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:
There is a lot of controversy over this case. Some commenters have written that this is a radical decision and is disastrous for unions,
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.
For example, Amazon is currently facing 75,000 claims from customers and has dropped the arbitration requirement for customers presumably due to the cost of arbitration. Uber and Lyft have also faced numerous mass arbitration campaigns with thousands of workers filing claims.
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.
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.
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