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Class Actions, Collective Bargaining and a Colorado Cakeshop: Why The Supreme Court’s Fall Term Matters for Employers

The 2017-2018 Supreme Court  term could be a very significant one for employment law.  With a newly constituted conservative majority, the Court is poised to decide three cases that will likely have far-reaching implications on public sector collective bargaining, class action litigation, and discrimination on the basis of sexual orientation.

Are Class Action Waivers in Arbitration Agreements Legal?

The Supreme Court kicked off its fall term on October 2, hearing oral arguments in three consolidated class action waiver cases: NLRA v. Murphy Oil USA, Inc., Epic Systems Corp v. Lewis, and Ernst & Young LLP v. Morris.  In taking on the cases, the Court has agreed to decide whether employment arbitration agreements that bar class actions are prohibited as an unfair labor practice.  On Monday, the NLRB defended its position that such waivers are unlawful.  But not all federal agencies were in agreement.  The Department of Justice backed management, after switching teams earlier this year to align itself politically with the new administration.  The decision will resolve a circuit split between the Second, Fifth and Eighth Circuits which have ruled that class action waivers do not violate an employee’s right to concerted activity under the NLRA, and the Six, Seventh and Ninth Circuits which have held the opposite.

Are Mandatory Union Fees for Public Employees Constitutional?

The newest labor case to be added to the docket involves a dispute over whether compulsory Union fees for public sector employees violate the First Amendment.  Back in 1977, the Court upheld the constitutionality of such fees in Abood v. Detroit Board of Education. But when the issue was heard earlier this year in Friedrichs v. California Teachers Association, it appeared there could be a change.  That was until Justice Scalia’s death prior to a decision resulted in a 4-4 deadlock.  In the new case, Janus v. American Federation of State, County and Municipal Employees, Illinois government worker Mark Janus argues that mandatory fees are unconstitutional because they force employees to fund an organization even when it does not represent an individual’s interests.  The union disagrees that the issue implicates the First Amendment, and claims that workers like Janus will unfairly reap the benefits of collective bargaining if permitted to forgo paying union dues.  The union’s defeat is predicted with the addition of Gorsuch to the bench. Depending on the scope of the Court’s ruling, a labor union loss could have devastating consequences on public sector labor organizations.

Is a Baker’s Refusal of Services to a Same Sex Couple Unlawful?

While not an employment case per se, the decision in Masterpiece Cakeshop v. Colorado Civil Rights Commission could have far-reaching implications for employers.  The case involves a Christian baker’s refusal to bake a custom wedding cake for a gay couple due to the baker’s religious beliefs.  The couple won in state court, claiming that the baker’s actions violated Colorado’s anti-discrimination law prohibiting public accommodations discrimination on the basis of sexual orientation.  The baker believes the ruling violates his Free Speech and Free Exercise rights because his baking is a form of creative expression.  If the Court finds for the baker, this could open the doors for other businesses to claim the same, and legally deny services to individuals on the basis of sexual orientation.

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