4 Employment Issues In Play For A More Conservative Court

Law360 (September 22, 2020, 10:40 PM EDT) -- Justice Ruth Bader Ginsburg's death gives President Donald Trump a chance to expand the U.S. Supreme Court's conservative majority to six, raising employers' chances of winning business-friendly rulings on joint employment, labor rights and other hot-button issues.

The long-standing conservative majority has already been a friend to business, recently blessing employers' use of arbitration agreements that force workers to forego their court rights and barring public-sector unions from extracting fees from dissidents. If the Senate confirms another conservative jurist to the bench, workers will have an even tougher time earning the high court's favor, experts say.

"When you're 5-4, you've got to change one mind," said Judy Conti, governmental affairs director for the National Employment Law Project, a workers' advocacy group. "When you're 6-3, you've got to change two minds. It's a big difference."

Here, Law360 looks at four areas of labor and employment law where an expanded conservative majority could make its mark.

Who Is an Employee?

Few employment law issues have captured as much attention in recent years as the debate over how to classify so-called gig workers under wage and other laws. As this battle continues to rage in the lower courts, a bolstered conservative majority could soon step in.

"The place where Justice Ginsburg's untimely death and departure from the court and likely replacement with a different sort of justice [will have the biggest impact] … is going to come in the gig economy area," said Stuart Gerson, a member at management-side employment law firm Epstein Becker Green.

The Fair Labor Standards Act, Title VII of the Civil Rights Act and other federal employment laws condition their protections on employee status: Workers classified as employees enjoy overtime pay, anti-discrimination measures and other rights, and workers classified as independent contractors do not.

Workers' advocates and progressive state attorneys have lately sought to extend these rights to the gig economy, where workers are generally treated as independent contractors. Private attorneys have sued on behalf of workers for unpaid wages and overtime under federal law with mixed success, and California and Massachusetts prosecutors have sought to make businesses reclassify workers.

Only the Eastern District of Pennsylvania has ruled on the merits of a federal misclassification claim, and the Third Circuit has since vacated that decision, reviving some drivers' class claims that Uber misclassified them as independent contractors. But it's only a matter of time before the issue works its way to the high court. The conventional wisdom is that a conservative court would come down on the side of business, but that's not certain, Gerson said.

"I don't write the conservatives off because there's an increasing tendency among the conservative justices to take very textualist views," he said, alluding to Chief Justice John Roberts and Justice Neil Gorsuch siding with the court's liberal wing on LGBT workplace rights in May.

The high court may also get a chance to review recent Trump administration rulemaking on worker classification and the similar issue of joint employer liability, Conti said. A New York federal judge recently struck down a U.S. Department of Labor rule making it easier for businesses to avoid legal liability for workers employed through staffing companies or other intermediaries, and the DOL on Tuesday tightened its take on the FLSA's classification test. Assuming the latter rule also draws a challenge, an expanded conservative majority could get a crack at those policies.

"Depending on timing and the possibility of Biden winning the election, many of them will likely be withdrawn or legal challenges will be dropped," Conti said. "But if Trump wins reelection, those remain live disputes."

Public-Sector Union Siege Continues

The pre-Justice Brett Kavanaugh majority dealt public-sector unions a blow in 2018 when it said they violated the First Amendment by making nonmembers cough up fees to cover collective bargaining and other costs. Union opponents have sought to pile on with two follow-up petitions now pending at the high court, and they may find an audience in an expanded conservative majority.

In a direct follow-up to 2018's Janus v. AFSCME ruling, former Illinois state worker Mark Janus has asked the Supreme Court to review a Seventh Circuit decision shooting down his bid to apply the ruling retroactively and recoup fees he and other dissenters paid. The other case, Reisman v. Associated Faculties of the University of Maine, asks the high court to reverse a decision upholding the exclusive representation doctrine in the public sector, which allows unions to speak and act on behalf of all workers they represent.

These efforts are built on Justice Samuel Alito's majority opinion in Janus, which capped off "an unprecedented effort" by the arch-conservative to narrow public-sector unions' influence, AFL-CIO general counsel Craig Becker told Law360. Adding another jurist of Justice Alito's mindset to the high court could give these union opponents more momentum, Becker said.

But these cases lack the traditional criteria that would make them ripe for review, such as a split in circuit opinion. On the contrary, there's a "mountain of cases all on one side of both of these issues," and the high court would have to overturn long-established precedent to side with the union opponents, Becker said.

"But is it possible that the president will appoint and the Senate will confirm someone who will be an activist in the mold of Justice Alito?" Becker said. "It's possible."

Religious Rights Teed Up

Although the conservative majority relegated Justice Ginsburg to a dissenting vote in most of the employment cases it took up in recent years, Justices Roberts and Gorsuch joined the liberal bloc in May's landmark ruling in Bostock v. Clayton County that federal discrimination law protects gay and transgender workers. But a more conservative court could narrow that ruling by expanding employers' power to police workers' gender identities and sexual orientations on religious grounds.

"You could see an advocate of religious liberties striding in and perhaps pushing aside some of the gains that LGBT advocates have won in the past decade," said Richard Meneghello, an employment attorney with Fisher Phillips.

The 6-3 Bostock majority said Title VII's ban on discrimination "because of sex" encompasses bias based on gender identity and sexual orientation. But in his opinion, Justice Gorsuch explicitly left unanswered whether businesses can cite a religious defense to a job bias, leaving the door open for certain employers to claim it violates their religious beliefs to employ gay or transgender workers.

If Justice Ginsburg's successor is seated by early November, court watchers won't have to wait long to get a sense of their take on religious liberty: On Nov. 4, the court will hear Fulton v. City of Philadelphia, which asks whether a publicly funded religious foster care agency can deny same-sex couples the ability to serve as foster parents.

The case could serve as a bellwether for a new conservative majority's views, Meneghello said.

"The Supreme Court is not going to have a magic bullet that is going to make everybody happy in the area of religious liberty," Meneghello said. "It's really difficult to develop an equal compromise, and I think you're going to get some people who are very disappointed in whatever they do."

The Salary History Question

Momentum has built in recent years for the Supreme Court to decide whether employers can escape unequal pay claims by pointing to the suing worker's past salary. A larger conservative majority makes it more likely the court will side with businesses when it inevitably takes up the issue.

The federal Equal Pay Act bars businesses from paying men and women different amounts for the same work with a few exceptions, such as when the gaps are due to seniority, merit or "any factor other than sex." Historically, the courts have said this so-called catch-all provision covers employers when they set new workers' pay based on their past salaries, which is a common practice. But some courts have begun to rethink that doctrine on the notion that such "salary history questions" saddle women with lower pay when they take new jobs.

In February, the en banc Ninth Circuit said that salary history is never a defense under the EPA. This puts the Ninth Circuit at odds with the Seventh Circuit, which has said past wages can be a factor in determining pay. Several other courts have said past salary is a "factor other than sex."

The Supreme Court rejected the employer's challenge to the Ninth Circuit order without comment, but the issue remains ripe for Supreme Court review. If a new-look court takes up the case, the six-member conservative majority "would be more likely to rule in favor of a broader reading," Meneghello said. But as is often the case with the high court, it's no lock that the new justice will take the purported conservative view, he said.

"Trying to prognosticate how specific issues are going to be decided by a Supreme Court nominee is notoriously difficult and has often left us all looking foolish very soon after those predictions have been made," Meneghello said.

--Editing by Jill Coffey and Emily Kokoll.

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