Majority gives short shrift to worker rights

Katherine V.W. Stone

On May 21, in Epic Systems v. Lewis, the Supreme Court, by a 5-4-majority, held that an employer may lawfully require its employees to agree, as a condition of employment, to take all employment-related disputes to arbitration on an individual basis, and to waive their right to participate in a class action or class arbitration. In that case, the U.S. Court of Appeals for the 7th Circuit and the National Labor Relations Board had held, to the contrary, that to compel workers to forgo their right to litigate or arbitrate their statutory employment claims on a collective basis was unlawful because it contravened their right to engage in collective activity for mutual aid and protection under the National Labor Relations Act.

The decision was issued in three consolidated cases, all of which presented a similar fact pattern. In each one, a worker is presented with an arbitration clause that requires all employment disputes be submitted to arbitration on an individual basis. The worker is told that if he wants to continue in the job, he will be deemed to have assented to the clause. Subsequently the worker files a class action lawsuit on behalf of himself and other workers similarly situated, alleging that the employer has violated the federal minimum wage and hour law. The employer moves to dismiss the lawsuit on the ground that the worker is bound by the arbitration clause and therefore is precluded from bringing a class action in a judicial or arbitration tribunal.

Since 1991, when the Supreme Court held that employment disputes could be subject to a mandatory arbitration agreement, Gilmer v. Interstate/Johnson Lane Corp., employers have increasingly included mandatory arbitration in their employment terms. And since 2011, when the Supreme Court upheld an arbitration clause that included a class-action waiver in a consumer case, AT&T Mobility LLC v. Concepcion, employers have increasingly added group-action waivers to their arbitration clauses. Today over half of nonunion companies impose arbitration agreements on their workers, and nearly all include group-action waivers.

In the face of this trend, the NLRB decided in 2012, in the D.R. Horton case, that contracts of employment that require workers to forgo the ability to collectively assert their legal rights contravene the NLRA, which protects workers’ ability to join together for the purpose of mutual aid and protection. The courts of appeals split over the issue.

Justice Neil Gorsuch, writing for the majority in Epic Systems, rejected the NLRB’s position and held that the pro-arbitration policy of the Federal Arbitration Act required that the arbitration agreement be enforced according to its terms, including the term that waived the right to proceed collectively. He reasoned that this did not contravene the NLRA because that statute protects only collective action in the context of unionization and collective bargaining, not collective action in a legal forum. He also claimed that the result was compelled by a hefty stream of Supreme Court rulings that have made arbitration agreements virtually unassailable and have held that the FAA overrides other federal statutes with which it might conflict. 

Moreover, Gorsuch expressly refused to engage the policy debate about whether it is desirable for employers to be permitted to force workers to forgo the ability to assert their rights collectively. He said that “[t]he policy may be debatable but the law is clear.”

Justice Ruth Bader Ginsburg wrote a compelling dissent in which she situated the issue in the context of the history of the NLRA and the Norris-LaGuardia Act. Before the 1930s, employers used many techniques to prevent their workers from acting collectively, including requiring them to assent to “yellow dog” contracts in which they promised to abstain from joining a union. Ginsburg argued that the NLRA and Norris-LaGuardia were an explicit rejection of such contracts. Instead, they were based on the premise that “employees must have the capacity to act collectively in order to match their employers’ clout in setting terms and conditions of employment.” 

Today’s employer-designed arbitration clauses that require employees to forgo the use of class actions in either a court or arbitration are, she claims, a latter-day version of the yellow dog contracts that Congress explicitly prohibited more than 80 years ago. And she pointed to research showing that the result of the decision is that workers will be unable to vindicate their rights to minimum wages and overtime protections.

The difference between the majority and dissenting opinions exemplifies two different modes of judicial analysis. Gorsuch avoids taking a position on the policy issue by reciting what he calls “a mountain” of Supreme Court precedent. He maintains that the outcome is mandated by that precedent.

In contrast, Ginsburg addresses the policy issue head on, using not merely judicial precedent, but also legislative history and current empirical evidence to show that the decision will lead to significant “underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.” Moreover, she questions the majority’s characterization of the precedent and argues that the court could uphold workers’ rights, protected by the labor law, to assert claims collectively without undermining the FAA. 

