2020-2021 U.S. Supreme Court Term Recap

With regards to labor and employment law decisions, the 2020-2021 U.S. Supreme Court term lacked the pizzazz of prior terms. The Court, however, issued a few noteworthy decisions, and the term offered an opportunity to gauge the Court’s new composition with the recent additions of Justices Brett Kavanaugh and Amy Coney Barrett. Practitioners should be mindful of the following decisions:

Cedar Point Nursery v. Hassid, 141 S. Ct. 891 (2021)

In a 6-3 decision written by Chief Justice John Roberts, the Court held that a 45-year old California labor regulation allowing union organizers to enter an agricultural employer’s property occasionally to speak with farmworkers before work, after work, and on their lunch breaks is a per se physical taking of the employer’s property for purposes of the Fifth and Fourteenth Amendments.  The Court held that the access regulation is a taking because it deprives property owners of their “right to exclude.”

Union Perspective 

(by Zoe Palitz[1]):  The Cedar Point decision could make union organizing even more challenging for California’s 800,000 farmworkers, who California argued face “[u]nique obstacles precluding” access to information about their rights.  On the other hand, as Justice Breyer points out in dissent, the Takings Clause prohibits only uncompensated takings.  On remand, California could arguably maintain the same access regulation as long as the state also provides minimal “just compensation” to agricultural employers when a union comes on their property.

Cedar Point may also have little impact beyond California’s agricultural labor regulation.  Justice Kavanaugh wrote separately to reaffirm the Court’s decision in NLRB v. Babcock & Wilcox Co., 351 U.S. 105 (1956), which upheld an NLRB ruling that employers subject to the NLRA (most private employers in the country) must allow union organizers access when “other … channels of communication” are not available.  The Cedar Point majority also limited its own holding in response to the dissent’s laundry list of “ordinary regulations” that “permit temporary entry onto … a property owner’s land,” including “activities ranging from examination of food products to inspections for compliance with preschool licensing requirements.”  The majority states that such activities – like OSHA inspections — would “generally not constitute takings,” and distinguished them as conditions on the receipt of a government benefit (like a permit to operate), or as justified to avoid a “risk posed to the public.”

Management Perspective

(by Joshua Nadreau[2]):  The Cedar Point decision will have an immediate impact on California’s agricultural employers, making it much easier to prohibit union entry onto the employer’s property.  At the very least, the employer will be eligible for compensation due to forced entry.  It remains to be seen, however, whether Cedar Point will have a substantial impact on other employers.  Property owners may raise similar challenges to other statutes and regulations that require access to private property.  Though the majority was quick to limit its holding in response to Justice Breyer’s dissent, the central holding of Cedar Point is that a property owner’s right to exclude others from her property is “one of the most essential sticks in the bundle of rights” bestowed by property ownership.  It is not a reach to predict this argument being raised in opposition to other similar regulations, especially in the context of non-government third-party access.  Nevertheless, organized employers should temper their expectations when it comes to union access under the NLRA, since it does not appear that Justice Kavanaugh is ready to undo similar union access rights in that context as noted above. 

[1] Ms. Palitz is a partner with Altshuler Berzon LLP in San Francisco.

[2] Mr. Nadreau is a partner with Fisher & Phillips LLP in Boston.

Van Buren v. United States, 141 S. Ct. 1648 (2021)

Resolving a Circuit split, the Court found in a 6-3 decision written by Justice Barrett that the Computer Fraud and Abuse Act (“CFAA”) does not prohibit a person from improperly using electronically stored information if the person was authorized to access the computer device.  Instead, the CFAA prohibits only a person from accessing information that is beyond the person’s authorized access. 

Employee Perspective

(by Daniel Hutchinson[1]):  Van Buren found that a police officer who used his employer’s computer database for an improper purpose did not violate the CFAA.  Van Buren properly recognized that a violation of an employer’s computer-use policy is not a per se violation of the CFAA.  Rather, under the CFAA, an employee may access and obtain electronic information that is not “off-limits” to her.  Van Buren therefore supports the ability of employee whistleblowers and plaintiffs to use available information from their work computers without facing a retaliatory CFAA lawsuit.  Employees should nonetheless be mindful of all statutes and laws that govern their use of work computers.  As a practical matter, employees should also remember that their employers may have the ability to monitor their use of employers’ computing systems.

Management Perspective

(by David Johnson[2]):  Although this is an important decision, it should not meaningfully impact the manner by which management attorneys advise their clients.  Federal and state statutory and common law provide a number of remedies for employers harmed by employees who improperly retrieve sensitive electronically stored information, including the Defend Trade Secrets Act, state versions of the Uniform Trade Secrets Act, breach of fiduciary duty claims, and the CFAA.  Thus, even if Van Buren limits the circumstances in which the CFAA may kick in, employers are left with other avenues to seek relief.    

[1] Mr. Hutchinson is a partner with Lieff Cabraser Heimann & Bernstein, LLP

[2] Mr. Johnson is a partner with Butler Snow LLP in Nashville.

Mahanoy Area School District v. B.L., 141 S. Ct. 2038 (2021)

In an 8-1 decision written by Justice Stephen Breyer, the Court concluded that it was improper for Pennsylvania high school officials to discipline a student for a vulgar social media post that she posted in frustration off-campus and after school hours after not making the cheerleading squad.  The Court found that the school had less of a regulatory interest in students’ off-campus speech and that “the school’s interest in teaching good manners is not sufficient, in this case, to overcome [the student’s] interest in free expression,” guaranteed by the First Amendment.

