Cases that the U.S. Supreme Court will hear in the term starting Oct. 6 will decide key questions involving the reach of federal agencies that enforce employment laws.
THE LAW: The Supreme Court will address the question of whether employers can challenge in court the EEOC’s actions during its conciliation process. It will decide whether the Department of Labor (DOL) had to formally amend Fair Labor Standards Act (FLSA) regulations when it changed a regulatory interpretation.
The EEOC will figure prominently in a Pregnancy Discrimination Act (PDA) case contesting new EEOC guidance that requires employers to treat pregnant employees the same way disabled employees are treated.
Also on the docket: Whether a lower court properly dismissed a state law complaint from an FLSA class action because of differences between state and federal statutes.
Another case hinges on the question of whether retiree health benefits can be negotiated away if the original contract contained no end date for those benefits.
WHAT’S NEW: Two cases before the court deal directly with the Obama administration’s rather muscular enforcement of federal employment law.
In the first case, EEOC v. Mach Mining, LLC, Illinois-based Mach Mining argued that the EEOC did not negotiate in good faith during its conciliation process and that, as a result, a sexual discrimination case against the firm should be dismissed.
The federal district court denied Mach Mining’s request, but agreed to let the courts decide whether an employer could use the EEOC’s bad faith as a defense. Ultimately, the 7th Circuit Court of Appeals ruled that nothing in the Civil Rights Act allows an employer to challenge the EEOC’s sincerity during the conciliation process. Other circuits have ruled that the EEOC’s actions are subject to varying degrees of judicial review under differing circumstances.
The Supreme Court’s decision should provide some guidance on whether and under what circumstances employers may challenge the EEOC’s actions.
In Perez v. Mortgage Bankers Association, the issue is the DOL’s ability to change regulatory interpretation without going through the formal process of amending the regulation.
In 2006, the DOL issued guidance citing mortgage loan officers as examples of personnel who would meet the FLSA’s administrative exemption. The industry relied on that guidance when classifying the officers as exempt. The Obama administration withdrew the 2006 guidance in 2010 and issued new guidance stating that the typical mortgage loan officer would not be exempt from the FLSA.
The Mortgage Bankers Association went to court arguing that a federal agency that makes a substantial change to its regulatory interpretation must go through the formal Notice of Proposed Rulemaking process that would involve public comment. The D.C. Court of Appeals agreed and vacated the 2010 letter. The Supreme Court will rule on the matter.
PDA and light duty
In Young v. UPS, a woman was restricted to lifting only 20 pounds during her pregnancy. She requested a light-duty assignment. UPS denied the request and placed her on unpaid leave, during which she lost her health coverage. She sued.
UPS won at both the district and appeals court levels. New EEOC guidance, issued in light of the ADA Amendments Act (ADAAA) would require employers to treat pregnant employees at least as well as other disabled employers. In this case, UPS allows workers injured on the job to work light-duty assignments, so the EEOC believes the PDA requires them to do the same for pregnant workers. Both the federal district and appeals court have sided with UPS.
Other cases
The case of Busk v. Integrity Staffing Solutions, Inc. involves a group of workers who challenged the company’s practice of not paying them for the time they went through security at an Amazon warehouse in Nevada. A federal district court allowed the FLSA class action to proceed, but ruled the state law issues were so different the case must be tried separately.
In Tackett, et al., v. M& G Polymers, LLC, et al, the Supreme Court will decide whether retirees can rely on a collective bargaining agreement listing no end date for their company provided health benefits. In 2009, a federal district court ruled the employer was liable for the payments and ordered that the retirees be provided with the current version of the plans eliminated in 2007. The employer appealed, claiming it was not liable; the retirees appealed, claiming they should have been placed back in the plans they lost in 2007.
In addition to these cases, conflicting decisions on funding for the federal health care exchanges established by the Affordable Care Act could end up on the court’s docket. Challenges to various states’ ban on same-sex marriage may head to the Supreme Court for final resolution.
HOW TO COMPLY: At this point, employers faced with the issues these cases present can only watch and wait. Once the court rules, employers should discuss each decision’s impact with their attorneys to see what steps are necessary to stay in compliance.
