High Court Hears Arguments in Two Major Employment Law Cases
The U. S. Supreme Court heard two cases that may have significant effects on American employers.
First, on April 16, the Supreme Court examined the overtime classification of home health workers in Long Island Care at Home, Ltd. v. Evelyn Coke.
Under the Fair Labor Standards Act (FLSA), employees who are not exempt from being paid overtime must be paid time and a half for time worked beyond 40 hours in a workweek.
Although domestic workers are covered by FLSA, since 1974, workers providing companion care to infirm and elderly persons have not been covered – because such workers tended to be hired by families. Fast forward 30 years, and companion care workers tend to be employed by home health-care businesses, which are often paid by Medicaid.
In 2004, the Second Circuit federal appeals court struck down certain federal Department of Labor regulations – which had been affirmed by federal appeals courts for the Sixth, Ninth, and Tenth Circuits – and ruled that such workers should be paid overtime.
The Second Circuit found that the regulations were inconsistent with: (1) the Congressional intent behind FLSA; (2) other regulations; and (3) other Department of Labor positions over time. The Court also ruled that the regulations had not been thoroughly explained by the Department of Labor, which showed “a lack of thorough consideration.” See 462 F.3d 48, 51 (2nd Cir. 2006).
The City of New York has claimed that overtime pay for companion care workers could cost $280 million per year – necessitating cuts in such services.
‘Cat’s Paw’ or ‘Rubber Stamp’ Liability
On April 18, the Supreme Court heard argument in a case of subordinate bias, also known as a “cat’s paw” or “rubber stamp” discrimination case, where the company is alleged to have discriminated by rubber-stamping a firing decision made by a low-level supervisor.
In BCI Coca-Cola Bottling Co. of Los Angeles v. E.E.O.C., the HR manager of a large bottling company fired an employee who said that he could not work on Sunday, and that he had been feeling sick. The employee’s job involved stocking soda products in grocery and retail stores, and the weekend’s sales were expected to be heavy due to an advertising campaign.
The HR Manager worked in a different city, never met the employee that she fired, and did not know that the fired employee was black (although this was noted on several documents in his personnel file). Also, the HR manager fired the employee (for insubordination) based only on information from the employee’s regional manager, whom the employee alleged had a history of treating black workers badly and making disparaging racial remarks.
To further complicate matters, the employee was diagnosed with an infection, and received permission from his direct supervisor to have the weekend off. The HR manager and regional manager did not know this when they fired the worker.
The same regional manager – who is Hispanic – previously had allowed a Hispanic worker to have the weekend off to celebrate her birthday.
To date, federal courts have taken different approaches to rubber stamp cases of subordinate bias. Some courts have allowed cases to proceed only where the person who makes an employment decision is biased. Other courts allow cases to proceed where biased subordinates simply influence an employment decision.
In this case, if the court finds for the Equal Employment Opportunity Commission, employers may face expanded liability for discrimination claims.
By Dave Dieteman , Labor & Employment Counsel For more information, contact me at 814/833-3200, 800/815-2660.