7th Circuit: Sexual orientation discrimination is a form of sex discrimination (with video)

In a monumental decision, the 7th Circuit has held that discrimination on the basis of sexual orientation is a form of sex discrimination under Title VII. Hively v. Ivy Tech Community College (7th Cir 04/04/2017) (en banc, 8-3) [Opinion text]. This is the first circuit court to reach this conclusion, and the 7th Circuit is not noted for being liberal.

Video: 3:39 minutes. Discussion of Hively v Ivy Tech Community College decision on sexual orientation discrimination.

Video: 3:39 minutes. Discussion of Hively v Ivy Tech Community College decision on sexual orientation discrimination.

SCOTUS: Decision to quash or enforce an EEOC subpoena is reviewed for abuse of discretion

The US Supreme Court has pulled the 9th Circuit into line with other circuits by holding that a district court’s decision whether to enforce or quash an EEOC subpoena should be reviewed for abuse of discretion, not de novo. McLane Co. v. EEOC (US Supreme Court 04/03/2017) [Opinion text] was unanimous on this question.

This case was an odd duck because both McLane Co. and the EEOC agreed that abuse of discretion was the proper standard. The Court had to press another lawyer into service to present arguments in favor of the 9th Circuit's outlier position that de novo was the correct standard.

Background: Damiana Ochoa filed an EEOC charge alleging sex discrimination based on pregnancy. She claimed she was fired because she failed a strength test following maternity leave. EEOC's investigation included a request for "pedigree information" such as names, addresses, and social security numbers of employees who had been required to take strength tests. The EEOC then issued a subpoena. The district court declined to enforce the subpoena as to pedigree information, writing that the pedigree information was “not relevant at this stage to a determination of whether the [test] systematically discriminates on the basis of gender.” On appeal, the 9th Circuit held that the subpoena should be enforced. In reaching that conclusion, the 9th Circuit reviewed the district court's decision de novo.

The Supreme Court decision by Justice Sotomayor took less than 12 pages to explain that district courts have a better handle on the details of ongoing litigation, and their decisions whether to enforce or quash EEOC subpoenas should be reviewed for abuse of discretion – not de novo.

Here are the reasons:

  • It's the longstanding practice of courts of appeals to use the abuse of discretion standard. This practice includes 30 years of NLRB cases before Title VII was enacted.
  • Subpoena enforcement usually turns on whether the evidence sought is relevant and whether production is unduly burdensome. District courts are better suited to resolving these issues than appellate courts.
  • District courts have more experience with these issues.
  • Deferential review helps streamline the litigation process.

If you're looking for excitement, you won't find it here.

[For recent decisions and pending employment law cases, see Supreme Court Watch.] 

SCOTUS argument: What's an ERISA church plan?

Advocate Health Care Network v. Stapleton [Supreme Court briefs] comes up for oral argument at the US Supreme Court on March 27. "Church plans" are specifically exempt from ERISA. Thus, church plans can ignore the many requirements and restrictions that ERISA requires of pension and benefit plans that are maintained by other private employers. The central issue is whether an employee benefit plan must be initially established by a church in order to qualify for ERISA's church plan exemption, or whether it is enough that the plan is maintained by a church or by a church-controlled or church-affiliated organization.

Video: 2:50 minutes. Discussing pending Supreme Court case on ERISA church plans. Advocate Health Care Network v. Stapleton

Video: 2:50 minutes. Discussing pending Supreme Court case on ERISA church plans. Advocate Health Care Network v. Stapleton


SCOTUS: Employees win structured dismissal bankruptcy case

In a sweeping decision, the US Supreme Court held that bankruptcy courts may not approve structured dismissals that provide for distributions that do not follow ordinary priority rules without the consent of affected creditors. Czyzewski v. Jevic Holding Corporation (US Supreme Ct 03/22/2017) (6-2) [Opinion text].

In this case an official unsecured creditors’ committee and a secured lender negotiated a settlement under which the lender set aside some money to distribute to unsecured creditors – and totally cut out former employees who had priority claims under the Bankruptcy Code. This "structured dismissal" did not follow the bankruptcy priorities, which would have preferred the drivers' wage claims.

The Supreme Court would have none of that. And not merely in cases involving special priorities for employees. In sweeping terms, the Court rejected the notion that there could be "rare cases" in which courts could find "sufficient reasons" to disregard priorities. The Court identified potentially serious consequences that could flow from such an exception: departure from the protections granted particular classes of creditors, changes in the bargaining power of different classes of creditors even in bankruptcies that do not end in structured dismissals, risks of collusion, and increased difficulty in achieving settlements. "[W]e conclude that Congress did not authorize a “rare case” exception."

All bankruptcy lawyers will need to pay close attention to this case.

For recent decisions and pending employment law cases, see US Supreme Court Watch.]

SCOTUS: NLRB's Acting GC was unlawfully appointed

Hundreds of NLRB decisions could be at risk after the Supreme Court's decision that for three years Lafe Solomon served improperly as the NLRB's Acting General Counsel. NLRB v. SW General US Supreme Ct 03/21/2017) (6-2) [Opinion text]. The NLRB's decision that SW General committed an unfair labor practice was vacated because the ULP complaint was issued at a time when Solomon lacked authority to issue the complaint.

NLRB decisions issued between January 5, 2011 and November 4, 2013 could now be at risk. The decisions are not automatically voided, but could be nullified if the losing party (usually an employer) properly raised and preserved an objection in proceeding before an ALJ or at the Board level. I assume the 180 days statute of limitations has run on these cases, so some folks are going to get a "get out of jail free" card.

When Ronald Meisburg resigned as General Counsel in June 2010, the President appointed Solomon as Acting GC. So far so good. About six months later – January 5, 2011 – the President nominated Solomon to be permanent GC, and sent his name to the Senate for confirmation. Solomon never got confirmed by the Senate. But he continued serving as Acting GC until the Senate confirmed Richard Griffin as permanent GC on November 4, 2013.

The problem was that the Federal Vacancies Reform Act (FVRA) is pretty specific. Subsection (b)(1) of the FVRA prevents a person who has been nominated to fill a vacant Presidential-appointment-and-Senate-confirmation office from performing the duties of that office in an acting capacity.

The Court rejected the government's argument that "we've always done it this way," saying:

"The Board contends that legislative history, purpose, and post-enactment practice uniformly show that subsection (b)(1) applies only to first assistants. The text is clear, so we need not consider this extra-textual evidence. * * * In any event, the Board’s evidence is not compelling."

The Court also rejected the argument that FVRA Subsection (b)(1) should be read as meaning that only first assistants are barred from serving in an acting position after being nominated for the permanent position.

As for the two dissenters, this is a good summary:

"Congressional silence in the face of a decade-plus practice of giving subsection (b)(1) a narrow reach casts serious doubt on the broader interpretation. It indicates that Congress, like the Executive Branch, interpreted subsection (b)(1) in line with its text to reach only first assistants to the vacant office serving pursuant to subsection (a)(1)."

[For recent decisions and pending employment law cases, see Supreme Court Watch.]


- Web site for Ross Runkel, Arbitrator & Mediator: https://www.RossRunkel.com/ -