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Supreme Court will address key employment law cases this term


The Civil Rights Act of 1964 dominates this year’s employment-related Supreme Court docket, with the Justices hearing two cases involving Title VII of that landmark law.

Also to be decided between now and next June: cases involving the Fair Labor Standards Act (FLSA) and the Employee Retirement Income Security Act (ERISA).

Questions to be decided

For 50 years, courts have been trying to settle what Title VII of the Civil Rights Act means to employers and employees.

This term, the Supreme Court will seek to define who is a supervisor under Title VII and what affirmative action should look like at this stage of the 21st century.

In the FLSA case, the Court will rule on legal tactics that potentially short-circuit collective actions by several employees.

Another case raises the issue of how far ERISA-covered plans can go to get reimbursed when beneficiaries also collect damages from other plans.

Two Title VII cases

In Vance v. Ball State University, Maetta Vance claimed three different supervisors harassed her because of her race. Vance is black.

The university maintains that one person Vance identified as a super­visor was in fact a co-worker under Title VII’s definition.

The difference is important. Em­ployers are strictly liable for supervisors’ actions, but only have a duty to promptly respond to and address co-worker complaints.

The appeals court that heard this case dismissed Vance’s complaint because she presented insufficient evidence against the supervisors and because Ball State disciplined the co-worker who clearly harassed Vance.

Vance argues the co-worker was in fact a supervisor because the co-worker could “direct her daily activities,” a standard several circuit courts have adopted. However, the 7th Circuit defined a supervisor as someone with “the power to hire, fire, demote, promote, discipline or transfer the employee.”

The Supreme Court will decide which definition applies.

Fisher v. The University of Texas has garnered the most headlines this term, and the Supreme Court has already heard arguments in the case. Abigail Fisher, a white undergraduate student, claims the University of Texas’ use of race as a factor in its admissions process unfairly denied her a place at the school.

Federal contractors, government entities and companies operating under affirmative action orders will be watching the decision to understand its impact on existing affirmative action programs.

FLSA and class actions

In Symczyk v. Genesis Eldercare, a nursing home changed its pay policies to deduct time for meal breaks from nurses’ pay whether they took their breaks or not.

Laura Symczyk filed a complaint on behalf of herself and all similarly situated employees claiming the practice violated the FLSA. The nursing home offered her a $7,500 settlement (essentially all the damages she asked for) before any other em­­ployees joined the suit. She refused the settlement.

The nursing home moved to have Symczyk’s case dismissed based on her refusal.

Symczyk argued against dismissal, contending that to do so would allow employers to “pick off” plaintiffs without reforming an allegedly illegal practice.

The district court dismissed the suit, but the circuit court reinstated it. The Supreme Court will resolve this tension between the employer’s right to settle out of court and plaintiffs’ rights to collective action.

ERISA benefits in the balance

In US Airways v. McCutcheon, the court must decide how far an em­­ployee benefit plan can go to collect reimbursements for benefits it has provided.

Airline employee James McCutcheon was horrifically injured in an automobile accident. US Airways’ partially self-insured health plan paid $66,866 of McCutcheon’s medical bills. McCutcheon sued the other driver’s insurance company and the state’s underinsured motorists’ fund and received a $110,000 settlement.

After paying 40% of the settlement funds to his attorneys, he was left with $66,000. Citing a clause in its insurance contract, US Airways sued McCutcheon to recover the $66,866 from the amount he recovered.

The district court sided with US Airways and McCutcheon appealed, arguing that US Airways shouldn’t benefit from his efforts, and that absent his insurance recovery, he received nothing for pain and suffering despite his need for several operations and therapy for constant pain.

The appeals court directed the district court to determine “appropriate equitable relief” rather than following the contract’s terms. US Airways appealed to the Supreme Court.

Don’t wait for Vance

While all the cases have potential legal ramifications, there’s already an important compliance lesson to be taken from the Vance v. Ball State University case. The employer here promptly and fairly investigated each racial harassment charge the employee presented. When the case went to court, Ball State could show it had taken appropriate action at each step.

You don’t have to wait for a Supreme Court decision to get your harassment policies and practices in shape.