In the past few days, the United States Supreme Court has issued three decisions that significantly impact employment law. We offer a brief summary of the Court’s decisions and how they impact employers.
American Express v. Italian Colors. The case was not an employment law case and dealt with the less-than-sexy issue of arbitration clauses. We have written about arbitration clauses in the past and how employers can use arbitration clauses to try to avoid class action or collective action litigation. Click here for posts. In the American Express case, the Supreme Court said that a valid arbitration agreement can require a plaintiff to arbitrate a claim arising under federal law. Also, the Court said that an arbitration clause that waives the right to class arbitration in not invalid just because the plaintiff’s cost of arbitrating individually exceeds the potential recovery. The decision is significant because it offers employers the ability to require employees to arbitrate employment disputes and to waive their right to pursue a claim collectively or as a class action. If properly drafted, the arbitration clause could help prevent the dreaded collective action under the Fair Labor Standards Act, forcing disgruntled employees or former employees to pursue their claims individually and removing the leverage associated with a collective action.
University of Texas Southwest Medical Center v. Nassar. The issue in Nassar was the standard of proof for a retaliation claim under Title VII of the Civil Rights Act of 1964. There had been a split among the lower courts whether a plaintiff could prevail by proving that retaliation was one of several motivating factors for the adverse action or whether the plaintiff had to prove that retaliation was the “but for” cause for the adverse action. A majority of the Court held that the “but for” standard is the proper standard for retaliation under Title VII. The “but for” is a harder standard for the employee or former employee to meet. The decision is viewed as a victory for employers and could make summary judgment on Title VII retaliation claims easier for employers. For now, the “but for” retaliation standard is limited to Title VII, but courts might be receptive to applying the standard to claims under the ADA and the FMLA. (The Court previously ruled that the “but for” standard applies to claims under the ADEA.)
Vance v. Ball State University. The Court’s decision in Vance provides a bright-line test for who qualifies as a supervisor for purposes of a Title VII harassment claim. The Court adopted a narrow test and said that a supervisor must be empowered by the employer to take tangible employment actions, such as hiring, firing, promoting, reassigning significantly different tasks, or causing changes to benefits. The plaintiff had argued that a supervisor can be any person who directs an employee’s day-to-day activities. The Court rejected the lesser standard. The Court’s decision is significant because it reduces the number of people who will qualify as supervisors. Under Title VII, the employer can be liable for the conduct of its supervisors, including creating a hostile work environment. The employer has more defenses to the Title VII harassment claim when a non-supervisor is accused of creating the hostile work environment. The Court’s narrow definition of the concept of “supervisor” should help employers defend Title VII claims and tailor harassment training to those employees empowered to take tangible employment actions.