In this episode, I discuss the Supreme Court’s labor and employment law cases for the 2020-2021 term. Among the cases discussed are Cedar Point Nursery v. Hassid, which concerned access for unions to agricultural employers in California. The Court found that granting unions access for up to 3 hours per day for 120 days per year was a taking and the employers should have been compensated. I discuss what this case may indicate for other labor law cases in the future.
The episode also discusses California v. Texas, which concerns the Affordable Care Act; Henry Schein Inc. v. Archer and White Sales Inc., which deals with the enforceability of arbitration agreements; Fulton v. City of Philadelphia, which demonstrates the Court’s willingness to enforce religious rights and religious liberty; National Collegiate Athletic Association v. Alston, where the court held that the NCAA’s prohibition on education related benefits (e.g., scholarships) for college athletes violates antitrust laws and questioned the other compensation structures in college athletics; Tanzin v. Tanvir, another case where the court upheld religious liberty; TransUnion LLC v. Ramirez, a case concerning standing for class members in a class action; and Van Buren v. United States, which concerns individuals that exceed their access privileges on computers and will have implications for employers that try to protect their trade secrets.
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.
While there were some important decisions in the 2020-2021 term, this term was not as groundbreaking as last term when the Supreme Court issued the Bostock decision that prohibited employers from discriminating against employees based on their sexual orientation or gender identity.
Here are the labor and employment cases that were decided this term:
The Court held that California’s law that allowed union organizers access to the property of agricultural employers for up to three hours a day for 120 days per year was a taking (government seizure of private property) under the Fifth and Fourteenth Amendments, because the employers were not compensated.
The decision will not affect employers covered under the National Labor Relations Act. As stated on the NLRB’s website, agricultural workers are not protected by the National Labor Relations Act. The National Labor Relations Act controls access issues for the vast majority of employers. This decision will have no effect on that law contrary to any concern from various commentators.
The decision does indicate that the Supreme Court is currently favorable to employers on many labor law issues. There have been a few labor law cases in the last few years and with a more aggressive NLRB there is the possibility of new cases developing. Overall, this case will have a very narrow effect since it is limited to agricultural workers in California.
In this decision, the Supreme Court held that the plaintiffs lacked standing to challenge the individual mandate of the Affordable Care Act (ACA). Justice Breyer delivered the opinion of the Court and Justices Alito and Gorsuch dissented. As the Court held that the plaintiffs lacked standing, the ACA is still the law of the land. The decision changes nothing for labor and employment law or employer requirements under the law. Companies still need to provide insurance if they meet the 50-employee threshold under the ACA and comply with the other obligations under the law.
In this decision the Supreme Court again generally upheld the enforceability of arbitration agreements and found that when parties to an arbitration agreement delegate the issues of arbitrability to an arbitrator, the Court cannot override the contract by concluding that the arbitrability claim is wholly groundless. The Court, in a unanimous decision, determined that the “wholly groundless” exception to arbitrability is inconsistent with the Federal Arbitration Act. Arbitration is a matter of contract and the courts have to enforce these contracts. Courts still have the power to determine whether an arbitration agreement is itself valid.
This is just another decision indicating that the Court will generally rule in favor of arbitration agreements.
While the Supreme Court is generally in favor of enforcing arbitration agreements, many companies are now moving away from arbitration agreements because too many people have utilized them and they are costing the companies too much money to litigate compared to the cost of a court case. In arbitration, companies will normally pay for the costs of the proceeding and their own lawyers. Sometimes, the company will also pay the lawyers for the employee or other party.
There is likely a movement away from arbitration of employment law claims, but it will continue to be used frequently in labor arbitrations, as that forum is better for unions and companies than the NLRB (typically).
Decisions that are Not Employment Law Decisions But Affect Employment Law
Last term there were three different cases that dealt with religious issues and the law. This term, there was one particular case that was interesting and may indicate how future decisions regarding religious issues will be determined. The case concerned the refusal of Philadelphia to contract with Catholic Social Services (“CSS”) unless CSS agreed to certify same-sex couples as foster parents.
