Survey of Caselaw Developments in Labor and Employment Law 2017 - 2019
| Publication year | 2021 |
| Pages | 313 |
By Jeffrey J. MirMan [*]
The three years 2017-2019 saw an increase in cases decided under the Family and Medical Leave Act, the Fair Labor Standards Act, and the Americans with Disabilities Act; and renewed Court recognition of the right to engage in protected concerted activity by non-union employees. This Survey will discuss some of the more interesting cases in these, and other areas of importance at both the Federal and State level. A second article on this time period will examine developments at the State Board of Labor Relations, the National Labor Relations Board, and important Federal and State legislation.
I. SUPREME COURT CASES
The Court issued only one case of significance touching on labor and employment law in the 2016-2017 term. In McLane Co., Inc. v. Equal Employment Opportunity Commission,[1] the Court ruled that a federal district court’s decision to enforce, or to quash, an EEOC subpoena is to be reviewed under an abuse of discretion standard.
The complainant against McLane Co. was fired after eight years of employment when she failed a physical examination following her return to work from three months’ maternity leave. After she fled a Title VII charge of sex discrimination, the EEOC investigated and issued subpoenas to McLane, seeking the names, Social Security numbers, addresses, and telephone numbers of employees asked to take the physical evaluation. On the company’s motion to quash, the District Court declined to enforce the subpoenas, finding the information sought not to be relevant to the charges, because the information sought “‘could not shed light on whether the [evaluation] represents a tool of . . . discrimination.’”[2] Justice Sotomayor, writing for the majority, reasoned, “the district court’s decision whether to enforce a subpoena will turn either on whether the evidence sought is relevant to the specific charge before it or whether the subpoena is unduly burdensome in light of the circumstances. Both tasks are well suited to a district judge’s expertise.”[3] Because the Court of Appeals applied the wrong standard of review, the case was remanded to the Court of Appeals to review again the District Court’s decision for abuse of discretion.[4]
On remand the Ninth Circuit Court of Appeals found that the District Court had indeed abused its discretion in concluding that the material sought in the subpoena was not relevant,[5] observing that the standard was not admissibility at trial, or probity of unlawful discrimination, but is only whether “reasonable cause” exists “to believe that the charge is true.”[6] The Court concluded that the subpoena might yield information that other female employees were subjected to adverse employment actions after failing the test when male employees did not, which could be learned only after obtaining the identities and contact information of the employees tested.[7]
The term ending in June, 2018 saw the Court issue rulings favoring employers over unions and employees. The Court, by 5-4 margins, held in three cases that class action waivers do not violate the National Labor Relations Act. The majority stated that Section 7 of the NLRA is focused on employees’ rights to unionize and engage in collective bargaining, but that Section 7 does not protect an employees’ right to participate in a class or collective action. Class action waivers are enforceable under the Federal Arbitration Act. Epic Systems Corp. v. Lewis; Ernst & Young, LLP et al v. Morris et al; National Labor Relations Board v. Murphy Oil USA, Inc., et al.[8]
In another class action case, China Agritech, Inc. v. Resh[9], this time by a unanimous decision, the Court held that following the denial of class certification, a putative class member may not begin a new class action beyond the applicable statute of limitations. The Court refused to extend the 1974 ruling in American Pipe & Constr. Co. v. Utah[10] which held that “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action”.[11]
In Encino Motorcars, LLC v. Navarro,[12] a 5-4 majority rejected the principle that exemptions under the Fair Labor Standards Act must be “narrowly construed” against the employer. The majority determined that service advisors are exempt from overtime pay under the FLSA’s “automobile dealer” exemption applicable to salesmen, partsmen, and mechanics.
In Janus v. AFSCME Council 31,[13] again by a 5-4 majority, the Court held that public sector employees who are not members of a union cannot be legally required to pay agency or “fair share” fees as a condition of employment. The decision reversed the 1977 ruling in Abood v. Detroit Board of Educ.,[14] which found these mandatory fees to be constitutionally permitted.
