Legal Updates

October 2007

Recent Developments in Labor and Employment Law

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By: Robert M. Vercruysse

UNITED STATES SUPREME COURT
1. Equal Pay Act Statute of Limitations
  
  Ledbetter v. Goodyear Tire & Rubber, 127 S.Ct. 2162 (2007). A female retiree sued her former employer for violations of Title VII and the Equal Pay Act, alleging that sex discrimination-based poor performance evaluations she had received earlier in her tenure with her employer had resulted in lower pay than her male colleagues through the end of her career. The Supreme Court held that discrete discriminatory acts triggering the time limit for filing an Equal Employment Opportunity Commission (EEOC) charge could only be discriminatory pay decisions, not the issuance of paychecks that were lower because of the discriminatory acts.
  
  Ledbetter made no claim that intentionally discriminatory conduct occurred during the charging period or that discriminatory decisions occurring before that period were not communicated to her. The court rejected her argument that Goodyear's nondiscriminatory conduct in issuing paychecks to her during the charging period gave present effect to discriminatory conduct outside of that period.
2. FELA Standards
  
  Norfolk S. Ry. Co. v. Sorrell, U.S. 127 S. Ct. 799 (2007). Sorrell brought a Federal Employers’ Liability Act (FELA) action against his employer, Norfolk Southern Railway Corporation, after he was injured in a truck accident involving another employee. Norfolk argued that the jury should receive an instruction that if Sorrell’s negligence "contributed in whole or in part" to his injury – the same contributory negligence standard applied to the railroad – then the verdict must be reduced accordingly. Sorrell argued that the proper standard for employee contributory negligence under FELA was whether his actions "directly contributed" to his injuries, a different standard than that applied to the railroad. The trial court gave the instruction requested by Sorrell. The jury returned a verdict in favor of Sorrell, without indicating Sorrell’s percentage of fault.
  
  Norfolk appealed the decision, and the Missouri Court of Appeals affirmed. The Missouri Supreme Court denied review, and Norfolk petitioned for United States Supreme Court review. The basis of Norfolk’s appeal is that the contributory negligence instruction given to the jury, which was based on Missouri state law, conflicted with FELA’s contributory negligence standard, and thereby defeated federal substantive rights.
  
  In an opinion written by Chief Justice Roberts, in which Justices Stevens, Scalia, Kenned, Souter, Thomas, Breyer and Alito joined, the Court held that the trial court erred by giving the jury instruction requested by Sorrell. The jury instruction should have applied the same causation standard to both a railroad’s and an employee’s contributory negligence. The Court recognized that while states do have some flexibility in instructing a jury about the appropriate causation standards for railroad and employee negligence, the instruction still must apply the same standard to both parties. The Court vacated the opinion of the lower court and remanded the case back to the Missouri Court of Appeals to determine whether the error was harmless or if a new trial was warranted.
3. Public Sector Labor Unions
  
  Davenport v. Washington Education Association, 127 S. Ct. 2732 (2007). The Supreme Court rebuffed a constitutional challenge to an unusual state restriction on labor unions’ use of public employees’ agency fees – but not before the state changed the law.
  
  At issued was a Washington State law that required unions to secure a nonmember’s affirmative consent before using his or her agency fees for election-related purposes. The Court reversed the Washington Supreme Court’s decision that the restriction, as applied to public-sector unions, violated the First Amendment.
  
  The National Labor Relations Act (NLRA) leaves it to the states to govern labor relations with their own employees. Many states permit unions to act as the exclusive collective bargaining agent of designated units of public employees and, as the NLRA does in non-"right to work" states, allows unions to collect "agency fees" from employees who choose not to join the union.
  
  In a series of cases, the Court has held that the First Amendment is implicated when states require represented public employees to pay agency fees as a condition of employment and that, to accommodate those concerns, unions are constitutionally prohibited from using fees paid by objecting nonmembers for purposes that are not "germane" to collective bargaining. The Court has also established a variety of procedural safeguards to ensure that unions honor the rights of objecting nonmembers. See, e.g., Teachers v. Hudson, 475 U.S. 292 (1986).
  
  While the State of Washington generally authorized public-sector unions to collect agency fees in amounts equivalent to dues, a voter initiative – section 760 – required unions to secure affirmative authorization from nonmembers before using their fees for election-related purposes.
  
