Supreme Court Review Takes Deep Dive Into Top Employment Cases of the Past Term
December 14, 2022
With a 6–3 conservative majority, the U.S. Supreme Court issued several landmark rulings during its 2021–22 term, including on hot-button issues relating to guns, abortion, and religion. On December 13, employment law expert Robert B. Fitzpatrick led a D.C. Bar virtual program summarizing some of the Court’s key holdings in cases dealing with employment law and arbitration.
In a career spanning more than 50 years, Fitzpatrick has represented clients in employment discrimination, workplace harassment, retaliation, age discrimination, whistleblower, and other employment matters.
Badgerow v. Walters
In an 8–1 decision, the Supreme Court held on March 31 that federal courts do not have subject-matter jurisdiction to confirm or vacate an arbitration award under sections 9 and 10 of the Federal Arbitration Act when the only basis for jurisdiction is that the underlying dispute involves a federal question.
“This is huge for anyone who has a matter in arbitration,” Fitzpatrick said.
Justice Elena Kagan wrote the opinion for the majority reversing the district court and the U.S. Court of Appeals for the Fifth Circuit, and remanding the case for further proceedings. Justice Stephen Breyer wrote the lone dissent “in one of his last hurrahs,” Fitzpatrick noted.
The main takeaway is that, absent clear federal jurisdiction, most motions to revise an arbitration ruling are likely headed to state courts, he said.
Cummings v. Premier Rehab Keller, P.L.L.C.
In a case that has “the plaintiffs’ bar understandably very upset,” the Supreme Court ruled 6–3 that emotional distress damages were not recoverable in the case, offering “a clue that implied causes of action are a dead duck,” Fitzpatrick said.
The plaintiff, Jane Cummings, is deaf and legally blind. She had sought physical therapy services from Premier Rehab Keller and asked for a sign language interpreter. Premier Rehab declined and told Cummings her therapist would communicate through other means.
The majority opinion was written by Chief Justice John Roberts, and a concurrence was offered by Justice Brett Kavanaugh.
“Congress didn’t clearly state what damages are available, particularly emotional distress damages, in such a dispute,” Fitzpatrick said.
Hughes v. Northwestern University
This was a unanimous decision involving investment plans and the scope of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA). Plaintiffs claimed Northwestern had not exercised prudence in managing their defined contribution plan.
“There’s a lot in this little opinion,” Fitzpatrick said. “If you have clients who participate in 401(k) plans, you need to look at Hughes.”
Justice Sonia Sotomayor wrote the opinion vacating the lower court decisions and sending the case back to the Court of Appeals for the Seventh Circuit to reevaluate.
There are hundreds of these cases wending their way through federal courts with billions of dollars at stake, Fitzpatrick said.
Morgan v. Sundance Inc.
This case involved a Taco Bell employee, Robyn Morgan, who sued franchise owner Sundance in federal court for overtime pay in a class action claim. Sundance litigated at first, but then it sought to enforce an arbitration clause in Morgan’s employment contract. At issue was whether Sundance prejudiced Morgan’s claim by litigating first.
“This is the most important arbitration case of the past term. This is a case for plaintiffs, particularly, to run with,” Fitzpatrick said. “For years, plaintiffs have had to swim against judges” favoring arbitration, Fitzpatrick said. The outcomes suggests that “if there is a genuine issue over material fact, you get a jury trial,” he added.
The unanimous opinion, written by Justice Kagan, sent the case back to the Eighth Circuit directing it to reconsider whether Sundance had waived its claim to arbitration without weighing prejudice.
Southwest Airlines Co. v. Saxon
In this case, the Supreme Court held that an airline employee who works as a ramp agent supervisor is a “transportation worker” under the terms of the Federal Arbitration Act and therefore is not required to arbitrate her wage dispute with the airline.
Plaintiff Latrice Saxon had argued that ramp supervisors were a “class of workers engaged in foreign or interstate commerce” and therefore exempt from the act’s coverage. The district court disagreed, but the Seventh Circuit reversed.
The unanimous decision written by Justice Clarence Thomas affirmed the Seventh Circuit, holding that Saxon belongs to a “class of workers engaged in foreign or interstate commerce” and was therefore exempt from the Federal Arbitration Act’s scope.