In a unanimous decision, the Court ruled that Philadelphia’s refusal to contract with CSS unless it agreed to certify same-sex couples as foster parents violated the Free Exercise Clause of the First Amendment. The Court held that Philadelphia lacked a compelling interest to refuse to contract with CSS. The Court found that “CSS seeks only an accommodation that will allow it to continue serving the children of Philadelphia in a manner consistent with its religious beliefs; it does not seek to impose those beliefs on anyone else.”
The Opinion indicates that there are at least five justices that would overturn Employment Division v. Smith and replace it with a standard that is more favorable for accommodating religious beliefs. In Smith, the Supreme Court upheld the denial of unemployment benefits for two workers because they were fired for work related misconduct for ingesting peyote in a religious ceremony (peyote was illegal). The Court found that a person’s religious beliefs do not permit them to avoid complying with an otherwise valid law that controls conduct that the government has the power to regulate. The standard in Smith was that a generally applicable law that does not target a specific religious practice does not violate the free exercise clause of the First Amendment. It is not clear what standard the Court would use to replace the standard in Smith.
This decision could also indicate that the Court may find in a future case that employers need to better accommodate religious beliefs.
In this case, the Court held that the NCAA’s prohibition on education related benefits (e.g., scholarships) for college athletes violates antitrust laws. The NCAA cannot place limits on these benefits.
Justice Kavanaugh’s opinion on the issue is even more telling of the next steps that the Court may take regarding compensation for students in the NCAA. Justice Kavanaugh said that under the traditional “rule of reason” analysis “there are serious questions whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny.” It is likely that the compensation structure (i.e., wages) for student athletes will be challenged.
With the Big 12 Conference possibly imploding as a result of the loss of the University of Texas and the University of Oklahoma, one has to wonder whether the Supreme Court decision played a role. Sports Illustrated has a great article from a week before Texas and Oklahoma announced that they were leaving the Big 12 that they were leaving the Big 12 that speculated that super conferences were a possible response to this case and continued issues regarding scholarships. Certainly, the Supreme Court’s decision upends the current/prior model of college athletics and opens the possibility of schools competing with other schools by offering better compensation (at this point just scholarships and education benefits) to student athletes. Texas and Oklahoma may just be the first of many clear signs of the fallout from this case. Interestingly, the negotiations involving Texas and Oklahoma have been ongoing for about six months (or around January of 2021). The Court granted certiorari in this case in December 2020. It is possible that Texas, Oklahoma, and the SEC placed a bet on the outcome of the case by negotiating with the mindset that the NCAA was going to lose the case and they wanted to strike first.
What does Alston hold for the future of college sports and compensation? The next set of cases will concern non-educational related benefits and compensation for student athletes such as wages. It is likely that these rules will change.
This is not really an employment law case, but it again shows some of the interesting situations that may arise in employment law matters in the future. In this case, a Muslim man had his name on the No Fly List despite posing no threat to flights because he refused to become an FBI informant and report on other individuals. He claimed that this substantially burdened his exercise of religion in violation of the Religious Freedom Restoration Act (RFRA).
The issue in the case was whether the RFRA allowed lawsuits seeking money damages against federal employees. The RFRA entitles persons to sue and “obtain appropriate relief against a government.” The Court held that this includes government officials such as government employees and appropriate relief includes monetary damages.
Again, this case demonstrates the Court’s willingness to uphold religious rights.
This is a bit of a technical decision and the implications to employment law are not direct. The Court held that to have standing under Article III, a plaintiff must show that they suffered concrete harm. In this particular case, 1,853 individuals suffered concrete harm and had standing because their credit reports were shared with third parties. The other 6,332 class members did not have concrete harm as their reports were not shared with third parties.