Management Perspective

(by Michael Porter[1]):  Although not an employment case, this opinion provides insight about what the Court might expect from a public employer assessing an employee’s speech.  Government employees have First Amendment protection for speech on a matter of public concern, but not speech undertaken in furtherance of their official duties.  Under the “Pickering standard,” when a public employer’s interest in effective operation outweighs speech on a matter of public concern, however, an employee’s speech can lose its First Amendment protection.  

The Manahoy Court relied on prior precedent in finding the school district did not show the student’s off-campus speech, which the Court described as a few minutes of class time to address the student’s off-campus conduct and an asserted diminishment of team morale, sufficiently disruptive to lose First Amendment protection.  As a result, this decision is a reminder to public employers that, if they determine employee speech is disruptive to their operations, they should have a convincing documented record of how they reached that conclusion. 

Employee Perspective

(by Richard T. Seymour[2]):  This is a must-read for employment and civil rights lawyers.  The analytical step-by-step analysis of Justice Breyer’s majority opinion and Justice Alito’s concurring opinion, along with Justice Alito’s observation that the decision makers got “carried away,” are strong reminders that emotional reactions should not be allowed to govern important decisions.  The First Amendment basis of the decision means that public students and employees wind up with far greater protections than private students and employees, and this will bite hardest for faculty members in universities, where there are the greatest current pressures for lock-step thinking and therefore the greatest dangers to free-speech rights.  If private actors internalize the standards applicable to public actors, however, they and their students and employees will be much better off.

The Court’s most important observations include the areas in which public schools may still exercise limited power over off-campus speech, such as bullying and harassment targeted against particular individuals, but excluding speech that is merely perceived as inappropriate or hurtful, its explicit recognition of the difficulty of drawing some of these lines, and the need to exercise great care before taking action.  Such an exercise will avoid a lot of problems, and reduce greatly the need for litigation.      

[1] Mr. Porter is a partner with Miller Nash LLP in Portland, Oregon.

[2] Law Office of Richard T. Seymour, P.L.L.C., Washington, D.C.

NCAA v. Alston, 141 S. Ct. 2141 (2021)

In a landmark decision, the Court unanimously determined that the NCAA’s rules limiting education-related benefits that schools may provide to student-athletes run afoul of Section 1 of the Sherman Act.  The parties did not dispute the definition of the relevant labor market or that the NCAA enjoys monopsony power in the student-athlete labor market, and is capable of depressing wages below competitive levels and restricting the quantity of student-athlete labor.  Thus, the Court concluded that NCAA rules fixing wages for student-athletes are subject to antitrust scrutiny. 

Employee Perspective

(by Betsy Manifold and Thomas Burt[1]):  Of interest, the opinion notes that the student-athletes did not question that the NCAA may permissibly justify its restraints in the labor market by pointing to procompetitive effects in the consumer market (college sport fans).  The opinion notes that some amici argue that courts should not ‘trade off’ sacrificing a legally cognizable interest in competition in a labor market to better promote competition in a consumer market and that review should be limited to the particular labor market where the antitrust injury occurred.  In delivering the opinion of the Court, Justice Gorsuch notes that the parties “did not pursue this line” and that “all matters are taken as given, we express no views on them.”  This “line” could be significant in the antitrust analysis of other wage-fixing restraints in more traditional ‘for-profit’ industries and the Court clearly leaves this issue open.

The student-athletes also did not raise the district court’s denial of a broader injunction relating to compensation for athletic performance.  Justice Gorsuch also made clear that “we do not pass on the rules that remain in place or the district court’s judgment upholding them” and review “is confined to those restrictions now enjoined.”  Justice Kavanaugh’s concurring opinion then clearly invites additional antitrust scrutiny of the NCAA’s compensation rules relating to athletic performance.  The concurring opinion repeats that the Court does not address the legality of the remaining NCAA compensation rules, but also openly frames them in the way most favorable to the players’ future challenge:  “Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate.”  Where all the Justices appear to agree that these compensation rules are subject to ordinary “rule of reason” scrutiny, Kavanaugh warns that the pro-competitive justification of the NCAA’s business model of using unpaid student-athletes to generate billions in revenue for colleges “raises serious questions” and is properly viewed as vulnerable.  This case appears to take student-athletes one step closer to getting paid a fair rate for their labor.

Management Perspective

(by Clayton Bromberg[2]): Although the Court took great pains to clarify the narrowness of its ruling, as it related solely to the NCAA’s limitation on education-related benefits, the wide-ranging impact of the decision is fairly captured by Justice Kavanaugh in his concurring opinion:  “The NCAA is not above the law.”  Given the NCAA’s central role in governing college sports for the last 116 years, Alston has already spurred significant changes to the traditional norms of athletic amateurism.  On July 1, 2021, the NCAA adopted an interim policy allowing college athletes to benefit from the commercial use of their name, image, and likeness (“NIL”).  More change is coming as the opinion leaves many uncertainties unresolved—such as how to address the disparity between highly profitable athletic programs and the vast majority of college athletes who participate in non-revenue-raising sports, particularly in the context of Title IX.  Yet, given the serious blow Alston delivered the NCAA, those uncertainties are more likely to be resolved by individual institutions and conferences as they navigate education-related benefits, compensation, NIL, Title IX, and, potentially, conference realignment.

[1] Ms. Manifold and Mr. Burt are partners in Wolf Haldenstein LLP’s San Francisco and New York offices, respectively.  

[2] Mr. Bromberg is a partner in Starnes Davis Florie LLP’s Birmingham office.