White House and Supreme Court Workplace Compliance News & Resources

Who: Public employers

When: Effective immediately

On June 30, 2023, the U.S. Supreme Court ruled in 303 Creative v. Elenis. The case was a pre-enforcement challenge to enjoin the Colorado Civil Rights Commission from enforcing the state’s anti-discrimination law against 303 Creative, a web a graphic design business. Lorie Smith, the owner of the business, was considering adding website design to her portfolio of services. She did not want to be sued for refusing to build wedding websites for same-sex couples based on her religious beliefs. She argued that following Colorado’s Anti-Discrimination Act (CADA) would violate her First Amendment right against compelled speech. CADA states that it is unlawful for a person to refuse full and equal enjoyment of goods or services in a place of public accommodation.

The District Court denied Smith’s request for an injunction, and the Tenth Circuit Court of Appeals affirmed the District Court’s decision.

On review, the U.S. Supreme Court reversed the decision, stating that by creating wedding websites, Smith was providing an “expressive service” and engaging in “pure speech,” which is protected under the First Amendment. Justice Neal Gorsuch stated, “The First Amendment envisions the United States as a rich and complex place where all persons are free to think and speak as they wish, not as the government demands.” He added, “Public accommodations statues can sweep too broadly when deployed to compel speech.”

Justice Sonia Sotomayor—in the minority—stated, “Today, the court, for the first time in its history, grants a business open to the public a constitutional right to refuse to serve members of a protected class. … [T]he decision itself inflicts a kind of stigmatic harm, on top of any harm caused by denials of service.” She argued that “the act of discrimination has never constituted protected expression under the First Amendment.”

This Supreme Court Decision does not affect state and federal anti-discrimination laws for private employers. Private employers may still create their own anti-discrimination and anti-harassment policies to ensure a welcoming environment for employees and customers, and they may discipline employees who violate those policies.

How:

• Consider whether you should clarify your nondiscrimination policies and training.

Additional Resources:

303 Creative v. Elenis

Who: Public and private universities (see summary for relevance to private employers)

When: Effective immediately

On June 29, 2023, the U.S. Supreme Court ruled in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College to effectively dismantle affirmative action in the higher education admissions process.

The decision does not directly impact private employers, who can implement and maintain their own diversity, equity, inclusion, and accessibility programs, as long as they comply with U.S. Department of Labor and Equal Opportunity Employment Commission rules. In a press release following the ruling, the EEOC stated, “[i]t remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”

How:

• Consult with legal counsel to ensure your diversity, equity, and inclusion programs, practices, and policies comply with applicable laws.

Additional Resources:

Students for Fair Admissions, Inc. v. President and Fellows of Harvard College

Who: All employers

When: Effective immediately

On June 29, 2023, the U.S. Supreme Court ruled on Groff vs. Dejoy, a case that impacts how employers handle religious accommodations under Title VII of the Civil Rights Act of 1964. Groff was an evangelical Christian who worked for the United States Postal Service (USPS) when it started to require workers to deliver for Amazon on Sundays. Groff refused to work on Sundays, which led to disciplinary notices. He eventually resigned and then sued USPS under Title VII, arguing that USPS could have reasonably accommodated his Sundays off for worship without incurring significant costs or difficulty.

The lower courts ruled against Groff, saying that accommodating his Sunday worship days had imposed additional duties on his co-workers, disrupted the workplace, and lowered employee morale, requiring USPS to bear more than a de minimis cost. The U.S. Supreme Court disagreed and stated that showing “more than a de minimis cost” does not suffice to establish undue hardship.

Rather, the Court said a party shows an undue hardship when “the burden of granting an accommodation would result in substantially increased costs in relation to the conduct of its particular business.” The case was remanded to the lower courts, which must apply the new standard to the facts of the case.

How:

• Update your policies and procedures as needed to comply with the law.
• Train managers and HR personnel on the law.
• Consult with legal counsel regarding recent accommodation requests to determine if you need to adjust your decisions, and to determine what evidence you’d have to supply to prove hardship when denying an accommodation request.

Additional Resources:

Groff v. DeJoy

Who: All employers

When: Effective immediately

On June 1, 2023, the U.S. Supreme Court ruled in Glacier Northwest v. Teamsters that an employer may pursue a state tort claim when strikers damage company property if they failed to take “reasonable precautions” to protect that property. The court held that such a right is not preempted by the National Labor Relations Act (NLRA). Under the NLRA, workers have a protected right to engage in negotiations with an employer, including the right to strike.

In this case, the worker strike was executed in such a manner that would not only make a perishable product (concrete mixed that morning) unusable, it would damage the delivery mechanism (the mixing trucks). The court’s decision obligates striking unions to take steps to mitigate foreseeable and imminent harm to employer property, especially when it involves perishable products. Employers can sue unions for damages if strikers do not take reasonable precautions to prevent damage.

