March 21, 2017

Elections matter, and so do nominees to the United States Supreme Court. President Trump’s nomination of Neil Gorsuch to the Court may have a substantial impact on federal employment law.

This year the US Supreme Court is set to hear cases on touching a on variety of employer hot-button topics, including, one we’ve previously blogged about regarding an employer’s right to require employees to agree to never join a class action and, separately, to arbitrate any claims against the employer (by-passing the courthouse). In addition, two other cases, not directly affecting private employers, will lay the path for future cases falling under Title VII’s protections for employees against discrimination and Title II’s public accommodation requirements.

President Trump nominated Gorsuch to replace Antonin Scalia who died on February 13, 2016. Scalia was appointed by Ronald Regan and sat the nation’s highest bench for 30 years. Absent being hit by a bus, Gorsuch, turning 50 in August, will leave his mark for decades.

Gorsuch comes to the US Supreme Court from the 10th Circuit Court of Appeals. The 10th Circuit covers Colorado, Kansas, New Mexico, Oklahoma, Wyoming and Utah. He’s authored some notable opinions from which we can attempt to glean where his vote will take the Court. He is the author of the book “The Future of Assisted Suicide and Euthanasia” (2006, Princeton University Press); and authored the concurrence in the Hobby Lobby case.

Given the above, one can see patterns that may help predict the future path of the Court. Wherever that path may go, it will likely affect all employers.

First, let’s consider the likely impacts on the federal anti-discrimination laws. Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment. Title II of the Civil Rights Act prohibits discrimination in places of public accommodation (think, customers coming to your business or seeking your services). Up for oral argument on March 28th is Gloucester County School Board v. G. G., by His Next Friend and Mother, Deirdre Grimm. While this case does not involve either Title VII or Title II, its outcome will undoubtedly have far reaching effects because it results from agency an opinion letter issued by the U.S. Dept. of Education, Office of Civil Rights. Opinion Letters of the sort the Gloucester case involves are similarly issued by the DOL and relied upon by employers and businesses in interpreting their obligations under Title VII and Title II.

Gloucester involves a transgendered minor, Gavin Grimm who identifies as male and wishes to use the bathroom corresponding to his identification. The School Board adopted a policy requiring students (and presumably adults) to use the bathroom corresponding the gender of birth after it learned that Grimm. had been using the bathroom of his gender preference for nearly two months without conflict. Soon, after, the U.S. Department of Education published an opinion letter requiring schools to permit students to use the bathrooms consistent with the student’s gender identity. Grimm’s suit against the Board followed. Two questions are before the Supreme Court involve the first, is what deference should be extended to an unpublished agency opinion letter, and second, whether the agency’s interpretation of law be given effect?

With a Justice Gorsuch on the Supreme Court, there may well be less deference applied to agency interpretation. As we’ve previously blogged, Gorsuch has criticized the Chevron Doctrine under which the federal courts give deference to agency interpretations of ambiguous statutes. This deference is at the heart of what is at issue in Gloucester. The Gloucester case may give Gorsuch the opportunity to overturn Chevron, and he’ll also get a second bite at Chevron as well when the court hears the three consolidated cases coming out of the 5th, 7th and 9th Circuits which directly confront the validity of class action waivers in the employment context. (National Labor Relations Board v. Murphy Oil USA (No. 16-307), Epic Systems Corp. v. Lewis (No. 16-285), and Ernst & Young LLP v. Morris (No. 16-300).

With respect to the impact on the Title VII and Title II, Gorsuch’s concurrence in the Hobby Lobby case is also enlightening as to how the Court may proceed with a vote from a Justice Gorsuch. Hobby Lobby, is a closely-held, family owned, corporation employing thousands. Hobby Lobby’s owners refused to follow the Affordable Care Act’s mandate requiring that employer sponsored health insurance cover provide health insurance coverage for abortion-inducing drugs and devices, as well as related education and counseling, as the same violated their own sincerely held religious beliefs. In his concurring opinion, Gorsuch wrote, “All of us must answer for ourselves whether and to what degree we are willing to be involved in the wrongdoing of others. For some, religion provides an essential source of guidance both about what constitutes wrongful conduct and the degree to which those who assist others in committing wrongful conduct themselves bear moral culpability.” He also wrote, “And as we have seen, it is not for secular courts to rewrite the religious complaint of a faithful adherent, or to decide whether a religious teaching about complicity imposes ‘too much’ moral disapproval on those only ‘indirectly’ assisting wrongful conduct. Whether an act of complicity is or isn’t ‘too attenuated’ from the underlying wrong is sometimes itself a matter of faith we must respect.”

This line of reasoning could change how anti-discrimination laws have been enforced; pitting Title VII and Title II’s anti-discrimination goals (and the EEOC and various state human rights commissions) against an individual’s or business’s sincerely held religious belief (which is also protected under Title VII and Title II), may itself result in allowing certain types of discrimination. For example, there are a multitude of cases involving bakeries and florists (from a variety of religious beliefs) refusing to provide services for the LGBT community. Thus far, human rights commissions and courts have found in favor of the customer; however, applying Gorsuch’s reasoning in Hobby Lobby, an opposite result is easily reached.

All that said, the Supreme Court’s rulings that may limit the power of agencies or curtail anti-discrimination protects will for the most part only affect federal law. In “Blue states” and even “Swing states”, an opposite reaction to the changing tide under federal law may arise, and states laws may trend in the opposite direction to compensate for what happens at the federal level. This has already occurred in many states with different (higher) minimum wages. States have also been at the forefront of expanding civil rights protections and there is no reason to believe those trends will change with a Trump administration. Indeed, those trends may accelerate given the divisiveness now in Washington and throughout the country. In short, your Blue state will become Bluer, and your Swing state may well reflect the turmoil in Washington with uncertain results.

Steps You Can Take.

Make sure your employees understand the current anti-discrimination laws; training (and refreshers) are always helpful. If an employee has questions regarding providing service (or seeking an accommodation for their own sincerely held religious belief), take time to listen and talk with your employee – then reach out.

With respect to anti-class action waivers and arbitration agreements – review your agreements to make sure there is a blue-pencil clause permitting invalid provisions to be removed from the document or reduced in force, but still allowing the document to stand.

As always, we’re here to help you navigate the changing waters.