For example, Ginsburg points out the absurdity of the majority’s argument that, because Congress did not explicitly rule out class arbitration when it enacted the NLRA, the FAA compels the enforcement of arbitration agreements that ban collective procedures. As she explains, in 1935, at the time of the enactment of the NLRA, there were no class actions or class arbitrations, and it was 50 years before the Supreme Court decided that the FAA applied to statutory claims. Thus it is entirely unsurprising that Congress, in drafting the statute, did not expressly preclude the possibility of compelled waivers of collective assertion of statutory claims.

In Epic Systems, Gorsuch has shown himself to be a reliable, though perhaps less brash, version of Justice Antonin Scalia, the jurist he replaced on the Supreme Court. Like Scalia, Gorsuch musters a wall of precedent to support an outcome that was actually not at all preordained. And like Scalia, he washes his hands of the policy implications by claiming that he is only doing his job. His approach is disappointing, though unsurprising. Given that he had a bare 5-4 majority on his side, we might have hoped he would provide some reasoned analysis that tackled the serious policy issues at stake.

These issues are enormous. The use of arbitration clauses combined with class-action waivers seriously undermines the ability of workers to vindicate their rights. For example, in the past four years, Uber drivers in many states have brought class-action lawsuits alleging they are wrongfully classified as independent contractors and hence denied federal and state employment rights to minimum wages, overtime pay, expense reimbursement and other employment protections. 

The cases turn on the definition of “employee” for the purposes of federal and state law. And that issue has implications not only for Uber drivers but for hundreds of thousands of other on-demand workers in the new “gig” economy. But because Uber’s individual contracts with its drivers contain an arbitration clause that prohibits the drivers from participating in a class or collective action, the lower courts dismissed the lawsuits and held that each worker must arbitrate the issue on an individual basis. Now that the Supreme Court’s holding in Epic Systems can be cited to support those rulings, the question of whether on-demand workers have the protection of the labor laws – an important issue for millions of American workers — may never be definitively resolved.

One telling omission from Gorsuch’s opinion is his failure, despite recounting a mountain of precedent, to mention a fundamental pillar of arbitration law that was articulated by Justice Harry Blackmun in Mitsubishi Motors v. Soler Chrysler-Plymouth. There the court proclaimed that under the FAA, arbitration is only appropriate when it entails no loss of substantive statutory rights. In that case, the court justified sending an antitrust case to arbitration by stating that “so long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function.” It further elaborated by stating that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute.”

This principle, known as the effective vindication doctrine, is essential if courts are to justify closing the courthouse door to otherwise qualified litigants. And it is not a new idea. In the 19th century, Justice Joseph Story refused to order parties to arbitrate out of a concern that moving from a judicial to an arbitral forum could prejudice the rights of a party and lead to unjust results.

If there were ever a case in which compelled arbitration makes it impossible for parties to vindicate their substantive rights, it is a case like Epic Systems in which an employer insists that workers relinquish their ability to vindicate their employment rights on a collective basis. Under Mitsubishi’s effective vindication principle, the arbitration clause should not be enforced.

The Epic Systems decision not only closes the courthouse door to workers, it effectively bars them from any tribunal where they can vindicate their rights. Empirical evidence establishes that when courts compel workers to take their disputes to arbitration on an individual basis, workers are unlikely to prevail. And when they do prevail, their damage awards are significantly less than they would obtain in a court, as I’ve written about with Alexander Colvin. Moreover, in the face of plaintiffs’ reduced prospects for success and the measly amounts of any likely damage award, lawyers are often unwilling to take the cases. Thus, by endorsing clauses that require workers to take their claims to arbitration on an individual basis, Epic Systems empowers employers to deprive their employees of any viable mechanism to enforce their rights.

Given the important commitment to worker collective action embodied in our labor laws since the 1930s, it is depressing to see the Supreme Court majority give such short shrift to worker rights without any serious engagement with the issues at stake.

Worker rights

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Justices issue orders from “long conference”

Amy Howe 

September 28th, 2017 

This morning the Supreme Court issued orders from its September 25 conference, adding 11 new cases (for a total of nine additional hours of argument) to its merits docket for the term. The highest-profile grant came in Janus v. American Federation of State, Municipal and County Employees, a challenge to the fees paid by public-sector employees who are not members of the union that represents them. The justices have already considered the question presented by the case twice without resolving it, but are almost certain to do so during this go-round – with potentially serious implications for the union.

