Cert granted on whether Title VII exhaustion requirement is jurisdictional

The US Supreme Court has granted certiorari to decide whether Title VII’s administrative exhaustion requirement is a jurisdictional prerequisite to suit, as three Circuits have held, or a waivable claim processing rule, as eight Circuits have held. Title VII requires plaintiffs to exhaust claims of employment discrimination with the EEOC before filing suit in federal court. Fort Bend County v. Davis (US Supreme Ct cert granted 01/11/2019) [Order].

The 4th, 9th, and 11th Circuits hold that exhaustion is jurisdictional, so courts lack subject matter jurisdiction over claims that were never presented to the EEOC. The 1st, 2nd, 3rd, 5th, 6th, 7th, 10th, and DC Circuits treat failure to exhaust as a claim processing rule that is subject to waiver, forfeiture, and other equitable defenses. The Department of Justice is on record as describing Title VII’s exhaustion requirement as jurisdictional, and the EEOC has taken the position that it is not jurisdictional.

The Court will review the 5th Circuit's judgment in Davis v. Fort Bend County (5th Cir 06/20/2018) [PDF], which held that the defendant forfeited its exhaustion argument by not raising it in a timely manner before the district court.

[Subscribe to Employment Law Memo]

Supreme Court cases set for argument

Four employment law cases are set for argument at the US Supreme Court this fall, starting on opening day - October 1, 2018.

ADEA: Mount Lemmon Fire District v. Guido [Briefs] raises the issue of whether a local government is covered by the Age Discrimination in Employment Act even if it has less than 20 employees. To be argued Oct. 1, 2018. My comments: Does ADEA 20-employee minimum apply to local governments? US Supreme Court will decide

Arbitration: New Prime Inc. v. Oliveira [Briefs] raises two issues: (1) whether an independent contractor's arbitration agreement is covered by the Federal Arbitration Act, and (2) whether the trial court (rather than an arbitrator) should resolve that threshold question. To be argued Oct. 3, 2018. My comments: Who decides arbitrability question? US Supreme Court will decideCan an independent contractor have a "contract of employment"?

 
 

Class-action arbitration: Lamps Plus Inc. v. Varela [Briefs] raises this issue: "Whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements." To be argued Oct. 29, 2018. My comments: Class action arbitration case hits US Supreme Court.

Payroll tax: BNSF Railway v. Loos [Briefs] – Whether a railroad’s payment to an employee for time lost from work is subject to employment taxes under the Railroad Retirement Tax Act. To be argued November 6, 2018. My comments: Another railroad payroll tax case hits the US Supreme Court

SCOTUS: Public sector union agency fees violate the 1st amendment (5-4)

Janus v. AFSCME (US Supreme Ct 06/27/2018)
http://case.lawmemo.com/us/Janus.pdf

The US Supreme Court has ruled (5-4) that it is a violation of the 1st amendment for a state to require nonconsenting public sector employees to pay agency fees to a union, overruling Abood v. Detroit Bd. of Ed., 431 U. S. 209 (1977). "We conclude that this arrangement violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern." The Court characterized agency fees as compelled subsidy of the speech of other private speakers, and emphasized the inherently political nature of public-sector bargaining. The Court applied "exacting scrutiny" (less than strict; more than rational basis) to the issue and concluded that agency fees do not "serve a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms."

Thus, neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay.

The Court found that agency fees cannot be upheld on the ground that they promote an interest in labor peace because labor peace can readily be achieved through less restrictive means. As for the argument that agency fees are needed to eliminate free riders, the Court said that in non-agency-fee jurisdictions, unions are quite willing to represent nonmembers in the absence of agency fees, and any event States can avoid free riders through less restrictive means.

The Court said that Abood is not supported by the 1st amendment's original meaning. Also, Abood was never based on Pickering v. Board of Ed., 391 U. S. 563 (1968), and even under some form of Pickering, agency-fee arrangements would not survive. 

Stare decisis was not enough to save Abood. The Court said Abood was poorly reasoned, applied a deferential analytical standard, did not take into account the difference between the effects of agency fees in public- and private-sector collective bargaining, did not anticipate administrative problems with classifying union expenses as chargeable or nonchargeable, did not foresee practical problems faced by nonmembers wishing to challenge those decisions, and did not understand the inherently political nature of public-sector bargaining. 

DISSENT: The dissent views Abood as striking "a stable balance between public employees' First Amendment rights and government entities' interests in running their workforces as they thought proper," and says "the majority subverts all known principles of stare decisis."

Another railroad payroll tax case hits the US Supreme Court

Here's a case that's unimportant unless you are a railroad company or railroad employee. And then it is very important.

A railroad worker got a jury verdict against the railroad on his Federal Employers Liability Act claim that the railroad was liable for negligently causing a knee injury. The verdict included an amount of $30,000 for lost wages. The railroad moved the court to offset the lost wages award by the amount of the employee’s share of taxes ($3,765 ) owed under the Railroad Retirement Tax Act (RRTA). The trail court refused. The 8th Circuit affirmed. Loos v. BNSF Railway (8th Cir 08/03/2017) [PDF].  

The US Supreme Court granted certiorari on May 14 to review the 8th Circuit's judgment. BNSF Railway v. Loos (US Supreme Ct cert granted 05/14/2018) [Briefs]

The Railroad Retirement Tax Act together with the Railroad Retirement Act establishes a retirement and disability system that is separate from Social Security. The lower courts held that the damages that plaintiff received for time lost from work do not constitute taxable "compensation" under the RRTA. Altogether, various courts – both state and federal – seem to be hopelessly divided as to whether taxable “compensation” under the RRTA includes pay for time lost. This obviously makes life complicated for an interstate railway company and its employees, and makes them subject to differing tax treatment depending on where lawsuits are filed. In other words, there's a forum-shopping nightmare.

There is an IRS regulation that interprets taxable “compensation” under the RRTA as including pay for time lost. Courts differ as to whether to follow that regulation.

Expect an oral argument to be scheduled for the Fall of 2018.