HR and the Courts: Recent Rulings and Legislation

Each month, CUPA-HR General Counsel Ira Shepard provides an overview of some labor and employment law cases and regulatory actions with implications for the higher ed workplace. Here’s the latest from Ira:

Supreme Court Rules 5-4 That Employers Can Bar Class-Action Lawsuits and Require Mandatory Arbitration

The U.S. Supreme Court narrowly ruled in a 5-4 decision that employers can bar employees from filing class-action litigation and can require that such claims be processed through individual arbitration if the employer maintains a valid mandatory arbitration policy. The decision was split on ideological lines, with Justices Ginsburg, Breyer, Sotomayor and Kagan dissenting. Chief Justice Roberts along with Justices Thomas, Kennedy, Alito and Gorsuch combined to make the majority decision, which is based on the Federal Arbitration Act which favors the deferral to arbitration where valid arbitration agreements exist.

The decision involves three cases — Epic Systems v. Lewis (U.S. 16-285), Ernst & Young v. Morris (U.S. 16-300) and Murphy Oil v. USA (US 16-307). The cases largely involved Fair Labor Standards Act issues (classification disputes at Epic Systems and Ernst & Young, and a National Labor Relations Act matter at Murphy Oil involving employees collectively pressing their pay claims), but the reasoning can apply to all class-action cases, including discrimination cases. In her dissent, Justice Ginsburg called for Congress to override the decision by passing new laws.

EEOC Obtains $2.6 Million Settlement for Female Law Professors in Pay Bias Litigation

The Equal Employment Opportunity Commission (EEOC) recently announced that a group of female law professors at the University of Denver Law School will divide a $2.6 million settlement to compensate them for lost backpay as a result of years of gender discrimination in wages (EEOC v. University of Denver (D. Colo., No. 1:16-cv-02471, consent decree, approved 5/17/18)).

The case involved discrimination charges filed under the Equal Pay Act, pursued on the professors’ behalf by the EEOC, and an affirmative move by the university to reach a settlement. The settlement was outlined in a consent decree that was recently approved by the federal district court with jurisdiction over the case.

The case involved seven female professors who will divide the settlement and receive salary adjustments immediately. The EEOC in its investigation found that the female professors have been paid approximately $20,000 a year less than their male counterparts since October 2013. The settlement agreement also requires the law school to conduct an annual study of pay equity in the future with an independent and qualified labor economist. The agreement requires that the university fulfill its obligations under the agreement for the next six years, but that may be shortened to five years if an independent consultant reports to the EEOC that the school has complied with the terms of the agreement for at least the preceding three years.

Former College Athlete/Scholarship Recipient Fails in Wage Claim Against NCAA and 20 Universities

A former scholarship student and football star at Villanova University lost his lawsuit against the NCAA, Villanova and 19 other universities claiming that student athletes are employees of their schools and should be paid. The lawsuit alleged, among other things, a willful violation of the Fair Labor Standards Act. A federal district court judge in Pennsylvania dismissed the case (Livers v. NCAA et al. (E.D. Pa., No. 17-4271, 5/17/18)).

The lawsuit against the 19 schools the plaintiff did not attend were dismissed with prejudice, meaning he cannot amend and refile against those schools. The lawsuit against Villanova and the NCAA were dismissed because the plaintiff did not meet the requirements of the economic reality test to prove he was an employee. However, his claims against Villanova and the NCAA are subject to the plaintiff’s ability to amend and refile.

NLRB Strikes Down Employer Policy Banning Moonlighting on Personal Time

An National Labor Relations Board administrative law judge (ALJ) recently ruled that an employer policy that was unilaterally adopted as part of the employee handbook which was not subject to collective bargaining was unlawful, as it required employer permission before allowing an employee to work elsewhere while off duty. The employer had argued the work rule was important to ensure that employees came to work well rested and that they did not work for a competitor.

The ALJ ruled that the rule was overly broad and had a “significant potential impact” on the employees’ rights, which are protected by the National Labor Relations Act (Nicholson Terminal and Dock Co. (2018 BL 173681, NLRB, ALJ, Case No. 07-CA-187907, 5/16/18)).

Supreme Court Sides With Baker and Rejects Ruling of Colorado Civil Rights Commission in High-Profile LGBT Case, But Ducks Central First Amendment Issue

The Supreme Court has sided with a baker who had been cited by the Colorado Civil Rights Commission for refusing to bake a custom wedding cake ordered by a same-sex couple. The Supreme Court overturned the Colorado Commission’s holding in a 7-2 decision (Masterpiece Cake Shop Ltd., et al. v. Colorado Civil Rights Commission et al. (U.S. Case No. 16-111,6/5/18)).

The baker was Christian and asserted that his religion precluded him from baking the cake. The Supreme Court ducked the central issue of whether the First Amendment freedom of religion provision protects the baker’s right to refuse to bake the cake. Rather, the Court ruled that the decision of the Colorado Civil Rights Commission, because of its rhetoric, displayed unacceptable hostility to religion itself and therefore could not stand. In coming to its decision, a commissioner of the Colorado Civil Rights Commission stated, “… Freedom of religion and religion has been used to justify all kinds of discrimination throughout history, whether it be slavery, whether it be Holocaust … to me it is one of the most despicable pieces of rhetoric that [people can use].”

The Court concluded that this statement evidenced bias against religion and that that itself violated the First Amendment free exercise clause. Therefore, the decision of the Colorado Commission was vacated without the Supreme Court addressing the central issue of whether the First Amendment protects the baker’s right to refuse LGBT customers.