GPSolo Magazine - March 2004

Labor And Employment Law
The Supreme Court’s Labor And Employment Decisions: 2002-2003 Term

This article summarizes U.S. Supreme Court cases from the October 2002 term that relate directly or indirectly to labor or employment law or have implications for labor and employment practitioners.

Employee Retirement Income Security Act. In Kentucky Assoc. of Health Plans, Inc., et al. v. Miller, the Supreme Court held that “Any Willing Provider” (AWP) provisions were not preempted by the Employee Retirement Income Security Act of 1974 (ERISA) because they regulate insurance, within the meaning of the ERISA saving clause. Miller is likely to put pressure on the traditional low-reimbursement/ high-volume arrangements that health maintenance organizations (HMOs) have struck with providers in jurisdictions that adopt AWP laws as HMOs are forced to open their networks to all willing health care providers.

In Black & Decker Disability Plan v. Nord, the Supreme Court held that ERISA plan administrators need not give special deference to the determinations of a treating physician under the treating physician rule when making disability determinations under ERISA; rather, plan procedures need only “‘afford a reasonable opportunity . . . for a full and fair review’ of dispositions adverse to the claimant.”

Americans with Disabilities Act. In Clackamas Gastroenterology Assocs., P.C. v. Wells, the Court held that the principal guidepost for determining whether shareholders of a professional corporation were “employees” for purposes of triggering coverage under the Americans with Disabilities Act (ADA) is the common law element of control. The Court listed six factors relevant to this determination: (1) whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work; (2) whether and, if so, to what extent the organization supervises the individual’s work; (3) whether the individual reports to someone higher in the organization; (4) whether and, if so, to what extent the individual is able to influence the organization; (5) whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; and (6) whether the individual shares in the profits, losses, and liabilities of the organization.

Family and Medical Leave Act. In Nevada Dept. of Human Resources v. Hibbs, the Court held that employees of state government “may recover money damages in the event of the [s]tate’s failure to comply with the family-care provision of the [Family and Medical Leave] Act.” This means that state employees who are denied leave under the Family and Medical Leave Act (FMLA) may sue the state in federal court.

Fair Labor Standards Act. In Breuer v. Jim’s Concrete of Brevard, Inc., the Court held that the Fair Labor Standards Act (FLSA) provision granting state courts jurisdiction over FLSA damage suits was not an express prohibition of removal to federal court under the federal removal statute. The Court noted, “[n]othing on the face of [section] 216(b) looks like an express prohibition on removal, there being no mention of removal, let alone of prohibition.” Furthermore, the Court noted the word “maintain” is at best ambiguous, but when Congress wishes “to give plaintiffs an absolute choice of forum, it has shown itself capable of doing so in unmistakable terms. It has not done so here.”

Title VII, the Civil Rights Act of 1991, and mixed-motive cases. In Desert Palace, Inc. v. Costa, the Court held that a plaintiff in a Title VII sex discrimination case need only prove that sex was “a motivating factor” to a preponderance of the evidence, whether through direct or circumstantial evidence, in order to receive a mixed-motive jury instruction.

Railroads and coal mines. In Norfolk & Western Railway Co. v. Ayers, the Court held that damages for mental anguish resulting from the fear of developing cancer from exposure to asbestos may be recovered under the Federal Employers’ Liability Act (FELA), and that workers may recover the entire extent of their damages from a single railroad that was jointly negligent in causing their damages, leaving the railroad to seek contribution from the other tortfeasors.

False Claims Act. In Cook County v. United States ex rel. Chandler, the Supreme Court held that branches of local government are “persons” amenable to qui tam actions under the False Claims Act (FCA). The Court noted that local governments are commonly the recipients of federal funds, and the purpose of the FCA (i.e., “to reach all types of fraud, without qualification, that might result in financial loss to the Government”) would be served by including municipal governments as “persons” under the FCA. The opinion contains an interesting historical exploration of the meaning of the word “person,” noting that “neither history nor text points to exclusion of municipalities from the class of ‘persons’ covered by the FCA in 1863.”

Criminal sodomy and deviant sexual intercourse. Lawrence v. Texas will likely have a significant impact on the climate in which labor and employment issues affecting gays and lesbians are decided. In Lawrence, the Court held that a Texas antisodomy statute was unconstitutional because it violated the Due Process Clause of the Fourteenth Amendment. The Court reasoned that the Texas statute violated due process because it infringed on an adult’s liberty interest in private, consensual intimacy with another adult. The Court did not reach the Equal Protection issue.

Affirmative action. In the Michigan affirmative action cases, the Court upheld one type of raceconscious affirmative action program, while holding another unconstitutional. In Grutter v. Bollinger the Court held that the University of Michigan Law School admissions program was constitutional because it was narrowly tailored to achieve a compelling government interest. In Gratz v. Bollinger the Court held that the University of Michigan undergraduate admissions program violated the Equal Protection Clause of the Fourteenth Amendment, Title VI of the Civil Rights Act of 1964, and 42 U.S.C. section 1981. Because employment is the other arena of American life in which affirmative action operates, the University of Michigan cases will have an important impact in labor and employment law. It appears that affirmative action as a principle was soundly affirmed in Gratz and Grutter, and these cases may signal the Court’s willingness to uphold workplace affirmative action programs, so long as they are not mechanical and give due credit to individual characteristics, including race.

Arbitration. In Green Tree Financial Corp. v. Bazzle, the Court held that a determination of whether a contract that provided for arbitration of disputes also provided for classwide arbitration was a matter to be resolved by the arbitrator. Green Tree was not a labor and employment case—its subject matter was financing and security agreements made between a lender and individual borrowers—however, the case will have important implications for the arbitration of labor and employment contracts. The Court determined that the issue of whether the contracts compelled class arbitration was for the arbitrator, as a matter of contractual interpretation, to determine.

Maria O’Brien Hylton is a professor at Boston University School of Law.

For More Information About The Section Of Labor And Employment Law

- This article is an abridged and edited version of one that originally appeared on page 247 of The Labor Lawyer, Fall 2003 (19:2).

- For more information or to obtain a copy of the periodical in which the full article appears, please call the ABA Service Center at 800/285-2221 or go to www.ababooks.org.

- Website: www.abanet.org/labor/home.html/

- Periodicals: The Labor Lawyer, journal published three times per year; Labor and Employment Law, quarterly newsletter.

- Books and Other Recent Publications: Fair Labor Standards Act and 2002 Supp. ; Employment Discrimination Law, 3d ed. and 2002 Supp .; Elkouri and Elkouri: How Arbitration Works, 5th ed .; How ADR Works; Covenants Not to Compete: A State-by-State Survey, 3d ed. ; The Developing Labor Law, 3d ed. and 2002 Supp .; 2002 Supp. to How to Take a Case before the NLRB, 7th ed. ; Equal Employment Law Update, Fall 2000 ed. ; Employee Duty of Loyalty: A State-by- State Survey, 2d ed. and 2002 Cum. Supp. ; The Railway Labor Act and 2001 Supp. ; Employee Benefits Law, 2d ed. and 2002 Cum. Supp. ; Occupational Safety and Health Law, 2d ed.; Trade Secrets: A State-by-State Survey and 2002 Supp.; International Labor and Employment Laws, vols. 1 and 2 and 2002 Supps. ; Discipline and Discharge in Arbitration and 2001 Supp.

 

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