The United States Supreme Court will finally weigh in on some important employment law issues that have divided the appellate courts for years. It also recently decided a class arbitration case with employment ramifications.
Does Title VII of the Civil Rights Act Apply to LGBTQ Employees?
Title VII prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion. In recent years, the Supreme Court had declined calls to decide whether the “because of sex” language applies to discrimination based on sexual orientation and gender identity. But, the Court recently announced it will decide two cases alleging discrimination based on sexual orientation and one based on gender identity.
In Zarda v. Altitude Express, the Second Circuit Court of Appeals held that Title VII does prohibit discrimination based on sexual orientation. However, in Bostock v. Clayton County, the Eleventh Circuit held the opposite, setting up a circuit split the Supreme Court could no longer ignore. In both cases, employees alleged they were fired due to their sexual orientation.
In R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission, the Court considers Title VII’s applicability to transgender employees. In the case, the Sixth Circuit held that Title VII protects transgender employees from discrimination and an employer cannot use religious beliefs as a justification for discrimination.
The Supreme Court likely will hear oral arguments later this year with decisions coming from the Court in 2020.
Is the Affirmative Defense that an Employee Bringing a Title VII Lawsuit Failed to Exhaust Administrative Remedies Waivable?
Generally, before filing a federal lawsuit alleging discrimination under Title VII, a person must file a charge of discrimination with the EEOC. When a plaintiff fails to exhaust this administrative remedy, employers will seek dismissal of the federal lawsuit.
In Fort Bend County v. Davis, the Court will determine whether the requirement that plaintiffs bringing employment discrimination claims must present their claims to the EEOC before filing lawsuits is a claim-processing rule or a jurisdictional prerequisite. The question is important because claim-processing rules can be waived, whereas jurisdictional rules cannot. If held to be a jurisdictional rule, an employer could bring up the issue at any time, no matter how much time had passed.
In Fort Bend, the Fifth Circuit held that the requirement was merely a claim-processing rule and that the employer waived the affirmative defense by waiting five years to raise the issue. Regardless of the Court’s decision, it is best practice to raise such a defense as soon as applicable, absent extreme circumstances.
Supreme Court Denies Class Arbitration Absent Clear Agreement
In Lamps Plus v. Varela, the Court held that plaintiff-employees are barred from class arbitration in cases in which the agreement is ambiguous on the issue. In Lamps Plus, roughly 1,300 employees had their tax information stolen due to a data breach. One employee brought suit in federal court, but the district court ruled he could only bring the claim in arbitration due to the arbitration agreement that he signed when starting with the company. The district court also ruled that the employee could arbitrate on behalf of the entire class of injured employees because the agreement was ambiguous regarding class arbitration.
The Ninth Circuit affirmed the lower court’s decision, applying the principle that contract ambiguities should be construed against the party that drafted the contract. However, the Court, in a 5-4 decision, sided with the employer, holding that parties cannot be compelled to participate in class arbitration absent clear agreement. Specifically, ambiguity “does not provide a sufficient basis to conclude that parties to an arbitration agreement agreed to sacrifice the principal advantage of arbitration,” cost savings. This decision continues a string of decisions strengthening employer’s rights to compel individual arbitration, as opposed to riskier and potentially more harmful class arbitration.