  Starting with Machinists v. Street, 367 U.S. 740 (1961), the Supreme Court has repeatedly asserted that when a nonmember pays fees to a union, "dissent [over financially supporting the union’s activities] is not to be presumed – it must affirmatively be made known to the union by the dissenting employee." With the approval of the courts, unions have long understood Street to allow them to use agency fees for any purpose, unless a fee payer objects. Indeed, the Supreme Court of Washington read the admonition that "dissent is not to be with a union’s statutory entitlement does not imply that the legislatures (or voters) themselves cannot limit the scope of that entitlement."
4. Title VII Numerosity Is Not Jurisdictional
  
  Arbaugh v Y∓H Corp, 126 S Ct 1235 (2006). The 15-employee numerosity requirement is a substantive element of a Title VII claim, not a question of subject matter jurisdiction. Accordingly, the issue could not be raised defensively after the close of trial.

MICHIGAN SUPREME COURT
1. Whistleblower Elements
  
  Brown v. Mayor of Detroit, 478 Mich. 589 (2007). A police officer and a deputy chief of the police department's professional accountability bureau brought an action against the mayor and City of Detroit, alleging slander and violation of Michigan’s Whistleblowers' Protection Act (WPA).
  
  The Circuit Court, Wayne County, granted the city's motion for summary disposition of the slander claims, denied the mayor's motion for summary disposition of the slander claims, denied both defendants' motions for summary disposition of the WPA claims, and granted the officer's motion for partial summary disposition of the WPA claim, leaving only the issue of damages. The Court of Appeals issued a published opinion in which it reversed the circuit court's denial of the mayor's motion for summary disposition of the slander claims and reversed the circuit court's grant of partial summary disposition to the police officer on his WPA claim.
  
  The Mayor and the City of Detroit appealed the Michigan Supreme Court, arguing that an employee of a public body must report to an outside agency or higher authority to be protected by the WPA. The Michigan Supreme Court held that the WPA does not require that an employee of a public body must report violations or suspected violations to an outside agency or higher authority to receive the protections of the WPA. The court further held that the WPA does not limit its protection to those employees who are acting outside of their job duties when reporting violations or suspected violations.
2. Disability Act – Public Accommodation
  
  Haynes v. Oakwood Healthcare, 477 Mich 29 (2007). Plaintiff Gregory Haynes, a physician, claimed hospital’s denial of staffing privileges violated Michigan’s Civil Rights Act. The Michigan Supreme Court, reversing its prior holding, held that the physician stated a cause of action because the Civil Rights Act forbids unlawful discrimination against any individual in a place of public accommodation, not just members of the public. The Supreme Court found that the statute prohibits unlawful discrimination against any individual's full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation. This case reversed 15-years of precedent and shows how the Supreme Court can change the rules of employment law. The court overruled a 1992 Michigan Supreme Court case, Kassab v. Michigan Basic Prop Ins. Ass'n, which had held that the Civil Rights Act public accommodation provision "did not extend beyond services ... made available to the public." Accordingly, Haynes would not have been successful in his lawsuit had he brought it 15 years ago.
3. Elliott-Larsen Claim Accrual
  
  Joliet v Pitoniak, 475 Mich 30 (2006). Summary disposition should have been granted for the employer because, although the plaintiff "suffered damage" in the form of lost employment and diminished overtime within the 3-year limitations period, the "wrongs on which her claims were based" – i.e., allegedly harassing conduct, alleged misrepresentations and the allegedly discriminatory hiring of a younger man – occurred outside the limitations period.
  
  "The issue before us is whether plaintiff’s claims for violations of the Civil Rights Act, breach of contract, and misrepresentation accrue on the dates that the alleged discriminatory acts or misrepresentations occur or on the plaintiff’s last day of work. Following our decision in Magee v DaimlerChrysler Corp, 472 Mich 108 (2005), we hold that a claim of discrimination accrues when the adverse discriminatory acts occur. Thus, if a plaintiff’s complaint does not make out a claim of discriminatory discharge, a claim of constructive discharge for a separation from employment occurring after the alleged discriminatory acts cannot serve to extend the period of limitations for discriminatory acts committed before the termination. Because Jacobson v Parda Federal Credit Union, 457 Mich 318 (1998), held that allegations of constructive discharge could operate to extend the applicable period of limitations for discriminatory acts falling outside the period of limitations, and is inconsistent with Magee, supra, it is overruled.

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