There are three major cases of interest to our clients that will be decided by the U.S. Supreme Court this year during its October term. One is Friedrichs v. California Teachers Association, previously discussed in The Workplace Report. In Friedrichs, the Supreme Court will address the question as to whether teachers who are members of a public sector collective bargaining unit may be required to pay fair share fees even though they choose not to belong to the union that represents employees in the bargaining unit. In ruling on this question, the Court is expected to revisit its 1977 decision in Abood v. Detroit Board of Education, in which the Court upheld the imposition of fair share fees, with certain safeguards that are now being challenged as inadequate to protect public employees’ constitutional right to free association.
The second major case is Fisher v. University of Texas. This case also involves a revisiting of a prior Supreme Court decision. In the 2003 case of Grutter v. Bollinger, the Supreme Court upheld an admissions program at the University of Michigan Law School that involved consideration of race, among other factors, in admissions decisions. The Fisher case invites the Supreme Court to reconsider or modify its decision in Grutter, or to clarify the circumstances under which race may be considered as a positive factor in granting admissions to the nation’s higher education programs without violating the Equal Protection Clause of the Fourteenth Amendment to the Constitution.
In the 1990’s, the University of Texas used a race-conscious admissions program to increase enrollment of minorities and promote diversity in the student body. In 1996, following the decision of the Fifth Circuit Court of Appeals in Hopwood v. Texas, the University abandoned that program, but reinstituted consideration of race in admissions following the Grutter decision by the Supreme Court. In 2008, Abigail Fisher was denied admission to the University of Texas as an undergraduate, and she filed suit claiming that, but for her race, she would have been admitted. The District Court for the Western District of Texas granted summary judgment for the University, and the Fifth Circuit affirmed. She then filed a writ of certiorari with the U.S. Supreme Court.
On June 24, 2013, the Supreme Court ruled, by a vote of 7 to 1, to vacate the Fifth Circuit’s opinion and remand the case back to the Fifth Circuit for a determination as to whether the admissions program at the University of Texas met the Supreme Court’s “strict scrutiny” standard for upholding a race-conscious admissions program. The “strict scrutiny” standard requires, in this circumstance, that a race-conscious admissions program may be upheld in the face of an equal protection challenge if it is “necessary to further a compelling government interest” and is “specifically and narrowly framed to accomplish that purpose”. On July 15, 2014, the Fifth Circuit ruled, by a 2 to 1 vote, to uphold the University’s admissions program, and Fisher then petitioned for review.
The issue for decision by the Supreme Court is: “Does a public university violate the Equal Protection Clause of the Fourteenth Amendment when it considers race in admissions decisions?” It is clear in this regard that pure quota admissions systems are unconstitutional and that, under the Grutter holding, a university’s admission scheme to promote diversity in the student body can stand only if race is considered among many factors in making individualized enrollment decisions. In Fisher, the Supreme Court has the option to discontinue reliance on the Grutter decision, to limit that holding to its facts, or to further clarify the circumstances under which a public university’s race-conscious admissions program can survive strict scrutiny.
One of the factual elements of the case that is bound to attract the Court’s attention is that, by state law in Texas (the “Top Ten Percent Law”), the University guarantees undergraduate admission to all in-state applicants whose grades place them in the top ten percent of their high school graduating classes. Fisher contends that the University can achieve its diversity goals, or at least some of them, without a race-conscious admissions program simply by means of the Top Ten Percent Law. It will be interesting to see if the Court adopts that argument in rendering its decision.
The third major case is Braun v. Wal-Mart Stores, Inc. Braun comes before the Supreme Court on writ of certiorari from the Pennsylvania Supreme Court, which had upheld a judgment of nearly $188 million against Wal-Mart’s Pennsylvania stores in a case involving off-the-clock work and an alleged practice of requiring or allowing employees to work through Company-mandated break periods. The issue before the U.S. Supreme Court is whether the method of proofs allowed by the Pennsylvania trial court to establish liability (essentially, statistical compilations using company records which were then extrapolated to the class as a whole) violated the “trial by formula” limitations established by the Supreme Court in the 2011 case of Wal-Mart Stores, Inc. v. Dukes. But the substantive rulings in the courts below may establish a theory of liability that could prove troublesome to other employers, including Illinois public employers.
In Braun, an employee working an 8-hour day was entitled to two 15-minute paid break periods. The entitlement to break periods was not only specified but mandated in the Wal-Mart employee handbook. The Braun plaintiffs claimed, however, that, because of understaffing, employees often were required or encouraged by management to skip or work through their break periods. They contended that they and similarly situated class members were entitled to additional compensation for the missed break periods, claiming unjust enrichment, breach of contract, and a violation of the Pennsylvania Wage Payment and Collection Law (WPCL).
Wal-Mart contended that the break periods were paid, so that an employee was paid for the time whether he took the break or not. But the Pennsylvania court said that pay for break periods constituted “wages” under the WPCL and therefore formed an independent basis for a claim of unpaid wages. The break period mandate in the employee handbook, the court said, constituted an “agreement” between the company and the employee to provide paid break periods, an agreement that was not obviated by the disclaimer language of the handbook. The agreement, as characterized by the court, was an agreement to pay 40 hours’ pay for 37 ½ hours work (including any paid meal periods) and 2 ½ hours of paid break time in a workweek. Thus, the court said, “[w]e reiterate that a violation of the WPCL occurs when an employer fails to timely pay the monetary amount associated with a paid, agreed-upon rest break”.
Employers often don’t record or keep track of paid break periods, nor do they require employees to acknowledge receipt of break periods authorized by employer policy. The Braun case suggests that employers may want to begin keeping these additional records.