When the justices review the case of Mark Janus, an Illinois state employee, they will not necessarily be writing on a blank slate. In 1977, in Abood v. Detroit Board of Education, the Supreme Court ruled that, even if they cannot be required to pay fees that a union would use for political activity, like union organizing, public-sector employees can be required to pay a fee to cover the costs of contract negotiations. But Janus argued that even requiring him to pay the more limited fee violates his First Amendment rights because issues related to contract negotiations – like salaries, pensions and benefits for government employees – are inherently political. Therefore, he contends, his fee is going to support speech that is intended to affect the government’s policies, even if he disagrees with it. The U.S. Court of Appeals for the 7th Circuit rejected Janus’ argument, holding that it lacked the power to overrule the Supreme Court’s decision in Abood. But, Janus told the justices in his petition for review, they do have that power and should exercise it here.

The justices did not reach the union-fees issue the first time they considered it, in the 2014 case Harris v. Quinn; instead, they ruled that the employees in that case – home-health-care workers who were paid by the state – were not “true” public employees. They returned to the question again two terms ago and heard oral argument in January 2016, but they deadlocked after the February 13, 2016, death of Justice Antonin Scalia. With Justice Neil Gorsuch now on the bench, the justices are expected to decide the issue once and for all.

Another one of today’s grants, Encino Motorcars v. Navarro, is making a return trip to the Supreme Court. In 2016, the Supreme Court threw out a decision by the U.S. Court of Appeals for the 9th Circuit, which had concluded that “service advisors” at car dealerships were not covered by an exemption in the Fair Labor Standards Act from overtime for “any salesman” “primarily engaged in selling or servicing automobiles.” The court in that case ruled that the 9th Circuit should not have deferred to a Department of Labor regulation because the department had not provided a sufficient explanation for its decision to reverse course from its earlier position treating service advisors as exempt. The justices sent the case back to the 9th Circuit, ordering it to interpret the FLSA “without placing controlling weight on” the DOL regulation. The 9th Circuit once again ruled that service advisors were not exempt from overtime, but now the Supreme Court will review that decision.

The Fifth Amendment’s “self-incrimination clause” provides that no one “shall be compelled in any criminal case to be a witness against himself.” In City of Hays, Kansas v. Vogt, the justices will consider the scope of that clause – specifically, whether the Fifth Amendment is violated when statements are used at a probable cause hearing but not at a criminal trial.

While working for the city of Hays, Matthew Vogt applied for a job as a police officer in another city. As part of his agreement with the new employer, Vogt informed the Hays police department that he had kept a knife that he had acquired on the job. Using his statements, the Hays police department found “an audio recording which captured the circumstances of how Vogt came into possession of the knife,” and the state eventually charged Vogt with two felonies. The state held a probable cause hearing – at which, Vogt says, his statements about the knife were “used against him.”

The charges were dismissed, but Vogt filed a federal civil-rights lawsuit in which he argued that the city and four officers (along with his would-be employer, which had withdrawn its offer) had violated his Fifth Amendment rights. The district court granted the defendants’ motion to dismiss Vogt’s claims, but (as relevant here) the U.S. Court of Appeals for the 10th Circuit reversed. It acknowledged that the Supreme Court had not yet weighed in on “the precise moment when a ‘criminal case’ commences” for purposes of the self-incrimination clause. But it reasoned that “the right against self-incrimination is more than a trial right,” so that it is “violated when criminal defendants are compelled to incriminate themselves and the incriminating statement is used in a probable cause hearing.” The city asked the Supreme Court to weigh in, which it agreed today to do – with Justice Neil Gorsuch, who sat on the 10th Circuit before joining the court – recused.

