Court shoots down #MeToo evidence

Tracy White's $790,000 jury verdict on her hostile-work-environment claim was reversed because evidence of harassment of other employees (#MeToo evidence) cannot be used to prove that her work environment was impermissibly hostile. White v. State of Iowa (Iowa 04/12/2024) [PDF]

The opinion in this case describes a long series of unpleasant events that took place over a period of years. I won't repeat them here.

White’s own job duties as a supervisor included receiving reports of alleged discrimination experienced by other employees, and she relied, in part, on such reports to support her own hostile-work-environment claim.

The jury found that White proved a hostile work environment and awarded her $260,000 for past emotional distress and $530,000 for future emotional distress. The State moved for a judgment notwithstanding the verdict (JNOV) or a new trial, arguing that the evidence was insufficient to prove White’s own hostile-work-environment claim.

The Iowa Supreme Court remanded the case for entry of an order granting the State’s motion for JNOV.

The parties agreed that me-too evidence of which White was unaware cannot prove that she personally experienced a hostile work environment. The discrimination experienced by others and reported to her was insufficient to prove her own hostile-work-environment claim.

So White was left with a few offensive events that were relevant. But the court held that these were not sufficiently severe or pervasive to support a hostile-work-environment claim.

The court said:

"No one … touched her inappropriately, propositioned her for sex, or pressured her for romance. She was not assigned more work or paid less than a male social work administrator. Rather, she had generalized complaints that [her supervisor] was rude to her, gave her extra work, and favored a female coworker; specific complaints about a handful of inappropriate things said between 2015 and early 2019 (mostly about other people); and complaints that management failed to take prompt remedial measures. Unlike many plaintiffs who allege that harassment forced them to quit and argue constructive discharge, White remained on the job, a job she still enjoys after [her supervisor] was terminated. White was never demoted or transferred, either."

Workers win unanimous SCOTUS decision on arbitration exemption

The Federal Arbitration Act exempts “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce," so those folks are not required to arbitrate their claims.

The latest US Supreme Court case involved two men who owned the rights to distribute baked goods produced and distributed nationwide by Flowers Foods. When the men sued claiming violations of state and federal wage laws, Flowers moved to compel arbitration. The 2nd Circuit held that they were not “transportation workers” exempt from the FAA under §1 on the ground that the §1 exemption was available only to workers in the transportation industry, but that these men were in the bakery industry.

The US Supreme Court reversed in a short unanimous opinion. Bissonnette v. LePage Bakeries (US Sup Ct 04/12/2024) [PDF].

The Court said, "A transportation worker need not work in the transportation industry to fall within the exemption from the FAA provided by §1 of the Act."

Of course, this still leaves open the question of whether the workers (1) are not transportation workers and (2) that they are not “engaged in foreign or interstate commerce” within the meaning of §1 because they deliver baked goods only in Connecticut.

Grossman's Employment Discrimination Law Update

Paul Grossman just sent out his 105 page Employment Discrimination Law Update. If you practice employment law, this is something you must have. It’s thorough, objective, accurate, and easy to read.

In an act of great generosity, Paul sends this out periodically during the year to those who ask for it. Simply send your full contact information to Paul's secretary Cathy Smith-Joo: cathysmithjoo@paulhastings.com.

Paul Grossman is a partner at Paul Hastings, and is based in Los Angeles. He is a management-side employment lawyer and a frequent speaker on employment law.

Stop WOKE Act has been stopped

Florida's Individual Freedom Act (aka Stop WOKE Act) prohibits employers from holding mandatory employee meetings when those meetings endorse, among other things, diversity, equity, and inclusion. The 11th Circuit has now upheld a temporary injunction against this statute. Honeyfund.com v. Governor (11th Cir 03/04/2024) [Opinion]

This is a 1st amendment free speech case. The State argued that the statute was okay because it merely regulates conduct. But the court applied strict scrutiny to the statute because it is based on content and viewpoint, not conduct. This is due to its finding that the content of the message must be known in order to determine if the law has been violated.

Applying strict scrutiny, the court found that the statute is not specific and narrowly tailored to carry out a compelling government interest.

NLRB Joint Employer Rule is vacated

On March 8, a federal judge in Texas vacated the NLRB's final rule on joint employers, which was due to go into effect on March 11. [Decision]

The new rule would have made it easier for the NLRB to find that two entities were both employers of the same employees.

Apparently the judge thought it would be too easy.

The essential change the new rule would bring is to consider whether an entity has control over key working conditions such as pay, scheduling, discipline and supervision, even if that control is indirect or not exercised.

The judge ruled that the new rule is "contrary to law as to the Rule’s addition of a new 29 C.F.R. § 103.40 and arbitrary and capricious as to the Rule’s removal of the existing 29 C.F.R. § 103.40 (2020)."

Next stop: 5th Circuit.

SCOTUS sides – unanimously – with Sarbanes-Oxley whistleblower

It's unanimous!

The US Supreme Court unanimously holds that a Sarbanes-Oxley whistleblower must prove that his protected activity was a contributing factor in the employer’s unfavorable personnel action, but need not prove that his employer acted with “retaliatory intent." Murray v. USB Securities (US Supreme Court 02/08/2024) [Briefs]

UBS terminated Murray shortly after he informed his supervisor that two leaders of the UBS trading desk were engaging in what he believed to be unethical and illegal efforts to skew his independent reporting. He sued under the Sarbanes-Oxley Act, which specifically provides that employers may not “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of ” protected whistleblowing activity.

UBS argued that Murray should lose because he failed to produce any evidence that his supervisor possessed any sort of retaliatory animus toward him. But the Court pointed out that the word "discriminate" does not impose a “retaliatory intent” requirement on whistleblower plaintiffs. The normal definition of “discrimination” is “differential treatment.”

