Category: Constitutional Law

Are You Still Minding the Gap? A Check-Up for Navigating Line Between Political and Hate Speech and Workplace Acceptability

megaphone political speech hate speechIn December 2015, we broadly reviewed concerns and compliance issues for employers when managing employees engaged in workplace political speech or those accused of engaging in “hate” speech in the workplace. A brief scan of headlines so far into 2017 reveals more than 900 instances of alleged violence, hate speech, and harassment in and out of workplaces reported since late January. Human Resource professionals and in-house counsel may wonder, again—what are the company’s obligations and duties to our employees?

A quick review: “Political activity” and “political affiliation” are only protected statuses for certain employees and in certain locales. Courts have held the First Amendment protects public employees from their employers using political affiliation as a basis for employment decisions. The Civil Service Reform Act of 1978 expressly prohibits political affiliation discrimination toward federal employees. Several states have passed their own statutes concerning private-sector employees:

  • Michigan prohibits direct or indirect threats against employees for the purpose of influencing their vote;

  • Oregon prohibits threatening loss of employment in order to influence the way an employee votes on any candidate or issue;

  • Florida considers it a felony criminal offense to discharge or threaten to discharge an employee for voting, or not voting, in any election (municipal, county or state) for any candidate or measure submitted for a public vote;

  • Kentucky, Ohio, Pennsylvania, and West Virginia prohibit employers from posting or distributing notices threatening to close their businesses or lay off employees if a particular candidate is elected; and

  • California, Colorado, New York, North Dakota, and Louisiana have passed laws deeming it illegal for an employer to retaliate against an employee for off-duty participation in politics or political campaigns.

Several cities, such as Lansing, Michigan; Madison, Wisconsin and Seattle, Washington, protect political affiliation similar to protections afforded race, sex, age and disability, even for private sector employees.

Beyond these mandated protections, private sector employees should be mindful of workplace speech and conduct. For example, managers and supervisors who express any type of political opinion to subordinate employees may expose themselves to subsequent claims they acted out of bias against those employees on the basis of other protected statuses. How could an employee draw such a connection in his or her allegation? As we saw in the most recent election cycle, some political candidates across all levels (local, state and federal) voiced strong opinions about race relations, foreign relations policy, religious freedom, Second Amendment rights, immigration, LGBT rights and other issues directly related to characteristics protected by federal, state or local workplace anti-discrimination laws. Dropping into a workplace political debate with a subordinate employee about a candidate, elected official, political party, cause or other political issue risks allowing that employee to associate expressed opinions with some type of prohibited discriminatory bias.

Best Practices Check-up

  1. Understand there could be laws relating to workplace political speech or activities in your location;

  2. Educate managers and supervisors regarding what laws impact the workplace as well as the employer’s workplace culture; training can form a vital line of defense by limiting potential exposure before it has a chance to evolve;

  3. Remind managers and supervisors how personal opinions can be viewed by subordinate employees as a form of prohibited workplace bias; and

  4. Encourage managers and supervisors to resist being drawn into workplace political discussions, particularly with subordinate employees.

Should an employee file an internal complaint alleging a workplace hate-based incident, conduct a measured, consistent investigation to determine what (happened), who (was targeted) and if hate speech or other actions (based on a protected class or against company culture) is likely to have occurred. Resist assumptions.

If the investigation yields a conclusion that inappropriate behavior occurred, initiate appropriate actions to (1) hold employees appropriately accountable (for example, through formal warning up to discharge) and (2) decrease the likelihood of repeated incidents. Resist any media, or social media, attention that can serve to derail thoughtful consideration of the facts and promote an atmosphere leading to impulsive decisions.

