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Supreme Court Will Consider Four Employment Related Cases This Term

On October 1, the U.S. Supreme Court opened its new term and will review four cases that either directly concern employment laws or have an impact on employment litigation.  Primarily, the cases up for review involve disputes brought pursuant to Title VII of the 1964 Civil Rights Act, the Civil Service Reform Act, the Fair Labor Standards Act, and the Employee Retirement Income Security Act.  Below are brief summaries of the cases to be heard this term and the issues involved.

Vance v. Ball State University:

In Vance, Plaintiff, the only African-American employee working in the University Dining Services at Ball State University, brought suit against her employer after a coworker made racial epithets towards her.  The University investigated the complaints and issued a warning to the coworker, but did not pursue the claim further.  The Plaintiff subsequently filed suit in federal court alleging a range of federal and state discrimination claims.  The District Court granted summary judgment for the Defendants, which was ultimately affirmed by the Seventh Circuit.  In doing so, the Seventh Circuit held that one of Vance’s supervisors lacked the authority to “hire, fire, demote, promote, transfer, or discipline” an employee, which is necessary to impute harassment directly to an employer.

Issue before the Supreme Court as presented by SCOTUSblog[1]: Whether, as the Second, Fourth, and Ninth Circuits have held, the Faragher and Ellerth “supervisor” liability rule “(i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim’s daily work, or, as the First, Seventh, and Eighth Circuits have held (ii) is limited to those harassers who have the power to ‘hire, fire, demote, promote, transfer, or discipline’ their victim.”[2]

U.S. Airways, Inc. v. McCutchen:

After a car accident resulted in multiple surgeries and physical therapy, McCutchen’s employer’s health benefit plan paid medical expenses of $66,866.  McCutchen then sued the at-fault driver and recovered a total of $110,000.  After his attorney was paid his contingency fee, however, McCutchen’s net recovery was less than $66,000. U.S. Airways then demanded McCutchen reimburse the company the full $66,866, citing terms of the benefit plan which require reimbursement “for amounts paid for claims out of any monies recovered from a third party.” After McCutchen refused to reimburse U.S. Airways, the airline sued McCutchen under ERISA and eventually were awarded the full $66,866 judgment. The Third Circuit, however, reversed that ruling and held that it would be inequitable for U.S. Airways to be completely reimbursed by McCutchen since he received less than what his total medical expenses cost.

Issue before the Supreme Court as presented by SCOTUSblog: “Whether the Third Circuit correctly held — in conflict with the Fifth, Seventh, Eighth, Eleventh, and D.C. Circuits — that Section 502(a)(3) of the Employee Retirement Income Security Act (ERISA) authorizes courts to use equitable principles to rewrite contractual language and refuse to order participants to reimburse their plan for benefits paid, even where the plan’s terms give it an absolute right to full reimbursement.”[3]

Genesis HealthCare v. Symczyk:

In Genesis, the employee, a registered nurse, brought suit against Genesis Healthcare Corporation (“Genesis”) after Genesis implemented a policy that automatically deducted pay for employees’ meal breaks, even if the employee did not take a break.  In response to the new policy, Symczk sued under the Fair Labor Standards Act (“FLSA”) on behalf of herself and all others similarly situated.  Prior to Symczk moving for conditional certification and before any other potential plaintiffs opted in, Genesis made an offer of judgment pursuant to Fed. R. Civ. P. 68 for full satisfaction of her alleged damages, fees, and costs.

Since Genesis made the Offer of Judgment and no one joined the action, the District Court dismissed the suit as moot under Article III.  The Third Circuit, however, reversed, holding that the “relation back doctrine helps ensure the use of Rule 68 does not prevent a collective action from playing out according to the directives of 29 U.S.C. § 216(b) and the procedures authorized by the Supreme Court.”

Issue before the Supreme Court as presented by SCOTUSblog: Whether a case becomes moot and class certification is unavailable when the lone plaintiff receives an Offer of Judgment pursuant to Fed. R. Civ. P. 68 from the defendants to satisfy all of the plaintiff’s claims.[4]

Kloeckner v. Solis:

In this case, Kloeckner, a Senior Investigator for the Department of Labor’s (“DOL”) Employee Benefits Security Administration, filed a complaint with the Equal Employment Opportunity Commission (“EEOC”) alleging various discrimination claims as well as a hostile work environment claim.  The DOL then charged her for being “absent without leave,” and eventually terminated her about a year later. Kloeckner challenged the termination while her initial discrimination complaint was still pending, making the matter a “mixed case.”

After her EEOC complaint was unsuccessful, Kloeckner appealed to the Merit Systems Protection Board (“MSPB”)[5], which dismissed her claims as untimely. Kloeckner appealed the MSPB’s final order and the trial court dismissed the suit on the ground that the Federal Circuit had exclusive subject matter jurisdiction.  The Eighth Circuit ultimately affirmed, basing its holding on the meaning of the term “[c]ases of discrimination” in Title V, Section 7703(b)(2).

Issue before the Supreme Court as presented by SCOTUSblog: “When the Merit Systems Protection Board for federal employees decides a mixed case — that is, one containing both disputed termination and unlawful discrimination claims — without determining the merits of the discrimination claim, does the U.S. Court of Appeals for the Federal Circuit or, alternatively, a district court have jurisdiction?”[6]

If you or your company have any questions or concerns about these topics and would like further information, please email James G. Ryan at jryan@cullenanddykman.com.

A special thanks to Sean Gajewski, a law clerk at Cullen and Dykman LLP, for helping with this post. 

  1. [1] Disclaimer: Cullen and Dykman LLP is no way affiliated with SCOTUSblog, but we often use their services to track and keep up-to-date on recent Supreme Court decisions. The “Issue before the Supreme Court as presented by SCOTUSblog” portion of each case summary is used pursuant to SCOTUSblog’s Attribution-NonCommercial-NoDerivs 3.0 United States (CC BY-NC-ND 3.0) license.
  2. [2] Vance v. Ball State University, SCOTUSblog, http://www.scotusblog.com/case-files/cases/vance-v-ball-state-university/ (last visited October 10, 2012).
  3. [3] U.S. Airways, Inc. v. McCutchen, SCOTUSblog, http://www.scotusblog.com/case-files/cases/u-s-airways-inc-v-mccutchen/ (last visited October 10, 2012).
  4. [4] Genesis HealthCare Corp. v. Symczyk, SCOTUSblog, http://www.scotusblog.com/case-files/cases/genesis-healthcare-corp-v-symczyk/ (last visited October 10, 2012).
  5. [5] The Merit Systems Protection Board (“MSPB”) generally hears appeals brought by federal employees regarding certain adverse actions, such as dismissals.
  6. [6] Kloeckner v. Solis, SCOTUSblog, http://www.scotusblog.com/case-files/cases/kloeckner-v-solis/ (last visited October 10, 2012).