Three cases that directly address employment law issues are currently on the Supreme Court’s docket for this term: a gender discrimination case involving a police officer (Muldrow v. St. Louis, MO), a whistleblower retaliation case involving a financial strategist (Murray v. UBS Securities, LLC), and a forced arbitration case involving truck drivers (Bissonnette v. LePage Bakeries Park St.). This post will describe and analyze these three cases.
In all three cases, the circuit court decisions below pose additional difficulties for workers attempting to vindicate their rights in court. In Muldrow, the U.S. Court of Appeals for the Eight Circuit ruled that plaintiffs bringing Title VII discrimination claims must show that the employer’s discriminatory action resulted in “materially significant” harm, not just differential treatment based on a protected category. In Murray, the U.S. Court of Appeals for the Second Circuit ruled that plaintiffs bringing whistleblower retaliation claims under the Sarbanes-Oxley Act must prove that the employer acted with “retaliatory intent,” rather than the burden shifting to the employer to prove it had lawful reasons for its actions. And in Bissonette, the Second Circuit ruled that truck drivers must be in the “transportation industry” to be “transportation workers” who cannot be forced into mandatory arbitration agreements under the Federal Arbitration Act.
If the Supreme Court affirms any of these decisions, it would be a blow to workers’ rights and their ability to seek redress in court. Such an outcome could motivate some workers to turn to each other and the protection of a union and a collective bargaining agreement. As Burnes Center Senior Fellow Seth Harris discussed with his guests on a recent Power At Work blogcast, unions can play a critically important role in protecting employees from workplace discrimination and remedying discrimination after it occurs.
As of this writing, there are no labor law cases on the Supreme Court’s docket. Several other cases likely will have implications for labor and employment law, however. Two could have significant implications for the administrative state: Loper Bright Enterprises v. Raimondo and SEC v. Jarkesy. In Loper, a group of fisheries sued the National Marine Fisheries Service for creating a new rule that required them to fund at-sea monitoring programs. They argue the Service did not have the power to create such a rule and that the Chevron doctrine—which requires courts to defer to administrative agencies for reasonable interpretations of statutes if Congress’ intent is unclear and the statute is ambiguous—should be overturned or, at least, limited. In Jarkesy, the U.S. Court of Appeals for the Fifth Circuit found the SEC violated the Constitution when it imposed penalties against George Jarkesy for committing securities fraud. The Fifth Circuit agreed with Jarkesy that the SEC’s administrative proceeding violated the Seventh Amendment right to a jury trial, Congress does not have the power to delegate administrative decisions to the SEC, and the procedures for appointing SEC administrative law judges violate the Constitution’s appointments clause. The Supreme Court will review these conclusions.
A third non-employment-law case with possible workplace implications, Coinbase, Inc. v. Suski, involves a mandatory arbitration agreement signed by users of an online cryptocurrency exchange. The question before the Supreme Court is whether an arbitrator or a court should decide whether an arbitration agreement with a delegation clause is narrowed by a later contract that is silent as to arbitration and delegation.
Muldrow v. St. Louis, MO
Jatonya Clayborn Muldrow was a sergeant with the St. Louis Police Department. After working in the Intelligence Division for nine years, she was transferred to the Department's Fifth District, where her schedule, responsibilities, supervisor, workplace environment, and other conditions changed. Her position in the Intelligence Division was filled by a male sergeant. Dissatisfied with her new position, Muldrow sought a different position within the Department, which was more “high profile.” However, she was not hired. Muldrow sued the City of St. Louis, Missouri, and her police captain, alleging her forced transfer and denial of the requested position was due to her gender, amounting to unlawful gender discrimination.
Muldrow’s Title VII gender discrimination claim against the city was dismissed on summary judgement because the U.S. District Court for the Eastern District of Missouri found she did not suffer an “adverse employment action.” In other words, the court found she was not sufficiently harmed by her employer’s decision to transfer her, even if the decision might have been motivated by her gender. Affirming this decision, the U.S. Court of Appeals for the Eighth Circuit held that “a tangible change in working conditions that produces a material employment disadvantage” is necessary to bring a successful discrimination claim under Title VII and that neither Muldrow’s transfer nor her job denial met this standard.
Title VII of the Civil Rights Act of 1964 prohibits employers from failing or refusing to hire or otherwise discriminating against any individual with respect to “compensation, terms, conditions, or privileges of employment” based on their race, color, religion, sex, or national origin. While the statute does not use the phrase “adverse employment action,” courts interpreting Title VII’s anti-discrimination mandate, such as the Eighth Circuit, use the phrase as shorthand to describe the effects on the employee of the employer’s conduct. The question before the Supreme Court is whether Title VII prohibits discrimination regarding all "terms, conditions, or privileges of employment," or only discrimination by the employer that causes “materially significant disadvantages” for employees. The Eighth Circuit’s decision, in essence, is ”no materially significant harm, no foul.”