ARTICLE BYJay M. Dade of Polsinelli PC

© Polsinelli PC, Polsinelli LLP in California

Affirmative Action Policy Upheld By Supreme Court

affirmative action supreme courtRace may be taken into account when public universities and colleges admit students, ruled the U.S. Supreme Court today. For the second time, the Court was asked to decide whether the University of Texas at Austin’s admissions policy, which uses a variety of affirmative action factors to increase the diversity of its student population, violates the Equal Protection Clause of the Constitution. In a 4-to-3 decision (with Justice Kagan taking no part in the decision), the Court ruled that the race-conscious admissions program in question is lawful under the Equal Protection Clause. Fisher v. University of Texas at Austin, 579 U.S. __ (2016).

White Applicant Denied Admission Challenged Policy

Abigail Fisher, a white applicant who was denied admission to the University of Texas at Austin, sued the University alleging that its use of racial preferences in undergraduate admissions decisions is unconstitutional. She asserted that by including race in its admissions decisions, the University disadvantaged her and other Caucasian applicants.

The District Court in Texas that considered Fisher’s claims ruled in favor of the University, and the Fifth Circuit Court of Appeals agreed. Fisher appealed to the Supreme Court and in 2013, the Court kept her claims alive by sending them back to the Fifth Circuit so that the University’s admissions policy could be evaluated under the proper strict scrutiny standard. The Fifth Circuit reexamined the policy but came up with the same result, ruling in favor of the University. Fisher appealed to the Supreme Court again.

Court Finds Compelling Interest In Diversity of Students

In Fisher I, the Court ruled that the University’s affirmative action process, in which race was only one factor in assigning a numerical admissions score, needed to further a constitutionally permissible and substantial purpose or interest in order to meet the strict scrutiny standard. In today’s decision, the Court found that the University’s desire to provide its students the educational benefits that flow from having a diverse student body was a compelling interest sufficient to overcome the strict scrutiny standard.

Fisher had argued that the University failed to state more precisely what level of minority enrollment would constitute a “critical mass” at which time race would no longer need to be an admissions consideration. The Court rejected Fisher’s argument, stating that the educational benefits promoted by a diverse student body should not be reduced to pure numbers, especially in light of the fact that the University is prohibited from having a quota for minority student enrollment.

The Court also rejected Fisher’s assertion that the University had already achieved “critical mass” of minority enrollment, finding that the University had studied both statistical and anecdotal evidence that showed that race-neutral programs had not achieved its diversity goals. In addition, the Court rejected Fisher’s position that there were other workable race-neutral means of meeting the University’s educational goals.

University Must Continue to Evaluate Use Of Race In Admissions 

Although a slim majority of the Court upheld the University’s ability to use race as a factor in its admissions policy, the Court wrote that the University has a continuing obligation to satisfy the burden of strict scrutiny in light of any changing circumstances. It stated that the University must conduct periodic reassessments of its admissions program and continue to examine data to ensure that “race plays no greater role than is necessary to meet its compelling interest” in promoting the educational benefits advanced by diversity among students.

Three Justices Dissent

Chief Justice Roberts, as well as Justices Thomas and Alito, disagreed with their four colleagues in the majority. Justice Thomas wrote that “a State’s use of race in higher education admissions decision is categorically prohibited by the Equal Protection Clause.” Justice Alito separately wrote that the University had failed to show that its race-conscious plan was narrowly tailored to serve compelling interests so “[b]y all rights, judgment should be entered in favor of [Fisher.]”

Had Justice Antonin Scalia not passed away in February, he almost certainly would have voted along the lines of the dissenters. That would have resulted in an evenly divided court at 4-to-4. Justice Kagan did not participate because she had participated in the government’s part of the case when she was U.S. Solicitor General prior to being appointed to the Court. A 4-to-4 decision would have meant that the Fifth Circuit’s decision would stand, so the University would still have prevailed—but the decision would have had no precedential impact outside of the Fifth Circuit. But now, with Justice Scalia’s absence, the Supreme Court decision upholding the constitutionality of a race-conscious affirmative action plan is a precedential ruling that applies nationwide.

