Employment Law Highlights From The Past Year – 2013 Roundup

Nicholas Fortuna, January 22, 2014.

Arbitration Favored Over Class/Collective Action

Mandatory arbitration agreements in the employment setting gathered steam this year. The U.S. Supreme Court’s decision in American Express Co. v. Italian Colors Restaurant held that mandatory arbitration agreements with explicit waivers of the right to bring a class or collective action are enforceable notwithstanding federal common law and federal statutes to the contrary (i.e. National Labor Relations Act). The Courts of Appeals have universally upheld the waivers and enforced employment arbitration agreements. This is true even when Fair Labor Standards Act or Title VII pattern-or-practice claims are asserted. The ruling in American Express Co. is consistent with the general theme of the Supreme Court’s recent employment law rulings, which in effect limit the number of employment law cases that can be brought in federal courts.

However, 2014 may bring new changes in the battle to push employment claims out of the courts. Amendments are being offered to the Federal Arbitration Act that would prohibit mandatory arbitration provisions in an employment agreement. In California, the state courts are using the doctrine of unconscionability to challenge mandatory arbitration provisions. The approach is that it is unconscionable to force employees to sign an agreement containing a mandatory arbitration provision as a condition of employment. So far this has not been used to great effect. In most cases, the Federal Arbitration Act preempts state law.

Employment Law Class Actions May be at an End After Supreme Court’s Follow-up to Wal-Mart in 2013

The Supreme Court revisited the analysis it used in 2011 Wal-Mart v. Dukes, in which it stated that only those workers who truly have a common legal claim might sue as a group and required rigorous proof showing every single worker suffered from exactly the same bias. The suit involved potentially millions of different employment decisions, which prevented class certification because the claims were not truly common under the Supreme Court’s new stricter standard.

In 2013 the Supreme Court moved forward in its application of commonality to class actions in the antitrust case Comcast Corp. v. Behend. Here, the Court concluded that the class had been improperly certified because the plaintiffs’ expert’s damages model could not establish damages directly linked to the antitrust injury through common proof.  Questions of individual damage calculations will inevitably overwhelm questions common to the class.

Title VII Retaliation Claims

The Supreme Court held in University of Texas, Southwest Medical Center v. Nassar that Title VII retaliation claims must be proven by the stricter standard of but-for the retaliation, the employee would not have been fired. The Court stated that the less restrictive cause standard of mixed motives does not apply. The mixed motive standard is where one of the motives for firing the employee was retaliation, but that was not the only reason. Such an approach, the Court ruled, cannot be used in Title VII cases.

Sexual Harassment

The Supreme Court took on the question of who qualifies as an agent of the employer in an action claiming workplace harassment in the case of Vance v. Ball State University. The Court held that harassment of a nominal supervisor; one that merely oversees the employee’s day-to-day duties cannot subject the employer to liability of acts of harassment.  Unless the supervisor was vested with the authority to hire, fire, promote, or cause a significant change in benefits, he or she would not subject the employer to liability as its agent.