Supreme Court Poised for Big Cases on Job Bias, Whistleblowers

Job transfer as the basis of a discrimination lawsuit and the burden of proof for whistleblowers in retaliation cases are among a handful of issues with workplace implications featured in the upcoming US Supreme Court term.

The justices have already agreed to hear arguments in disputes touching on what job actions can give rise to bias claims under Title VII of the Civil Rights Act, and the burden-shifting framework for plaintiffs suing under the Sarbanes-Oxley Act’s whistleblower-protection provision. The court’s decision in another case before it could significantly curtail the regulatory power of federal agencies, including those enforcing labor and employment laws.

Here’s how the cases have the potential to shift employment law.

Job Transfer Bias

In Muldrow v. City of St. Louis, U.S., the justices are set to determine whether job transfers and denials of requests to change positions can form the basis of a Title VII claim when they don’t impose “materially significant disadvantages” on employees.

A growing number of federal appellate courts are undoing decades-old tests for Title VII lawsuits that filtered out allegations involving adverse job actions that weren’t considered illegal.

The US Court of Appeals for the Eighth Circuit ruled that police sergeant Jatonya Clayborn Muldrow couldn’t hold St. Louis accountable under Title VII because her rank, pay, and responsibilities weren’t changed. Muldrow claimed she was forced to transfer out of the intelligence unit, and that the denial of her subsequent transfer request was based on sex bias.

Muldrow, backed by the Biden administration, claims the appellate court imposed a judicially created “adverse employment action” standard that’s at odds with the text of Title VII. She asked the justices to adopt the US Court of Appeals for the D.C. Circuit’s holding that a worker isn’t required to prove “some additional harm over and above” an employer’s discriminatory job decision to establish a Title VII claim.

St. Louis has argued that there isn’t a circuit split over the adverse employment action requirement. The date for oral argument hasn’t been set.

Whistleblower Retaliation

A former UBS Securities LLC research strategist’s whistleblower case gives the justices a chance to resolve a circuit split over whether the Sarbanes-Oxley Act requires a plaintiff suing for retaliation to show that their employer acted with retaliatory intent.

The justices will hear argument Oct. 10 in Trevor Murray’s bid to undo a US Court of Appeals for the Second Circuit ruling last year vacating his $1.7 million jury verdict against UBS Securities and parent UBS Group AG. The jury should’ve been told that Murray is required to show that the bank retaliated by terminating his employment after complaining that officials pressured him to skew his reports in favor of their business strategies, the appellate court said.

Requiring proof of retaliatory intent—rather than only that a whistleblower disclosure contributed to an adverse action— would make it virtually impossible for whistleblowers to pursue Sarbanes-Oxley retaliation claims and discourage workers from stepping forward, attorneys told Bloomberg Law.

Depending on how the justices rule in Murray v. UBS Sec. LLC, U.S., anti-retaliation protections for corporate whistleblowers in several other industries like nuclear energy, railroads, and aviation could also be implicated, attorneys said. Congress created a similar burden-of-proof framework for employee whistleblowers under various statutes and modeled those provisions after each other.

The Second Circuit’s ruling not only raised a whistleblower’s burden of proof under the statute, but cuts directly against the holdings of the Tenth, Ninth, Fifth, and Fourth circuits, Murray argued in his Supreme Court petition.

UBS said in court papers that Murray was never a whistleblower. He was fired as part of a broader staff reduction caused by “significant financial difficulties” the company faced after he was hired, the bank said.

Chevron Review

A challenge to a federal requirement that vessels fishing for herring off the Atlantic coast cover the costs of government monitors for conservation and management purposes could have a big impact on workplace law.

In Loper Bright Enterprises v. Raimondo, the justices have been asked to overturn the court’s watershed 1984 Chevron v. Natural Resources Defense Council decision. The court held in Chevron that judges should defer to administrative agencies when they offer a reasonable interpretation of a vague statute.

Agencies like the National Labor Relations Board and the US Department of Labor invoke Chevron when defending regulations against court challenges.

The justices may overrule Chevron altogether. They also might narrow its scope to clarify that statutory silence isn’t the same as ambiguity that warrants virtually unfettered agency interpretation of the law, attorneys said. Either outcome would weaken federal agencies’ rulemaking authority and give ammunition to challengers of federal workplace regulations like wage and hour laws, they said.

Critics of the doctrine, including the Christian Employers Alliance and the National Right to Work Legal Defense Foundation Inc., have told the court that Chevron unlawfully interferes with Congress’ legislative authority. It gives the executive branch an improper advantage by requiring deference to an agency’s “reasonable” interpretation, they said.

A coalition of trade groups, including the Associated Builders and Contractors, the National Retail Federation, and Independent Electrical Contractors separately argued in a joint brief that the NLRB “has a record of interpreting its power expansively even in the face of express limitations” as a result of Chevron.

Oral argument hasn’t been scheduled.