2015 CASE LAW UPDATE

Presented by

Roland R. Cross

Brown, Hay & Stephens, LLP

205 S. Fifth Street, P O Box 2459

Springfield, IL62705

217 544 8491

I.United States Supreme Court Cases

  1. University of Texas Southwestern Medical Center v. Nassar, 133 S. Ct. 978 (2013).

Issue: Whether the retaliation provision of Title VII of the Civil Rights Act of 1964 requires a plaintiff to establish that an employer had an improper motive for its action.

Facts: Nassar is of Middle Eastern descent and was a faculty member at the University beginning in 2001. The alleged discrimination began in 2004, upon the hiring of his supervisor. The supervisor questioned Nassar’s billing practices and productivity, and stated her belief that “Middle Easterners are lazy” in front of him. Nassar applied for a promotion in 2006, and the supervisor actively undermined his efforts to secure the position. After this incident, he submitted a letter of resignation stating the supervisor created a hostile work environment due to her harassment.

Nassar resigned with the understanding he had a position at a clinic unaffiliated with the University. However, the university’s faculty, opposed this action, and the clinic was forced to withdraw its offer. Nasar sued the University alleging it constructively discharged and retaliated against him, in violation of Title VII.

Holding: The Supreme Court ruled in favor of the University in a 5-4 decision, holding that there must be a demonstrable causal link between the injury sustained and the wrong alleged. The Court found the proper standard of proof for retaliation cases was the “but for” causation standard.

  1. Sandifer v. United States Steel Corp., 134 S. Ct. 870 (2014).

Issue: Whether the Fair Labor Standards Act (“FLSA”) requires a company to compensate employees for the time spent changing into and out of their works clothes and the transit time from the locker room to their work stations.

Facts: Section 203(o) of the FLSA states that if an employer and a union agree that “time spent in changing clothes” is not compensable, that time does not count towards minimum wage and overtime calculations. The collective bargaining agreement between the company and the workers excluded this time from the workers’ compensation. Workers at the United Steel Corporation brought a class action suit against the company arguing that the FLSA required the company to compensate them for this time.

Holding: The Court emphasized the ordinary meaning of “clothes”, rejecting the Seventh Circuit Court of Appeals’ approach that “clothes” means anything worn on the body, including accessories and tools. Applying this definition, the Court held that all of the items work by the workers, except for the safety glasses and ear plugs, constituted “clothes”. The Court further found that putting protective clothing over street clothes falls within the definition of “changing clothes”. Therefore, the Court ruled for U.S. Steel, holding that the workers were not entitled to receive compensation for the time spent putting on the protective gear.

  1. Oxford Health Plans v. Sutter, 133 S. Ct. 2064 (2013).

Issue: Whether an agreement to arbitrate must explicitly include a provision permitting class-wide adjudication.

Facts: Oxford Health Plans and Sutter, aphysician, were parties to an agreement under which Sutter would provide primary care health services to members of Oxford’s managed care network in exchange for compensation. The contract included an arbitration provision. Sutter brought a class action suit in state court alleging improper denials, underpayment, and delays in reimbursement. The state court ordered arbitration. The parties requested the arbitrator decide whether the contract provision permitted class-wide arbitration. The arbitrator ruled the provision did allow for this.

Holding: The Court held that an arbitrator is authorized to order class arbitration. The Court further stated that when an arbitrator makes a decision based upon the contract between the parties, courts cannot vacate this decision, even it is incorrect, pursuant to section 10(a)(4) of the Federal Arbitration Act.

  1. Lawson v. FMR, LLC, 134 S. Ct. 1158 (2014).

Issue: Whether the whistleblower protection provision of the Sarbanes-Oxley Act applies to the employees of privately held contractors of a public company.

Facts: Lawson and Zang sued their respective Fidelity employers, alleging that the companies retaliated against them for reporting what they believed to be securities law violations. FMR argues that Congress only intended for section 1514A of the Sarbanes-Oxley Act apply to public employees.

Holding: The Court held that the whistleblower protection provision applies to employees of private contractors and subcontractors just as it applies to employees of the public company served by the private contractors and subcontractors.

  1. Harris v. Quinn, 134 S. Ct. 2618 (2014).

Issue: Whether home health care workers that provide in-home services to patients must pay union dues.

Facts: Non-union home care personal assistance, who provided in-home care to disabled individuals through Medicaid waiver programs run by the Illinois Department of Human Services, brought an action against the Governor and three unions, challenging the mandatory fair share fees paid to the union. The personal assistants claimed that the mandatory payment of fees violated their freedom of speech and freedom of association rights under the First and Fourteenth Amendments. Though a majority of their co-workers wanted to be part of the union, the petitioners did not desire to join.

