Justia U.S. Supreme Court Opinion Summaries

Articles Posted in Labor & Employment Law
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Petitioners, representing a class of current and former Cornell University employees, participated in two defined-contribution retirement plans from 2010 to 2016. They sued Cornell and other plan fiduciaries in 2017, alleging that the plans engaged in prohibited transactions by paying excessive fees for recordkeeping services to Teachers Insurance and Annuity Association of America-College Retirement Equities Fund and Fidelity Investments Inc., in violation of the Employee Retirement Income Security Act of 1974 (ERISA) §1106(a)(1)(C).The District Court dismissed the prohibited-transaction claim, requiring plaintiffs to allege self-dealing or disloyal conduct. The Second Circuit affirmed the dismissal but on different grounds, holding that plaintiffs must plead that the transaction was unnecessary or involved unreasonable compensation, incorporating §1108(b)(2)(A) exemptions into §1106(a) claims.The Supreme Court of the United States reversed and remanded the case. The Court held that to state a claim under §1106(a)(1)(C), a plaintiff need only plausibly allege the elements contained in that provision itself, without addressing potential §1108 exemptions. The Court determined that §1108 sets out affirmative defenses, which must be pleaded and proved by defendants. The Court emphasized that the statutory text and structure do not impose additional pleading requirements for §1106(a)(1) claims and that the burden of proving exemptions rests on the defendants. View "Cunningham v. Cornell University" on Justia Law

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Douglas Horn, a commercial truck driver, purchased and consumed a CBD tincture called "Dixie X," marketed as THC-free by Medical Marijuana, Inc. After a random drug test by his employer detected THC in his system, Horn was fired for refusing to participate in a substance abuse program. Horn subsequently sued Medical Marijuana under the Racketeer Influenced and Corrupt Organizations Act (RICO), claiming that the company's false advertising led to his job loss.The District Court granted summary judgment in favor of Medical Marijuana, reasoning that Horn's job loss was a consequence of a personal injury (ingesting THC), and thus not recoverable under RICO, which only allows recovery for business or property injuries. The Second Circuit Court of Appeals reversed this decision, holding that Horn's job loss constituted an injury to his business under RICO, rejecting the "antecedent-personal-injury bar" that precludes recovery for business or property losses derived from personal injuries.The Supreme Court of the United States reviewed the case to determine whether civil RICO categorically bars recovery for business or property losses that derive from a personal injury. The Court held that under civil RICO, a plaintiff may seek treble damages for business or property loss even if the loss resulted from a personal injury. The Court emphasized that the statute's language allows recovery for business or property harms without excluding those that result from personal injuries. The judgment of the Second Circuit was affirmed, and the case was remanded for further proceedings consistent with this opinion. View "Medical Marijuana, Inc. v. Horn" on Justia Law

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Gary Waetzig, a former employee of Halliburton Energy Services, Inc., filed a federal age-discrimination lawsuit against the company. He later submitted his claims for arbitration and voluntarily dismissed his federal lawsuit without prejudice under Federal Rule of Civil Procedure 41(a). After losing in arbitration, Waetzig sought to reopen his dismissed lawsuit and vacate the arbitration award, citing Federal Rule of Civil Procedure 60(b) as the basis for reopening the case.The U.S. District Court for the District of Colorado reopened the case, ruling that a voluntary dismissal without prejudice counts as a "final proceeding" under Rule 60(b) and that Waetzig made a mistake by dismissing his case rather than seeking a stay. The District Court also granted Waetzig's motion to vacate the arbitration award. Halliburton appealed, and the Tenth Circuit reversed the District Court's decision, holding that a voluntary dismissal without prejudice does not count as a "final judgment, order, or proceeding" under Rule 60(b).The Supreme Court of the United States reviewed the case and held that a case voluntarily dismissed without prejudice under Rule 41(a) counts as a "final proceeding" under Rule 60(b). The Court reasoned that a voluntary dismissal is "final" because it terminates the case and aligns with the definitions and historical context of the term "final." The Court also concluded that a voluntary dismissal qualifies as a "proceeding" under Rule 60(b), encompassing all steps in an action's progression. The judgment of the Tenth Circuit was reversed, and the case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Waetzig v. Halliburton Energy Services, Inc." on Justia Law

