Employment Law

Supreme Court Poised to Make Its Mark On Employment Law

Halfway through the current administration, it’s unlikely there will be much significant employment legislation passed between now and the next election. With the Democrats controlling the House of Representatives, it doesn’t really matter what laws the president proposes and the Senate passes. There won’t be any consensus on major legislative policy initiatives.

Source: Bill Chizek / shutterstock

But that’s not to say significant employment policies won’t be implemented. Administratively, the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC) will continue on their path of reversing all Obama-era regulatory initiatives. And, as had been widely anticipated or feared (depending on your point of view), the courts will place their stamp on employment law.

Paid for Sleeping? Federal vs. California Law

In mid-April, I was at the U.S. Supreme Court watching arguments relevant to a case I have on a prime example of running legislative policy through an ideological lense. At issue was whether federal or California law will apply to employees who start and end their seven-day shifts on California soil but perform their duties on Outer Continental Shelf (OCS) platforms several miles off the California coast.

Why is that important? Because under federal law, an employer and an employee can agree that sleeping time need not be paid. Under recent California appellate court decisions, however, an employer must pay an employee for sleeping time if he isn’t free to leave the premises during those hours. It’s hard to leave the premises when you’re on a platform 12 miles offshore. Therefore, if state law applies, the employer likely has to pay the employees 24 hours a day, shelling out a premium for 16 of those hours.

For the past 50 years, the prevailing legal view is that offshore platforms are enclaves of exclusive federal jurisdiction under the Outer Continental Shelf Act, which says federal law will prevail unless there is “applicable and not inconsistent” state law. Courts have held that the federal Fair Labor Standards Act (FLSA) supplies the rule, so state law isn’t applicable. Moreover, since a different result would occur if California law was used, that law would be inconsistent.

But last year, the 9th Circuit Court of Appeal (whose rulings apply to California employers) decided that California law is applicable to work on the OCS, and it isn’t necessarily inconsistent that California law achieves a different result than federal law. The U.S. Supreme Court heard arguments on that 9th Circuit ruling on April 16.

It’s a dangerous game attempting to predict rulings based on the justices’ questions, but if the hearing was any indication, the justices will play true to form, and the 9th Circuit’s change to the law is likely to be short-lived. Justices Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor peppered the offshore platform operator with tough questions about why state law and federal law couldn’t both be applied. Justice Stephen Breyer added some tough questions, although it was ultimately difficult to see where he would land.

It appeared clear, however, that the five conservative justices would give little support to the 9th Circuit’s expansion of California overtime rules to the OCS. With a relatively strong five-justice majority ready to reverse the 9th Circuit, the liberal block might not stand firm, and a broader majority than the standard 5-4 vote may result. Much more than Congress, it’s likely to be the Supreme Court that will shape employment law.

Supreme Court Shapes Employment Law

Highly anticipated employment issues are coming over the horizon, including whether discrimination and harassment on the basis of sexual orientation and transgender status are included within the prohibition on sex discrimination and sexual harassment under Title VII of the Civil Rights Act of 1964. This Court will make those determinations, which could have an impact on employment law for decades—especially if the older Justices Ginsburg and Breyer do not remain on the Court through the end of the Trump presidency.

The administrative decisions made by the U.S. Department of Labor, the NLRB, and the EEOC will have their impact as well, but those administrative actions will likely be reversed by the next Democratic administration—it’s the typical governmental tug-of-war. But the ideological divide of the Supreme Court is palpable when you sit in the courtroom, with many or most justices likely to be incumbent for decades.

It’s possible that individual justices will grow out of the philosophies that landed them on the Supreme Court. Recall that the Court presided over by Chief Justice Earl Warren, known for its liberal rulings, was composed largely of conservative appointees. The lifetime appointment frees the justices from political considerations. But whichever way it turns, look to the Supreme Court as the major force directing the trend of employment law in America.

Mark SchickmanMark I. Schickman is of counsel with Freeland Cooper & Foreman LLP in San Francisco and Editor of California Employment Law Letter. You can reach him at 415-541-0200 or schickman@freelandlaw.com.