What is the U.S. Supreme Court dining on from the employment law menu this coming term? It's a four-course meal, and here is what the discerning diner needs to know.
THE APPETIZER: WHAT CONSTITUTES A CHARGE OF DISCRIMINATION?
Let's start with an appetizer: What constitutes a charge of discrimination under federal civil rights laws? Yes, the question sounds more like a zen koan than an important legal issue, but trust me, cases rise or fall on the answer.
Patricia Kennedy worked for a large transportation company. Believing herself the victim of age discrimination, she went to the Equal Employment Opportunity Commission, filing an intake questionnaire and a four-page verified affidavit detailing the facts upon which she based her charge. She later filed an official charge on an EEOC-approved form, according to the 2nd U.S. Circuit Court of Appeals' opinion in Holowecki, et al. v. Federal Express Corp. (Kennedy is not the first named plaintiff, but only the issue she raises is before the high court.) The trial court dismissed the charge.
Not so fast, the 2nd Circuit said. It applied the well-known duck test: If it waddles like a duck, quacks like a duck and looks like a duck, then it's a duck. Here, the materials supplied by Kennedy included the name of the employer, detailed the allegations and thus alerted the EEOC that they were meant to constitute a charge. In so finding, the court noted the submitted materials were "forceful" in tone and content and thus sufficient to let the EEOC know the plaintiff was asking it to look into the allegations. As it happened, the EEOC did not treat the submissions as a charge and did not tell the employer that it had received the charge until the plaintiff filed the official one.
Why does this matter? If a court considers the materials to be a charge, then the suit lives, because the plaintiff timely filed a charge with the EEOC. If a court doesn't consider the materials to constitute a charge, then the trial court tosses the suit, because the plaintiff untimely filed the official form more than 300 days after the alleged discrimination.
THE SALAD: CAN PARTIES TO AN ARBITRATION AGREEMENT AGREE TO EXPAND THE SCOPE OF JUDICIAL REVIEW?
Let's clear the appetizer plates and head to the salad course: Can the parties to an arbitration agreement agree to expand the scope of judicial review under the Federal Arbitration Act (FAA), or are they limited to the narrow scope of review contained in the FAA? The case the Supreme Court will hear, Hall Street Associates LLC v. Mattel Inc., arose in a commercial context. Landlord Hall Street Associates and tenant Mattel agreed to submit any dispute to arbitration, according to the 9th U.S. Circuit Court of Appeals. Either could appeal the arbitrator's award to a court of competent jurisdiction and argue that the arbitrator's conclusions of law were erroneous. The 9th Circuit said this side agreement was invalid. The FAA limits the grounds for judicial review to a few named grounds and -- to borrow a phrase -- it is easier for a camel to go through the eye of a needle than for an arbitration award to be set aside.
But employers are becoming unhappy with arbitration, which is turning out to be as expensive as the court system. Plus, if they lose, they have no right of review. If the high nine say that an employer can utilize an expanded right of appeal, it will make arbitration more attractive; if not, many employers may, like the prodigal son, come back to the civil justice system.
THE MAIN COURSE: IS 'ME TOO' EVIDENCE ADMISSIBLE IN DISCRIMINATION CASES?
For the entree, the court will take up a matter I have argued about for the past 26 years: Is "me too" evidence admissible in a discrimination case? Here's the drill, according to the 10th U.S. Circuit Court of Appeals' opinion in Mendelsohn v. Sprint/United Management Co.: The employer fired Ellen Mendelsohn in a reduction in force. Mendelsohn sued for discrimination, and her lawyer wanted to put other employees on the stand to say, "Hey, I was discriminated against as well when I was fired in the R.I.F." The trial court said no to this, but the 10th Circuit said yes in an age discrimination suit.
Why? The appeals court said it is relevant and the jury should hear it even if the witnesses worked in different work groups and under different supervisors. The 10th Circuit rejected out of hand an argument that is one of my all-time favorites: To let this evidence in requires a mini-trial on why each witness was terminated, and a one-week trial stretches on as long as Phil Spector's trial.
The 10th Circuit's rejoinder? The trial court can manage these issues. In short, when looking at a Federal Rule of Evidence 403 issue and weighing relevance for the plaintiff versus unfair prejudice to the defendant, the trial court should weigh the scales of justice in favor of the plaintiff.
Mendelsohn is a big-time case, and the Supreme Court's ruling will have significant repercussions. As Corporate America continues to slim down in good economic times and bad, more employees will lose their jobs, and more employees will sue. Victory or defeat in the inevitable, subsequent litigation may hinge on whether courts admit this type of evidence. If jurors see a Greek chorus of white-haired terminated employees, each lamenting his fate, they are likely to think the smoke billowing into the air is fire-inspired.
THE DESSERT: CAN EMPLOYEES SUE RETIREMENT PLAN FIDUCIARIES FOR INDIVIDUAL LOSSES?
Finally, on to what Malcolm Forbes said was his favorite vegetable: dessert. I think the court will garnish this dish in favor of employers. Can an individual employee who suffers losses in a retirement plan due to a fiduciary breach -- the plan made bad investments -- sue the plan fiduciaries for her individual losses?
The high court has gone out of its way to protect fiduciaries and not expose them to liability, and I believe it will continue this trend in LaRue v. DeWolff, Boberg & Associates Inc. But the U.S. Department of Labor argued in an amicus brief to the 4th U.S. Circuit Court of Appeals that it's OK to let individuals sue for individual losses, because doing so inures to the benefit of the plan, sort of like the Three Musketeers -- it's all for one, and one for all. But in LaRue, the 4th Circuit said no; suing requires a plan participant to show a loss to the plan as a whole, not just a loss to the individual.
Well, that's it -- the big four to be decided by the high nine. Here's hoping for good briefing, thoughtful arguments and reasoned decisions that we can down with a postprandial glass of champagne, regardless of who wins or loses.
Michael P. Maslanka is the managing partner of Ford & Harrison in Dallas. His e-mail address is mmaslanka@fordharrison.com. He is board certified in labor and employment law by the Texas Board of Legal Specialization. He writes the Texas Employment Law Letter.
