Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw and Brooke Kozak | The Daily Recorder | Aug 16, 2016

This article is Part 2 of a two-part series providing an overview of recent United States Supreme Court decisions in employment law.

We continue below with brief summaries of the U.S. Supreme Court’s key employment law opinions. We also preview the cases that Court has accepted for review for the upcoming Term.

Encino Motorcars, LLC v. Navarro (June 20, 2016)

The overtime provisions of the Fair Labor Standards Act (FLSA) do not apply to salesmen, partsmen, or mechanics primarily engaged in selling or servicing automobiles at a covered dealership. In 1978, the Department issued an opinion letter stating that the statutory term “salesman” could include service advisors who sell repair and maintenance services. For over 32 years, the automotive industry relied on the Department’s position that service advisors were exempt from the overtime provisions of the FLSA. In 2011, the Department of Labor issued a new rule that interpreted the statutory term “salesman” to mean only an employee who sells vehicles. The Department provided little explanation for the new rule.

Courts tend to defer to an agency’s interpretation of a statute it enforces, if the agency’s interpretation is reasonable. However, the Court found that the DOL failed to provide a reasoned explanation for its decision to depart from its longstanding policy that service advisors were salespersons. The Court therefore declined to give deference to the agency’s new interpretation.

This case has limited direct application for employers. However, not only the DOL, but also the National Labor Relations Board and the Equal Employment Opportunity Commission have demonstrated willingness to issue new and revised interpretations of the laws under their purview. Therefore, this decision is an important limitation on the agencies’ exercise of their power.

The Supreme Court also decided several cases that only affect government employers. We briefly summarize those decisions below.

Fisher v. University of Texas at Austin (June 23, 2016)

The University of Texas at Austin (University) uses an undergraduate admissions system that includes a “holistic review containing numerous factors,” including race. A university may not consider race in the admissions process unless it can show that use of the classification is necessary to achieve a compelling government interest. The Supreme Court held that the university’s race-conscious admissions program was lawful based on the specific facts of the case. Employers should be aware that the Fisher case does not apply to private sector diversity programs, which must be carefully drafted to avoid discrimination claims.

Heffernan v. City of Paterson (April 26, 2016)

This case examines the balance that public sector employers must strike when they are faced with an employee’s exercise of free speech under the First Amendment to the U.S. Constitution. If a government employer takes adverse action against an employee as punishment for the employee’s perceived (but not actual) exercise of constitutionally protected free speech, the employee is entitled to challenge that unlawful action. It is the employer’s motive, and not the actual activity, that matters.

Green v. Brennan (May 23, 2016)

Before a federal civil servant may sue his employer for discrimination in violation of Title VII of the Civil Rights Act of 1964, the employee must contact an Equal Employment Opportunity counselor at his agency “within 45 days of the date of the matter alleged to be discriminatory.” Where a federal employee resigns due to “intolerable discrimination,” claiming constructive discharge, the “matter alleged to be discriminatory” includes the resignation itself. Thus, the 45-day clock on the employee’s constructive discharge claims began running when the employee gave notice of resignation, not on the effective date of his resignation.

As a reminder, employees of private employers have 180 to file a complaint with the Equal Employment Opportunity Commission (EEOC), or 300 days if the employee’s state (such as California) has a fair employment practices agency with a dual-filing arrangement with the EEOC.

Simmons v. Himmelreich (June 6, 2016)

The Federal Torts Claims Act (FTCA) “allows plaintiffs to seek damages from the United States for certain torts committed by federal employees.” When a prisoner’s FTCA claim against the United States was dismissed under an exception for claims based on the performance of a “discretionary function or duty,” the prisoner filed a second constitutional tort claim against individual prison employees.

The Supreme Court held that the judgment bar provision of the FTCA, which forecloses future suits against individual employees, did not apply to claims dismissed for falling within one of the exceptions, allowing the second suit to go forward. The decision makes it easier for civil rights plaintiffs to pursue constitutional claims against individual federal employees.

Cases on the Docket for the October 2016 Term

So far, the Supreme Court has granted review of just two employment law-related cases for its upcoming Term that begins in October 2016. The Court in Microsoft v. Baker will consider the power of the circuit courts of appeals to review an order denying class certification. National Labor Relations Bd. v. SW General, Inc. concerns whether President Obama’s appointment of an acting General Counsel was lawful and, therefore, whether the Acting General Counsel’s activities during the period he held the office were valid. The Court of course may accept additional cases as the Term progresses.