How:

• Unions and strikers must take reasonable precautions to protect their employer’s property due to work stoppages and avoid labor-related misconduct.
• Consult with labor relations legal counsel regarding current and future labor conflicts.

Additional Resources:

Glacier Northwest v. Teamsters Ruling

National Labor Relations Act

Who: All employers

When: Effective immediately

On June 23, 2023, the U.S. Supreme Court ruled in Coinbase, Inc. v. Bielski that if a trial court denies a party’s request to compel arbitration, it must stay pre-trial and trial proceedings while the party appeals the decision on arbitrability.

The three key benefits of arbitration are privacy, cost savings, and efficiency. Court proceedings are public records, which can mean sensitive information is shared with the public. Arbitration proceedings are more private, especially when they include a confidentiality clause. Litigating in court is a costly process and when paused pending an appeal, the parties avoid those costs. Arbitration is also a more efficient process because it avoids the common scenario where the parties go through litigation, then the employer prevails on appeal.

Justice Brett Kavanaugh stated that “If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then many of the asserted benefits of arbitration—efficiency, less expense, less intrusive discovery and the like—would be irretrievably lost.”

How:

• Review your arbitration agreements and consult with legal counsel to ensure compliance with the law.

Additional Resources:

COINBASE, INC. v. BIELSKI Ruling

Who: All employers

When: Effective immediately

On February 22, 2023, the U.S. Supreme Court ruled in the Helix Energy Solutions Group v. Hewitt case that an employer didn’t pay a “salary” as defined under the Fair Labor Standards Act (FLSA), and therefore the employee was not overtime exempt. In the case, an employee who made more than $200,000 a year was paid at least a minimum rate on a daily basis, but the rate changed based on number of days worked in a row and didn’t provide a consistent weekly salary.

The question posed to the Court was whether being paid a minimum amount per day counts as a “salary” and therefore made the highly paid professional ineligible for overtime pay. The employer argued that the employee was overtime exempt and did not qualify for overtime compensation. The Court said to satisfy the exemption’s “salary basis” test, the employer would have had to guarantee a “predetermined amount” constituting “a steady and predictable stream of pay, week after week after week” regardless of the time worked.

Accordingly, employers should not assume that highly paid employees who would normally be overtime exempt are exempt if they pay them daily. Employees need to meet the salary basis, salary level, and duties to qualify for overtime exemption.

How:

• Review your overtime and pay practices to ensure compliance with FLSA and state laws and consult with competent counsel to see how this ruling could affect your employees.

Additional Resources:

Helix Energy Solutions Group v. Hewitt

Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA)

Who: All employers

When: Effective immediately

What: On July 15, 2022, a federal judge granted a preliminary injunction that prevents the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Education from enforcing the EEOC’s guidance on protections for LBGTQ+ employees. The guidance was published in a 2021 Technical Assistance Document. It gives examples of employer actions that may constitute discrimination, particularly those that would affect transgender employees. Two examples of potentially problematic practices are repeated and intentional use of a person’s incorrect pronouns and preventing access to bathrooms that correspond to a person’s gender identity.

Twenty  state attorneys general filed a lawsuit against the two federal , alleging that the agencies’ interpretation of the 1972 landmark civil rights statute known as Title IX and Title VII of the Civil Rights Act of 1964 directly interferes with their ability to enforce existing state laws. The states involved are Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, and West Virginia.

The federal court agreed, and temporarily enjoined the agencies from enforcement on the grounds that the EEOC had not complied with the procedures that are required for it to issue legally binding guidance. The EEOC must follow the proper notice and comment procedures for rulemaking before reissuing its guidance.

How:

• Consider whether to continue to comply with the guidance until the EEOC either reissues or rescinds it and continue to monitor for updates.

Additional Resources:

United States District Court Eastern District of Tennessee at Knoxville Memo

Who: California employers

When: Effective immediately

What: On June 15, 2022, the U.S. Supreme Court issued its long-awaited ruling on Viking River Cruises v. Moriana, a case that involved an employee suing in state court under California’s Private Attorney General Act (PAGA) on behalf of herself and other employees for alleged wage and hour law violations. The Court held that California employers can enforce arbitration agreements to the extent that they require employees to arbitrate individual claims under PAGA and that once the employee’s individual claims are compelled into arbitration, that employee does not have standing to bring a representative claim under PAGA on behalf of other employees.

Generally, PAGA allows employees to bring suit to recover penalties as a proxy for the state of California (75% of penalties recovered go to the state and 25% go to the employees). PAGA actions can be brought on behalf of the employee and on behalf of other aggrieved current or former employees.

