Court is in Session: Three Employment Law Cases Before the Supreme Court to Watch This Term

The United States Supreme Court is now in session and three cases stand out on the docket that private employers will want to follow. While not the blockbusters heard during the Court’s last session, these cases will address important issues ranging from the proper interpretation of Sarbanes-Oxley Act’s whistleblower provision to the breadth of the President’s recess-appointment power to what constitutes “changing clothes” under the FLSA.

#1: Lawson v. FMR LLC (Fidelity Investments)

Lawson v. FMR LLC asks the Supreme Court to determine whether an employee of a privately-held contractor or subcontractor of a public company is protected from retaliation by Sarbanes-Oxley Act’s (“SOX”) whistleblower provision.

In a nutshell, Petitioners made repeated complaints regarding their employers’ practices to company executives and, for one Petitioner, to the Securities and Exchange Commission; each was thereafter subjected to adverse employment action. They contend that they are protected by Section 1514A of SOX which prohibits certain public companies and their contractors from retaliating against an “employee” who engages in protected activity. On the other hand, Respondents argue that the “employee[s]” protected from retaliation are limited to employees of public companies themselves, and do not include those who work for private contractors of a public company.

The district court found for the Petitioners, but was reversed by the United States Court of Appeals for the First Circuit. If the interpretation urged by Petitioners is adopted, any employer doing business with a public company could potentially become covered by SOX’s whistleblower provision, a significant expansion of SOX. Lawson is set to be heard on November 12, 2013.

Orrick prepared the amicus brief in this case filed by the Securities Industry and Financial Markets Association (SIFMA). To obtain a copy of that brief, or other briefs in the case, contact Mike Delikat.

#2: National Labor Relations Board v. Noel Canning

NLRB v. Noel Canning will explore the breath of the President’s constitutional recess-appointment power. At issue is whether the President’s recess-appointment power: (i) may be exercised during a recess that occurs within a Senate session or is limited to recesses that occur between Senate sessions; (ii) may be exercised to fill vacancies that exist during a recess or is limited to vacancies that first arose during that recess; and (iii) may be exercised when the Senate is convening in pro forma sessions.

During Senate pro forma sessions, President Obama invoked the Recess Appointments Clause (“Clause”) and appointed three new National Labor Relations Board (“NLRB”) members. Noel Canning contends that an order of the NLRB, so composed, is invalid because the appointments were not authorized by the Clause. The United States Court of Appeals for the District of Columbia found that the appointments were not authorized because none of the NLRB vacancies had arisen during an inter-session recess and had been filled during that recess. On appeal, NLRB argues the Court of Appeals erred in its holding and further contests Noel Canning’s claim that the occurrence of pro forma sessions meant that the Senate was in session for the purposes of the Clause.

This case is noteworthy because if the President’s recess appointments are invalid, then the rulings of the NLRB between January 4, 2012 and July 30, 2013 in which these appointees have participated would be called into question. In the year between the disputed recess appointments and the D.C. Circuit’s opinion alone, the NLRB ruled on over 200 cases. One significant decision rendered during this period was New York Party Shuttle, LLC & Fred Pflantzer, 359 NLRB No. 112 (May 2, 2013), which held that an employee’s Facebook postings criticizing his employer constituted protected union organizing activities. Click here to read more on New York Party Shuttle, LLC & Fred Pflantzer. Argument in this case has not yet been scheduled.

#3: Sandifer v. United States Steel Corp.

Under Section 203(o) of the Fair Labor Standards Act (“FLSA”), an employer need not compensate a worker for time spent “changing clothes” if that time is excluded from compensable time under a collective bargaining agreement. This case asks the Supreme Court to determine what constitutes “changing clothes.”

United States Steel Corporation (“U.S. Steel”) workers argue that donning and doffing mandatory safety wear does not constitute “changing clothes” within the meaning of FLSA § 203(o) because safety wear is not “clothes,” and therefore should be compensable time. The district court sided with U.S. Steel finding that such time is not compensable, and the United States Court of Appeals for the Seventh Circuit affirmed. The Supreme Court will consider whether employers and employees in unionized industries will be permitted to negotiate on whether time spent changing into and out of protective gear is compensable and will determine how much deference to give the Department of Labor’s interpretation of changing clothes. The United States submitted an amicus curiae brief supporting U.S. Steel. The Supreme Court will hear argument on this issue on November 4, 2013.