This article is Part 1 of a two-part series providing an overview of recent United States Supreme Court decisions in employment law.
The United States Supreme Court issued several decisions during the past year that may affect California employers. We summarize the most important of these decisions below.
Tyson Foods, Inc. v. Bouaphakeo (March 22, 2016)
Bouaphakeo and other employees of Tyson Foods work in a pork processing plant in Iowa. Their work requires them to wear protective gear, but the exact gear depends on the tasks a worker performs in a given day. The employer compensated some, but not all, employees for time spent donning and doffing the gear. The employees filed suit, alleging that the employer’s policy to not pay for donning and doffing activities denied them compensation for hours worked as required by the Fair Labor Standards Act.
The employees sought certification as a collective action. Because the employer failed to keep records of the employees’ time spent donning and doffing, the employees relied on a study performed by an industrial relations expert that averaged how long donning and doffing activities took. The employer argued that reliance on “representative evidence” provided by the expert was improper “trial by formula” because it would lead to recovery for some individuals who had not actually worked more than 40 hours a week.
The Supreme Court said representative evidence could be used for class certification in cases where the employees’ reliance on an expert’s study did not deprive the employer of its ability to litigate individual defenses. The Court reasoned that if the employees had litigated their cases individually, the sample at issue would have been sufficient to “fill an evidentiary gap created by the employer’s failure to keep adequate records.”
The Court’s decision rests of the specific facts of the case. The Court specifically declined to create a bright line rule regarding use of representative evidence to establish classwide liability.
Friedrichs v. California Teachers Association (March 29, 2016)
Where a union is the exclusive bargaining representative for a school district, public school employees in California can be required to either join the union or pay a “fair share service fee.” The “fair share” fee is intended to compensate the union for its representation, including bargaining on behalf of the employees.
A group of public school teachers sued, saying the “fair share” requirement violates the First Amendment, by forcing the employees to subsidize political speech with which they disagree. This case potentially challenged an earlier Supreme Court decision, in which the Court had upheld these “fair share” fees as constitutional. But the eight-member Supreme Court issued a split decision, leaving existing law intact. The Court also denied the plaintiffs’ petition for rehearing.
Spokeo, Inc. v. Robins (May 16, 2016)
The Fair Credit Reporting Act (FCRA) requires consumer reporting agencies to “follow reasonable procedures to assure maximum possible accuracy of” consumer reports. Spokeo operates a “people search engine,” which searches a wide variety of databases to gather and provide personal information about individuals to a variety of users, including employers wanting to evaluate prospective employees. Robins discovered his Spokeo profile contained inaccurate information and sued for failing to comply with the FCRA’s requirements.
Spokeo argued that Robins had not properly pleaded “injury in fact” as required by Article III of the Constitution. The injury-in-fact requirement for standing under Article III requires a plaintiff to allege an injury that is both concrete and particularized. The Ninth Circuit Court of Appeals had held that Robins adequately alleged an injury in fact because Spokeo violated his individual statutory rights under the FCRA. Robins appealed.
The Supreme Court held a “bare procedural violation, divorced from any concrete harm,” will not satisfy the “injury in fact” requirement for standing. That is, the plaintiff did not adequately explain how Spokeo’s failure to follow the FCRA caused “concrete” harm, even if Spokeo did not follow the letter of the law.
Had the case gone the other way, it would have made employers who conduct background and credit checks more vulnerable to class action suits, because plaintiffs would not have to allege an injury separate from the statutory violation itself. Although this is a case resolved on a procedural ground, it is a good reminder for employers to review background check policies and procedures to ensure compliance.
CRST Van Expedited, Inc. v. Equal Employment Opportunity Commission (May 19, 2016)
The District Court had dismissed claims brought by the Equal Employment Opportunity Commission (EEOC) against CRST Van Expedited, Inc. (Defendant) under Title VII of the Civil Rights Act of 1964. The lower court found the agency’s claims were barred because the EEOC had failed to adequately investigate or attempt to conciliate before filing suit.
Title VII authorizes an award of attorney’s fees to a “prevailing party” under certain circumstances. The District Court awarded the employer over $4 million in attorney’s fees against the EEOC, finding that CRST had won, and that the EEOC’s case was sufficiently groundless to warrant a fee award. But the Eighth Circuit Court of Appeals reversed the fee award, holding a defendant can be a “prevailing party” only by obtaining a “ruling on the merits.” CRST won its case at an early stage, before the District Court considered any of the underlying facts of the case.
The Supreme Court in a unanimous decision held that CRST was entitled to attorney’s fees. The Court reasoned that Congress intended for a defendant to be able to recover fees expended in frivolous, unreasonable or groundless litigation when the case is resolved in defendant’s favor, whether on the merits or not.
Part 2 of this article will be printed next time.