Hunton Employment & Labor Perspectives

With all the recent attention in the press and by the Department of Labor on who is a fiduciary and what a fiduciary needs to do, you may wonder if you have waited too long to focus on this issue.  While the March 2012 opinion by the Federal District Court for the Western District of Missouri in Tussey v. ABB, Inc., found that it was too late for the plan fiduciaries for the two ABB Inc. 401(k) plans to fix their mistakes, the opinion should serve as a wake up call to other 401(k) plan fiduciaries to change their fiduciary ways before it is too late for them.

Today, the U.S. Supreme Court issued its decision in Nat’l Federation of Independent Business v. Sebelius, the constitutional challenges to the Patient Protection and Affordable Care Act (“PPACA”). In upholding the constitutionality of PPACA, the Court held:

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In recent years, the National Labor Relations Board (NLRB) and unions have placed a growing emphasis on extending the application of labor law into the social media arena.  As part of this initiative, the NLRB has adopted a strong stance against social media policies that it believes pose a threat to employees’ right to engage in protected activities under Section 7 of the National Labor Relations Act (NLRA).

On June 18, 2012, in Christopher, et. al. v. SmithKline Beecham Corp., the United States Supreme Court issued its first decision interpreting the so-called white collar exemptions under the Fair Labor Standards Act and finally resolved the circuit split over whether pharmaceutical sales representatives are exempt as outside salespeople.  This decision is not only a long-awaited victory for the pharmaceutical industry, but also a key win for employers in all industries. In Christopher, the Supreme Court held that pharmaceutical sales reps qualify for the outside salesman exemption and are not entitled to overtime wages. The Court also unanimously rejected the U.S. Department of Labor’s (“DOL”) attempt at back-door regulation through an amicus brief, delivering a blow to the DOL’s recent enforcement campaign.

The EEOC is appealing the recent decision in EEOC v. Houston Funding II, Ltd., et al., Case No. H-11-2442 (S.D. Tex. Feb. 2, 2012), which dismissed a complaint filed by the EEOC, and held that “firing someone because of lactation or breast-pumping is not sex discrimination.”  The District Court stated that even if the EEOC could prove that Houston Funding had fired an employee because she sought permission to pump breast milk at the office, the agency would not have a Title VII claim because lactation is not pregnancy, childbirth, or a related medical condition.

On June 4, 2012, the California Court of Appeal held that class-action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (“FAA”).  In Iskanian v. CLS Transportation Los Angeles LLC, the appeal court affirmed an order to compel arbitration of wage-and-hour claims in light of the 2011 United States Supreme Court case AT&T Mobility LLC v. Concepcion.  As a result, Iskanian provides employers with the necessary ammunition to argue for the enforceability of employment contract provisions providing for arbitration of claims and waiver of class-action lawsuits.

The Seventh Circuit Court of Appeals recently ruled that discrimination on the basis of immigration status is not covered under Title VII.  In Cortezano v. Salin Bank & Trust Co., No. 11-1631, the facts involved spouses Kristi and Javier Cortezano.  Javier was an unauthorized immigrant from Mexico, while his wife Kristi was employed as a sales manager at Salin Bank. When Kristi’s supervisor discovered Javier’s unauthorized immigrant status, the bank initiated a process that ultimately led to Kristi’s termination.  Kristi filed suit against Salin Bank alleging, among other things, employment discrimination under Title VII.  The U.S. District Court for the Southern District of Indiana granted Salin Bank’s motion for summary judgment. 

It is commonplace in employment litigation to learn that a charge by a single employee of a discrete violation of law has become the basis for broad and far reaching requests for information and documents or that the EEOC has filed a complaint for hundreds of employees it has not even considered in its investigation or in its attempts at statutory conciliation.

In what has roundly been hailed as a landmark decision, the Equal Employment Opportunity Commission (“EEOC”) held in Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, EEOC Appeal No. 0120120821 (April 20, 2012) that, although no federal statute explicitly prohibits employment discrimination based on gender identity, transgender individuals may nonetheless state a claim for sex discrimination under Title VII.

On May 21, 2012, the Ninth Circuit Court of Appeals held in a split decision that the Americans with Disabilities Act (“ADA”) does not bar discrimination based on marijuana use unless that use is authorized under federal law.  In James v. City of Costa Mesa, No. 10–55769, the court held that even marijuana use under a doctor’s supervision in accordance with state law was not protected under the ADA.  The court held that the ADA excludes illegal drug users from its definition of qualified individuals with a disability.  Although generally-applicable California drug laws carve out an exception for uses of marijuana for medical purposes under doctor supervision, there are no such exceptions to the federal Controlled Substances Act.  Since the ADA defines “illegal drug use” by reference to federal law, and the federal law does not authorize marijuana use for medical purposes, the Ninth Circuit Court of Appeals decided that discrimination in the provision of public services based on marijuana use was not prohibited by the ADA.