Once the whistleblower shows that the protected activity was a “contributing factor in the unfavorable personnel action,” the burden shifts to the employer to “demonstrat[e], by clear and convincing evidence, that the employer would have taken the same unfavorable personnel action in the absence of that behavior.”

New arbitration case at the US Supreme Court

No Supreme Court session would be complete without a case dealing with arbitration.

There's a 6-4 split among the Circuit Courts on the question of whether Section 3 of the Federal Arbitration Act requires district courts to stay a lawsuit pending arbitration, or whether district courts have discretion to dismiss when all claims are subject to arbitration.

That's the question in Smith v. Spizzirri (US Supreme Court, certiorari granted 01/12/2023) [Briefs].

Federal Arbitration Act Section 3 says that when a court finds a dispute subject to arbitration, the court “shall on application of one of the parties stay the trial of the action until such arbitration” has concluded.

Does this allow district courts the option of dismissing the case rather than granting a stay?

Six circuits say the only option is to grant a stay. That's what the plain text says.

Four circuits say that district courts have discretion – in cases where the entire dispute is subject to arbitration – to dismiss the case.

My view is that the statute says to grant a stay – period. The Supreme Court has often held that courts have no business adding things to statutes, and courts must apply statutes the way Congress wrote them.

Look for an oral argument in the spring, and a decision before summer.

Cert grant on appeals from the Merits Systems Protection Board

The US Supreme Court granted certiorari in Harrow v. Department of Defense [Briefs] on December 8.

This case will decide whether the 60-day time limit for seeking Federal Circuit review of an order of the Merits Systems Protection Board is jurisdictional and therefore not subject to equitable tolling.

The Supreme Court has decided cases involving similar statutory deadlines, and found them to be non-jurisdictional. I expect this case will come out that way also.

Oral argument will be in the spring, with a decision just before summer recess.

Here is the formal statement of the issue:

“When a federal employee petitions the U.S. Court of Appeals for the Federal Circuit to review a final decision of the Merit Systems Protection Board, 5 U.S.C. § 7703(b)(1)(A) provides: “Notwithstanding any other provision of law, any petition for review shall be filed within 60 days after the Board issues notice of the final order or decision of the Board.” In the decision below, the Federal Circuit relied on settled circuit precedent holding this filing deadline to be jurisdictional, despite recent opinions from other Circuits and this Court holding analogous filing deadlines to be nonjurisdictional.

“The question presented is whether the 60-day deadline in Section 7703(b)(1)(A) is jurisdictional.”

Arbitration Boot Camp

Before your next arbitration, check out Arbitration Boot Camp videos.

https://rossrunkel.com/abc

Arbitration: Post-Hearing briefs

Video – Arbitration Boot Camp – Post-Hearing briefs.
7 pointers for you.
Plus: Your weak points and their strong points.

Arbitration: Cross-Examination

Video – Arbitration Boot Camp – Cross-Examination –

Constructive and destructive cross-examination.

Six ideas for you.

Arbitration: Opening Statement

Video – Arbitration Boot Camp – Opening Statement –

First impression, tell your story, your first final argument, start with a bang, witnesses, documents, strong points, weak points.

Arbitration: Pre-Hearing preparation

Video – Preparing for your arbitration hearing –

Identify the rules, list the elements, match the facts to the elements, identify witnesses and documents that will prove (or disprove) those facts, identify your weak points, identify their strong points, have a theme.

One more US Supreme Court case on arbitration coming soon

The US Supreme Court seems to love arbitration cases. On November 3, 2023 the Court granted certiorari to decide Coinbase v. Suski [Briefs].

It's all about delegation clauses, and which issues are for a court to decide or for an arbitrator to decide.

When David Suski and three others opted into a sweepstakes, they created their online Coinbase accounts, and agreed to a user agreement which contains an arbitration provision. That provision has a delegation clause which says the arbitrator will decide any dispute over the validity of the arbitration agreement.

Later, the plaintiffs opted into the sweepstakes' Official Rules, which include a forum selection clause providing that California courts have exclusive jurisdiction over any controversies regarding the sweepstakes.

When the plaintiffs sued claiming various consumer protection violations, Coinbase filed a motion to compel arbitration, which the trial court denied. The trial court concluded that a delegation clause in the user agreement did not delegate to the arbitrator the issue of which contract governed the dispute. The trial court further ruled that the Official Rules superseded the user agreement and, therefore, that the user agreement's arbitration clause did not apply.

And the 9th Circuit affirmed.

The 9th Circuit said that the issue is not the scope of an arbitration agreement (clearly something for an arbitrator to decide), but whether an arbitration agreement exists at all (clearly an issue for the court to decide).

The court put it this way: "The district court correctly ruled that because the User Agreement and the Official Rules conflict on the question whether the parties' dispute must be resolved by an arbitrator or by a California court, the Official Rules' forum selection clause supersedes the User Agreement's arbitration clause."

There is definitely a split of authority on this issue. The 1st and 5th Circuits and Alabama hold that a valid delegation clause commits to the arbitrator any questions about the narrowing or superseding effect of a subsequent agreement. In contrast, the 3rd and 9th Circuits, Alaska, Texas, and Wisconsin refuse to enforce a delegation clause in this context.

NLRB's Joint-Employer Final Rule

The NLRB's Joint-Employer Final Rule – issued today – will make it significantly easier to find that two entities are both employers of a group of employees.

The biggest change is this: The 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised, and without regard to whether any such exercise of control is direct or indirect.

The previous rule provided that a putative joint employer must “possess and exercise . . . substantial direct and immediate control” over essential terms and conditions of employment.

Read the 229-page rule HERE.