The implication for employment law is that courts may be less likely to find risk of future injury is enough for plaintiffs to have standing, and a court may be less likely to uphold certification of such a class.
While this case does not directly concern employment law, it does have labor and employment law implications.
The Court held: “An individual ‘exceeds authorized access’ when he accesses a computer with authorization but then obtains information located in particular areas of the computer—such as files, folders, or databases— that are off-limits to him.” The Court rejected the premise that obtaining information for personal purposes when contrary to a contract or policy constituted a violation of the Computer Fraud and Abuse Act (CFAA).
The decision is narrow. It does not cover people “who have improper motives for obtaining information that is otherwise available to them.” The Court specifically rejected the interpretation that Section 1030(a)(2) of the CFAA prohibits someone from obtaining information for their personal use when it is contrary to a contract or other policy (such as a workplace policy).
Under the decision, it will be more difficult for employers to pursue claims or charges against employees for violating the CFAA when they access computer documents that are off limits to them on a device that they are authorized to use (e.g., by breaching a firewall, going into an encrypted folder/document, or document/folder that is password protected)Oftentimes, this scenario will arise when an employee misappropriates trade secrets, financial information, customer lists, and other confidential information.
Conclusion
This was not a blockbuster Supreme Court session for labor and employment law like we have had over the past few years. However, there were several cases that affected employment and labor law. It will be interesting to see what the next term brings.
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.
2020 has arrived and so have my 2020 labor and employment law predictions. One side note, I am not going to repeat my 2019 labor and employment law predictions that are likely to happen in 2020 (new states that protect medical marijuana use outside of work, increased sexual harassment charges, the elimination of the H-4 EAD program, the NLRB issuing the joint employer standard, more states passing paid family leave, independent contractor issues arising, notices of inspection (I-9 inspections) increasing, and the Supreme Court’s decision on DACA.) So what’s new in 2020? Let’s dive right in.
1. Minimum Wage Increases Will Occur in a Number of States and Ballot Initiatives Will Be Undertaken to Get Them on the Ballot in Additional States
In the world of oil and gas, there
are a lot of companies with debt maturities coming due in 2020 or 2021 (see this
article from the Wall Street Journal discussing the $120 billion debt wall these companies will face
through 2023), and oil prices have been below
the break-even point for many drilling sites. It is possible that there could
be a number of layoffs in that industry. Of course, the situation in Iran (the
death of Soleimani and Iran’s reaction to his death), any decisions from OPEC,
and any possible economic slowdowns or other geopolitical issues could change
this.
The workplace and workforce is changing even if the situation for retail stores and the oil and gas industry improves and we avoid a recession. Many people have read articles about the jobs that supposedly won’t exist in the future, which is something to keep an eye on. In short, layoffs are a part of life and the economy. We can expect them to continue or increase in 2020.
3. Onboarding and Employee Retention Continues to Grow in Importance
No matter what happens next year
with layoffs, there will be a lot of workers that will need to be trained,
retrained and onboarded. Companies are finally starting to recognize they need
to find, adequately train, and keep their employees because unemployment is at
a low. In short, businesses are going to want to find the right people, train them
well, and try to keep them given the lack of qualified and available employees.
Remember, onboarding is more than just orientation. It is a long process to
help workers become established in an organization and usually occurs over an
extended period of time through a set process to help the employees adjust to
their new job. Onboarding also takes more importance as certain jobs are
eliminated, new technology is brought into a company, and workers change
positions.
The Bureau of Labor Statistics found that “Over the 12 months ending in October, hires totaled 69.8 million and separations totaled 67.4 million, yielding a net employment gain of 2.4 million. These totals include workers who may have been hired and separated more than once during the year.” Again, there were 69.8 million people hired between October 2018 and October 2019. Onboarding, training, and employee retention have gained in importance over the past few years and will continue to do so.
