Decade in Review: Top Supreme Court Rulings Still Affecting Employers

With 2020 upon us, it’s a great week to have fun with biggest of the decade lists – whether they may be movies (Avengers?), sports teams (Patriots?), music artists (Taylor Swift?) or something else.

So, it’s in that spirit that we look back at the top four Supreme Court rulings affecting employers in the past decade. Of course, my son came home from school insisting the decade doesn’t end until next year since there was no year zero. But that’s a debate for another time and no reason to keep you in suspense for another 365 days!

The Supreme Court had some groundbreaking decisions in the 2010s, including one curve ball that few saw coming. It’s a list sure to provoke discussion, so without further ado, here it is…

NFIB v. Sebelius (Upholding the ACA)

At this point, the Affordable Care Act’s demise has been incorrectly forecast too many times to count. But long before the 2017 repeal and replace campaign failed in the Senate, most observers on both sides of the political aisle thought it likely that the Supreme Court would strike down the law when it first came before the justices.

But Chief Justice John Roberts surprised liberals and conservatives alike when he provided the decisive vote to uphold the ACA in a 5-4 ruling.

In NFIB v. Sebelius, the Court upheld the bulk of the ACA and its individual health insurance mandate in June 2012. The majority reasoned that the individual mandate provision could be considered a tax on an individual’s decision not to buy health insurance, and therefore is constitutional.

The ACA has continued to face legal challenges since then. Just over a year ago, a federal judge in Texas ruled that the individual coverage mandate is unconstitutional. And last month, a divided New Orleans-based 5th Circuit Court of Appeals agreed, though it did not invalidate the rest of the health care law.

If the Supreme Court ultimately upholds the lower court ruling from Texas, it could lead to as many as 20 million more Americans becoming uninsured. But with Chief Justice Roberts and the four colleagues who joined him in support of the ACA (Justices Ginsburg, Sotomayor, Breyer and Kagan) still on the Supreme Court, it’s unlikely that will happen with the Court’s current composition.

Obergefell v. Hodges (same-sex marriage)

In its landmark 2015 ruling in Obergefell v. Hodges, the Supreme Court legalized same-sex marriage by finding that same-sex couples cannot be denied the benefits that are afforded to opposite-sex couples. While the case did not come from the employment realm, it had clear ramifications for employers.

Two years earlier, the Supreme Court’s Windsor ruling enabled couples living in states where same-sex marriages were legal to become eligible for more than 1,000 federal benefits and protections linked to marital status. Obergefell v. Hodges extended that right to same-sex couples in all 50 states.

But this historic ruling did not address whether Title VII of the Civil Rights Act protected such couples from employment discrimination. As a result, as Proskauer employment attorney Anthony Oncidi noted during an XpertHR podcast, it created the peculiar situation where two men (or two women) could get married on a Sunday and then have their employers fire them the next day in 29 of the 50 states lacking protections from sexual orientation discrimination.

Of course, the next chapter is likely to be written in 2020 as the Supreme Court recently heard arguments in a trio of LGBT cases. At issue is whether Title VII protects employees from being fired based on their sexual orientation, transgender or transitioning status, and a decision is expected by late June – just as the presidential race zips into overdrive.

But the author of the Obergefell opinion, Justice Anthony Kennedy, has since retired and been replaced by Justice Brett Kavanaugh. That shift has left doubt as to whether the Court will extend Title VII to protect LGBT employees.

Walmart v. Dukes – Pumping the Brakes on Class Actions

From a pure nuts-and-bolts employer liability standpoint, there was perhaps no bigger case in the past decade than the Supreme Court’s 2011 ruling in Walmart v. Dukes. In that case, which would have been the largest class action in US history, the justices ruled 5-4 that a group of about 1.5 million women could not be certified as a nationwide class in a gender discrimination case.

The plaintiffs included current and former Walmart employees who accused the nation’s largest private employer of systematically discriminating against women in its pay and promotion policies. But in refusing to certify the class, the Court reasoned that the women lacked the commonality of claims needed to bring a class action.

For instance, the majority found that the only corporate policy the evidence established was Walmart’s “policy” of giving local supervisors discretion over employment matters. Writing for the Court, Justice Antonin Scalia noted that local store managers could increase the wages of hourly employees with only limited corporate oversight and that promotions worked in a similar fashion.

He also wrote, “A regional pay disparity, for example, may be attributable to only a small set of Walmart stores, and cannot by itself establish the uniform, store-by-store disparity upon which the plaintiffs’ theory of commonality depends.”

The Court’s ruling unquestionably made it more difficult for employees to rely exclusively on anecdotal or statistical evidence to bring a class action employment discrimination lawsuit.

Epic Systems v. Lewis

If Walmart v. Dukes dealt a blow to employees banding together to sue their employers in court, the 2018 ruling in Epic Systems v. Lewis further closed the door on class actions of any sort.

In a 5-4 ruling affecting an estimated 25 million employment contracts, the Supreme Court ruled that companies may compel their employees to arbitrate workplace disputes individually rather than as part of a class action.

Employees had argued that the National Labor Relations Act made such arbitration agreements illegal because they denied workers the right to engage in “concerted activities” for their mutual aid and protection. The contracts required employees to submit their wage and hour claims to binding arbitration and to do so only on an individual basis.

As a practical matter, that can be a death knell for many cases since plaintiffs’ attorneys are much less likely to take a case if it can only be brought individually. “The ruling makes clear that employers have a vehicle to sidestep the threat of class and collective actions,” said Ballard Spahr employment attorney Steven Suflas, who manages the firm’s Denver office.

But in a withering dissent, Justice Ruth Bader Ginsburg called the Court’s decision “egregiously wrong.” She suggested that the majority had resurrected “yellow dog” contracts that employees must sign as a condition of beginning work.

What do you think was the biggest Supreme Court ruling affecting employers in the 2010s? Please weigh in by leaving a comment below.

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