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Advocacy & Compliance News

Legal Watch - January 25, 2017
January 25, 2017

By Ira Michael Shepard, CUPA-HR general counsel and partner with Saul Ewing LLP

U.S. Supreme Court Will Consider Whether Mandatory Arbitration Agreements Covering Class Action Complaints Are Lawful

The Supreme Court will hear arguments on a case which will decide a split in the U.S. circuit courts of appeals on whether mandatory arbitration of class action and collective litigation complaints are lawful. The case to be heard by the court this year is Murphy Oil v. NLRB (U.S. No. 16-307, cert granted 1/13/17)).

While mandatory arbitration of employment disputes is commonly imposed by employers in union and non-union environments, a trend to expand these litigation waivers to include costly class actions has been increasing over the years. The National Labor Relations Board (NLRB) has stepped in with a position that such waivers are prohibited by the National Labor Relations Act as an employment policy, even in non-union settings, because such unilateral action infringes on an employee’s right to exercise concerted activity.

The circuit courts of appeals are split as to whether the NLRB’s position is lawful. The second, fifth and eighth circuits have rejected the NLRB’s position banning such arbitration agreements. The seventh and ninth circuits have issued opinions that support the NLRB’s ban. The NLRB asked the Supreme Court to consider these issues as a result of its loss before the fifth circuit in the Murphy Oil case.

The decision is likely to have a broad impact on employee policies, especially if the Supreme Court rejects the NLRB’s ban on such class action waivers in favor of mandatory arbitration. 

Appeals Court Rules Age Discrimination, Disparate Impact Cases Can Be Brought by Subgroups of Older Workers Claiming That a Policy Inadvertently Discriminates in Favor of Other Age-Protected Groups

The U.S. Court of Appeals for the Third Circuit (covering Pennsylvania, New Jersey and Delaware) recently ruled that subgroups of older workers can pursue litigation against an employer for enforcing a policy that, while neutral on its face, inadvertently discriminates against them in favor of other age-protected sub groups (Karlo v. Pittsburg Glass Works (2017 BL 6064, 3rd Cir., No. 15-3435, 1/10/17)). The federal Age Discrimination in Employment Act (ADEA) protects all workers over 40 from discrimination on the basis of age. Three prior courts of appeals — the second, sixth and eighth — have disallowed such lawsuits.

The plaintiffs in this case allege that the company’s workforce reduction policy, which was neutral on its face, discriminated disproportionately against workers in their 50s in favor of workers in their 40s. In the plaintiffs’ view, this creates a classic and actionable disparate impact case. The AARP supports the decision of the third circuit while employer groups are opposed, claiming the decision will lead to statistical manipulation and that the ADEA was not intended to pit one protected class subgroup against another.

The Supreme Court will ultimately have to step in and eliminate the split in the circuits.

Court of Appeals Rules Employees’ Facebook Posts Critical of Their Public Employer’s Management Practices Protected by the First Amendment

The generally conservative U.S. Court of Appeals for the Fourth Circuit (covering Virginia, Maryland, West Virginia, North Carolina and South Carolina) recently held that a public employer violated its employees’ free speech rights under the First Amendment by enforcing an overbroad policy which restricted employees from posting social media comments critical of the employer or other workers (Liverman v. City of Petersburg (2016 BL 417216, 4th Cir. No. 15-2207, 12/15/15)).

The plaintiffs (police officers in the City of Petersburg police department) had posted comments on their respective Facebook pages which were critical of the police department for using rookies as instructors and allegedly promoting inexperienced police officers. The police department disciplined the two officers for the posts, which it said violated the department’s ban of social media comments critical of the department and/or department employees. The court, in ruling for the employees, found that the police department’s social media policy violated the First Amendment free speech rights of the police officers because it was a “virtual blanket prohibition of speech critical of the public employer.”

The court held that comments critical of the public employer’s policies go to the essence of public concern and therefore are protected by the First Amendment. The court concluded that while the social media aspects of the case appeared to raise a novel issue, the traditional First Amendment analysis should be applied to social media to protect posts as all other speech.

Retired 68-Year-Old Plaintiff Gets Jury Trial Over Supervisor’s Allegedly Coercive Comment About Potential Layoffs of Younger Workers if Older Workers Didn’t “Step Aside"

A federal district court judge recently ruled that a 68-year-old plaintiff, who claimed he was “coerced” into retiring by his supervisor’s comment that younger workers would be laid off if older workers did not step aside, has a right to bring his allegations before a jury in his age discrimination case (Dockery v. Duncia County (2016 BL 400338, ND Miss. No. 3:15 CV 00139, 12/1/16)).

The judge in denying the employer’s motion for summary judgement held that there was evidence of “generalized pressure” by the supervisor for older workers to retire and spare younger workers a layoff. The court concluded that while the employer never directly told the plaintiff he would be fired if he did not retire, that is not fatal to the plaintiff’s case. The court held that a jury could conclude that the comments coerced him into retiring.