The first Monday in October (October 5) marked the beginning of the U.S. Supreme Court’s new term. While during the course of the 2015-2016 term the Court could agree to hear additional cases, these are the labor and employment cases currently on the docket, as well as a case involving affirmative action in university admissions that could have a significant impact on affirmative action in employment. Decisions are expected in each of these cases by the end of June 2016. 

Affirmative action
Although Fisher v. University of Texas at Austin is not an employment case, this affirmative action case, which is on a return visit to the Supreme Court, could significantly affect employment-related affirmative action requirements.

The case involves the constitutionality of the University of Texas’ practice of considering race as one of several factors in its undergraduate admissions process. In 2013, the Supreme Court held that the U.S. 5th Circuit Court of Appeals had not correctly applied a “strict scrutiny” test, which is required when an official action treats a person differently on account of race or ethnic origin. The Supreme Court sent the case back to the court of appeals to apply “a searching examination” and determine whether the university had met its burden to prove that the reasons for the racial classification are “clearly identified and unquestionably legitimate.”

Upon its second look at the case, the 5th Circuit found that racial preferences were constitutionally justified by the university’s stated need to enroll underrepresented minority students from majority white high schools who might not otherwise be accepted under the state’s Top 10% Rule, which grants automatic admission to the University of Texas to in-state students in the top 10 percent of their high-school class.

The case is now back before the Supreme Court so the Court can determine whether the court of appeals correctly applied the strict scrutiny test prescribed in the Supreme Court’s 2013 decision. The Court’s decision could affect affirmative action programs in employment, particularly those used by public employers.

In MHN Government Services, Inc. v. Zaborowski, employees filed suit against their employer, seeking overtime compensation under the Fair Labor Standards Act (FLSA). Their employment contracts, however, required them to submit employment disputes to arbitration rather than litigation in court. Their employer sought to compel arbitration, but the federal trial court and the 9th Circuit found that multiple provisions of the arbitration requirement were unconscionable for a number of reasons and refused to enforce the arbitration agreement.

The employment contract had a severability clause providing that if “any provision of this Agreement is rendered invalid or unenforceable . . . the remaining provisions of this Agreement shall remain in full force and effect.” The court of appeals, however, determined that it could not merely sever the portions of the arbitration clause it found offensive because, under California law, when the contract at issue is an arbitration agreement, “[t]he finding of ‘multiple unlawful provisions’ allows a trial court to conclude that ‘the arbitration agreement is permeated by an unlawful purpose'” and deny severance, thereby invalidating the entire arbitration requirement.

At issue before the Supreme Court is whether California law, which applies a separate rule of contract severability to arbitration agreements than it does to other kinds of contracts, is preempted by the Federal Arbitration Act (FAA). In recent years, the Supreme Court has ruled in favor of the expansive use of arbitration, as contemplated by the FAA.

Constructive discharge
In Green v. Brennan, a former postmaster claimed that the U.S. Postal Service (USPS) retaliated against him after he made employment discrimination claims. He was investigated, threatened with criminal prosecution, and put on unpaid leave. Shortly after being put on leave, he signed a settlement agreement with the USPS that provided him paid leave for three and a half months, after which he could choose either to retire or to work in a position that paid much less and was about 300 miles away.

The postmaster ultimately decided to retire. He then filed a complaint against the postmaster general in the U.S. District Court for the District of Colorado alleging that the USPS engaged in retaliation by, among other actions, constructively discharging him in violation of Title VII of the Civil Rights Act of 1964.

The issue before the Supreme Court is whether the filing period for a constructive discharge claim begins to run when an employee resigns or at the time of the employer’s last allegedly discriminatory act leading to the resignation. There is a split of opinion among the eight courts of appeals that have addressed this issue. A Supreme Court decision should provide the definitive answer.

Union dues requirements for public employees
Under California law, school districts may require public school teachers, as a condition of employment, to either join the union representing teachers in their district or pay an “agency fee,” the equivalent of dues to that union. The fee is meant to support union activities that are “germane to [the union’s] functions as the exclusive bargaining representative.”

Each year, the union must determine the portion of its expenses that are “nonchargeable,” i.e., not germane to its function as the exclusive bargaining representative. For example, such expenses could relate to political activity. The union must send a notice (known as a “Hudson notice”) to all nonmembers that sets forth the amount of the agency fee as well as a breakdown of the chargeable and nonchargeable portions of the fee. To avoid paying for nonchargeable expenditures, a nonmember is required to affirmatively opt out of such payments each year by notifying the union of her objection after receipt of the Hudson notice.

At issue in Friedrichs v. California Teachers Association is whether these requirements violate the public employees’ rights under the First Amendment to the U.S. Constitution. The Court’s decision would likely have a significant impact on the continued financial viability of public-sector unions.

Judith E. Kramer is an attorney with Fortney & Scott, LLC in Washington, D.C. She may be contacted at

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