In the term ending in June, 2019, the Court issued rulings dealing with arbitration, Title VII, the Age Discrimination in Employment Act, and agency deferral. In one of many 5-4 decisions, the Court tackled class action arbitrations again. The Court ruled that because class action arbitration is a substantial departure from ordinary arbitration of individual disputes, a court may compel class action arbitration only in those situations where the parties expressly indicate their intention in particular arbitration agreements: “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.” Lamps Plus, Inc. v. Varela.[15]
In a consumer case nevertheless important in employment litigation, Nutraceutical Corp. v. Lambert,[16] the Court held that F.R.C.P. Rule 23(f), which sets a 14-day deadline to seek permission to appeal an order granting or denying class certification, is not subject to equitable tolling.
In a rare unanimous ruling, the Court held in Fort Bend County, Texas v. Davis[17] that Title VII’s requirement that complainants file a charge of discrimination with the EEOC prior to fling suit is not a subject matter jurisdictional requirement, but merely a claim-processing rule. Therefore, the employer was not privileged to first raise the issue of the plaintiff’s failure to specify religious discrimination in her EEOC charge years into litigation timely commenced after a Notice of Right To Sue issued on a sex discrimination and retaliation charge.
In a case applicable to state and local governments, the Court ruled that the Age Discrimination in Employment Act applies to all such employers, regardless of their size. Mount Lemmon Fire District v. Guido.[18]
Finally, again by a 5-4 margin, in Kisor v. Wilkie,[19] the majority declined to overrule the Auer deference doctrine, deferring to an agency’s reasonable interpretation of its own ambiguous regulation, although the remand to the Circuit Court came with exhaustive guidance about determining true ambiguity and the quality of the Agency’s interpretation.
II. SECOND CIRCUIT COURT OF APPEALS CASES
A. Fair Labor Standards Act Cases
In Wang v. Hearst Corporation,[20] the Second Circuit Court reviewed the seven part test for determining whether an individual should be classified as an intern or employee established in Glatt v. Fox Searchlight Pictures, Inc..[21] Applying the “primary beneficiary test”, the Court felt compelled to repeat the non-exhaustive test, as will I in this abbreviated fashion: the extent to which
1. the intern and the employer clearly understand that there is no expectation of compensation;
2. the internship provides training similar to that which would be given in an educational environment, including clinical and other hands-on training;
3. the internship is tied to the formal education program by integrated coursework or academic credit;
4. the internship accommodates academic commitments by corresponding to the academic calendar;
5. the duration is limited to the period in which it provides beneficial learning;
6. the interne's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern;
7. the intern and the employer understand that there is no entitlement to a paid job at the conclusion of the internship.
The Court reiterated that “[t]he totality of the circumstances should be considered in view of the ‘purpose of a bona fide internship to integrate classroom learning with practical skill development in a real-world setting.’”[22] Still, an intern “may provide a direct benefit to the employer so long as the intern receives identifiable educational or vocational benefits in re-turn.”[23]
The Wang Court rejected the plaintiffs’ claims to employee status. Their taking meeting minutes and learning about photo shoots were deemed evidence of vocational skills taught and learned, and the Court disagreed that “internships should be just like school.”[24] Other supporting factors included that the internship was a graduation requirement; that interning with an editorial department of a magazine was consistent with the plaintiff’s major in English and professional interest in writing; and that approval from the university was required to participate in the internship and receipt of academic credit was a prerequisite.[25]
The Wang Court further emphasized that the seven part test “intentionally omitted a criterion that had been advanced by the Department of Labor that the alleged employer derive no immediate advantage from the activities of the intern.”[26] Thus, a plaintiff does not acquire employee status merely because some or all of his work complements or displaces the work of paid employees.[27]
In January, 2018, the Department of Labor announced that it was abandoning its own six-part test and adopting the primary beneficiary test utilized...
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