This Littler Lightbulb highlights some of the more significant employment and labor law developments at the U.S. Supreme Court and federal courts of appeal in the last month.

At the Supreme Court

• Recovery of Damages for Property Destroyed During a Strike. On January 10, 2023, the Supreme Court heard oral argument in Glacier Northwest v. International Brotherhood of Teamsters.  At issue is whether the National Labor Relations Act (NLRA) preempts state court lawsuits seeking to recover damages for property allegedly destroyed as part of a strike. The case involves a lawsuit by a construction materials company seeking damages from a union local for concrete that spoiled during a drivers’ strike.  The company appealed a decision by the Washington Supreme Court affirming the dismissal of the state law claims under the Garmon preemption doctrine, which blocks state lawsuits regarding union conduct such as strikes that are arguably protected by the NLRA.

Counsel for the company argued that the state court case should be allowed to proceed because the union’s conduct was not protected under the NLRA, citing other cases in which courts and the National Labor Relations Board have found union activities unprotected. In response to the company’s position, counsel for the union argued that union conduct is not unprotected simply because it causes an employer economic harm. In response, Chief Justice Roberts said, “There certainly is a distinction between economic harm to the employer, which is at the heart of many strikes, and intentional destruction of property. The difference between the milk spoiling and killing the cow.”  

We will report on the Court’s decision when it is issued.

• Religious Accommodation. On January 13, 2023, the Court agreed to review the decision of the U.S. Court of Appeals for the Third Circuit in Groff v. DeJoy, which assessed the issue of undue hardship in a case involving a U.S. Postal Service (USPS) employee’s request for Sundays off for religious observance. Applying the more-than-de-minimis-cost standard set by the Supreme Court in Trans World Airlines, Inc. v. Hardison, the Third Circuit agreed with the USPS that granting the employee’s request would increase the workload for other employees and impact employee morale creating more than a de minimis cost to the employer and create an undue hardship. Accordingly, the Third Circuit concluded that declining to grant the employee’s request to be excused from Sunday work did not violate the religious accommodation requirement of Title VII.

The employee appealed to the Supreme Court, which will likely hear argument in late April and issue a decision by early summer.

In the Federal Appellate Courts

• NLRB 2019 Union Election Rule.  The U.S. Court of Appeals for the D.C. Circuit reviewed a challenge by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) to the NLRB’s 2019 rule governing union representation elections.  In American Federation of Labor v. NLRB, No. 20-5223 (D.C. Cir. Jan. 17, 2023), the D.C. Circuit rejected the AFL-CIO’s claim that the 2019 rule as a whole is arbitrary and capricious. Concluding that the rule is reasonable and was sufficiently explained, the D.C. Circuit endorsed the district court’s finding that “the record establishes that the Board exercised its discretion with relevant information in hand and with eyes wide open concerning the impact of the significant changes that it was adopting.”

The court of appeals also affirmed the district court’s invalidation of three of the rule’s provisions because the NLRB promulgated them without the required notice-and-comment period: those relating to the eligible employee-voters list, the timeline for certification of election results, and election-observer eligibility. As to two other provisions—those regarding pre-election litigation of certain issues and a related change to election scheduling—the D.C. Circuit reversed the district court, finding they were validly promulgated by the NLRB as procedural rules not requiring notice and comment.

The D.C. Circuit also reversed the district court’s finding regarding the so-called “impoundment provision,” holding that “the impoundment provision is contrary to law.” The 2019 rule provides that if a party files a request for review of an election process and the NLRB either grants the request or does not rule on it before the election occurs, “all ballots shall be impounded and remain unopened pending such ruling or decision.”  That provision, the court of appeals held, acts as a prohibited stay in violation of NLRA Section 3(b), 29 U.S.C. §153(b).

• Gender-Based Wage Discrimination.  In Mayorga v. Marsden Building Maintenance, No. 22-1630 (8th Cir. Dec. 20, 2022), the Eighth Circuit upheld summary judgment in favor of the employer in a lawsuit filed by a female building special services worker who alleged she was paid less than two male colleagues who were hired at the same time and performed the same work, in violation of Iowa Code § 216.6A. Applying the same standards as under the federal Equal Pay Act, the Eighth Circuit stated that an employer “cannot escape liability merely by articulating a legitimate non-discriminatory reason for the employment action,” but rather must “prove that the pay differential was based on a factor other than sex.”

Citing prior Eighth Circuit precedent for the proposition that a pay differential based on education or experience is a factor other than sex, the court found the evidence established that the two male employees had more relevant experience: One had operated the machinery used by the company in a previous similar position with another company, and the other had over a decade of experience in general cleaning services and special services combined. In contrast, the appellant had no experience in special services and had to learn how to use some of the special services equipment “on the job.” Accordingly, the Eighth Circuit agreed with the District Court that the pay differential between the female employee and her male counterparts was justified based on the employees’ prior work experience.

