Posted by marykeating on July 5, 2011 under Employment benefit issues, FMLA, Family responsibility, Sex-based discrimination | 
A Maryland state employee filed suit after his termination from the court system. He claimed that he was the victim of race discrimination, and also that his termination violated the Family and Medical Leave Act. The lower courts rejected both contentions, but the Supreme Court has agreed to hear the issue involving his FMLA claim. This blog discussed the case earlier.
That part of the decision related to the immunity of states from private lawsuits in federal courts. Under the 11th Amendment to the Constitution, states cannot be sued in federal courts unless the state has consented to the suit, or Congress has specifically, and legally, removed the immunity.
The Supreme Court earlier decided that Congress removed the immunity for FMLA suits against states when the employee was using FMLA protection to care for another person. The FMLA protected workers in that situation because of ingrained sex discrimination, “the pervasive sex-role stereotype that caring for family members is women’s work.”
The FMLA offers protection to workers taking time off for their own illness or disability also; but according to the Fourth Circuit, the motivation for the law did not implicate any constitutional protections. Instead, Congress found that the economic effect of job loss due to illness was profound, and sought a way to limit it when larger employers were involved. Because there was no constitutional imperative underlying the law, Congress could not validly permit the states to be sued.
The petition for certiorari pointed out cases in which the circuit courts believe that the law has to stand or fall as a unit, therefore all of its parts must be viewed together. Others specifically requested the high court’s guidance.
The Supreme Court does not announce why it agreed to hear a case; it becomes clearer (sometimes) after the decision comes out. The Rehnquist Court upheld states’ rights to be free of federal legislation, but this newer Court may go in a different direction.
Posted by marykeating on June 26, 2011 under Sex-based discrimination |
In the wake of the Supreme Court’s refusal to allow an enormous class action to proceed against Wal-Mart, representatives of employees and employers are evaluating its message. Justice Scalia’s pointed criticism of the plaintiff class’s approach intrigues some management representatives. The plaintiffs argued that by giving almost unfettered discretion to male managers to hire, pay and promote, Wal-Mart ensured an old boy’s club to flourish. The Supreme Court rejected this idea completely, saying that without a company-wide policy of discrimination, the class could not prove its case.
Now some advisers are contemplating whether to recommend more discretion and less top-down control, in the interest of avoiding class discrimination complaints. Others are not so sure.
A healthy corporate culture is imposed from, and rewarded from, the top. Nicely worded statements in the employee handbook are worth nothing if they have no backup. A manager who is permitted to discriminate, treat his employees like dirt, and look the other way when racial or sexual harassment pervades the workplace has no incentive to change his ways. If the behavior goes too far and the company is sued, however, the particular victims of this person’s discrimination do not have to mount a class action. One, two, or five people suing the company for discrimination costs less than a class action to defend, but is not something any employer courts. A maverick manager defying the company does more harm than simply inviting lawsuits. Morale suffers, some good employees leave the company, and sick leave usage rises as the miserable employees take time off for stress-related ailments. Fettered discretion is much smarter.
Posted by marykeating on July 15, 2010 under Employment benefit issues |
The Supreme Court will decide an important issue in employee benefits in its next term. Under the federal law that governs employee benefits (ERISA), employees are entitled to get a copy of a summary plan description as well as notification of any important changes to the plan. The summary plan descriptions almost always state that the actual “plan” governs in cases of any differences in language. Although participants in the plan are entitled to obtain the full document upon request, they are not routinely given out without the request. Because pension plan document can easily run more than 100 pages, there are critical differences in language in plenty of cases. The plan amendments are even more difficult to comprehend, sometimes, since they can’t be understood without sitting down with the plan document itself to know how a change to Article IX might affect an employee’s entitlement to disability benefits, for example.
The Supreme Court took this case for a typical reason: different federal circuit courts of appeals used different standards to decide when employees may sue over the discrepancy between the summary plan description and the language of the longer plan. In the case before the Supreme Court, employees charged that CIGNA changed the pension plan, telling employees that it had “enhanced” the plan; in reality, the future benefits available upon retirement would be less favorable. The trial court found that by spinning its communications, CIGNA “wished to avoid the employee backlash likely to result from a thorough discussion of these aspects” of its changes to the plan. Still, the District Court concluded that it could not force the plan to reinstate the old benefits. The employees ask the Supreme Court to make clear that the trial courts are free to provide meaningful remedies for violation of the law.
