U.S. Supreme Court Provides Limited Guidance to Employers During Last Term But Is Anticipated To Provide More Useful Guidance in Fall

The U.S. Supreme Court decided a few employment-related cases during its 2016 term addressing the appropriate standards for reviewing EEOC issued subpoenas and preventing forum shopping by employees wanting to sue their employers.[1]

  With respect to the EEOC subpoena case, employers should not be afraid to challenge a subpoena issued by the EEOC, although the court has more latitude to decide whether to enforce a subpoena.  McLane Co., Inc. v. E.E.O.C., 137 S.Ct. 1159 (2017).  In McClane, an employee was required to take a physical evaluation upon returning from maternity leave and after failing the evaluation three times she was fired.  The employee filed a gender discrimination charge with the EEOC and the EEOC issued subpoenas to the employer seeking information regarding the employer’s use of the physical evaluation information including employees’ names, social security numbers, addresses, and telephone numbers.  The employer refused to comply with the subpoenas and the EEOC filed an action to enforce the subpoenas.  The district court refused to enforce the subpoenas determining that the information the EEOC sought was not relevant to the gender discrimination charges.  The Ninth Circuit reviewed the lower court’s ruling de novo and reversed.  The Supreme Court found that the Ninth Circuit applied the wrong standard of review and held that a decision whether to enforce or quash an EEOC subpoena is to be reviewed for abuse of discretion, not de novo.  The abuse of discretion standard gives more latitude to the lower court’s decision to enforce or quash the subpoena. 

             The second employment case decided by the U.S. Supreme Court last term prevented employees from forum shopping their claims to a more favorable jurisdiction, especially when the employee does not live in the jurisdiction and the alleged injury did not occur in the jurisdiction.[2]  Thus, corporations operating in multiple states will likely now be able to limit the States in which they are forced to defend employment lawsuits. 

             However, when the Court re-convenes in the fall, there are two cases which will provide more substantive guidance to employers.[3]    The Court will decide whether class and collective action waivers in employment arbitration agreements should be upheld under the Federal Arbitration Act.  Currently, the Circuit Courts of Appeals are split on the issue.  The Second, Fifth, Eighth, and Eleventh Circuits upheld class action waivers and the Seventh and Ninth Circuits found the class action waivers are unenforceable.  The Court will also determine whether the anti-retaliation provision for “whistleblowers” found in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 extends to individuals who have not reported alleged misconduct to the Securities Exchange Commission and thus fall outside the Act’s definition of a “whistleblower.”

 Campbell Litigation will follow these employment-related cases in the Supreme Court’s next term and report back once decisions are handed down.    

 

 

 

[1] The U.S. Supreme Court decided other employment cases related to federal employees.  Coventry Health Care of Missouri, Inc. v. Nevils, 137 S.Ct. 1190 (2017) (determining that private insurance carriers contracted to provide health insurance to federal employees may seek subrogation and reimbursement regardless of state laws prohibiting such action); Perry v. Merit Systems Protection Bd., ---S.Ct.---, 2017 WL 2694702 (2017) (determining that a federal district court is the proper forum for judicial review of a Merit Systems Protection Board dismissal of a mixed case on jurisdictional grounds).  The Court also clarified whether an Indian tribe’s sovereign immunity can extend to individual employees of the tribal gaming authority for their tortious conduct.  Lewis v. Clarke, 137 S.Ct. 1285 (2017).  Finally, the Court determined that ERISA’s exclusion of “church plans” extends to a principal purpose organization that maintains a plan for the employees of a church as long as the organization is controlled by or associated with a church.   Advocate Health Care Network v. Stapleton, 137 S.Ct. 1652 (2017).

[2] See High Court Limits Employee Forum Shopping, The Rocky Mountain Employers Blog, June 8, 2017, http://www.rockymountainemployersblog.com/blog/2017/6/8/high-court-limits-employee-forum-shopping.

[3] National Labor Relations Board v. Murphy Oil USA, Inc., Docket No. 16-307 (consolidated with Epic Systems Corp. v. Lewis, Docket No. 16-285, and Ernst & Young LLP v. Morris, Docket No. 16-300); and Digital Realty Trust, Inc. v. Somers, Docket No. 16-1276.

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