Affirmative Action in the Employment Context

Even though the Fisher case examined affirmative action in higher education admissions programs, the decision may have ripple effects in the employment context. By upholding the use of race-conscious affirmative action plans, the Court may have limited or foreclosed some constitutional challenges to affirmative action in employment policies as well. But race-based programs will still need to meet strict scrutiny standards to pass constitutional muster. Employers seeking a diverse workforce through the use of affirmative action plans will need to articulate the compelling interest that supports their use of race as a consideration in hiring, backed up by data and other evidence that no other race-neutral means are available to achieve the employer’s goal. As such, employers seeking to implement such policies should still proceed with caution.

ARTICLE BY R. Calder Huntington of Holland & Hart LLP

Copyright Holland & Hart LLP 1995-2016.

Religious Freedom Regarding ACA Contraceptive Mandate Still In Limbo

On May 16, 2016, the U.S. Supreme Court offered only limited guidance on the challenges to the religious “accommodation” procedure under the Affordable Care Act’s (ACA’s) contraceptive mandate. Numerous faith-based institutions had challenged the mandate and the procedural requirements for seeking an exemption on religious grounds as violations of the Religious Freedom Restoration Act (RFRA) and the First Amendment of the federal Constitution. In an unusual (but not unprecedented) move, the Court relied on confirmations from both sides that an alternative solution may resolve this dispute, and remanded the cases back to the Third, Fifth, Tenth, and D.C. Circuits to allow the parties to work it out. Zubik v. Burwell, 578 U.S. ___ (2016).

Religious Objection Form At Issue

Under the ACA, organizations providing health insurance to their employees must cover certain FDA-approved contraceptives as part of their health plans. Federal regulations, however, permit organizations to object to providing contraceptives on religious grounds. To avoid recourse for failing to provide mandated contraceptive coverage, such organizations must provide a form, either to their insurer or to the federal government, stating their religious objection.

Numerous faith-based nonprofit organizations, including the Little Sisters of the Poor Home For the Aged in Denver, argue that the ACA’s procedures require them to be complicit in providing services that violate their sincerely held religious beliefs. In various federal courts throughout the country, these religious institutions filed lawsuits challenging the legality of having to submit the religious objection form. After various appellate courts weighed in, the cases were consolidated for the Supreme Court to decide.

Court Sought Alternate Solutions

In late March, the Court asked both sides to come up with new proposals on how the female employees of these nonprofit organizations could receive cost-free contraceptive coverage without burdening the organizations’ religious  freedoms. After reviewing the parties’ submissions, the Court concluded that both sides confirmed there was a feasible option to provide contraceptive coverage through the organizations’ insurance companies without any objection notice from the religious parties.

In its per curiam opinion, the Court vacated the judgments and remanded the cases back to the respective appellate courts to allow the parties “an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans receive full and equal health coverage, including contraceptive coverage.” The Court stated that the parties should be given “sufficient time to resolve any outstanding issues between them.”

The Court, including the concurrence by Justice Sotomayor joined by Justice Ginsburg, emphasized that it was not ruling on the merits of the case and that the lower courts should not read anything into the Court’s opinion as leaning one way or the other. As it relates to the nonprofits in this case, the Court stated that the government has notice that they object on religious grounds so no further notice is required going forward. It also emphasized that the government should not fine or penalize the nonprofits.

What It Means

The Supreme Court’s failure to decide the legal issues surrounding the ACA’s contraceptive mandate and the religious “accommodation” means that numerous federal appeals courts will individually address whether the parties can come up with a mutually satisfactory resolution of the cases. It is unclear whether any of the courts will have to decide the legal issues (again). In any event, the very real possibility is that one or more cases could end up before the Supreme Court in a later session.

Article By Steven T. Collis of Holland & Hart LLP

Copyright Holland & Hart LLP 1995-2016.

Supreme Court Rules Public Employee Demoted For Perceived Political Activity Can Bring First Amendment Challenge

In a 6-to-2 decision, the Supreme Court ruled that when a public employer demotes an employee in order to prevent the employee from exercising his free-speech rights, the employee may challenge that action as a violation of the First Amendment and §1983, even if the employer was mistaken about the employee’s behavior. The Court found that the government’s motive is what matters and that the constitutional violation of discouraging employees from engaging in protected political activity and speech is the same regardless of whether or not the employer was mistaken about the employee’s political involvement. Heffernan v. City of Paterson, 578 U.S. ___ (2016).