4. The Governmental Agencies Gear Up for the Election by Releasing a Lot of New Regulations Before the Election Happens
The Congressional Review Act allows a new Congress to
disapprove of any new regulation within a 60 legislative day window by a
majority vote. If the vote succeeds, then the rule does not go into effect. It
was only used once before the Trump administration. The Republican Congress
under Trump used
it 14 times.
The Trump administration and the agencies will push out new regulations and decisions to avoid their regulations being undone either by the Congressional Review Act or by the heads of the agencies after the election (assuming that a Democrat is elected). Many agencies that previously did not engage in much rulemaking are also engaging in rulemaking to avoid their new rules being overturned easily (through decisions). You can look to the NLRB (joint employer rule) and the DOL (overtime rule and joint employer rule) as prime examples of this.
5. Candidates Push Their Election Agendas Which Will Give us a Peek into the Labor and Employment Landscape in 2021
I wrote
awhile back about the Democratic candidates. At that time there were around
25 different candidates. Most of those have basically fallen away. We can
expect that President Trump and the eventual Democratic candidate will propose
a number of different ideas that will affect the workplace.
I expect President Trump to push limiting immigration based
on the belief that this will protect American jobs and perhaps he will also
propose some kind of paid family leave program as he discussed in his 2016
campaign.
The Democratic candidate can be expected to support raising the minimum wage to $15, the PRO act (that would transform union organizing, eliminate right to work states, permit card check (union elections would not need to happen if enough authorization cards were signed), expand the definition of ‘joint employer’, permit secondary boycotts (targeting neutral worksites), adopt a more restrictive definition of independent contractors, and much more), and a paid family leave program. Depending on the final Democratic candidate, more proposals could go into effect. Moreover, the success of these proposals will depend on the final composition of the House and Senate (in addition to who controls the White House).
6. Union Elections and Organizing Increases this Year Especially in the Tech Sector
Unfortunately, I did not get to publish this blog post before this prediction started to come true (I swear I wrote this before I heard about the CWU trying to organize video game developers, you can ask my kids, but who can trust anyone under 5 years old…). The tech sector is going to become an increasing target of union organizing. Unfortunately, many companies do not treat their employees right (they work long hours, their concerns are not addressed, and many of their coworkers are let go for what feels like no reason to them). Mistreated employees are always the biggest threat and cause of union organizing. The tech sector is ripe for organizing because many companies fit this model.
7. More States Pass Employment Related Laws- Especially Variations of the Independent Contractor Law that California Adopted (the ABC Test)
Employment law has become more fragmented and more influenced by multiple sectors of government (federal, state, county, and city) with a greater influence at the local level than ever before. This is going to continue. This fragmentation affects almost every area of employment law (labor law has not been affected to the same degree). For example, a number of states have their own overtime salary threshold so the new federal overtime rule does not affect them and a number of states have begun to tighten their independent contractor rules (which means that companies must follow these complex rules for each state that they operate in).
This one is not so much a prediction as it is a statement of fact. With the current administration being more business friendly (and depending on the results of the election in 2020, that may continue for 4 more years) the trend of employment law is increasingly being done at the state and local level.
8. Mental Health Issues and the Workplace Become More Important
Nearly 1
in 5 adults had a mental illness in 2016. Carley
Sime at Forbes wrote “Mental health and substance abuse
cost US businesses between $80 and $100 billion annually.” That is a
cost that companies cannot ignore. In 2020 and throughout the decade more
companies will recognize this cost and offer treatment and solutions to their
staff.
The good news is that more companies are discovering that
treatment works. The Center for Workplace Mental Health found that 80 percent of employees treated for mental health problems reported improvements in both their
productivity and job satisfaction.
More companies are recognizing the effects of mental health and wellbeing on their workforce and taking steps to prioritize these issues and ensure their employees feel supported.
9. There will be a Ton of Issues Around Free Speech and the Workplace (i.e. It is an Election Year).
This one feels like cheating. It hardly counts as a
prediction. It is an election year.