Holding: The Court held the union had a narrow role, and therefore, there is no compelling interest served by forcing the petitioners to contribute that cannot be satisfied by less restrictive means. Unions are not permitted to collect fees from a particular category of public employees who do not wish to join the union. The Court did not invalidate agency-fee schemes for “full-fledged public employees”, but the opinion does state that such fees are vulnerable to further attack in future litigation.

  1. Lane v. Franks, 134 S. Ct. 999 (2014).

Issue: Whether the First Amendment protects a public employee from retaliation, after the employee gave sworn testimony about corruption in the workplace.

Facts: Lane alleged that Franks terminated him in retaliation for testifying against a state representative. Lane was director of an at-risk youth program at Central Alabama Community College, and he terminated the state representative’s employment at the college because,while she was listed on the program’s payroll, she did not perform any actual work at the college. A federal court later prosecuted the state representative, and Lane was subpoenaed to testify. Following his testimony, Lane was terminated from his position.

Holding: The Court held that Lane’s speech was protected under the First Amendment because he “provided truthful sworn testimony, compelled by subpoena, outside the course of his ordinary job responsibilities”. The Court found that Lane had not acted in his official capacity by testifying at the trial, but rather was acting as citizen providing citizen speech on a matter of public concern. The Court, however, sent the case back to the lower courts because it found that Franks had qualified immunity. Therefore, while Lane’s testimony was protected by the First Amendment, it will be up to the lower court to determine if Lane’s constitutional right was clearly established, so as to overcome Franks’ immunity from suit.

  1. Burwell v. Hobby Lobby Stores, 134 S. Ct. 2751 (2014).

Issue: Whether federal law permits a corporation to deny its employees insurance coverage for contraception, due to the corporation’s religious objections, when the employees are legally entitled to such coverage.

Facts: Representatives of Hobby Lobby Stores sued the Secretary of Health and Human Services, Kathleen Sebelius, challenging the contraception mandate in the Affordable Care Act. Hobby Lobby argued that the provision requiring health care plans provided by employers to cover contraception violated the Free Exercise Clause of the First Amendment and the Religious Freedom Restoration Act of 1993 (“RFRA”).

Holding: The Court held that Congress intended the RFRA to be read as applying to corporations since they are composed of individuals who use them to achieve their desired ends. The Court found that the contraception requirement forces corporations run by religious individuals to fund actions the individuals considered to be abortion, or face significant fines. The Court ruled that the provision created a substantial burden on the employers and that the provision was not the least restrictive means for achieving the government’s interests.

II.Important Federal Cases

  1. Thompson v. City of Waco, 764 F.3d 500 (5th Cir. 2014).

Issue: Whether the employer’s restriction of an employee’s duties constituted adverse employment action.

Facts: Thompson and two other police detectives were suspended for falsifying their timesheets. Thompson is a black male, and the other two detectives are white. Upon the end of the suspension, Thompson was subjected to several restrictions that were not placed upon the other two detectives. The restrictions prevented Thompson from working undercover, being the lead investigator, or searching for evidence without supervision. He alleged that these restrictions amounted to a demotion and deterred his potential for advancement.

Holding: The Fifth Circuit Court held that the restrictions amounted to an “ultimate employment decision” equivalent to a demotion. The court found that following his suspension, Thompson no longer functioned as a detective, but as an assistant to detectives. This decision provides some clarification as to what constitutes discrimination as to the terms or conditions of employment. The court found that because the restrictions represented an ultimate employment decision, Thompson could bring suit under Title VII of the Civil Rights Act of 1964.

  1. Withers v. Johnson, 763 F.3d 998 (8th Cir. 2014).

Issue: Whether an employee’s failure to follow an employer’s policies regarding a return-to-work release permits the employer to terminate the employee.

Facts: Withers suffered a work-related injury and sought medical attention the same day. He was cleared to return to work, but with a ten pound lifting restriction. He provided the release to his boss, Johnson. Withers received follow-up treatment and was given further restrictions, which he immediately provided to Johnson. Johnson did not object to any of the restrictions.

A few weeks after the injury occurred, Withers’ doctor moved him to non-duty status, and he went on Family and Medical Leave Act (“FMLA”) leave on April 1. Withers was cleared to return to work on May 10. He tried to reach Johnson for several days without success, leaving two non-specific voicemails. On May 16, he faxed his release form to the human resources department. That same day, a letter was sent to Withers from Johnson, terminated his employment. The termination was based upon a company policy that required an employee to immediately provide a return-to-work release to his supervisor upon receiving clearance from a doctor. The policy further states that any employee who does not immediately provide the release form will be deemed to have resigned. Withers filed suit alleging violations of the FMLA and the Americans with Disabilities Act.