Supervisor Assumed Employee Supported Opposing Candidate

Jeffrey Heffernan was a police officer in Paterson, N.J., a twenty-year veteran of the force. After being promoted to detective in 2005, he was assigned to the office of the chief of police. In April 2006, the city was in the middle of a mayoral election where the incumbent had the support of Heffernan’s supervisors, but the challenger was a former Paterson police chief and friend of Heffernan. Heffernan could not even vote in the election as he did not live in the city but his mother did.

One afternoon, while off duty, Heffernan went, at his mother’s request, to the challenger’s campaign office to get a new yard sign for his mother’s yard. Other members of the police force saw him with the sign. The following day, Heffernan’s supervisors demoted him to patrol officer and assigned him to a walking patrol post. They demoted him as punishment for what they thought was his “overt involvement” in the challenger’s campaign, even though that belief was mistaken. Heffernan was not involved in the campaign but merely picked up the sign to help his bedridden mother.

Heffernan sued, alleging his demotion violated the First Amendment. He asserted that his supervisors demoted him because they thought he engaged in constitutionally protected speech, even though they were mistaken about his actions. The district court and Third Circuit Court of Appeals rejected his claim, holding that a free-speech retaliation claim under §1983 lies only when the government retaliated against an employee who actually exercised his First Amendment rights, not on the mistaken perception that he exercised protected rights.

High Court Rules In Favor Of First Amendment Protection 

Generally, the First Amendment prohibits government officials from dismissing or demoting an employee because that employee engaged in constitutionally protected political activity or speech. Heffernan argued that the government’s motive in taking an adverse employment action is the key to a public employee’s retaliation claim. He alleged that as long as a government employer believed that the employee was engaged in protected activity and took adverse action because of that belief, the employer violated the First Amendment.

The Supreme Court agreed. Writing for the majority, Justice Breyer stated that “the government’s reason for demoting Heffernan is what counts here.” The Court ruled that when a government employer demotes an employee because it wants to prevent the employee from engaging in political activity protected by the First Amendment, the employee is entitled to challenge that unlawful action under the First Amendment and §1983, even if the employer is acting upon a factual mistake regarding the employee’s behavior. The Court stated that the employer’s mistake does not diminish the risk of harm to the demoted employee or to others who fear similar adverse consequences of engaging in protected activity.

The Court left the door open, however, for government employers to adopt a neutral policy that prohibits police officers from overt involvement in any political campaign. Whether a specific neutral policy meets constitutional muster is a question the Court left for another day.

It’s the Employer’s Ill Motive that Matters, Not the Employee’s Exercise of Rights

The Court’s ruling means that a public employer can be held liable for violating an employee’s constitutional rights even where the employee admits he wasn’t exercising those rights. The public employer’s desire or motive to keep the employee from engaging in protected political activity is enough to give the employee a viable claim for damages under §1983 regardless of whether the employee engaged in any activity protected by the Constitution.

Article By Joanna R. Vilos of Holland & Hart LLP
Copyright Holland & Hart LLP 1995-2016.

California Court to PGA Tour Caddies: You'll Get Nothing and Like It!

As the full swing of the PGA season rounds the corner, and with the azaleas blooming at Augusta, the trusted confidants of golf’s premier players have already missed the cut.

Last month, the District Court for the Northern District of California dismissed a lawsuit filed against the PGA Tour by a group of 168 caddies contending that the Tour may not require them to wear shoulder-to-thigh length “bibs” during tournaments, many of which feature the name of the golfer for whom the caddie works (on the back) and the names and logos of tournament sponsors (on the front) (Hicks v. PGA Tour, Inc., 2016 WL 928728 (N.D. Cal. Feb. 9, 2016)). Among other arguments, the caddies alleged that the Tour missed the fairway and violated their “right of publicity” by using them as “human billboards” for tournament sponsors without compensation.

