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Key Recent U.S. Supreme Court Employment Cases Key Recent U.S. Supreme Court Employment Cases

Key Recent U.S. Supreme Court Employment Cases

As first appeared in the American Bar Association.

The biggest stories of last year span from the NSA controversy to Miley Cyrus’s twerk-inspired performances. The U.S. Supreme Court, however, shall not be outdone as it has made some notable statements of its own, especially with respect to employment law. Below is a review of recent key U.S. Supreme Court decisions affecting employers and employees.

University of Texas Southwestern Medical Center v. Nassar

In Nassar, the Supreme Court ruled that employees must prove retaliation claims filed under Title VII of the Civil Rights Act of 1964 according to traditional principles of but-for causation, and not the lessened motivating factor test that governs Title VII discrimination claims. Nassar involved a doctor, Naiel Nassar, who filed a Title VII retaliation suit against his employer, University of Texas Southwestern Medical Center (UTSW). Nassar alleged he was constructively discharged from UTSW in retaliation for complaining about harassment based on his Middle Eastern descent. At trial, the jury ruled in favor of Nassar after being instructed that retaliation claims, similar to discrimination claims, required a showing that retaliation served as a motivating factor for the adverse action. On appeal, the Fifth Circuit affirmed the lower court’s ruling. In a 5–4 decision, however, the U.S. Supreme Court reversed the Fifth Circuit’s ruling and held that Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the challenged employment action. The Court acknowledged that with the steady increase in Title VII retaliation complaints, this heightened but-for causation standard may facilitate a reduction in dubious claims.

Vance v. Ball State University

In Vance, the Supreme Court defined “supervisor,” clarifying the Title VII vicarious liability rule for a supervisor’s harassment of an employee. In Vance, Maetta Vance sued her employer, Ball State University (BSU), alleging that another employee subjected her to a racially hostile work environment. The Supreme Court affirmed the Seventh Circuit’s decision, and held that BSU was not liable for harassment under Title VII as the employee accused of wrongdoing was not a supervisor. The alleged harasser lacked the ability to “hire, fire, demote, promote, transfer, or discipline” Vance. The Supreme Court rejected the EEOC’s definition of supervisor and noted that an employee’s “ability to direct another employee’s tasks is simply not sufficient” to establish employer liability under Title VII.

Genesis Healthcare Corp. v. Symczk

In Symczk, the Supreme Court held that when a single plaintiff in an uncertified collective action under the Fair Labor Standards Act (FLSA) receives an offer from all defendants to satisfy her claims in full, that case becomes moot and subject to dismissal. At trial, Laura Smyzck argued that her employer, Genesis Healthcare Corp. (GHC), violated the FLSA by unlawfully making automatic deductions for its employees’ meal breaks. GHC made an offer of judgment under Fed. R. Civ. P. 68 in full satisfaction of the Symczk’s alleged damages, fees, and costs. In a 5–4 decision, the Supreme Court reversed the Third Circuit’s decision and held that employers may terminate uncertified collective action lawsuits under the FLSA, where no other individuals have joined the action, by agreeing to pay the putative class representative the entire amount of damages claimed. The Court ruled that “the mere presence of collective-action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.”

U.S. Airways v. McCutchen

McCutchen resolved a circuit court split regarding the proper interpretation of the terms of an Employee Retirement Income Security Act (ERISA) plan. The employee in McCutchen suffered injuries from an automobile accident that occurred during his employment with U.S. Airways. U.S. Airways’ self-insured group health plan, under which McCutchen had coverage, paid $66,866 of his medical bills. For $110,000, McCutchen settled a lawsuit against the insurance company that covered the driver who caused the automobile accident. McCutchen’s net recovery was $66,000 after he paid 40 percent in attorney fees. The terms of U.S. Airways’ group health plan required McCutchen to reimburse the plan for “amounts paid for claims out of any monies recovered from a third party.” McCutchen asserted that in interpreting group health plans, a court may use equitable principles effectively to reduce the amount a plan stands to recover by the amount the participant paid in attorney fees. The Supreme Court rejected this argument, however, and held that equitable defenses cannot trump a plan’s terms setting forth the right to reimbursement. Nonetheless, the Court held that parties may rely upon equitable principles, to “fill gaps” left by the plan or to help interpret ambiguous plans.

Stay tuned this year, as 2014 will likely be filled with more noteworthy employment law decisions from our nation’s highest court.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances. 

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