Wyatt Employment Law Report


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Sixth Circuit Reversed in Union Benefits Health Case: Supreme Court Rules Against Retired Workers

By Amanda Warford Edge

On Monday, in M&G Polymers USA, LLC v. Tackett, No. 13-1010, the U.S. Supreme Court ruled that ambiguous provisions in union contracts should not be automatically interpreted in favor of a company’s retired workers. The case concerned a union contract from the 1990s that provided free health care benefits to the retirees of a chemical plant in Apple Grove, West Virginia who received pensions. In 2000, M&G bought the plant, and in 2006, it sought to make its retirees contribute to the health care costs. The retirees sued, alleging that they had been promised free benefits for life. The contract, of course, did not directly state whether the parties intended lifetime investiture.

Medical Records & StethoscopeThe district court found for M&G—but according to the Sixth Circuit, the retirees’ benefits had, in fact, vested for life. The Sixth Circuit relied on a long line of precedent, dating back to 1983, in support of this holding. Essentially, this precedent presumed the existence of lifetime benefits, even when the contracts at issue did not specify them. In Tackett, the Sixth Circuit expanded upon this presumption, holding that Continue reading


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Supreme Court Dismisses Case Involving Employer Neutrality Agreement

By Edwin S. Hopson

U.S. Supreme Court Building, Washington, D.C. ...

U.S. Supreme Court Building, Washington, D.C. (LOC) (Photo credit: The Library of Congress)

On December 10, 2013, the U.S. Supreme Court issued an order in UNITE HERE Local 355 v. Mulhall, 571 U.S. ___ (2013), No. 12-99, dismissing the writ of certiorari as improvidently granted.  The case involved the question of whether an employer who agrees with a union (1) to remain neutral should the union seek to organize its employees, (2) that the union will be given access (for organizing purposes) to nonpublic areas of the company’s premises, and (3) that the union will receive a list of employees’ names and contact information, is in violation of the Labor Management Relations Act.  This statute makes it a crime for an employer “to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value” to a union that represents or seeks to represent the company’s employees.  29 U.S.C. §186(a)(2).  The lower court, the 11th Circuit Court of Appeals, had held that such commitments by the company violated the LMRA.

The Supreme Court had already received briefs in the case and had heard oral argument before it decided to dismiss the case without deciding it.  Three Justices, Breyer, Sotomayor and Kagan, dissented and argued that the Court should have kept the case and requested additional briefing on several issues.


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Supreme Court Rules Drug Company Sales Employees Are Not Entitled to Overtime Pay

By Edwin S. Hopson

In Christopher et al. v. SmithKline Beecham Corp., d/b/a Glasxosmithkline, 567 U.S. ___ (2012), No. 11-204, decided June 18, 2012, the U.S. Supreme Court, in a 5-4 decision, ruled that certain drug sales employees are to be treated as “outside salesmen” under the Fair Labor Standards Act (FLSA) and therefore are exempt from the overtime requirements of the law.  The drug sales employees had filed a private action against their employer under the FLSA seeking unpaid overtime pay.  The U.S. Department of Labor had filed an amicus brief supporting the employees’ claims.

The court’s opinion was authored by Justice Alito, who was joined by Chief Justice Roberts, and Justices Scalia, Kennedy and Thomas.  Justice Breyer wrote a dissenting opinion that was joined in by Justices Ginsburg, Sotomayor and Kagan.

The majority, after rejecting any deference to the Department of Labor’s interpretation, reviewed the FLSA and its regulations and concluded that the drug sales employees were exempt even though they only obtained non-binding commitments from doctors to prescribe their drugs to their patients (who actually were the purchasers in most cases).  The statutory provision in question, 29 U. S. C. §203(k), states that “‘[s]ale’ or ‘sell’ includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition.” [Emphasis added].  The majority seized upon the “or other disposition” phrase and ruled for the drug company defendant, pointing out, “Petitioners—each of whom earned an average of more than $70,000 per year and spent between 10 and 20 hours outside normal business hours each week performing work related to his assigned portfolio of drugs in his assigned sales territory—are hardly the kind of employees that the FLSA was intended to protect.” Slip Opinion Page 22.


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Supreme Court Confirms Company’s Right to Prohibit Class Action Claims Being Litigated Under an Arbitration Agreement

By Edwin S. Hopson

On April 27, 2011, in a 5 – 4 decision, authored by Justice Scalia and joined in by Chief Justice Roberts, and Justices Kennedy, Thomas and Alito, the U.S. Supreme Court in AT&T Mobility LLC v. Concepcion, 563 U.S. ____ (2011), held that the Federal Arbitration Act (“FAA”) preempted California law holding that an arbitration provision that disallowed class action proceedings was unconscionable and unenforceable.  Justices Breyer, Ginsburg, Sotomayor and Kagan dissented.  Although the underlying case was commercial in nature, this decision has significant ramifications in the employment law arena in light of the fact that many employers require employees to sign on to arbitration agreements or programs that limit the types of disputes that can be litigated in court or before administrative agencies.  Indeed, Justice Scalia relied in part on and cited Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 33 (1991) which allowed age discrimination claims to be arbitrated.   Also, this case could have application to collective bargaining agreement arbitration provisions as well.


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Supreme Court Decides FLSA Anti-Retaliation Provision Includes Oral Complaints

By Edwin S. Hopson

The U.S. Supreme Court on March 22, 2011,  issued its decision in Kasten v. Saint Gobain Performance Plastics Corp., 563 U.S. ____, No. 09-834 (2011) holding, in a 6 to 2 decision authored by Justice Breyer, that under the Fair Labor Standards Act (FLSA) anti-retaliation provision an oral complaint to a supervisor comes within the scope of 29 U. S. C. §215(a)(3), which forbids employers from discharging “any employee because such employee has filed any complaint” claiming a violation of the FLSA.  Kasten had lost in the district and appellate courts which had found that the term “filed” required a written complaint.  Justice Breyer, in a decision joined in by Chief Justice Roberts, and Justices Kennedy, Ginsburg, Alito and Sotomayor (Justice Kagan took not part in the case), noted that the statutory language must be viewed in context and with the purpose of the law in mind.  He also pointed out that a number of agencies allow oral “filings” and that the U.S. Department of Labor’s consistent interpretation of the provision included oral complaints as well as written ones.   The issue of whether the complaint must be filed with the government in order to come within the anti-retaliation provision was expressly not decided by the court.

In dissent, Justice Scalia, joined by Justice Thomas, argued, among other things, that the complaint must be in writing to be consistence with the term “complaint” as used elsewhere in the FLSA.  He also contends that it made no sense to decide the “oral versus written” question while side-stepping the question of who the addressee of the complaint should be, stating:  “[i]t presumably does not include a complaint to Judge Judy.” Slip opinion, page 8.