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Supreme Court to hear variety of employment-related cases

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in Employment Law,Human Resources

The U.S. Supreme Court will hear a number of cases during the 2013-14 term that could affect employers.

THE LAW: The justices will examine the Fair Labor Standards Act (FLSA), which governs minimum wage and overtime pay, to determine one particular question: What does it mean to “change clothes"?

The court will also take a look at the Sarbanes-Oxley Act (SOX) to determine exactly who the law was designed to protect. SOX, authored in the wake of the Enron crisis, provides protection to whistle-blowers who file complaints about financial malfeasance.

The Labor Management Rela­­tions Act (LMRA) governs how companies and unions negotiate contracts. The High Court will determine whether “neutrality agreements” between employers and unions violate the law.

When does the clock start ticking on insurance contracts covered by the Employee Retirement Income Security Act (ERISA)? Does it begin when an employee submits a disability claim to an insurer or when the insurer issues a final denial of benefits?

Finally, the highest-profile case of the term deals with the president’s constitutional power to fill vacancies on the National Labor Relations Board (NLRB). Depending what the Court decides, hundreds of NLRB decisions could be invalidated.

FLSA: Paying for changing?

At its heart, Sandifer v. United States Steel Corporation asks when em­­ployees must be paid for “changing clothes.” U.S. Steel employees filed a class-action lawsuit over the issue, by­­passing their union. The collective bargaining agreement conceded that time spent changing was not compensable.

The employees argued the FLSA entitles them to compensation regardless of how the union contract read. Their argument is based, in part, on the Court’s 2006 decision in Alvarez v. IBP, Inc., which ruled the FLSA and the Portal-to-Portal Act required employees to be paid for “doffing and donning” safety equipment.

The court’s analysis should help draw the line between “changing clothes” and “donning and doffing” safety equipment.

A hole in SOX?

The SOX section at issue in Lawson v. FMR, LLC states that no publicly traded company, mutual fund or “any officer, employee, contractor, subcontractor, or agent of such company or nationally recognized statistical rating organization” may retaliate “against an employee” because of protected whistle-blower activity.

In this case, two employees of a Fidelity Investments subcontractor claim they were fired after complaining that Fidelity’s actions violated Security and Exchange Commission regulations. The court will decide whether SOX applies to a nonpublicly traded subcontractor employees alleging malfeasance by a publicly traded prime contractor.

LMRA: Legal neutrality

A Florida gambling company agreed to remain neutral as the union attempted to organize its employees in return for the union running ads in support of a pro-gambling ballot initiative. An employee argued the practice violated the LMRA, which bars employers from providing a “thing of value” to labor unions attempting to organize their workers.

The court will decide if “neutrality agreements”—such as the one in this case, UNITE HERE Local 355 v. Mulhall—violate LMRA.

ERISA: Timing of denial

In Heimeshoff v. Hartford Life & Accident Insurance Co., the court will decide how contractual time limits on ERISA plans are calculated.

A Walmart employee’s medical condition forced her to leave work and apply for long-term disability benefits. Her doctor, however, never completed the claim forms and the company denied the claim. She obtained counsel, but by the time the company issued its final denial, more than three years had passed.

When she sued, the case was dismissed because the contract barred legal action three years past the time when proof of loss was required. She argues the three-year period should run from the date of the final denial.

NLRB and presidential powers

President Obama’s nominees for the NLRB could not get an up or down vote in the Senate in 2011 because of a filibuster. When the Con­­gres­­sional session ended, Obama invoked recess appointment powers to fill two vacancies.

But the Senate continued to meet in pro forma sessions during the period, so when a Pepsi-Cola bottler lost its case before the NLRB, it chal­­lenged the board’s right to decide the case, arguing the two board members had been appointed illegally.

A federal district court agreed, and the administration appealed directly to the Supreme Court.

The case is NLRB v. Noel Canning.

HOW TO COMPLY: Depending on each employer’s unique circumstances, any or all of these cases could impact the way it does business moving forward. Follow the cases in the HR Specialist and then consult with your attorney to assess each decision’s impact on your business.

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