Holding: The Eighth Circuit upheld dismissal of Withers’ claims because Johnson had complied with all of Withers’ necessary accommodations. Withers did not allege any retaliatory motive and his unsuccessful attempts at reaching Johnson did not demonstrate interference with his FMLA leave or discrimination due to his disability. The Court found that Withers’ termination was properly based on violation of the policy requiring employees to immediately provide their supervisors with release forms.

  1. Budhun v. Reading Hospital and Medical Center, 765 F.3d 245 (3rd Cir. 2014).

Issue: Whether an employer has a duty to restore an employee’s position following her FMLA leave.

Facts: Budhun worked at Reading Hospital as a credentialing assistant, and the job required her to type for about sixty percent of the work day. She broke a bone in her hand that prevented her from typing at full speed. On August 2, human resources gave her FMLA paperwork and advised her to take a leave since she could not work full duty. After receiving medical attention, Budhun was cleared to return to work on August 16 with no restrictions. Upon her return to work, human resources informed her that if she still could not type at full speed she could not be considered fully duty, and therefore would have to remain on leave until her hand fully healed and she could type at full speed. Budhun’s doctor advised the Hospital that Budhun would need to be on leave until November 9 to return to full duty. Her twelve week FMLA leave ended September 23; the hospital approved this leave and also approved non-FMLA leave until November 9. In a meeting on September 15, hospital administration determined that since Budhun was not able to return to work at the end of the twelve week FMLA leave, they would replace her. Budhun filed suit, alleging the Hospital interfered with her leave and then retaliated against her, both in violation of the FMLA.

Holding: The Third Circuit held that the hospital interfered with Budhun’s right to return to work on August 16 and stated that an employer may require that a return to work release specifically address an employee’s capacity to perform the “essential functions” of her position, “but only if the employer provides a list of essential functions to the employee” when the employee becomes eligible for FMLA leave. The hospital had not provided Budhun with such a list, and her release was based on the information she provided to her doctor. Furthermore, the hospital did not contact the doctor, as Budhun had authorized it to do. The court also found that the hospital had not established that Budhun was incapable of performing the essential functions of her job, since she could still type, just at a slower pace. The court also determined that Budhun had presented sufficient evidence to demonstrate that the hospital’s hiring of a new employee to fill her position constituted adverse employment action.

  1. Kauffman v. Petersen Health Care VII, LLC, No. 13-3661 (October 16, 2014) C.D. Ill. Reversed and remanded

Employee filed an ADA action against the employer because the requested accommodation (having another employee push the hairdresser’s client’s wheelchairs to her work area) was denied. The District Court granted the employer’s motion for summary judgment which alleged that pushing wheelchairs was an essential function of the employee’s job and that no reasonable accommodation was available.

Holding:

The Appellate Court reversed, indicating that the record suggested that pushing the wheelchairs was only a small portion of the plaintiff’s job requirements. The Court also pointed out that the employer’s position that it was not required to accommodate anyone with a permanent restriction doesn’t relieve it from a duty to at least attempt accommodation.

III.State Law Cases

  1. Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327.

Issue: Whether a noncompetition agreement is enforceable if an employee is fired or resigns within two years of signing the agreement.

Facts: As an employee of Premier Dealer Services (“Premier”), Fifield was required to sign an employment agreement that contained noncompetition and nonsolicitation clauses. The provisions were set to last for two years. Fifield and Premier negotiated the terms of the provisions, so that the clauses applied for two years following the end of Fifield’s employment, unless he was terminated without cause during the first year of employment. Fifield began work at Premier on November 1, 2009, and he resigned on February 10, 2010. Following his resignation, Fifield filed a lawsuit requesting the court to declare the contract provisions to be unenforceable because he had not provided any consideration upon which a contract could be formed.

Holding: The First District Appellate Court held that Fifield’s employment was an illusory benefit to Premier, and this could not serve as consideration for the contract restrictions. The court did state that continuous employment for two or more years could serve as adequate consideration to enforce a noncompetition clause.This holding stands as law because the Illinois Supreme Court denied Premier’s appeal of the appellate court’s decision.

  1. Regions Bank v. Joyce Meyer Ministries, Inc., 2014 IL App (5th) 130193.

Issue: Whether an employer has a duty to an employee’s family to protect them from the employee by investigating emails sent from the employee’s work computer.

Facts: An employee of Joyce Meyer Ministries (“JMM”) used his work computer to email death threats pertaining to himself, his wife, and his children. The threats began in 2008. He killed his wife and two sons on May 5, 2009. Regions Bank, as administrator of the wife’s estate, filed a wrongful death action against JMM, arguing that JMM had acted negligently when it failed to protect the family from the employee’s threatened harm. JMM had a policy that prohibited employees from using their work computers to send harassing or threatening emails. The policy permitted the company to monitor or inspect the electronic communications of any employees that violated the policy.