Trump is a polarizing figure. Politics seems more divided
now than any time in the last twenty years or so. “A 53-point [difference]
separates the percentage of Republicans (65%) and the percentage of Democrats
(13%) who believe the United States is headed in the right direction, according
to data from the latest Economist/YouGov
poll.”
We may be more divided now than any time since Thomas
Jefferson and John Adams faced off (you really need to watch this video on what they said about each other in the campaign to understand
how bad it was) With this being an election year, we also get to experience
attack ads (here is a
history of attack ads), which means that more people will have more fodder
to attack supporters of one candidate.
Additionally, from a workplace perspective, the election will likely cause more people to talk about politics at work, which can be another polarizing situation you may want to be smart about. You can read about what to do here. This is something that will probably only get more divisive before it improves (some time after the 2020 presidential election but before the 2022 midterms). With the impeachment and the bitterness of this election we have reached a bit of a tipping point in divisive politics and can perhaps expect them to be more divisive and interfere with the workplace more than ever.
10. The Cases Before the Supreme Court Put Increased Focus on Religion, Transgender Issues, and Sexual Orientation in the Workplace.
The Supreme Court cases on the ministerial exception add to this issue. Here is a breakdown from SCOTUSblog on those cases:
In Our Lady of Guadalupe School v. Morrissey-Berru and St. James School v. Biel, the justices will consider the scope of the “ministerial exception,” a court-created doctrine that prohibits courts from reviewing employment decisions by religious employers involving their ministers. Under the exception, courts must determine which employees serve a “ministerial function.” In these cases, which will be argued together, two California Catholic schools are challenging rulings by the U.S. Court of Appeals for the 9th Circuit that teachers who sued the schools after the teachers’ contracts were not renewed were not, despite their religious duties, “ministers” for purposes of the exception. The schools tell the justices that the issues presented in the two cases are “vital to the daily operations of religious organizations,” and that “getting it right is crucial in protecting church-state relations.”
All of these Supreme Court decisions will cause a lot of talk about the place of religious beliefs and how they relate to the issue of sexual orientation and transgenderism/gender identity.
11. States Continue to Implement Restrictions on Noncompetition Agreements
This is something that is already happening in a number of
states and now the FTC has also begun to weigh in on the issue. The Federal
Trade Commission recently held a public workshop to “examine whether there is a
sufficient legal basis and empirical economic support to promulgate a
Commission Rule that would restrict the use of non-compete clauses in
employer-employee employment contracts. This follows a labor market workshop hosted by the Department of
Justice’s Antitrust Division in September 2019.”
Washington has a law that went into effect on January 1 that
prohibits noncompetes for employees that earn less than $100,000 and
independent contractors that earn less than or equal to $250,000.
Maryland also enacted a similar law last year that prohibits
noncompetes for “employees
earning equal to or less than $31,200 annually or $15 per hour.”
Maine’s
law went into effect in 2019 and prohibits employers from entering into a noncompete agreement with an
employee if they earn wages at or below 400% of the federal poverty level.
New Hampshire
passed a law in 2019 that prohibits
employers from entering into or enforcing agreements with low-wage employees
(those earning less than 200% of the federal minimum wage currently $14.50 an
hour).
Rhode Island’s law went into effect on January 15. It prohibits noncompetes for nonexempt
employees, certain graduate and undergraduate students, people 18 and under,
and low wage employees (those earning less than 250% of the federal poverty
level currently $600.48 per week ($31,225 / 52))
Conclusion
2020 is going to be a big year for employment and labor law issues. Employers should prepare for these upcoming changes to ensure that they are staying a step ahead of the competition. As usual, these issues will be followed this year at the Texas Labor Law Blog, and I hope you all stay ahead of the curve this year!
The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.
The information provided is my own and does not reflect the opinion of my firm or anyone else.
Brett Holubeck (of Houston, Texas) is the attorney responsible for this site.