Posted by marykeating on June 29, 2010 under Interesting cases |
The Supreme Court handed down a decision earlier this month that invalidated a large number of decisions made by the National Labor Relations Board, New Process Steel v. National Labor Relations Board, The Board investigates complaints against employers regarding union activity, certifies union elections, and has similar duties generally relating to organized labor. The Board is supposed to have five members, and a majority vote is enough. Unfortunately, for two years the Board has only two members. This is politics – when the third member’s term expired in 2007, when President Bush was a lame duck, no action was taken. The Board members are designed to be from different political parties, and if no one is nominated, or the Senate does not confirm, vacancies can linger. This happens in judicial openings, too, but in this case the fact that the Board made decisions with only two members meant it did not have a quorum, or majority, and therefore those decisions are no good.
The Senate responded by quickly confirming two more nominees, one a Republican former congressional staffer, and one a labor lawyer who had been given a recess appointment awaiting full action by the Senate, bringing the Board back to five.
The Supreme Court’s decision theoretically could require the rehearing of scores of cases. In the real world, though, the parties to the disputes got the decision and moved on, and will have no incentive to reopen the old wounds. In some cases, the employee might be in a different job, in some the challenged practice has been abandoned, and in all cases the cost to bring the case again will have to be considered. Still, more than 70 cases were pending in court over the Board’s actions; these will be returned, giving the newly invigorated Board plenty to do.
Posted by marykeating on May 25, 2010 under Employment benefit issues |
The Supreme Court usually ends its term in June with the real blockbuster decisions (though the decision holding that corporations have free speech rights, issued in February, may prove to be the most significant).
Yesterday a unanimous court ruled that the Fourth Circuit was wrong in denying a disability claimant the right to recover attorney’s fees and costs.
I commented on this pending case here, Hardt v. Reliance Standard Life Ins. Co.
The Fourth Circuit denied attorney’s fees to the long-term disability claimant, on the theory that she did not show that she was a “prevailing party.” Her long-term disability carrier had denied benefits, she appealed internally, was denied repeatedly, and finally filed suit. The court found fault with the insurance company’s reasoning, which had ignored much of the available evidence, and ordered it to reconsider. If it failed to reconsider all of the evidence, the court warned that it would enter judgment in favor of the claimant. On reconsideration, the insurance company finally changed its decision and paid the plaintiff her disability benefits. Therefore the only further court proceedings involved the claimant’s attorney fee request, which the trial court granted, and the Fourth Circuit vacated.
The Supreme Court rejected the idea that the claimant had to qualify as a “prevailing party.” That usually means that a judgment is entered in favor of the person. The words of the statute did not require prevailing party status (although many others do). Instead, the Court borrowed from an early case interpreting the Environmental Protection Act (Ruckelshaus v. Sierra Club, 463 U. S. 680, 694 (1983)), and held that “a fees claimant must show ‘some degree of success on the merits’ before a court may award attorney’s fees under §1132(g)(1).” Justice Stevens disagreed with using a different law to guide the interpretation of ERISA, but agreed with the result.
This decision is important to employees who are so often rejected on their first claims for benefits under disability policies. Navigating the requirements for benefit claims can be a major undertaking. The decisionmakers, often the insurance companies that ultimately will pay the benefits, require medical records, interviews, questionnaires, medical tests, and often have short timelines for these requirements. Appeals at the administrative level must be handled with a lot of attention to detail, so that if necessary a federal court can be persuaded that the claimant has the bulk of the evidence on her side. Then, if the claimant is successful, the only damages that ERISA allows are the benefits themselves! The hardship of living without income, the burden of complying with all of the demands of the insurance company, the emotional toll – none of these can be elements of damage in court. But the attorney’s fees and litigation costs are available, IF the claimant “shows some degree of success” on the merits. The Supreme Court cut off an easy escape hatch for the insurance company. It was certain to lose in court if it persisted, and by relenting on the benefits it hoped to deny the claimant attorney’s fees. Her persistence paid off, at least by not costing her additional money for pursuing benefits for which her employer had paid premiums.
Posted by marykeating on April 20, 2010 under Discrimination in employment |
Yesterday the Supreme Court agreed to decide a case involving the “cat’s paw” theory of discrimination. The case will be argued and decided next term, so Justice Stevens’ replacement should be on board by then (barring a major Senate gridlock). This theory of discrimination allows a plaintiff to show that, even though the decision maker who fired him was not biased against him, the biased person had influence over the decision or the decision maker. The colorful name derives from a short story about a monkey who convinces a cat to retrieve chestnuts from the fire. The monkey gobbles them up, but the cat has the burned paws.
