Important Employment Cases in U.S. Supreme Court

Writing in the October newsletter of the Employment Law Committee, Eve B. Masinter and Melissa M. Mulkey of McGlinchey Stafford, New Orleans, discuss cases the U.S. Supreme Court will consider in its current term:

The U.S. Supreme Court has several important employment cases on its 2003-04 docket. They range from a challenge to a hiring policy under the Americans with Disabilities Act to recovery of attorney's fees under the Equal Access to justice Act.

Raytheon Co. v. Hernandez

On October 8, the Court heard arguments in the first, and likely the most significant, of the cases. (No. 02-479, decision below, 298 F.3d 1030 (9th Cir. 2002).) Hernandez involves an appeal from the Ninth Circuit's decision reversing a grant of summary judgment in favor of Raytheon in claims brought by a former employee, Joe Hernandez.

He worked for Hughes Missile Systems (later acquired by Raytheon) for 25 years. In July 1991, he tested positively for cocaine use on the job, an offense which was grounds for his immediate termination. Rather than being terminated, however, he was given the option to resign in lieu of termination, which he choose to do. This was noted on his personnel file and pursuant to an "unwritten" policy, it resulted in his ineligibility for rehire. Two and a half years later, in January 1994, Hernandez applied to be rehired by Hughes. he was not selected for rehire based on the unwritten policy against rehire of individuals who had resigned in lieu of termination.

He sued under the Americans with Disabilities Act (ADA), alleging that he was denied employment based on his record of drug addiction. In reviewing the district court's grant of summary judgment, the Ninth Circuit determined that Hernandez met his prima facie burden of demonstrating that he had a record of disability (drug addiction), applied and was qualified for the position, and was not hired because of his record of disability. There were disputed issues of fact as to whether the employer knew of the alleged disability at the time of its decision.

In examining whether the employer met its burden of articulating a legitimate nondiscriminatory reason for its actions, the Ninth Circuit held that "Hughes' unwritten policy against rehiring former employees who were terminated for any violation of its misconduct rules, although not unlawful on its face, violates the ADA as applied to former drug addicts whose only work-related offense was testing positive because of their addiction." The court concluded that not only had Hernandez provided sufficient evidence to proceed to a jury on his failure to hire claim, but that "a policy that serves to bar the re-employment of a drug addict despite his successful rehabilitation violates the ADA."

This case presents some interesting issues. First, it will be the first time that the Supreme Court has addressed the issue of a "qualified individual with a disability" in the context of a recovered drug addict. Second, although the Ninth Circuit specifically found that the plaintiff's "disparate impact" claim was time-barred, it appears to have utilized a disparate impact analysis by holding that an employer's articulated reason is not sufficient if based on a policy that, in effect, bars employment based on a disability. Finally, there is the broader issue of an employer's use of a neutral policy and under what circumstances employers must tailor policies to the individual circumstances of its employees or applicants.

EDITOR'S NOTE: On December 2, the Court vacated and remanded the case to the Ninth Circuit, without reaching the issue on which certiorari was granted. The Court held that the Ninth Circuit improperly applied a disparate-impact analysis in a disparate-impact case in order to reach its holding.

General Dynamics Land Systems v. Cline

On November 12, the Court heard the second of its employment cases. (No. 021808, decision below, 296 F.3d 466 (6th Cir. 2002).) This case also presents a significant issue-whether a claim for "reverse" age discrimination is actionable under the Age Discrimination in Employment Act (ADEA)-as to which there is a split among the courts of appeals.

The case involves a claim by employees between the ages of 40 and 49 who sued after their employer entered into a collective bargaining agreement providing retiree medical benefits only to persons who had 30 years of service and were 50 years of age or older. This agreement replaced the previous collective bargaining agreement, which required only 30 years of seniority for eligibility, with no minimum age requirement. The employees argued that by entering into this agreement, the employer discriminated against them on the basis of age in violation of the ADEA.

The district court granted the employer's motion for summary judgment on the ground that the ADEA does not prohibit "reverse" age discrimination-actions that favor older workers over younger ones. The Sixth Circuit disagreed, finding that the plain language of the ADEA provides protection to any individual over 40 who is discriminated against on the basis of age.

In contrast, the First and Seventh Circuits have found that the ADEA does not provide a cause of action for "reverse discrimination." In other words, younger workers, even if over 40 and thus protected under the ADEA, cannot challenge practices that favor older workers. These circuits looked beyond the plain language of the ADEA and focused on the intent of the act.

Jones v. R.R. Donnelley & Sons

The Court will resolve another split among the courts of appeals concerning the proper limitations period for racial harassment and termination claims under the Civil Rights Act of 1866 (42 U.S.C. 1981). Specifically, the Court will be asked to determine whether the four-year "catchall" statute of limitations implemented pursuant to 28 U.S.C. 1658, or the statute of limitations from the forum state, applies to section 1981 claims. (No. 02-1205, decision below, 305 F.3d 1205 (7th Cir. 2002).)

For those who enjoy a close examination of statutory interpretation, this is their case. In Patterson v. McLean Credit Union, 491 U.S. 164, 176-77 (1989), the Supreme Court held that section 1981 "extends only to the formation of a contract, but not to problems that may arise later from the conditions of continuing employment." Congress later amended section 1981 by way of the Civil Rights of Act of 1991, specifically making it applicable to "the making, performance, modification and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship." Between these two events, in 1990, Congress enacted a uniform catch-all statute of limitations for "civil actions arising under an act of Congress" enacted after the effective date of the statute and for which a specific limitations period is not provided. 28 U.S.C. 1658.

In this case, the Seventh Circuit addressed whether the federal four-year, or the forum state's more restrictive two-year, limitations period applied. The plaintiffs argued that because, based on the Supreme Court's ruling in Patterson, no cause of action "existed" prior to the enactment of the Civil Rights Act of 1991, the court should utilize the four-year limitations period for these claims. The employer urged that the two-year period was appropriate because section 1658 was intended only to encompass new enactments, not amendments to existing statutes.

Ultimately, after much analysis, the Seventh Circuit adopted the employer's argument. Thus, the forum state's period applied to the plaintiffs' section 1981 claim because the Civil Rights Act of 1991 merely amended section 1981. The Seventh Circuit joined the Third and Eighth Circuits. In contrast, the 10th Circuit has ruled that the catch-all limitations period applies to section 1981 claims.

The U.S. Solicitor General has filed an amicus brief arguing that the four-year period should apply because these claims did not exist until Congress passed the Civil Rights Act of 1991.

Scarborough v. Principi

This case involves a claim for fees under the Equal Access to justice Act (EAJA), and the Court will be asked to determine whether failing to make all of the required allegations in a fee application is jurisdictional, or if a party can amend the application later. (No. 02-1657, decision below, 319 F.3d 1346 (Fed.Cir. 2003).)

After prevailing in the underlying litigation and within the 30-day time period, Scarborough applied for attorney's fees under the EAJA, 28 U.S.C. 2412(d), but he failed to allege in the fee application that "the position of the United States was not substantially justified," as required by the statute. The government argued that this pleading requirement was jurisdictional and that he could not later amend his application.

The Federal Circuit agreed, finding that the required allegations are jurisdictional in nature and must be made within the 30-day application period. This decision is at odds with the Third and Eleventh Circuits, both of which have held that the allegations are pleading requirements that can be met by amendment. The Supreme Court will resolve this split.