Significant Decisions: The USSC and Employment Law in 2024Feb 02, 2024
The United States Supreme Court (USSC) has recently heard oral arguments in three cases— and announced a decision in a fourth case— that could have far-reaching impacts on employment law issues in the months and years ahead. The cases involve religious accommodations for employees, whistleblower protection, mandated job transfers and discrimination, and the ability of federal agencies to interpret and apply the law. All four cases have the potential to significantly affect the law related to workplaces and possibly overturn long-standing precedent.
Religious Accommodation: Groff v. DeJoy, Postmaster General
In Groff v. DeJoy, argued on April 18, 2023, with the decision announced on June 29, 2023, the USSC attempted to settle the debate about employers satisfying the “undue hardship” standard under Title VII of the Civil Rights Act when they deny a request by an employee for a religious accommodation.
The case involved a postal worker requesting time off on Sundays to pursue his religious beliefs. Such a request would have been acceptable to the United States Postal Service (USPS) historically. Now, such an accommodation is more difficult, with the explosive growth of other competitive delivery services that operate seven days a week.
The petitioner, Gerald Groff, sued under Title VII of the Civil Rights Act and asserted that the USPS could have accommodated his Sunday Sabbath practice “without undue hardship on the conduct of the USPS’s business.” The Court clarified that to satisfy an “undue hardship” under Title VII, the employer must demonstrate that an accommodation would result in “substantially increased costs in relation to the conduct of the particular business.”
For employers, this decision means that “de minimus costs” — costs lacking significance or importance — are no longer sufficient to deny the request. The cost must now be “substantial.” Also, requiring other employees to work overtime may not be enough to establish “undue hardship” in the future.
The decision brings the test for denying a request for religious accommodation — the demonstration of substantially increased costs — closer to the standard for evaluating accommodation under the Americans with Disabilities Act, highlighting “significant difficulty or expense” as the only acceptable reason for denying accommodation.
Whistleblower Protection: Murray v. UBS Securities, LLC
On October 10, 2023, the USSC heard oral arguments in Murray v. UBS Securities LLC, and the decision will decide whether a whistleblower that reports financial misconduct — under the Sarbanes-Oxley Act — and is subsequently fired must prove that the employer acted with “retaliatory intent.”
The Sarbanes-Oxley Act (SOX) requires that companies maintain records and implement other strategies to prevent and respond to fraud. SOX has a whistleblower protection provision that protects employees who report suspected SOX violations from adverse employment actions.
No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 USC 78l)… may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee.
The petitioner, Trevor Murray, had reported alleged fraud to his supervisors and was subsequently fired. Murray took his employer to court and won after a jury trial. USB Securities appealed. The United States Court of Appeals for the Second Circuit vacated the court’s judgment, saying that Murray had to prove that his employer had intended to retaliate against him to invoke whistleblower protection. Murray appealed that decision to the Supreme Court.
At the Supreme Court, Murray argued that the Second Circuit’s standard for retaliation under Sarbanes-Oxley was too high. Murray’s attorneys argued that whistleblowers only have to show that their protected activity contributed to their employer’s adverse action. The employer, Murray asserted, then has the burden of proving otherwise — and that it would have taken the same action regardless of the employee’s whistleblowing activity.
The Court’s ruling, which has yet to be announced, could have significant consequences. If the Court decides that whistleblowers must prove the employer’s retaliatory intent — rather than asking employers to prove its absence — it would increase the difficulty of succeeding with whistleblower claims and potentially discourage employees from coming forward to report illegal activity. Equally problematic from the whistleblower’s perspective would be the requirement to prove that the employer’s retaliatory intent was the sole or predominant cause of the employer’s adverse action. From the employer’s perspective, of course, such a ruling would provide a layer of protection from such claims.
We’ll have to await the decision, and see how it is written, before more deeply analyzing its potential consequences.
Employment Discrimination: Muldrow v. City of St. Louis
How severe must an employer’s actions be to trigger the anti-discrimination provisions of the Civil Rights Act? Can an employer move an employee to a new job with less prestige and responsibility — because of bigotry — and escape Title VII’s discrimination prohibitions by merely keeping that employee’s salary the same? These were the critical questions asked when the USSC heard oral arguments in Muldrow v. City of St. Louis on December 6, 2023.
The case involves a female employee of the St. Louis police department, Jatonya Muldrow, who was hired as an intelligence officer and subsequently transferred to a less prestigious position with fewer responsibilities but without any change in compensation. Muldrow’s supervisor allegedly wanted a man in the intelligence officer position, and sidelined Muldrow so a man could be given her position.
For many years, lower courts have assumed that discrimination required “significant” and “materially adverse” actions on the employer’s part. Actions that reduce the employee’s income — like getting fired, demoted, or suspended — have been the legal benchmark for decades. This is the first time the USSC will weigh in on the issue of whether an involuntary transfer constitutes a violation of Title VII.
The federal trial court and Court of Appeals ruled that Muldrow’s transfer wasn’t significant enough to count as an “adverse action.” When the USSC agreed to hear the case, it limited the question to involuntary job transfers. The Court wanted to avoid opening up the Pandora’s box of whether Title VII could cover an even more comprehensive array of “mistreatments.”
The USSC’s decision, expected by the end of June 2024, will hopefully broaden our legal understanding of what specific kinds of employer actions count as discrimination under Title VII.
Federal Regulation: Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo
Two cases argued before the USSC on January 17, 2024 could significantly alter federal agencies’ regulatory power. The cases — Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo — challenge the federal government’s requirement for fishing companies to pay for federal monitors on their boats. The requirement was based on an administrative agency’s interpretation of federal statute. Under a landmark 1984 case — Chevron v. Natural Resources Defense Council —courts defer to an administrative agency’s interpretation of statute when certain requirements are met. At the time the USSC issued the opinion, and in the intervening decades, deferring to administrative agencies has largely been perceived as a way to rein in activist judges and prevent them from making policy from the bench.
Is the current conservative-dominated Court prepared to toss aside a 40-year-old precedent instructing federal judges to defer to federal agencies in interpreting the laws those agencies enforce? Who decides? That’s the question. Do unelected judges decide, or do regulators who have — at least theoretically – a degree of expertise and accountability? Aren’t judges constitutionally empowered to interpret the law, and not unelected bureaucrats?
During the January 17, 2024 argument, the Court’s liberal justices emphasized the limits of judicial authority and capacity. “Will the courts be able to decide these issues as to things they know nothing about, courts that are completely disconnected from the policy process, from the political process, and that just don’t have any expertise in an area,” Justice Elena Kagan asked, “or are people in agencies going to do that?”
The Court’s conservative justices believe that Chevron allows Congress to “punt” hard choices to unelected bureaucrats and allows agencies to flip-flop how decisions get made from one administration to another.
The decision should be announced before the end of June. If the Court’s opinion does away with Chevron, the resulting fundamental shift in the balance of power between the federal agencies and the federal judiciary could well have significant impact on the framework of laws regulating the workplace, and the interpretation and enforcement of those laws.
If you have any questions or concerns about any emerging employment law issue or workplace challenge, don’t hesitate to contact Orr & Reno for assistance.