Justices’ Musings Offer New Workplace Litigation Strategies

Employment law litigants emerged from the US Supreme Court’s latest term with legal fodder that can fuel new clashes over hot-button issues like decades-old workplace discrimination standards and the inclusion of uninjured class members in wage-and-hour cases.

The high court tackled federal overtime exemptions, retiree disability discrimination claims, and civil rights cases against state agencies over the past nine months. Additionally, its rulings on nationwide injunctions and class standing will stretch into the labor and employment space.

But the justices also issued concurring, dissenting, and plurality opinions that—though nonbinding—can be used to address long-standing disputes that have created a more complicated legal environment for both workers and companies, legal observers said.

For example, the court’s increasingly strict textualism approach has led to a rejection of judge-made rules and a focus on a statute’s plain meaning, said Corey Devine, a partner at Muskat Devine LLP.

“We find ourselves in a moment where the Supreme Court is going to reexamine all of the judge-made laws or doctrines, and we keep seeing outcomes where the court says they have no basis in the text, and it’s not going to continue to apply them,” he said. “Every term, we’re getting fairly significant cases that are reshaping the law.”

This forces employment law litigants and lower courts to rethink foundational frameworks in assessing workplace litigation, he added.

Bias Test

Justice Clarence Thomas’ concurrence in Ames v. Ohio Department of Youth Services could prompt a reevaluation of a three-part evidentiary test the high court established in 1973’s McDonnell Douglas Corp. v. Green for workers with indirect evidence of discrimination.

That framework lacked textual grounding in Title VII of the 1964 Civil Rights Act, Thomas wrote in a concurrence joined by Justice Neil Gorsuch.

Thomas’ textualist argument supports a broader streamlined approach where Title VII’s plain language governs. He suggested that workers simply need to show there are genuine factual disputes that could lead a reasonable jury to find there was discrimination.

Legal scholars have said the concurrence is likely to encourage plaintiffs to challenge the validity of the third prong of the McDonnell Douglas test, more commonly known as the “pretext” stage. It requires workers to show their employer’s stated reason for a negative job action was a cover up for illegal discrimination.

Thomas raised similar concerns about McDonnell Douglas when the court earlier this year declined to hear a case challenging the broader evidentiary standard.

Eventually, the day will come when the justices “find the right case on which to opine on the McDonnell Douglas standard,” said Alyesha Asghar, co-chair of Littler Mendelson PC’s EEO & Inclusion Practice Group.

Class Standing

Justice Brett Kavanaugh’s dissent in Labcorp v. Davis signaled his readiness to restrict the certification of class actions with uninjured members, saying it violates Article III standing and enables the plaintiffs-bar to “coerce businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial.”

Kavanaugh shared this view after the high court, in an 8-1 dismissal order, concluded that it “improvidently granted” review of Labcorp’s bid to limit who can join a class action accusing the company of discriminating against blind people with its self-service check-in kiosks. The question presented was whether federal court rules allow the certification of damages classes that include both injured and uninjured members.

Kavanaugh said he would have sided with Labcorp, and his dissent outlines a road map for defendants to challenge proposed classes at the certification stage.

His argument has the potential to limit wage-and-hour lawsuits in particular, as they usually involve class actions. These cases concern issues like overtime, employee misclassification, and meal-break violations, which can result in subgroups of people unaffected by what’s being disputed.

It could also discourage settlements by raising defense leverage and litigation expenses for plaintiffs.

ADA Rights

Four justices used a plurality opinion in Stanley v. City of Sanford to create an opening for disabled retirees to sue under the Americans with Disabilities Act for denied post-employment benefits.

A majority of the justices held that Title I of the ADA only covers “qualified individuals” with disabilities who hold or seek a job at the time of the alleged bias. But Justices Gorsuch, Samuel Alito, Elena Kagan, and Sonia Sotomayor said an alternative path exists for such cases under the ADA if the plaintiff can show they experienced disability bias while still employed.

Others could invoke the Rehabilitation Act, which prohibits disability discrimination by contractors and federal grant recipients, and the Constitution’s equal protection clause, if they can’t satisfy this timing requirement, the plurality opinion said.

Titles II and III of the ADA are also avenues for disabled retirees, as they don’t impose the same “qualified individual” restriction as Title I and aren’t based on whether someone was disabled at the time of employment, said William Goren, an attorney and consultant.

But claims under these remedies differ in scope and are less potent than Title I because they typically carry limited damages or only injunctive relief, he said.