California, like many other states, recognizes both a statutory and a common law right of publicity. In California, to state a claim for common law misappropriation in violation of the right of publicity, a plaintiff must allege that defendant used the plaintiff’s name, likeness, or identity without plaintiff’s consent, to the defendant’s advantage, causing harm to plaintiff. The caddies argued that they had never consented to the Tour’s use of their “likeness and images” in connection with the corporate-sponsored bibs during television broadcasts of tournaments. Lawyers for the caddies estimated the value of chest-front advertising on caddie bibs at $50 million per Tour season, of which the caddies received no cut.

U.S. District Judge Vince Chhabria dismissed the caddies’ lawsuit last month with prejudice, writing that “(t)he caddies’ overall complaint about poor treatment by the Tour has merit, but this federal lawsuit about bibs does not.” The court’s ruling relied heavily on the contract that each caddie must sign with the Tour to work an event. The form contract provides that “(c)addies shall wear uniforms…as prescribed by the host tournament and the PGA TOUR,” but does not explicitly require a caddie to wear a tournament bib. The caddies argued that the contract’s particular silence as to bibs precludes the Tour from requiring the caddies to wear the advertisement-laden smocks between the ropes. As a matter of contract interpretation, Judge Chhabria cited the general rule that even where disputed contract language appears ambiguous, the ambiguity can be resolved as a matter of law where context reveals that the language is susceptible to only one interpretation. The court found context in the caddies’ own admission that the Tour has required them to wear bibs for decades as the primary part of their “uniform.” Therefore, concluded Judge Chhabria, the only reasonable interpretation of the contract is that caddies agreed the Tour could make them wear bibs.

Resting upon this interpretation of the Tour contract, the court ruled that the critical element in the caddies’ right of publicity violation claim was not satisfied, namely, a lack of consent. Because the court interpreted the caddie contract as requiring the caddies to wear bibs, and when read with a provision of the contract whereby caddies assign to the Tour their “individual television, radio, motion picture, photographic, electronic … and all other similar or related media rights” with respect to their participation in Tour events, the court concluded that the caddies consented to the use of their images at tournaments, including any logo on the bibs. Thus, tapping in an easy two-foot putt, the court dismissed the caddies’ claim relating to the right control the commercial use of their likenesses.

Even if the district court’s decision is upheld on appeal, all is not lost. Caddies still possess a long game and can always individually negotiate with sponsors to endorse products and place advertisements on other highly visible parts of the uniform, such as hats and shirt sleeves. Further, the court apparently did find some merit in the caddies’ allegations of poor treatment by the Tour, which may earn them a few strokes in the court of public opinion. So, they got that going for them, which is nice.

Article By Litigation Practice Group of Proskauer Rose LLP

© 2016 Proskauer Rose LLP.

California Court to PGA Tour Caddies: You’ll Get Nothing and Like It!

As the full swing of the PGA season rounds the corner, and with the azaleas blooming at Augusta, the trusted confidants of golf’s premier players have already missed the cut.

Last month, the District Court for the Northern District of California dismissed a lawsuit filed against the PGA Tour by a group of 168 caddies contending that the Tour may not require them to wear shoulder-to-thigh length “bibs” during tournaments, many of which feature the name of the golfer for whom the caddie works (on the back) and the names and logos of tournament sponsors (on the front) (Hicks v. PGA Tour, Inc., 2016 WL 928728 (N.D. Cal. Feb. 9, 2016)). Among other arguments, the caddies alleged that the Tour missed the fairway and violated their “right of publicity” by using them as “human billboards” for tournament sponsors without compensation.