• Rule Prohibiting Healthcare Providers from Denying Gender-Affirming Care to Transgender Individuals Barred.  In The Religious Sisters of Mercy v. Becerra, No. 21-1890 (8th Cir. Dec. 9, 2022), a three-judge panel of the Eighth Circuit granted a permanent injunction to religious organizations that challenged a U.S. Department of Health and Human Services rule interpreting the anti-discrimination provision of the Affordable Care Act to prohibit healthcare providers from denying gender-affirming care to transgender individuals and requiring employers to cover gender-affirming care in their employee benefit plans. Affirming the district court’s decision, the Eighth Circuit found the rule violated “the plaintiffs’ sincerely held religious beliefs and fails to satisfy strict scrutiny under the Religious Freedom Restoration Act of 1993 (RFRA).”

The decision largely focused on the government’s arguments that the plaintiffs lacked standing, their RFRA claims were not ripe, and they had not demonstrated “imminent irreparable harm sufficient to justify permanent injunctive relief.” The court rejected the government’s arguments, finding plaintiffs faced a “credible threat” of enforcement and that “the current regulatory scheme” placed them in the impossible position of either “defying federal law and risking serious financial civil penalties, or else violating their religious beliefs.” Quoting the Fifth Circuit decision in Franciscan All. v. Becerra, 47 F. 4th 368 (5th Cir. 2022), a similar case, the court stated, “the loss of freedoms guaranteed by . . . RFRA . . . constitute[s] per se irreparable harm.”

• Alleged Adverse Actions Based on Union Advocacy. In Salmon v. Lang, No. 21-1104 (1st Cir. Dec. 16, 2022), the First Circuit affirmed the district court’s grant of summary judgment to a Massachusetts town, the local school committee, and public school officials in a case by the president of the teachers union alleging First Amendment retaliation and violation of state civil rights laws for union advocacy. The appellant claimed she suffered adverse actions including workplace harassment, disciplinary action, and transfer denials following her complaints about classroom conditions. The appellate court agreed with the district court that there was no causal connection between the employee’s complaints and the alleged adverse actions. Among other things, the court found that a reprimand issued to the employee was justified by her access of student records in violation of the school’s confidential-access policy.

More significantly, as to her claim that denial of her transfer applications was retaliation for speaking out about classroom conditions, the court found appellant failed to establish her applications would not have been denied “‘but for [her] speech.’” The fact that the denial of the transfer requests occurred after the employee’s complaints was insufficient to support an inference of retaliation, the court said, emphasizing that the denial of her transfer applications occurred more than a year after she had complained about classroom conditions. Instead, the court found the evidence firmly established that the denial of the employee’s transfer requests was based on her interview performance and lack of specialized skills and experience compared to other applicants.

As to her claims of harassment, including being escorted from the building by the police when she showed up for an unscheduled meeting and refused to leave, the court held that “no reasonable jury could find that the sum of these events would create a ‘chilling’ effect that would deter a reasonably hardy individual from exercising their union-advocacy rights.”  There was no evidence of “physical force” or “unwarranted ‘heavy-handed use of police power,’” the court found. Moreover, the court concluded, the purpose of the police escort was not to punish or deter the employee from continuing her union advocacy but rather to discreetly and cooperatively expedite her departure to avoid any further disturbance before her students arrived, since she was visibly upset and agitated.  

• Disability Discrimination and FMLA Retaliation. The Eight Circuit affirmed summary judgment for the employer in a case involving an employee with multiple sclerosis who was terminated after 28 years of employment. The appellant in Corkrean v. Drake University, No. 22-1554 (8th Cir. Dec. 13, 2022) was a college Budget and Office Manager who reported directly to the dean. In July 2018 a new dean was appointed and from the outset, before learning of the employee’s medical condition, the dean had issues with the employee’s performance. When the dean discussed with the employee her erratic attendance the employee told the dean she had multiple sclerosis. Human Resources provided the employee with FMLA certification forms, which she completed, and informed her that she needed to notify her supervisor when she was absent for an FMLA-protected reason, which she frequently failed to do. 

The employee’s performance issues continued, and the dean met with the employee a number of times to discuss the problems, including unprofessional communications with staff, failing to pay faculty members the appropriate amounts, missed deadlines, taking unapproved time off for personal reasons, and frequently failing to communicate the reasons for her absences. When the employee’s performance did not improve, an HR representative met with her to discuss the issues and provided her with a performance memorandum listing the performance issues, outlining an improvement plan, describing FMLA procedures, and warning that “failure to achieve immediate and sustained improvement … could result in further disciplinary action.” Two months later, when the employee failed to correct her performance deficiencies, she was terminated from employment. At the termination meeting, the dean provided her with a memorandum detailing her continued mistakes, dismissive attitude toward those mistakes, and continued unapproved non-FMLA absences from work.

The employee filed suit alleging, essentially, that she was terminated because of her disability in violation of the ADA and in retaliation for taking FMLA leave. In affirming summary judgment for the employer on all counts the court found the employer “established a robust, well-documented set of legitimate reasons for [the employee’s] termination” and the employee failed to provide sufficient evidence of pretext, noting that the employee’s supervisor and HR “were always careful to separate performance and unexcused attendance issues from FMLA leave.”