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Supreme Court’s Employment Cases to Focus on Overtime, Diversity

Sept. 30, 2022, 9:20 AM

The US Supreme Court’s docket this term features a handful of cases with workplace implications, including an oil rig manager’s overtime pay dispute and high-profile suits over admissions policies at top universities.

The justices will hear three cases by early November that have the potential to shape the employment legal landscape, from pay calculations under federal wage and hour law to corporate diversity initiatives to where workers can sue their employers.

Here’s how the upcoming Supreme Court term is shaping up for workplace law.

Overtime Rules

The court on Oct. 12 will hear arguments in Helix Energy Solutions Group Inc. v. Hewitt on whether a foreman for a Texas-based oil and gas services company qualifies for overtime pay under the Fair Labor Standards Act despite earning more than $200,000 a year.

Helix is seeking to overturn the US Court of Appeals for the Fifth Circuit’s September 2021 decision that employee Michael Hewitt was entitled to overtime compensation. Hewitt made double the threshold of $100,000 a year applied at the time for the FLSA’s overtime carveout for “highly compensated” workers, but that threshold didn’t apply because his pay was calculated on a daily basis rather than as a salary, the court said.

The decision could have ripple effects, particularly in the energy industry because it uses day rates to compensate workers, including highly paid employees on oil-field or offshore jobs.

But Hewitt’s attorney, Ed Sullivan of Oberti Sullivan LLP, told Bloomberg Law at the time the Supreme Court agreed to take the case that Helix was using the matter to undercut the FLSA’s overtime rules.

“Helix violated eight decades of established law when it decided not to pay Mr. Hewitt overtime,” Sullivan said.

Diversity Hiring

Challenges to how Harvard University and the University of North Carolina consider race in their admissions processes, two of the most high-profile cases the Supreme Court is considering this fall, also have caught the attention of employers seeking to achieve a diverse workforce.

The challengers say the affirmative action programs penalize Asian-American and White students in violation of Title VI of the Civil Rights Act of 1964, and asked the court to reconsider earlier rulings allowing race-based criteria for higher education.

If the cases, Students for Fair Admissions Inc. v. President and Fellows of Harvard College and Students for Fair Admissions Inc. v. University of North Carolina, result in a decision against race-conscious admissions policies,private businesses’ diversity initiatives could be in limbo.

Industry groups and dozens of companies, including Alphabet Inc.’s Google, Meta Platforms Inc., and Apple Inc., urged the high court in amicus briefs to uphold the schools’ policies. Corporate diversity, equity, and inclusion efforts rely on college admissions programs that produce a diverse pipeline of qualified future workers and business leaders, they said.

“Empirical studies confirm that diverse groups make better decisions thanks to increased creativity, sharing of ideas, and accuracy. And diverse groups can better understand and serve the increasingly diverse population that uses their products and services,” the companies said. “These benefits are not simply intangible; they translate into businesses’ bottom lines.”

The cases, which will be heard separately Oct. 31, also have implications for corporate shareholders who have been increasingly pushing companies to disclose gender and diversity data about their workforce.

These demands help ensure that “C-suite and other senior management employees ‘walk the walk’ when it comes to increasing and sustaining diverse representation across companies,” the HR Policy Association said in a brief.

Jurisdictional Dispute

Finally, the court is scheduled to hear a case Nov. 8 that potentially could allow workers to “forum shop” for a favorable venue to sue employers with a national presence.

Mallory v. Norfolk Southern Railway Co. involves former railroad worker Robert Mallory, who wants to hold Norfolk Southern Railway Co. liable for his alleged exposure to asbestos and toxic chemicals in Virginia and Ohio during his employment. Mallory, a Virginia resident, brought his Federal Employers’ Liability Act complaint against the Virginia-based company in Pennsylvania state court even though his alleged injuries lacked any connection there.

The question before the justices is whether a company must defend itself against lawsuits in a state based only on its registration to do business there.

Mallory’s theory is that Norfolk Southern consented to personal jurisdiction under the state’s so-called “long-arm” statute when it registered to do business there. The Pennsylvania Supreme Court ruled against him in December 2021 after finding the statutory scheme unconstitutional.

But if the justices side with Mallory, a national company could face litigation in any state where it’s registered, regardless of the parties’ connections there, the company told the justices.

The Justice Department backed the railway company in a recent brief.

The state’s jurisdictional regime “subverts interstate federalism by reaching beyond Pennsylvania’s borders and allowing state courts to hear cases in which Pennsylvania has no legitimate interest,” the agency said.

To contact the reporter on this story: Khorri Atkinson in Washington at katkinson@bloombergindustry.com

To contact the editors responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com