In Viking River Cruises, Moriana sued her former employer on behalf of herself and other employees under PAGA. Prior to that, Moriana had signed an arbitration agreement that contained a “class action waiver.” Her former employer moved to compel arbitration of her PAGA claims. The trial court denied this motion and the California Court of Appeal affirmed this decision based on a prior case, Iskanian v. CLS Transportation of Los Angeles, where the California Supreme Court held that arbitration agreements containing waivers of the right to bring a PAGA representative action were unenforceable.

However, the U.S. Supreme Court overruled the Court of Appeal, holding that the rule preventing the division of PAGA claims into individual and non-individual claims is preempted by the Federal Arbitration Act (FAA). Accordingly, the Court held that Moriana should have been forced to arbitration her individual PAGA claims, and that once Moriana’s individual claims are sent to arbitration, she is unable to bring non-individual PAGA claims on behalf of other employees.

How:

• Work with legal counsel to bring your arbitration agreements in line with the ruling.
• Monitor whether the California legislature amends PAGA in light of the Viking River Cruises ruling.
• Monitor current litigation related to AB 51 that could result in the disallowance of mandatory arbitration agreements as a condition of employment.

Additional Resources:

Viking River Cruises Inc. v. Moriana Ruling

Who: All employers

When: Effective immediately

What: On June 24, 2022, the U.S. Supreme Court ruled in the matter of Dobbs v. Jackson Women’s Health Organization. With this decision, the court upheld Mississippi’s legal restrictions on abortion and overturned Roe v. Wade (1973) and Planned Parenthood of Southeastern Pennsylvania v. Casey (1992). The ruling states that the U.S. Constitution does not confer a right to abortion and returned authority to govern the matter to individual states.

States may now pass laws that restrict abortion rights and criminalize the act of assisting individuals who seek an abortion. Some states have existing laws in place that ban some forms of abortion—laws that became or will become effective because federal authority over abortion was removed.

Employers need to be aware of the state laws they must abide by in relation to:

• Assisting employees who are seeking an abortion;
• Covering abortions under group health plans;
• Covering abortion-related travel expenses to a jurisdiction where abortion is legal;
• Granting leave in the case of abortion; and
• Applying provisions of the Pregnancy Discrimination Act.

Group health plan benefits are tax-free to the extent that the medical care meets the requirements of Internal Revenue Code Section 213. The care does not need to be medically necessary, but it must be legal. Therefore, in some states, the care would have to be medically necessary to be covered as a tax-free benefit.

Fully insured medical plans must abide by state insurance laws. Self-funded plans are governed by the Employee Retirement Income Security Act (ERISA), which generally preempts state law. Litigation will likely ensue to determine the viability of the federal preemption over state laws related to abortion.

Employers should be aware that under the Pregnancy Discrimination Act, they may not take adverse employment action against an employee for having or considering an abortion, nor for the employee’s decision not to have an abortion. Under the Family and Medical Leave Act (FMLA), employees may be eligible to take protected leave for abortion-related care if their healthcare provider determines that they have a qualifying serious health condition.

How:

• Consult with legal counsel to determine the interplay of the federal, state, and local employment laws that could affect your employees.
• Review your health care benefits and leave policies; revise as needed.
• Monitor for developments in related legislation in the states where you operate.

Additional Resources:

Dobbs v. Jackson Women’s Health Organization

Planned Parenthood of Southeastern Pennsylvania v. Casey

Roe v. Wade

Who: Louisiana, Mississippi, and Texas employers and employees

When: Effective immediately.

What: On June 15, 2022, the Fifth Circuit issued a ruling declaring that COVID-19 does not fall under the natural disaster notice exception under the federal Workers’ Adjustment and Retraining Notification (WARN) Act. In the case, employees of a Texas oil company were terminated without any advance notice. The employees filed suit, and the trial court determined that the COVID-19 pandemic was a form of “natural disaster.”

The employees appealed, and the Fifth Circuit Court ruled that the definition of “natural disaster” only applies to the examples given in the text of the WARN statute (i.e., hydrological, geological, and meteorological events). The Fifth Circuit specifically reasoned that Congress was familiar with past pandemics when the WARN Act was passed and could have included words such as “disease” or “pandemic” in the examples listed if it wanted to do so.

How:

Review your current policies and procedures and update them to comply with the new ruling.

Educate and inform your employees about state mandates and safety protocols.

Additional Resources:

Easom v. US Well Services, Inc. No. 21-20202

Who: Federal employers and employees

When: Effective immediately

What: On April 7, 2022, the 5^th U.S. Circuit Court of Appeals reversed a district judge’s ruling regarding COVID-19 vaccination, thereby reinstating the COVID-19 vaccine requirement for federal workers.

The vaccination requirement, which was issued in September of 2021 mandates that all executive agency employees must be fully vaccinated against COVID-19, with exemptions for medical reasons and religious beliefs.

Additional Resources:

Executive Order on Requiring Coronavirus Disease 2019 Vaccination for Federal Employees