California, like many other states, recognizes both a statutory and a common law right of publicity. In California, to state a claim for common law misappropriation in violation of the right of publicity, a plaintiff must allege that defendant used the plaintiff’s name, likeness, or identity without plaintiff’s consent, to the defendant’s advantage, causing harm to plaintiff. The caddies argued that they had never consented to the Tour’s use of their “likeness and images” in connection with the corporate-sponsored bibs during television broadcasts of tournaments. Lawyers for the caddies estimated the value of chest-front advertising on caddie bibs at $50 million per Tour season, of which the caddies received no cut.

U.S. District Judge Vince Chhabria dismissed the caddies’ lawsuit last month with prejudice, writing that “(t)he caddies’ overall complaint about poor treatment by the Tour has merit, but this federal lawsuit about bibs does not.” The court’s ruling relied heavily on the contract that each caddie must sign with the Tour to work an event. The form contract provides that “(c)addies shall wear uniforms…as prescribed by the host tournament and the PGA TOUR,” but does not explicitly require a caddie to wear a tournament bib. The caddies argued that the contract’s particular silence as to bibs precludes the Tour from requiring the caddies to wear the advertisement-laden smocks between the ropes. As a matter of contract interpretation, Judge Chhabria cited the general rule that even where disputed contract language appears ambiguous, the ambiguity can be resolved as a matter of law where context reveals that the language is susceptible to only one interpretation. The court found context in the caddies’ own admission that the Tour has required them to wear bibs for decades as the primary part of their “uniform.” Therefore, concluded Judge Chhabria, the only reasonable interpretation of the contract is that caddies agreed the Tour could make them wear bibs.

Resting upon this interpretation of the Tour contract, the court ruled that the critical element in the caddies’ right of publicity violation claim was not satisfied, namely, a lack of consent. Because the court interpreted the caddie contract as requiring the caddies to wear bibs, and when read with a provision of the contract whereby caddies assign to the Tour their “individual television, radio, motion picture, photographic, electronic … and all other similar or related media rights” with respect to their participation in Tour events, the court concluded that the caddies consented to the use of their images at tournaments, including any logo on the bibs. Thus, tapping in an easy two-foot putt, the court dismissed the caddies’ claim relating to the right control the commercial use of their likenesses.

Even if the district court’s decision is upheld on appeal, all is not lost. Caddies still possess a long game and can always individually negotiate with sponsors to endorse products and place advertisements on other highly visible parts of the uniform, such as hats and shirt sleeves. Further, the court apparently did find some merit in the caddies’ allegations of poor treatment by the Tour, which may earn them a few strokes in the court of public opinion. So, they got that going for them, which is nice.

Article By Litigation Practice Group of Proskauer Rose LLP

© 2016 Proskauer Rose LLP.

Dane County Judge: Wisconsin’s “Right to Work” law unconstitutional

wisconsin supreme courtIn a decision issued April 8, 2016, Dane County Circuit Court Judge William Foust ruled that Wisconsin’s “Right to Work” law violates the Wisconsin Constitution because it takes union property without just compensation (i.e., it is an unlawful taking).

According to the Wisconsin Manufacturers & Commerce (WMC), which played a leading role in seeking and attaining passage of the law, Judge Foust’s decision “is an act of blatant judicial activism that will not withstand appellate review.” Wisconsin Attorney General Brad Schimel also issued a statement expressing disappointment in the ruling and stating that he is “confident the law will be upheld on appeal.”

Judge Foust ruled that the law unconstitutionally takes union property by forcing a union to represent workers who are not members of the union and do not pay dues to the union. Judge Foust found the State’s argument that “neither federal law nor state law requires a union or other entity to become an exclusive bargaining representative” to be “disingenuous.” According to Judge Foust, the unions have no choice in representing all employees because, by law, their existence depends upon being the exclusive bargaining agent for any particular bargaining unit.

A copy of Judge Foust’s order is available here.

Article by: Rufino Gaytán of Godfrey & Kahn S.C.
Copyright © 2016 Godfrey & Kahn S.C.