In Collins v. Virginia, the justices have agreed to clarify the scope of the “automobile exception” to the warrant requirement – specifically, whether it applies to a car parked on private property, close to a home. The case arose when officers looking for a motorcyclist who had eluded them saw a picture of a motorcycle on petitioner Ryan Collins’ Facebook page, found the house where Collins spent at least several nights each week, and located the motorcycle under a tarp toward the back of the driveway, near the house. A police officer walked into the driveway and removed the tarp to find the motorcycle’s Vehicle Identification Number and license tag, from which he learned that the motorcycle was stolen. When Collins was charged with receiving stolen property, he countered that evidence regarding the motorcycle should be suppressed because the police officer had entered the area around his house without a warrant, in violation of the Fourth Amendment.

The state courts rejected his argument. Although the state conceded that the police officer’s actions constituted a search under the Fourth Amendment, for which a warrant would normally be required, the Supreme Court of Virginia concluded that the “automobile exception” applied because the motorcycle was “readily mobile” and the police officer had “several reasons to believe the motorcycle was contraband.” This was true, the court continued, even though the motorcycle was on private property. At Collins’ request, now the Supreme Court will weigh in.

The Fourth Amendment is at the center of another case the justices agreed to review today: Byrd v. United States. The case arose when Terrence Byrd’s girlfriend rented a car, but did not include him on the rental agreement. On the same evening, Byrd was pulled over for a traffic violation. When police searched the car, they found 49 bricks of heroin and body armor. Byrd was arrested and charged with possession of body armor by a felon, as well as possession of heroin with intent to distribute it. At trial, he argued that the heroin and body armor could not be used against him because the search violated the Fourth Amendment. The district court disagreed, reasoning that Byrd did not have any expectation of privacy in the rental car because “he was not a party to the rental agreement and he did not pay for the rental.” The U.S. Court of Appeals for the 3rd Circuit affirmed, prompting Byrd to go to the Supreme Court.

In McCoy v. Louisiana, the justices will consider the case of Robert McCoy, who was convicted of first-degree murder for the shooting deaths of his estranged wife’s son, mother and step-father. After firing his public defender, McCoy was represented by Larry English, an attorney paid by his parents. As with his public defender, McCoy maintained his innocence in meetings with English and “emphatically opposed” English’s proposal to concede that McCoy was guilty in the hope that he would be spared the death penalty. McCoy attempted to remove English and represent himself, but the trial court rejected his request on the ground that it came too late: His trial was only a few days away.

When the trial began, English did indeed concede McCoy’s guilt, over interruptions from McCoy. McCoy was convicted and sentenced to death. He appealed (among other things) English’s concession of guilt, arguing that it violated his constitutional right to have the effective assistance of an attorney. The Louisiana Supreme Court denied his appeal, but now the Supreme Court will consider his claim.

In Rosales-Mireles v. United States, the Supreme Court will weigh in on whether the U.S. Court of Appeals for the 5th Circuit applied too harsh a standard in determining whether to correct a plain error by the district court. The petitioner in the case, Florencio Rosales-Mireles, pleaded guilty to re-entering the United States and was sentenced to 78 months in prison. On appeal, he argued that the district court had calculated his sentence wrong, and the federal government agreed. However, the 5th Circuit declined to correct the error, explaining that the kind of errors that would “seriously affect the fairness, integrity or public reputation of judicial proceedings” are “ones that would shock the conscience of the common man, serve as a powerful indictment against our system of justice, or seriously call into question the competence or integrity of the district judge” – a standard that Rosales-Mireles cannot, in its view, meet. Rosales-Mireles went to the Supreme Court, arguing that the 5th Circuit’s standard is too high; today the justices granted his petition for review.

A trio of new cases – Dalmazzi v. United States, consolidated with Cox v. United States and Ortiz v. United States for one hour of oral argument – raises interesting questions arising out of the service of active-duty military officers on the U.S. Court of Military Commission Review, an intermediate appellate court for military commissions. For nearly 150 years, Congress has (subject to limited exceptions) barred active-duty military officers from holding another, civilian post within the executive branch. The petitioners in these cases served in the Air Force until they were charged with violating various provisions of the Uniform Code of Military Justice. Their cases went to the U.S. Air Force Court of Criminal Appeals, where their panels included judges who were also serving on the CMCR. The service members challenged those judges’ continued service on the AFCCA, arguing that, because of their service on the CMCR, they should no longer be members of the military and could not review the service-members’ cases. In Ortiz’s case, the court rejected that claim on the merits, while the other service-members’ claims were deemed moot because the president had not yet signed the judges’ CMCR commissions when the decisions against them were issued. The Supreme Court today agreed to review the service members’ claims; it also directed the service members in two of the three cases (Dalmazzi and Cox) to brief and argue whether the Supreme Court has jurisdiction to review their cases.

