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Friday, July 19, 2013

High Court Gives Employers Gifts

By: Tommy Eden

By all accounts this last term of the Supreme Court was good for employers. The Court released decisions that will make it more difficult for employees to bring certain types of employment litigation.

In Oxford Health Plans v. Sutter justices unanimously affirmed an arbitrator's decision to allow arbitration on a classwide based on broad contractual language that did not expressly discuss class actions or class arbitration. The Supreme Court's deference to the arbitrator is a blueprint for employers looking to escape costly jury trials.

In American Express v. Italian Colors Restaurant the Court ruled that the Federal Arbitration Act does not allow a court to invalidate an arbitration agreement containing a class arbitration waiver simply because it would cost plaintiffs more to arbitrate their claim than they could possibly recover.

In Nitro-Lift Technologies LLC v. Eddie Lee Howard et al., the Court admonished the Oklahoma Supreme Court for voiding a non-compete agreement that contained an arbitration clause, saying the contract's validity was a matter for an arbitrator, not the courts to decide.

In University of Texas Southwestern Medical Center v. Nassar, the Court determined that a worker bringing a Title VII retaliation claim must show that retaliation was the "but-for" cause of an adverse employment action; i.e. the alleged retaliation would not have occurred absent an improper motive on the employer's part.

In Vance v. Ball State, the Court redefined "supervisor" more limited when it comes to harassment suits. Supervisor's actions in harassment cases can result in an employer being found to be vicarious liable. Now to be considered a supervisor one must have the ability to make a significant change to employment status, such as hiring, firing, failing to promote, reassigning with significantly different responsibilities or causing a significant change in benefits.

Common Sense Counsel: Gifts not fully accepted and acted upon are worthless. These cases will certainly make a lot of employers look at adopting employment arbitration agreements to reduce the risk of costly employment litigation.

All employers should consider taking the following steps: 1) only classify supervisors as those who fit into the narrow definition adopted by the high court; 2) when dealing with “sacred cow” employees always document legitimate nondiscriminatory business reasons and follow your handbook; 3) seriously consider adopting an employment arbitration provision in your handbook with an employee sign off that also includes class wide arbitration of all disputes; 4) designate a private panel of qualified arbitrators conveniently located for your business for the aggrieved employee to pick from; and 5) cover all potential employment disputes using broad arbitration language. See to prepare for Guns in the Parking Lot Act August 1.

Tommy Eden is a Lee County native, an attorney with the local office of Constangy, Brooks & Smith, LLP and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901.

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