U.S. Supreme Court Employment Decisions Update

The United States Supreme Court decided several employment law cases this past term.  The Court addressed a number of topics, from the statute of limitations in cases alleging discriminatory pay practices, to the exempt status of home care aides under U.S. Department of Labor regulations.  There are three cases on the docket for next Term.

Ledbetter v. Goodyear Tire & Rubber Co., Inc: In the first case Lilly Ledbetter claimed Goodyear discriminated against her based on her sex by setting her pay lower than male counterparts.  As a result, her pay continued to be lower over time.  Years after the allegedly discriminatory pay decisions, she brought a claim of sex discrimination under Title VII of the Civil Rights Act of 1964.  Title VII requires plaintiffs to file administrative charges within 180 days of the discriminatory decision in some states, and within 300 days in others.  Ledbetter argued that each paycheck was a new discriminatory decision to pay her, based on the initial discriminatory setting of her pay.

The Supreme Court ruled that the EEOC charges were untimely.  The Court held: “The EEOC charging period is triggered when a discrete unlawful practice takes place.  A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination.  But of course, if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.”  Ledbetter v. Goodyear Tire & Rubber Co., Inc. (May 29, 2007)

Long Island Care at Home, Ltd. v. Coke: Evelyn Coke was employed by Long Island Care at Home as a home-care companion for elderly patients.  Long Island Care at Home did not pay Coke minimum wages or overtime, relying on the U.S. Department of Labor’s application of an exemption in the Fair Labor Standards Act.  In 1974, Congress amended the FLSA to provide coverage for “employees in domestic service.”  However, the 1974 amendments exempted casual babysitters and companions to the elderly or infirm.  That section provides that its terms are to be “defined and delimited by regulations” prescribed by the Secretary of the Department of Labor.

The DOL regulations state that “[e]mployees who are engaged in providing companionship services...and who are employed by an employer or agency other than the family or household using their services, are exempt from the Act’s minimum wage and overtime pay requirements.”

Coke sued claiming she was non-exempt and entitled to minimum wages and overtime.  The Second Circuit agreed with Coke that the DOL’s regulation was invalid.  The Supreme Court disagreed, however, holding that the DOL properly exercised its authority to issue regulations interpreting the FLSA.  Therefore, Coke was properly classified as exempt.  Long Island Care at Home, Ltd. v. Coke (June 11, 2007)

Davenport v. Washington Education Association: The National Labor Relations Act permits states to regulate their labor relationships with public employees.  Many states allow public-sector unions to negotiate agency-shop agreements that entitle a union to levy fees on employees who are not union members, but whom the union represents in collective bargaining.

The First Amendment prohibits public-sector unions from using objecting nonmembers’ fees for ideological purposes not germane to the union’s collective-bargaining duties.  There are various procedural requirements placed on unions to ensure that objecting nonmembers can prevent their fees from being used for such purposes.

Washington voters approved an initiative requiring a union to obtain the nonmembers’ affirmative authorization before using their fees for election-related purposes.  Davenport sued the Washington Education Association (WEA), claiming the union was using fees for political activity in violation of the initiative.

The Washington Supreme Court held that the initiative violated the First Amendment because it regulated the expenditure of funds on political issues.  The U.S. Supreme Court disagreed.  The Court ruled that states can require unions to obtain its members’ affirmative consent to spend agency fees on political activities.  Davenport v. Washington Education Association (June 14, 2007)

Pending Cases

Federal Express Corporation v. Holowecki: In October, the Court will consider what constitutes a “charge” of discrimination sufficient to satisfy the Age Discrimination in Employment Act (ADEA)’s requirement that a plaintiff must first file such a charge with the Equal Employment Opportunity Commission.  The Second Circuit held that plaintiff Patricia Kennedy satisfied the requirement of filing a charge by submitting an EEOC Intake Questionnaire, and a four-page affidavit detailing her claims of age discrimination.  The EEOC failed to file a formal charge, investigate the claim, or send notice to the employer.  The Court of Appeals ruled that Holowecki had done enough to satisfy the “exhaustion” of administrative requirements.

Hall Street Associates, L.L.C. v. Mattel, Inc.:  While this is not an employment law case, it will have an impact on arbitration agreements in employment matters.  The parties’ arbitration agreement provided that the courts had the power to vacate or modify an arbitrator’s decision when “the arbitrator’s conclusions of law are erroneous.”  The Ninth Circuit ruled that this provision was invalid under the Federal Arbitration Act because that law specifies arbitration awards may be vacated or modified only in limited circumstances, such as fraud or arbitrator bias.

Sprint/United Management Company v. Mendelsohn: The Supreme Court will decide whether “me-too” evidence of discrimination is admissible.  Mendelsohn sued her former employer (Sprint), alleging Sprint unlawfully discriminated against her on the basis of age in violation of the ADEA.  Mendelsohn alleged she was selected for termination based on her age during a company-wide reduction in force (RIF).

A jury decided the case in favor of Sprint, however Mendelsohn successfully argued to the Tenth Circuit Court of Appeals that the trial court improperly excluded evidence that Sprint discriminated against other employees during the same layoff.  Sprint argued that only alleged discrimination against “similarly situated” employees were those supervised by the same decision maker as Mendelsohn.  Courts generally have held that such proof, called “me-too” evidence, is inadmissible, or admissible only under limited circumstances.

If you have any questions regarding the above court decisions, please contact Jack Lipovac, SPHR, lipovacj@hr-onesource.com at (515) 221-1718.