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EMD Sales, Inc. distributes food products in the Washington, D.C. area and employs sales representatives who manage inventory and take orders at grocery stores. Several sales representatives sued EMD, alleging that the company violated the Fair Labor Standards Act (FLSA) by failing to pay them overtime. EMD argued that the sales representatives were outside salesmen and therefore exempt from the FLSA’s overtime-pay requirement.The U.S. District Court for the District of Maryland held a bench trial and found EMD liable for overtime pay because EMD did not prove by clear and convincing evidence that its sales representatives were outside salesmen. The court ordered EMD to pay overtime wages and liquidated damages. EMD appealed, arguing that the District Court should have used the preponderance-of-the-evidence standard instead of the clear-and-convincing-evidence standard. The U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s judgment, adhering to Circuit precedent that required employers to prove FLSA exemptions by clear and convincing evidence.The Supreme Court of the United States reviewed the case and held that the preponderance-of-the-evidence standard applies when an employer seeks to demonstrate that an employee is exempt from the minimum-wage and overtime-pay provisions of the FLSA. The Court reasoned that the FLSA does not specify a standard of proof for exemptions, and in the absence of such specification, the default preponderance standard should apply. The Court reversed the Fourth Circuit’s judgment and remanded the case for further proceedings consistent with this opinion. View "E.M.D. Sales, Inc. v. Carrera" on Justia Law

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Several Starbucks employees in Memphis, Tennessee, announced plans to unionize and invited a local news crew to their store after hours to promote their efforts. Starbucks fired multiple employees involved in the media event for violating company policy. The National Labor Relations Board (NLRB) filed an administrative complaint against Starbucks, alleging unfair labor practices. The Board's regional Director then filed a petition under §10(j) of the National Labor Relations Act seeking a preliminary injunction that would require Starbucks to reinstate the fired employees during the administrative proceedings. The District Court granted the injunction, applying a two-part test that asks whether there is reasonable cause to believe that unfair labor practices have occurred and whether injunctive relief is just and proper. The Sixth Circuit affirmed the decision.The Supreme Court of the United States vacated the Sixth Circuit's decision. The Supreme Court held that when considering the NLRB’s request for a preliminary injunction under §10(j), district courts must apply the traditional four-factor test articulated in Winter v. Natural Resources Defense Council, Inc. This test requires a plaintiff to make a clear showing that they are likely to succeed on the merits, that they are likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in their favor, and that an injunction is in the public interest. The Court found that nothing in §10(j) displaces the presumption that these traditional principles govern. The Court rejected the Board's argument that statutory context requires district courts to apply the traditional criteria in a less exacting way. The Court concluded that the reasonable-cause standard substantively lowers the bar for securing a preliminary injunction by requiring courts to yield to the Board’s preliminary view of the facts, law, and equities. The case was remanded for further proceedings consistent with this opinion. View "Starbucks Corp. v. McKinney" on Justia Law

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The case involves the interpretation of Section 3 of the Federal Arbitration Act (FAA), which outlines procedures for enforcing arbitration agreements in federal court. The petitioners, current and former delivery drivers for an on-demand delivery service operated by the respondents, filed a lawsuit alleging violations of federal and state employment laws. The respondents moved to compel arbitration and dismiss the suit. The petitioners agreed that their claims were arbitrable but argued that Section 3 of the FAA required the District Court to stay the action pending arbitration rather than dismissing it entirely. The District Court issued an order compelling arbitration and dismissed the case without prejudice. The Ninth Circuit affirmed the decision.The Supreme Court of the United States reversed the Ninth Circuit's decision. The Supreme Court held that when a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, Section 3 of the FAA compels the court to issue a stay, and the court lacks discretion to dismiss the suit. The Court reasoned that the statutory text, structure, and purpose all point to this conclusion. The Court further explained that the FAA's structure and purpose confirm that a stay is required. The Court concluded that staying rather than dismissing a suit comports with the supervisory role that the FAA envisions for the courts. The case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Smith v. Spizzirri" on Justia Law

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Sergeant Jatonya Clayborn Muldrow, a police officer in the St. Louis Police Department, alleged that she was transferred from her position in the Intelligence Division to a uniformed job in another department because of her gender. Despite maintaining her rank and pay, Muldrow's responsibilities, perks, and schedule were significantly altered. She filed a Title VII suit against the City of St. Louis, claiming that the transfer constituted sex discrimination with respect to her employment terms and conditions.The District Court granted the City summary judgment, and the Eighth Circuit affirmed, holding that Muldrow had to show that the transfer caused her a "materially significant disadvantage." The courts ruled that since the transfer did not result in a reduction to her title, salary, or benefits and only caused minor changes in working conditions, Muldrow's lawsuit could not proceed.The Supreme Court of the United States disagreed with the lower courts' interpretation of Title VII. The Court held that an employee challenging a job transfer under Title VII must show that the transfer brought about some harm with respect to an identifiable term or condition of employment, but that harm need not be significant. The Court rejected the City's arguments based on statutory text, precedent, and policy, and vacated the judgment of the Eighth Circuit, remanding the case for further proceedings under the correct Title VII standard. The Court clarified that Muldrow only needed to show some injury respecting her employment terms or conditions, not that the harm was significant. View "Muldrow v. City of St. Louis" on Justia Law