This pops up in a lot of employment contexts. A supervisor may not have the power to fire his subordinates, but he certainly has the power to write them up and do their evaluations. If this person dislikes a subordinate because or his race or religion, for example, he can wage a campaign to get rid of the person. He can make up stories or exaggerate encounters so that the person can be called “insubordinate,” or “a poor team player. “This influence may be exercised
by, among other things, ‘supplying misinformation or failing to provide relevant information to the person making the employment decision.’”
The quote is from the case that the Supreme Court will hear, Staub v. Proctor Hospital. Staub alleges that he was fired for being a reserve member of the military. This action violates the Uniformed Services Employment and Reemployment Rights Act (USERRA). Staub showed that one of his supervisors found his military schedule problematic and wanted him fired. He won at trial, but the Seventh Circuit decided that there was too much evidence that the decision maker was independent of the biased subordinate’s influence, and used other, non-discriminatory reasoning to support his firing. The appellate court reversed his win.
It is never safe to predict why the Supreme Court takes a case, or which way it will rule. The Seventh Circuit faulted the trial court for not making a preliminary decision about whether there was enough evidence of “singular influence” by the biased supervisor to permit the cat’s paw theory to be presented to the jury. The Supreme Court may focus on that issue, or may decide to bless or damn the entire theory. Either way, it will be helpful to have guidance on the use of this theory of discrimination.
Posted by marykeating on April 17, 2010 under Employment benefit issues |
The Supreme Court will decide a case centering on the award of attorney’s fees in a long-term disability appeal. The Fourth Circuit, which hears appeals from federal courts in Maryland, decided that the successful claimant could not obtain attorneys’ fees from the insurance company. While the case will focus on a narrow provision of one law, ERISA, it has widespread ramifications. The case is called Hardt v. Reliance Standard Life Ins. , and discussed here.
ERISA is the acronym for the Employee Retirement and Income Security Act. This law governs employee benefit plans, including not only pensions but health insurance, life insurance, and long-term disability insurance. Among its provisions is a requirement that the benefit plan offer an internal administrative appeal procedure when claims are denied.
Long-term disability plans are frequently offered as fringe benefits. As many people have found, however, the administrators of these plans can be very suspicious of claims, and may deny benefits to claimants on dubious grounds. The administrators are often the same insurance companies who will pay the claim if they decide the claim is valid. A disabled person can go to court only after “exhausting” the administrative remedies (the word used by the courts is especially appropriate here). Then the court will review the decision of the administrator by comparing the definitions of the plan, the medical evidence, and the administrator’s reasoning. Ordinarily the disabled employee cannot add more information in court, so developing a good administrative record is key. 
Bridget Hardt’s experience followed a path I’ve seen many times. Her injuries and subsequent health issues prevented her from working, according to her and her doctors. The Social Security Administration agreed that she was unable to work and granted her benefits, but the long-term disability plan administrator did not agree. She filed suit under ERISA, and the federal court instructed the administrator to reconsider the evidence. It relented at that point, and gave her benefits through retirement age.
Under ERISA, a court may order a party to pay the other person’s attorney’s fees if the case was successful. These fee-shifting statutes are designed, in part, to encourage attorneys to take cases for people who might not be able to afford representation. The federal court in Ms. Hardt’s case awarded attorney’s fees to her; but the appeals court disagreed, holding that the administrator’s reconsideration did not result in a judgment in favor of the claimant, so Ms. Hardt did not qualify as a prevailing party. In other words, her success on the claim was not the result of a court order telling the administrator to pay the claim.
Because other federal courts have taken the opposite view, and because ERISA cases frequently arise in federal court, the Supreme Court has decided to resolve the question. It would be unfortunate if the Supreme Court takes the narrow view adopted by the Fourth Circuit. It is difficult for someone to battle an insurance company, and sometimes the nature of the employee’s disability makes it even harder to jump through the company’s hoops. A lawyer can be helpful to formulate the arguments and amass the evidence that might lead the insurance company to agree with the person’s doctor that she’s disabled. When the administrator agrees during that administrative process, attorney’s fees are not recoverable. But if they make a federal case out of it, it seems fair to make the insurance company pay for the successful person’s fees, even if the success does not stem from a judgment.
The decision should be issued by the end of June.
Posted by marykeating on March 23, 2010 under Federal wage and hour law, retaliation |
The Supreme Court agreed yesterday to decide a case of critical importance to retaliation claims under the federal wage law, the Fair Labor Standards Act. The request to the Supreme Court presented one question for review:
Is an oral complaint of a violation of the Fair Labor Standards Act protected conduct under the anti-retaliation provision, 29 U.S.C. § 215(a)(3)?