Supreme Court Rules TCPA Class Action Not Mooted by Unaccepted Settlement Offer to Named Plaintiff

Today the U.S. Supreme Court ruled 6-3 that a company’s unaccepted offer of complete relief to a named plaintiff in a putative class action does not moot the plaintiff’s case. Before the ruling, authored by Justice Ruth Bader Ginsburg, there was disagreement among the Courts of Appeals over whether an unaccepted offer can moot a plaintiff’s claim, thereby depriving federal courts of Article III jurisdiction. While not specific to the Telephone Consumer Protection Act (“TCPA”), this issue is common to cases involving statutes like the TCPA because damages are statutorily set and thus easily calculated. Under this ruling, a company facing a TCPA class action lawsuit cannot moot the case by offering complete relief to the named plaintiff before class certification.

Background on the Case

In Campbell-Ewald Co. v. Gomez, the U.S. Navy hired a nationwide advertising and marketing communications agency to execute a multimedia recruiting campaign that involved text messages. The marketing agency then hired a vendor to generate a list of cellular telephone numbers geared towards the Navy’s target audience who had consented to receive solicitations by text message. Under this campaign, the vendor sent text messages to over 100,000 recipients. One of those recipients was the named plaintiff, who alleged that he had not consented to receive the text message, and that the advertising agency violated the TCPA by sending the message (and perhaps others like it).

Before the deadline to file class certification, the advertising agency filed an offer of judgment under Federal Rule of Civil Procedure 68. The agency offered the named plaintiff complete relief – including his costs and $1,503 per text message that he could show he received. Note that the maximum the plaintiff could recover under the TCPA is $1,500 per text message plus the costs of filing suit. The plaintiff did not accept the settlement offer and allowed the Rule 68 submission to lapse after the time, 14 days, specified in the Rule.

The take-away from this important Supreme Court decision is that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. Because plaintiff’s individual claim was not made moot by the expired settlement offer, the claim retained its vitality during the time to determine whether the case could proceed on behalf of the class.

Article By Robert V. Spake, Jr. of Polsinelli PC

© Polsinelli PC, Polsinelli LLP in California

Obergefell Uncertainty re: Same Sex Spousal Benefits

On June 26, 2015, the U.S. Supreme Court removed a cloud of uncertainty for same-sex couples when it ruled, in the landmark decision of Obergefell v. Hodges, that the equal protection and due process clauses of the Fourteenth Amendment require all states to issue marriage licenses to same-sex couples seeking to marry and to recognize same-sex marriages lawfully performed in other states. We previously discussed the ruling in our blog post, Same-Sex Marriage Decision: Uniformity in All States. However, as discussed below, the Obergefell ruling left at least two unanswered questions.

Retroactivity

Justice Kennedy’s opinion for the majority in Obergefell did not state whether the decision should be applied retroactively. Retroactive application could require employers to revisit their past practices in providing employee benefits to same-sex couples. To date, no guidance has been issued by the IRS or other federal agencies to assist employers in this respect. Some news outlets have reported that the Social Security Administration intends to apply the Obergefell decision retroactively, but to date no official guidance has emerged.

The retroactivity conundrum is highlighted in at least two lawsuits initiated in Federal courts over the past year that challenge employers’ denials of health benefits to the same-sex spouses of employees.

  • In Cote v. Wal-Mart Stores Inc., an employee sought repeatedly to have her same-sex spouse added to her health insurance but was denied. While Wal-Mart did extend benefits to same-sex spouses in the wake of the Windsor decision, the employee and her spouse had accumulated significant medical bills prior to Windsor. The employee is challenging Wal-Mart’s pre-Windsor denials and is seeking class-action status for the suit.

  • In Considine v. Brookdale Senior Living, an employee’s request to have her same-sex spouse added to her health plan was denied because Brookdale Senior Living did not offer health insurance coverage to same-sex spouses. After requesting briefs in mid-July on the impact of the Obergefell decision, the court recently sent the parties to arbitration based on an arbitration clause in Ms. Considine’s employment agreement.