In 2015, in Gelboim v. Bank of America, the Supreme Court ruled that when a district court dismisses the only claim in a case that has been consolidated with other actions for pretrial proceedings in multidistrict litigation, the district court’s order is final and appealable, even if there are still claims pending in other cases in the multidistrict litigation. In Hall v. Hall, a case arising out of a family dispute over property in the U.S. Virgin Islands, the Supreme Court has agreed to resolve a four-way split among the courts of appeals regarding whether the same rule announced in Gelboim also applies to cases consolidated in single-district litigation. [Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, was among the lawyers for the petitioner in Gelboim, but I am not affiliated with the firm.]

Today’s grants are likely to be argued in either January or February. The justices are expected to issue more orders from the September 25 conference – which are likely to mostly be denials of review – on Monday morning at 9:30.

Trump deletes pro-Strange tweets after Roy Moore wins Alabama election

BY NICOLE HENSLEY

September 27, 2017,

President Trump deleted a round of tweets pumping Sen. Luther Strange's campaign shortly after he lost to Roy Moore in Alabama's tight runoff race Tuesday night.

The trio of tweets penned Monday and Tuesday were a last-ditch attempt to sway voters for Trump's endorsed candidate, Strange, over former judge Roy Moore.

Trump's dispatches vanished without explanation shortly after he returned to the White House. He soon called Moore to congratulate the Republican candidate on his primary election victory.

One tweet said, "Luther Strange has been shooting up in the Alabama polls since my endorsement."

"Finish the job - vote today for "Big Luther," Trump wrote, according to ProPublica’s Politwoops.

Another said Strange is "tough on crime & border - will never let you down."

The Citizens for Responsibility and Ethics caught onto Trump’s disappearing feed. The government watchdog is suing Trump, claiming he is violating the Presidential Records Act by deleting tweets.

“Trump can try to erase his support of Strange, but under the Presidential Records Act, all his tweets must be archived (we’re suing over it), the nonprofit wrote Tuesday.

A handful of pro-Strange tweets remain on Trump’s feed from August and September, including one that boasts “Alabama is sooo lucky to have a candidate like ‘Big’ Luther Strange.”

Trump first endorsed Strange in August for the state’s special election to replace a seat left vacant by Jeff Sessions, who was tapped to lead the Justice Department.

Moore will now face off with Democrat Doug Jones in December. 

Does Trump care about Puerto Rico's hurricane victims?

BBC

September 26, 2017

The warning from Puerto Rico's governor in the wake of Hurricane Maria was stark: act now, or risk a humanitarian disaster.

Those outside the capital were still struggling without power, while locals reported clean water and medicines were also scarce.,

But many in the US - of which Puerto Rico is a territory - are questioning whether their president cares about the 3.5m American citizens whose lives have been turned upside down.

A quick glance at Donald Trump's Twitter feed over the weekend - arguably the president's preferred method of communication - gave no hint of the unfolding humanitarian crisis.

Instead, his attention was firmly focused on whether or not American footballers knelt or stood during the national anthem.

It didn't go unnoticed.

Number of Trump tweets about pro sports since Friday: 20

Number of Trump tweets about Puerto Rico since Friday: 0

The president finally acknowledged the disaster on Monday evening - although his response came complete with what appeared to be a side-swipe at Puerto Rico's debt crisis.

"Really not sure how to read this other than Trump taking this opportunity to blame Puerto Rico for its misfortune..." tweeted McKay Coppins, a writer for The Atlantic.

Meanwhile, the Toronto Star's Washington correspondent Daniel Dale compared the tweets to "a paramedic gazing at a screaming man trapped in a wrecked car and saying: 'You're quite overweight.'"

Many others were also left with a bitter taste in their mouth.

But is there any merit to the claim Mr Trump cares less about what is happening in Puerto Rico than he did when hurricanes struck Texas and Florida?

The White House has denied it has abandoned Puerto Rico.

