For an industry that thrives on stability, 2017 has been tumultuous. The new administration has ushered in an ideological shift on regulation that has left key aspects of employment law in limbo. That means the Supreme Court and federal circuit courts will have a powerful role in defining the direction of employment law in the coming year.
Some HR leaders saw the winds change when Justice Antonin Scalia died at the end of 2016, leaving a sudden absence on an ideologically split court during an election year. His replacement, Judge Neil Gorsuch, has been announced and will go through confirmation hearings soon.
HR Dive spoke to Melissa Raphan, Partner and Chair of the Labor and Employment group at Dorsey, to gain insight on what is to come from the land's highest courts — and from Gorsuch's potential rise to SCOTUS — as the year progresses.
The details on Gorsuch
Gorsuch has widely been heralded as a pro-business choice on labor issues, so expect him to swing the court toward a more conservative approach in upcoming labor clashes.
Raphan called Gorsuch an "originalist" who prefers to stick to statutory language and who maintains a practical approach to employment discrimination cases generally. His past cases reveal a legal mind that prefers not to turn the federal government into a safety net for those that can't work and believes accommodations should be about enabling employees to work, rather than not work.
He instead argues that the court is merely there to determine whether something is within legal bounds. Gorsuch said the court is meant to prevent intentional discrimination cases, Raphan noted — not to be a super-personnel department for the private sector.
These opinions shed light on how he may rule on upcoming Supreme Court cases, particularly the NLRB arbitration agreement case if he is confirmed in time.
4 cases to keep an eye on
The legality of arbitration clauses
The Supreme Court is set to hear three upcoming cases on arbitration in the coming months. The court's final ruling on this issue — and more specifically, arbitration-mandated employer contracts — will be a rather important indicator of the direction of workers' litigation rights.
Employers began writing arbitration clauses into worker contracts in order to reduce the incidence of class action suits. Such waivers are already common for contracts involving credit cards and cell phones.
In 2011, the court sided with AT&T, permitting arbitration clauses under the Federal Arbitration Act. But other federal court rulings have made the issue less straightforward. The 9th U.S. Circuit Court of Appeals, for example, sided with the NLRB against Ernst & Young last August, determining that EY's contract clause denied employees the right to seek class action litigation.
The EY case led to NLRB action against similar anti-class action clauses regarding employees of American Express, Citigroup and Domino's.
Smaller employers stand to lose out the most if the court rules against arbitration clauses. Startups like WeWork, Uber and Square have been criticized by workers' rights advocates for forcing prospective employees to sign such agreements and stripping them of legal rights.
Raphan said that Gorsuch would likely view class action waivers favorably, citing a decision in the 10th circuit in which Gorsuch "expressed approval of such agreements."
Title VII and sexual orientation protections
While not currently under SCOTUS review, enough disagreement could occur between the circuits that it could land on the docket. Cases on the dockets of both the 7th Circuit Court of Appeals and 11th are attempting to answer: Does the Title VII protection against sex discrimination cover sexual orientation and gender identity?
The EEOC argues that the statute includes sexual orientation. Years of court precedent do not agree. But the 7th Circuit surprised court watchers when it took up the case once again, reflecting the frustration judges are having with the rule. Raphan said sexual orientation protection may follow a similar path to protection from sexual harassment. Statutes didn't expressly defend such protections in their text, but courts eventually decided that the intent was present anyway.
At least one federal judge has ruled that the statute does in fact protect LGBT persons, and SCOTUS did make a fairly solid declaration of support for LGBT rights with the ruling on same-sex marriage that came down in 2015.
If the case moves in favor of LGBT protections, it could cause complications for religious accommodations in some organizations.
Browning-Ferris and joint employer liability
The phrase "joint employer" has caused no shortage of headaches for HR pros. Last year, the NLRB's Browning-Ferris ruling claimed any organization that contracted services from temp employment agencies was jointly liable with the temp agency. The broad nature of the ruling threatened to turn the franchiser/franchisee relationship on its head.
Right now, employers are instructed to limit their joint relationship with franchisees or contracted services as much as possible. But the new administration may put the kibosh on attempts to expand the joint employer relationship due to their expressed willingness to deregulate.
"Are agencies going to look for the option to expand that definition? If we believe everything we hear, it does not seem likely," Raphan said of the DOL and NLRB under Trump.
That case is currently under appeal in the U.S. Court of Appeals for the District of Columbia Circuit, and oral arguments are set to be heard next month. Stay tuned.
FLSA tip pooling
The DOL caused quite a stir when it expanded the tip pooling rule in 2011, barring restaurants from making front-of-the-house staff share tips with those in back-of-house positions such as dishwashers and cooks. Seven states have banned the practice entirely.
The decision potentially lies with the Supreme Court, as various business groups, including the National Restaurant Association, have petitioned the high court. Organizations are questioning whether it was within the DOL's authority to ban the practice at all.
Under the Obama administration, executive branch entities like the DOL enjoyed more expanded power to interpret and expand statutes. The Trump administration has been outwardly against such regulation so far.
In general, most watchers are expecting a decrease in regulation under the new admin. While many employers will welcome that, the current upheaval is troubling regardless which way the pendulum is swinging.
"The employer community is eager for certainty in the area of regulations because it is very challenging to manage a workforce when there's a patchwork of regulations," Raphan said.