What’s Going On at the U.S. Supreme Court

Matters that have significant impact on small businesses rarely find their way to the U.S. Supreme Court. But that’s certainly not an ironclad rule of some sort. Sometimes, a decision arising from a dispute between giants (one of whom is often some agency of the U.S. Government) can have ramifications for virtually all businesses, regardless of size.

The United States Supreme Court began its 2013-2014 term last October with a few new cases that private employers may want to follow. By law, the U.S. Supreme Court’s term begins on the first Monday in October and lasts until the first Monday in October of the next year.

The Court receives approximately 10,000 petitions for legal review of lower court decisions. The Court’s caseload has increased steadily each year. By comparison, in 1960, only 2,313 cases were on the docket, and in 1945, only 1,460.

The nation’s high court agrees to review and hear oral argument in only about 100 cases per term and formal written opinions are issued in only about 80 to 90 cases. Here are a few cases that may be of interest to employers this year.

1. NLRB v. Noel Canning: In this case, the Court is being asked to review a case challenging President Obama’s “recess” appointments to the National Labor Relations Board. This case calls into question the validity of many of the NLRB’s recent key decisions since they were issued at a time when the Board did not have a legally authorized quorum. A lower court ruled that President Obama’s “recess” appointments to the NLRB were “constitutionally invalid” because the U.S. Senate was not actually in recess at the time President Obama made three appointments to the NLRB. Depending on how the Supreme Court rules, several recent NLRB decisions could be reversed. For example, the slew of cases which deal with employee firings when they use social media to complain about their employer could be subject to reversal.
2. Lawson v. FMR LLC: This case asks the Court to determine whether the Sarbanes-Oxley Act’s whistleblower protections should be extended to private companies serving under contract to public companies. Sarbanes-Oxley (SOX) protects employees who provide information or assist in investigations into violations of federal criminal law relating to mail/wire fraud, banking/securities fraud, Securities and Exchange Commission regulations, and shareholder protections. The law protects employees of publicly traded companies and brokerage firms, but the issue before the Court is whether the law should also be extended to privately-held contractors or subcontractors of a public company.
3. Sandifer v. U.S. Steel Corp: Section 203(o) of the Fair Labor Standards Act (FLSA) provides that an employer is not required to compensate a worker for time spent “changing clothes” if that time is excluded from compensable time under a collective bargaining agreement. A crucial distinction in this case revolves around the difference between “clothes” and “protective gear.” Steel workers who do their job wearing flame-retardant gear argue that putting on and taking off (“donning and doffing”) mandatory safety wear does not constitute “changing clothes” and should be compensable time. U.S. Steel argued that the activity of changing clothes “refers to the process of putting on the entire outfit worn by an employee at the beginning of the day, and taking off that outfit at the end of the
   day.” U.S. Steel argued that, when drafting the law, Congress intended the process of changing clothes to include donning and doffing protective items such as boots, aprons, leggings and hoods; items that U.S. Steel argued are “clothes under any definition.” Lower courts sided with U.S. Steel and ruled that such time is not compensable. The case may have a significant impact on employers in unionized industries whose workers must wear protective gear.

The decisions in these cases could have significant impact on some employment practices on businesses of all sizes.

Best Practices

• Use caution in drafting any policies that could interfere with employees’ rights to engage in protected concerted activity.
• Remember, “protected concerted activity” may include employee complaints about working conditions on personal Facebook or Twitter pages, and blogs.
• Seek legal counsel before taking any adverse employment action against an employee who engages in protected concerted activity to try and improve the terms and conditions of his/her employment.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.