On January 8, 2018, the United States Supreme Court denied a petition for certiorari seeking to overturn the Fourth Circuit’s new joint employer test under the Fair Labor Standards Act. As a result, employers will continue to be faced with differing joint employer standards in the various federal circuits.
The United States Supreme Court recently resolved a Circuit Court split on the appropriate standard of review of a District Court’s decision whether to enforce a subpoena issued by the Equal Employment Opportunity Commission (“EEOC”). In McLane Co., Inc. v. Equal Employment Opportunity Commission, No. 15-1248, 581 U.S. __ (April 3, 2017), the Court held that such a decision should be reviewed only to determine whether the District Court abused its discretion – a deferential standard of review. This conclusion was fairly uncontroversial. Indeed, the abuse of discretion standard has long been used for review of decisions whether to enforce administrative subpoenas (such as those issued by the National Labor Relations Board). Historically, however, the Ninth Circuit alone has used a de novo standard of review in these circumstances, while the seven other U.S. Courts of Appeal to have addressed this issue all applied the more deferential standard. The Ninth Circuit panel itself questioned why de novo review applied, in light of the substantial authority to the contrary, and the Supreme Court took the case to resolve this circuit split.
The United States Supreme Court has granted consolidated review of three cases to determine whether arbitration agreements that waive employees’ rights to participate in a class action lawsuit against their employer are unlawful. The Court’s decision to address the uncertainty surrounding class action waivers of employment claims follows a circuit split last year in which the Fifth and Eighth circuits upheld such waivers and the Seventh and Ninth circuits found that such waivers violate the National Labor Relations Act. Given the increasingly widespread use of class action waivers by employers to stem costly class and collective actions, the high court’s ruling is likely to have a significant nationwide impact.
On January 31, 2017, President Trump nominated Neil Gorsuch to fill the nearly year-long vacancy on the Supreme Court left by Justice Scalia. Judge Gorsuch, currently on the Tenth Circuit Court of Appeal, is likely a welcome choice for employers. His employment decisions generally—though not always—have favorable outcomes for employers. However, he does not appear to be a trailblazer on employment issues, but rather applies established precedent that generally favors employers. His employment decisions do not tend to draw dissent, bolstering the view that his opinions are not significant departures from Tenth Circuit and Supreme Court precedent. (Of course, not all agree. Senator Elizabeth Warren describes him as having “twisted himself into a pretzel to make sure the rules favor giant companies over workers and individual Americans. He has sided with employers who deny wages, improperly fire workers, or retaliate against whistleblowers for misconduct. He has ruled against workers in all manner of discrimination cases.”)
The United States Supreme Court has denied a restaurant manager’s petition seeking review of whether parties may stipulate to the dismissal with prejudice of a lawsuit alleging violations of the Fair Labor Standards Act (“FLSA”), or whether judicial or Department of Labor (“DOL”) approval is a prerequisite to such a dismissal, as the Second Circuit held in his case, Cheeks v. Freeport Pancake House, Inc. Having declined the petition for writ of certiorari, FLSA lawsuits will remain more difficult to resolve for employers in New York, Connecticut, and Vermont.