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Supreme Court Report: Justices Consider Employment Law Issues

Supreme Court Report: Justices Consider Employment Law Issues
  • February 5, 2001

By the end of June 2001, the U.S. Supreme Court is expected to issue rulings in nine employment-related cases on a variety of issues from arbitration to remedies for sexual harassment. Four of the nine pending cases have already been argued; the other five are scheduled for argument by the end of April. The range of issues includes enforcement of individual arbitration agreements; the supervisory status of nurses under the National Labor Relations Act; compensation for lost future wages in a sexual harassment case; and, two ERISA actions, among others.

In a case already decided this term, the Supreme Court upheld an arbitrator's award reinstating a truck driver, who had twice tested positive for marijuana, to a safety sensitive position. The Court determined that, absent an explicit, well defined and dominant public policy to the contrary, the arbitrator's award based on a union contract's "just cause" provision should not be vacated. In reaching its decision, the Court found that federal law and regulations on substance abuse testing for drivers emphasized the role of evaluation and rehabilitation, while leaving the question of punishment to labor-management negotiation. Eastern Associated Coal Corp. v. United Mine Workers, District 17 (121 S. Ct. 462, 165 LRRM 2865, 16 IER Cases 1633).

Mandatory, Pre-dispute Arbitration

In a case likely to have a significant impact on mandatory arbitration agreements outside the union setting, the Supreme Court will decide whether the Federal Arbitration Act, which requires the enforcement of valid arbitration provisions in commercial settings, also applies to employment contracts (Circuit City Stores Inc. v. Adams, U.S., No. 99-1379). The case was argued last November. The employer sought to enforce an arbitration provision in the employee's job application form and prevent him from taking a discrimination claim to court. The arbitration provision also contained a disclaimer stating it did not constitute an employment contract nor alter the status of employment at will.

The U.S. Court of Appeals for the Ninth Circuit found the arbitration provision was an employment contract because signing it was a condition of employment. Broadly interpreting an exception under the FAA for employment contracts, the Ninth Circuit refused to compel arbitration. In contrast, other federal appeals courts have used a more narrow interpretation and applied the FAA to employment contracts, except those where employees directly engage in the movement of goods in interstate commerce.

Among the organizations supporting a decision favorable to arbitration is the Society for Human Resource Management. On behalf of SHRM, Jackson Lewis filed an amicus brief arguing that the arbitration provision should be enforced and that the FAA should be interpreted consistently among the courts to support and encourage the use of arbitration to resolve employment disputes.

Editor's Note: We will continue to track the progress of these cases and will report on the decisions as they are announced.

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