In both of these cases the U.S. Equal Employment Opportunity Commission (“EEOC”) found probable cause that the defendants had discriminated against the plaintiffs on the basis of their gender, a theory the EEOC has advanced in such cases since 2012.

Some courts interpreting state law have already found in favor of the retroactive recognition of same-sex marriages, including a federal court in Alabama and a state court in Pennsylvania. The Alabama case involved a wrongful death suit where state law required damages to be distributed under the laws of intestate succession. The plaintiff prevailed in having his same-sex marriage recognized retroactively and received the proceeds of the suit, even though the marriage ceremony was performed in 2011 and the plaintiff’s same-sex spouse died that same year, which was before Alabama recognized same sex marriage.

In the Pennsylvania case, the plaintiff sought to receive spousal death benefits from various benefits providers, inheritance tax treatment as a spouse, and access to a jointly-owned safety deposit box following the death of her common-law same-sex spouse. Finding in the plaintiff’s favor, a state judge recognized the 2001 same-sex common law marriage despite the fact that it was not recognized under state law when celebrated, and the plaintiff’s same-sex spouse died before same-sex marriage was recognized in Pennsylvania.

Self-Insured Health Plans

Another lingering question concerns Obergefell’s effect on employers that sponsor self-insured health plans. After Obergefell, will state and/or federal anti-discrimination laws require those plans to offer benefits to same-sex spouses? ERISA generally preempts state regulation of self-insured health plans, and there is nothing in ERISA or other federal law prohibiting discrimination based on sexual orientation. Obergefell does not appear to apply. However, as noted above, the EEOC has taken the position that discrimination against an employee based on the employee’s sexual orientation equates to discrimination based on gender. The EEOC’s approach is currently being tested in the courts. In the meantime, any employer that elects not to offer self-insured medical benefits to spouses of same-sex couples risks attracting the attention of the EEOC.

Article By Jeremy T. Coffey, William B. Duff, Edward Spacapan Jr, B. Frank Thorn
Schiff Hardin LLP

© 2015 Schiff Hardin LLP

WTF? NLRB’s OK with “Cut the Crap?” – Protected Speech Under the NLRA

The National Labor Relations Board (NLRB) has yet again undercut employers’ efforts to limit profane and vulgar language by workers finding vulgar buttons and stickers to be protected speech under the National Labor Relations Act (NLRA).

NLRB

In Pacific Bell Telephone Company and Nevada Bell Telephone Company d/b/a AT&T and Communication Workers of America, Case # 20–CA–080400, the board ruled that the two companies violated the NLRA when they attempted to block workers from wearing buttons and stickers containing the phrase “Cut the Crap” and the abbreviation “WTF.”

The buttons and stickers read “WTF Where’s the Fairness,” “FTW Fight to Win” and “Cut the Crap! Not My Healthcare.” In overturning an administrative law judge’s (ALJ) prior ruling and holding 2-1 that the buttons and stickers were protected speech, the board majority found the language not to be so profane as to lose protection of the Act, particularly where the “WTF” and “FTW” buttons and stickers “provided a nonprofane, nonoffensive interpretation on their face.”

The board’s final order in the case barred the two companies from maintaining and enforcing an overbroad rule which banned these employees from wearing the union-provided pins and stickers. The companies were further ordered to cease and desist from refusing to let employees work unless they removed this union insignia.

The case is the latest in a series of cases in which the board is making it very clear that a wide variety of foul, vulgar and otherwise offensive language remains protected speech and does not lose its protection under the Act when the language is used in the context of concerted activity. In the Plaza Auto Center, Inc., Hooters, and Starbucks cases, the Board also condoned extremely offensive language and overturned decisions to terminate employees.

Employers who are considering discipline or termination of employees for foul, vulgar and/or offensive language must step carefully given this series of decisions. You must first make certain that the language used could not be considered to have been part of a discussion or interchange with the employee that could be viewed as concerted activity.

ARTICLE BY Gerald F. Lutkus of Barnes & Thornburg LLP
© 2015 BARNES & THORNBURG LLP