Anti-retaliation laws give powerful protection for employees who either complain about their own discriminatory treatment, or someone else’s. Often the proof available to establish sexual harassment, for example, is too disputed for the plaintiff to win, but the employer’s retaliatory reaction is crystal clear.
For historical reasons the language of the Fair Labor Standards Act is different. That law dates from the Great Depression, while the Civil Rights Acts from the 60s, 70s, and 80s broadened the language defining retaliation.
In the case before the Supreme Court, a Wisconsin factory worker complained to his supervisor and to the company’s human resources department that the company’s location of time clocks was illegal. The placement of the clocks led to employees not being paid for time spent putting on and taking off protective clothing and Kevin Kasten warned his company, using the company’s reporting procedures, that it was acting illegally. He was warned, suspended and fired. The company lost in the trial court but convinced the appeals court that oral complaints cannot be “filed,” as required by the statute. 
The Supreme Court accepts very few cases every year, but one of its major criteria is whether there is a “split” in the Circuits, meaning that appellate courts of equal stature interpret the same law in opposite ways. This issue has split the Circuits, with many agreeing that to “file” a complaint does not require a piece of paper.
It is never safe to guess why the Supreme Court takes on a case, or how the case will come out. Still, it will be helpful to get this issue settled. If the Court upholds the Seventh Circuit, and permits retaliation for oral complaints of wage violations, the outcome will likely be more retaliatory firings, but also perhaps more union campaigns to combat the perceived unfairness, and more employees complaining in writing or to the Department of Labor when they believe there are wage and hour missteps.
Posted by marykeating on March 19, 2010 under Court news |
Photograph by Franz Jantzen, Collection of the Supreme Court of the United States.
The Supreme Court of the United States heads the most publicity shy branches of government. The politicians in Congress need publicity for reelection, and many seem to crave it. The President has no choice but to live in a fishbowl. But the Supreme Court Justices are appointed and have no need for reelection or popularity. Some probably shy away from publicity because they are naturally scholarly types, and others do so because judicial ethics and customs put a tight rein on what judges say in public. To date, there is no videotaping of arguments, and the Justices have not looked kindly on lower courts’ admission of cameras into the courthouses.
Even with these limitations, though, the Supreme Court building is open to the public, and welcomes anyone to attend oral arguments on a first come-first serve basis. The building itself is magnificent, and the courtroom especially is awe-inspiring (and not very large). Regardless of whether one is inclined to visit, the newly redesigned Supreme Court website is terrific.
Information to guide visitors provides thorough information about the argument calendar, what cannot be brought into the building, and how to get to the court. Without leaving your desk, researchers, or just interested citizens, can find lots of information including opinions, transcripts of arguments, and sources for briefs. (The Supreme Court link for recent briefs is not working as of this writing.)
Posted by marykeating on October 2, 2009 under Interesting cases, Race-based discrimination |
It’s the little things that can trip you up. This is true of lots of fields, from sports to carpentry to litigation. The Supreme Court just agreed to decide a case involving one of the critical little things: the statute of limitations for filing a claim of discrimination. The Court famously decided this issue two years ago in Ledbetter v. Goodyear Tire & Rubber. It refused to allow a wage discrimination case by a woman who made less than the men in the same jobs she held. She worked for years without knowing that she was paid less than the men around her; once she learned, she filed a claim of discrimination. Since the original decision to pay her less than the men had occurred years earlier, even though the effects of that decision were perpetuated and exaggerated as the years went by, the Court held her claim came too late.
Congress reversed this decision by amending the law in January; this was President Obama’s first enactment. The Lilly Ledbetter Fair Pay Act applies to wage discrimination. Specifically, it governs a “compensation decision or other practice.” There have been some questions about how far the Lily Ledbetter law goes, but it cannot be stretched to protect the 6,000 unhappy applicants in Lewis v. Chicago.
That case will decide whether African-American applicants for firefighter positions should have filed claims of race discrimination within 300 days of the City announcing a discriminatory practice, or 300 days after the employer uses it. In the Lewis case, Chicago used a test that had a disparate impact against the African-American applicants, putting many in the “qualified” category, while most people in the “well-qualified” category were white. The applicants argued that the test did not accurately measure aptitude for firefighting, and therefore should not be used since it had the effect of weeding out African-Americans, not those who would fail at firefighting.
The applicants filed claims after the City hired from the well-qualified list; the Seventh Circuit held that they should have made claims within 300 days of the announcement of the lists. The United States has filed a brief in favor of the firefighters.