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Neal Bissonnette and Tyler Wojnarowski, distributors for Flowers Foods, Inc., a major producer and marketer of baked goods, sued the company for alleged violations of state and federal wage laws. Flowers Foods moved to compel arbitration under the Federal Arbitration Act (FAA). The key issue was whether the exemption from coverage under the FAA for any "class of workers engaged in foreign or interstate commerce" is limited to workers whose employers are in the transportation industry.The District Court dismissed the case in favor of arbitration, stating that for Bissonnette and Wojnarowski to be exempt from the FAA, they must be "transportation workers." The court concluded that their broader scope of responsibility under the Distributor Agreements belied the claim that they were primarily truck drivers. The Second Circuit affirmed the District Court's decision on the alternative ground that Bissonnette and Wojnarowski "are in the bakery industry." According to the Second Circuit, §1 of the FAA exempts only "workers involved in the transportation industries."The Supreme Court of the United States disagreed with the Second Circuit's interpretation. The Court held that a transportation worker does not need to work for a company in the transportation industry to be exempt under §1 of the FAA. The Court emphasized that the relevant question is what the worker does for the employer, not what the employer does generally. The Court vacated the judgment of the Second Circuit and remanded the case for further proceedings consistent with its opinion. The Court did not express an opinion on any alternative grounds in favor of arbitration raised below. View "Bissonnette v. LePage Bakeries Park St., LLC" on Justia Law

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Trevor Murray worked as a research strategist at UBS, a securities firm. His job involved reporting on commercial mortgage-backed securities markets to current and future customers. Under SEC regulations, Murray was required to certify that his reports were produced independently and reflected his own views. When two leaders of the CMBS trading desk pressured him to make his reports more supportive of their business strategies, Murray told his supervisor about it. The supervisor told Murray not to alienate the trading desk and to write what the business line wanted. He eventually recommended that Murray be removed from his position, despite having recently given him a strong performance review. When the CMBS trading desk did not accept Murray as a transfer, he was fired.Murray argued that he was terminated in violation of the whistleblower protection provision in the Sarbanes-Oxley Act because UBS fired him in response to his internal reporting about fraud on shareholders. He prevailed at trial, but the Second Circuit Court of Appeals vacated the jury’s verdict and remanded for a new trial. It found that the whistleblower protection provision requires an employee to prove retaliatory intent, which a clarifying jury instruction had not properly indicated.The U.S. Supreme Court disagreed, instead agreeing with the Fifth and Ninth Circuits that the whistleblower protection provision does not impose this type of requirement. The Court acknowledged that a whistleblower must prove that his protected activity was a contributing factor in the adverse action against him, but it noted that the text of the statute does not include or refer to a requirement of proving retaliatory intent, which it treated as similar to “animus.” The Court noted that the statute contains a burden-shifting framework, requiring the whistleblower to show that their protected activity was a contributing factor in the adverse action, after which the employer must show that it would have taken the same action anyway. It found that a requirement of proving retaliatory intent would be incompatible with the burden-shifting framework. View "Murray v. UBS Securities, LLC" on Justia Law

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Groff, an Evangelical Christian who believes that Sunday should be devoted to worship and rest, took a mail delivery job with the Postal Service (USPS). USPS subsequently began facilitating Amazon’s Sunday deliveries. To avoid working Sundays on a rotating basis, Groff transferred to a rural USPS station. After Amazon deliveries began at that station, Groff received progressive discipline for failing to work on Sundays. He eventually resigned. Groff sued under Title VII of the Civil Rights Act, asserting that USPS could accommodate his Sunday Sabbath practice “without undue hardship" to its business, 42 U.S.C. 2000e(j). The Third Circuit affirmed summary judgment in favor of USPS, reasoning that under Supreme Court precedent, “requiring an employer ‘to bear more than a de minimis cost’ to provide a religious accommodation is an undue hardship.”The Supreme Court vacated. Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantially increased costs in relation to the conduct of its particular business. After tracing Establishment Clause and Title VII jurisprudence, the Court concluded that showing “more than a de minimis cost,” as that phrase is used in common parlance, does not establish “undue hardship” under Title VII. Undue hardship is shown when a burden is substantial in the overall context of the business–a fact-specific inquiry. Courts must consider all relevant factors, including the accommodations at issue and their practical impact, given the nature, size, and operating cost of an employer. Impacts on coworkers are relevant only to the extent those impacts affect the conduct of the business. Title VII requires that an employer “reasonably accommodate” an employee’s practice of religion, not merely assess the reasonableness of a particular possible accommodation. An employer must do more than conclude that forcing other employees to work overtime would constitute an undue hardship; other options must be considered. View "Groff v. DeJoy" on Justia Law