Dynamic Year Expected In Labor And Employment Law

President Obama's re-election, a newly active NLRB, and important decisions pending before the Supreme Court promise to make 2013 an interesting year in labor and employment law – domestically and internationally. Here is a summary of key issues we will see in the new year.

Hostile Environment Harassment

One case before the Supreme Court, Vance v. Ball State University,1 may resolve a circuit split concerning how to identify which employees qualify as supervisors whose actions can result in vicarious Title VII liability for a hostile environment, including sexual harassment.

Under established precedent, an employer is vicariously liable for severe or pervasive workplace harassment by a supervisor of the victim. If the supervisor took a tangible adverse employment action against the victim, the employer may be held strictly liable, but, if the supervisor did not take a tangible adverse employment action, the employer may be vicariously liable. Under the latter scenario, the employer may avoid liability if it can prove it exercised reasonable care to prevent and correct harassing behavior, and the employee claiming harm unreasonably failed to take advantage of any preventive or corrective opportunities that could have avoided or reduced the harm.

The Second, Fourth, and Ninth Circuits have held that the "supervisor" liability rule applies to harassment by those whom the employer vests with authority to direct and oversee their victim's daily work. The First, Seventh, and Eighth Circuits have articulated a "bright-line" rule, finding supervisor liability limited to those harassers who have the power to "hire, fire, demote, promote, transfer, or discipline" their victim.

If the Supreme Court decides to adopt the broader definition of "supervisor" used by the Second, Fourth, and Ninth Circuits, employers could find those employees whom they place in charge of a project, however minor, or deputize to dole out shift assignments for the day, deemed supervisors. Employers would favor a bright-line definition, meaning that only individuals who have the power to hire, fire, demote, promote, transfer, or discipline are supervisors.

Affirmative Action

Also pending before the Supreme Court is Fisher v. University of Texas,2 an affirmative action case with the potential to upend thinking about affirmative action and employer diversity initiatives. In Fisher, a white female student denied admission to the University of Texas at Austin alleges that the university discriminated against her on the basis of her race in violation of the Equal Protection Clause of the Fourteenth Amendment. The question presented is whether public universities may use affirmative action policies that take a student's race into consideration in admissions decisions.

In Grutter v. Bollinger,3 the Supreme Court rejected an equal protection challenge to the University of Michigan's use of race as a factor in student admissions. Grutter was a 5-4 decision, with Justice Sandra Day O'Connor writing for the majority; Justices Rehnquist, Kennedy, Scalia, and Thomas dissented. If the Supreme Court rules against the university, it may overturn Grutter and hinder affirmative action policies at public universities.

While it has never been lawful for an employer to make decisions concerning the terms and conditions of employment solely on the basis of minority status, employers have implemented employment practices aimed at increasing their racial and ethnic diversity in the belief that doing so strengthens their business. While not an employment case, Fisher could reshape the perception of affirmative action, even in private industry.

Mandatory Arbitration

Mandatory arbitration of Fair Labor Standards Act collective actions came under fire in a big way...