Legal Blog

How Recent Supreme Court and Other Legal Decisions Impact Your Workplace: Hobby Lobby, NLRB, and Ball State

A recent batch of Supreme Court decisions has dominated the news, but if you’re not a legal professional, these cases may raise more questions than answers. What does the so-called “Hobby Lobby” decision mean for your workplace? Why were President Obama’s recess appointments to the National Labor Relations Board ruled invalid? How is a supervisor defined under Title VII? Is telecommuting now considered a reasonable accommodation under the ADA? And last, and certainly most profound: does a Facebook “Like” count as protected speech? In this article, I’ll explore the first three questions. Check back for my next installment on everything you need to know about rulings regarding telecommuting and protected speech online, as well as information on using social media when hiring. Several controversial court decisions lie ahead—if you’re a constitutional law junkie, I guarantee these cases will pique your interest.

Burwell v. Hobby Lobby

Before I dive into what the Hobby Lobby decision means for your workplace, allow me to share some background. President Clinton signed the Religious Freedom Restoration Act (RFRA) into law in 1993. The RFRA seeks to limit legislation that “substantially burdens a person’s free exercise of religion,” unless the agency can demonstrate that application of the burden a) advances a “compelling governmental interest;” and b) is the least restrictive method possible to do that. After an amendment in 2000, the act now clarifies “exercise of religion” to be any “exercise of religion whether or not compelled by, or central to, a system of religious belief.” Among its stipulations for coverage, the Patient Protection and Affordable Care Act (ACA) requires that employer group health plans pay for preventative care for women, including twenty FDA-approved contraceptive methods as chosen by the Health Resources and Services Administration—a component of Health and Human Services (HHS). Four of these methods terminate a pregnancy after conception. Churches and other religious institutions do not have to pay for contraceptives for employees also, religious nonprofit organizations are effectively exempt as well. In the Hobby Lobby case, three companies were seeking a similar exemption. These for-profit organizations refused to pay for after-conception birth control on the grounds of religious belief. Such methods, they argued, contradicted their Christian conviction that life begins at conception. These three businesses—Hobby Lobby Stores, Mardel Christian & Education and Conestoga Wood Specialties—each sued the HHS separately, but joined for argument in the U.S. Supreme Court. The “Hobby Lobby” shorthand refers to the combined cases. The plaintiffs’ disagreement stemmed from the severe economic consequences they would face by not furnishing the four contraceptives. Hobby Lobby Stores would have to pay a yearly penalty of $475 million while Mardel and Conestoga would be subject to $33 million and $15 million, respectively, per year. Over the course of the hearing, the U.S. Supreme Court accepted over 80 amicus curiae briefs—documents filed by parties not directly involved in the case, but who express passionate interest in its outcome. This outpouring of opinion by and large favored the plaintiffs, and included religious groups, members of Congress and the Senate, as well as various legal and health organizations. In a 5–4 vote, the Court held that “the regulations promulgated by the Department of Health and Human Services requiring employers to provide their female employees with no-cost access to contraception violate the Religious Freedom Restoration Act.” It argued that the government could assume the cost of the four contraceptives itself, or it could grant the same exemption that religious organizations have to for-profit companies who oppose the contraceptive methods due to religious belief. This decision is narrow in scope. It does not apply to other insurance coverage mandates, so vaccinations, blood transfusions, and other medical practices remain unaffected irrespective of whether they clash with an employer’s religious beliefs. And as Justice Alito wrote, the decision does “not provide a shield for employers who might cloak illegal discrimination as religious practice.”

NLRB v. Noel Canning, et al.

Like Hobby Lobby, this decision should be fascinating to anyone with an interest in constitutional law or its history. In fact, the crux of this case can be traced back to the original drafting of the Constitution and the foundation of the United States. Noel Canning, a Pepsi-Cola distributor, asked the Federal Court to review a National Labor Relations Board (NLRB) order. Three of the five board members, the company contended, were invalid appointments, and thus the Board lacked a quorum. The conflict arose while Noel Canning was going through a labor dispute: the NLRB ordered the company to execute a collective bargaining agreement and reimburse employees for losses incurred during the dispute. In a stunning victory for employers in unionized settings, the Court ruled in favor of Noel Canning. Why? The quick answer is that President Obama appointed three Board members to the NLRB in too slight of a time frame. In December 2011, the Senate passed a resolution commencing a series of pro-forma sessions every Tuesday and Friday from December 17th, 2011 through January 20th, 2012. Essentially, pro-forma sessions occur to meet the minimum requirements of Senate guidelines. At this time, nominations of the three ultimately invalid members were still pending in the Senate. President Obama invoked the Recess Appointments Clause to appoint these three members in the three days between pro-forma sessions on January 3rd and January 6th. The Recess Appointments Clause gives Presidents the power to fill all vacancies that may arise during a Senate recess—either during a session, if there’s a break; or between sessions. There were two background considerations that are relevant to the questions here. The first was whether the Recess Appointments Clause is a subsidiary method of appointing officers of the United States. In its decision, the Court weighed historical precedent and the intentions of our nation’s founders. It asserted that while “such appointments can be both necessary and appropriate in certain circumstances,” the authors wrote the Clause at a time when the Senate met for only one annual session. The President should not use the Clause as a means to sidestep Senate confirmation. And though no language exists to detail the valid interval length for the Clause to apply, the Solicitor General acknowledged that “a three-day recess would be too short.” Three days of inaction are “not a significant interruption of legislative business” and “not long enough to trigger the President’s recess appointment power.” What are the consequences? Decisions that were rendered by the NLRB during the one and a half year period, by these recess appointees, can all be appealed. That’s about 800 decisions. Furthermore, the NLRA does not have a statute of limitations, so an employer can still appeal a decision today, and perhaps long in to the future. Clearly, the NLRB may have a long docket on its hands.

Vance v. Ball State University

The Supreme Court made this decision in 2013, but I bring it to your attention because it remains relevant and may have passed by some practitioners’ and companies’ radars. In brief, this case defined who could be considered a “supervisor” under Title VII of the Civil Rights Act of 1964. Under Title VII, employees have the right to be free from a hostile work environment and discrimination by reason of race, color, sex, or national origin. The law holds employers liable for direct discrimination and harassment, or as a result of negligence, i.e. turning a blind eye to abuse of an employee or ignoring a victim’s assertions. In addition, companies may be held “vicariously” liable in situations in which a supervisor’s behavior creates a hostile work environment—unless:

  1. the employer exercised reasonable care to prevent and correct the harassing behavior; and
  2. the employee unreasonably failed to take advantage of the preventative or corrective opportunities that the employer provided.

In other words, these conditions deal with scenarios where an employee fails to read their employee handbook and has not brought their complaint to the proper person in charge. As you may imagine, employers wanted a stricter definition of a “supervisor.” If someone considered herself a supervisor was harassing an employee, and the victim didn’t bring up the issue, the employer would want to avoid liability for conduct it did not know occurred. The Court clarified the issue in 2013. It held that a supervisor is any employee with the authority to take “tangible employment actions against the victim employee, such as hiring, firing, failing to promote, reassigning the victim to significantly different responsibilities, or making a decision that causes a significant change in benefits.” There are practical implications to this holding: employees cannot disclaim their supervisory status by denying their authority to fire an employee and still wield the power to induce HR to take that same action. Nor can an employer funnel supervisory responsibilities to only a few employees. The onus for co-worker against co-worker abuses still falls on employers, as was true prior to this decision. Whether Congress overrides this decision remains to be seen, but employers should take care to delineate supervisory responsibilities and—as always—watch out for any signs of workplace harassment.



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