Spokeswoman Sarah Huckabee Sanders told reporters on Monday: "We've done unprecedented movement in terms of federal funding to provide for the people of Puerto Rico and others that have been impacted (by) these storms.

"We'll continue to do so and continue to do everything that we possibly can under the federal government to provide assistance."

Her words have been backed up by politicians on the island, and Jenniffer Gonzalez, who, as resident commissioner, is Puerto Rico's non-voting representative in Washington.

She praised the administration's response, telling the Associated Press news agency: "This is the first time we get this type of federal co-ordination."

But still, it is Mr Trump's personal reaction which seems to have angered social media users in the States, including singer Marc Anthony, who was born in the US but whose parents are Puerto Rican.

His ex-wife, the singer Jennifer Lopez, also of Puerto Rican descent, has donated $1m to the relief efforts already, according to the Guardian.

And when compared to Mr Trump's response to the two hurricanes which preceded Maria, there does appear to be an imbalance.

Mr Trump sent at least one tweet out a day about Texas for a week after Hurricane Harvey barreled into its coastline on 26 August, causing great damage and leaving at least 47 people dead.

By 2 September, he had asked Congress for $7.8bn (£6bn) as an initial amount to help rebuild the area.

Mr Trump also visited Texas twice within a week.

In the days after Hurricane Irma hit Florida on 10 September, Mr Trump sent a flurry of tweets - although not as many as with Texas - and visited the area within five days.

So far, no date has been set for a visit to Puerto Rico, although one is planned.

In the meantime, as Mr Trump returns to criticizing the NFL on social media, people on Twitter are keen to him know exactly where they stand on the issue.

Kushner Used Personal Email Account for Government Business

By MAGGIE HABERMAN and SHARON LaFRANIERE

SEPT. 24, 2017

Jared Kushner, President Trump’s son-in-law and a White House senior adviser, has used his personal email account to conduct official government business, his lawyer acknowledged on Sunday.

The lawyer, Abbe Lowell, said that Mr. Kushner, using the personal account, had received or sent “fewer than a hundred emails” involving his White House colleagues over the first seven months of the administration. Mr. Lowell said the emails were all forwarded to Mr. Kushner’s official account, creating a record.

The use of the personal account was first reported by Politico.

Mr. Kushner is not the only official in the Trump White House who has been found to have used private email or text messaging for government business, a situation that has raised questions about the administration’s preservation of records. But Mr. Kushner is the person closest to the president to have his personal email use become public.

As a candidate, Mr. Trump aggressively attacked Hillary Clinton, the Democratic nominee, for her use of private email while she was secretary of state. Some of Mr. Trump’s allies outside the White House are urging him to press for a prosecution of Mrs. Clinton, even though an F.B.I. investigation into her handling of classified information has been closed. At Mr. Trump’s rallies, his supporters still break into cheers of “lock her up!”

In a statement, Mr. Lowell said: “Mr. Kushner uses his White House email address to conduct White House business. Fewer than a hundred emails from January through August were either sent to or returned by Mr. Kushner to colleagues in the White House from his personal email account.”

He added: “These usually forwarded news articles or political commentary and most often occurred when someone initiated the exchange by sending an email to his personal, rather than his White House, address. All nonpersonal emails were forwarded to his official address and all have been preserved in any event.”

Two people who have exchanged emails with Mr. Kushner on his personal account said it was set up during the transition period, when he was stepping back from his real estate company and needed a new email address.

A government official, who spoke on the condition of anonymity because he was not authorized to speak about Mr. Kushner’s email habits, said that unlike in the Clinton case, Mr. Kushner had not set up a private server to house the personal email account. While Mrs. Clinton used her personal account exclusively, the official said that Mr. Kushner does use his government account.

Federal rules require that officials’ correspondence be retained as part of the government record.

Another person with knowledge of Mr. Kushner’s email use said that others in the administration, including Stephen K. Bannon, the former chief strategist, and Reince Priebus, the former White House chief of staff, had also used personal email accounts for what could qualify as government business. People close to both men have said such emails were not frequent.

But among West Wing officials, Mr. Kushner has received the most scrutiny over issues of transparency, in part because of omissions he made with reporters early in the administration and on a government form about his contacts with Russian officials during the transition.