Muldrow argues that all discriminatory employer conduct should be prohibited, not only conduct that causes materially significant harm. She points to the decision in Peterson v. Linear Controls, Inc., as an example of egregious employer conduct that a heightened harm requirement would allow. There, the U.S. Court of Appeals for the Fifth Circuit found that forcing Black employees to work outside in the summer heat with no water while allowing white employees to work inside with air conditioning did not constitute unlawful racial discrimination under Title VII because the differential treatment was not harmful enough.
In their amici curiae brief in support of Muldrow, the National Employment Lawyers Association, the NAACP Legal Defense and Educational Fund, and the National Women's Law Center, argue that a heightened harm standard would essentially restore the “separate but equal” doctrine the Supreme Court unanimously repudiated in Brown v. Board of Education. Oral arguments occurred on December 6, 2023.
Murray v. UBS Securities, LLC
Trevor Murray was a strategist at UBS Securities, a financial institution. He alleges UBS terminated him in retaliation for reporting alleged fraud to his supervisor in violation of the Sarbanes-Oxley Act (SOX). The SOX Act’s anti-retaliation provision prohibits employers from discharging, demoting, suspending, threatening, harassing or in any other manner discriminating against an employee in the terms and conditions of employment “because of” whistleblowing.
Murray won at trial in the U.S. District Court for the Southern District of New York, but the U.S. Court of Appeals for the Second Circuit vacated the decision because the jury instructions did not say that a whistleblower-employee must prove the employer acted with ”retaliatory intent” to succeed in a SOX retaliation claim. The district court had instructed the jury that Murray must show the protected activity he engaged in was a “contributing factor” in his termination. The instructions stated that “contributing factor” meant the protected activity “must have either alone or in combination with other factors tended to affect in any way UBS's decision to terminate plaintiff's employment.” Further, the district court told the jury Murray was not required to prove that his protected activity was the “primary motivating factor” in his termination or that UBS's articulated reasons for terminating him were a “pretext.”
The question before the Supreme Court is whether a whistleblower bears the burden of proving that the employer acted with a "retaliatory intent"—as the Second Circuit held—or if a lack of retaliatory intent is an affirmative defense for which the employer bears the burden of proof. Murray argues that the text of the SOX Act does not explicitly require the whistleblower to show “intent” as part of their case in chief. Rather, the statute expressly states that a burden-shifting framework applies. This means that the whistleblower must show protected activity was a “contributing factor” to the unfavorable personnel action, and then the burden shifts to the employer to “demonstrate by clear and convincing evidence that the employer would have taken the same unfavorable personnel action” even if the employee did not blow the whistle. The shift in the burden of proof to the employer acknowledges that the employer controls much of the relevant information, like documents and testimony by employees related to the termination.
UBS argues that causation and intent must be proven separately. UBS dismisses the “contributing factor” language in the SOX Act as only being one part of proving “causation.” It argues that Congress’ use of the word “discrimination” implies a whistleblower must separately prove “retaliatory intent.” Oral arguments occurred on October 10, 2023. A decision is expected in the coming months.
Bissonnette v. LePage Bakeries Park St
Neal Bissonnette and Tyler Wojnarowski are truck drivers who deliver baked goods to stores and restaurants in Connecticut. They brought a class action lawsuit against the manufacturers of the baked goods they deliver alleging unpaid or withheld wages, unpaid overtime wages and unjust enrichment pursuant to the Fair Labor Standards Act and Connecticut wage laws. The manufacturers moved to compel arbitration based on mandatory arbitration clauses in the drivers’ contracts. The drivers argued that the court should not compel arbitration under the Federal Arbitration Act (FAA) because the statute excludes “transportation workers.”
The federal courts have repeatedly used the FAA to enforce arbitration agreements in employment cases. However, the plain language of the FAA excludes contracts with “seamen, railroad employees, [and] any other class of workers engaged in foreign or interstate commerce,” which has been interpreted to mean the FAA excludes contracts with “transportation workers.” Independent contractors can be transportation workers under the FAA.
The U.S. district court granted the manufacturers’ motion to compel arbitration ruling that the truck drivers were not “transportation workers” and dismissed the case. The U.S. Court of Appeals for the Second Circuit affirmed this finding, holding that “the plaintiffs are not ‘transportation workers,’ even though they drive trucks, because they are in the bakery industry, not a transportation industry.” In contrast, the U.S. Courts of Appeals for the First and Seventh Circuits have held that the “transportation worker” exemption applies to any worker "actively engaged" in the interstate transportation of goods. The Second Circuit joined the Eleventh Circuit in adding an additional requirement that the worker's employer must also be in the "transportation industry."
The question before the Supreme Court is whether a class of workers that is actively engaged in interstate transportation must also be employed by a company in the transportation industry to be exempt from the FAA and, therefore, not bound by a mandatory arbitration clause in a contract. The Supreme Court granted certiorari on September 29, 2023. No oral arguments have yet been scheduled.
