HR and the Courts: Recent Rulings and Legislation

Each month, CUPA-HR General Counsel Ira Shepard provides an overview of some labor and employment law cases and regulatory actions with implications for the higher ed workplace. Here’s the latest from Ira:

University Argues ERISA Claims Not Subject to Jury Trial

MIT is one of a dozen or so prominent universities to be sued in separate Employee Retirement Income Security Act (ERISA) collective actions across the country claiming breach of fiduciary duty for offering too many investment choices and allegedly charging unreasonably high administrative fees among other fiduciary charges and allegations. A number of the cases have been dismissed by federal judges, and at least one was settled. Many are in various stages of preliminary litigation, with some possibly heading to trial.

In late August, MIT’s trial counsel argued to the federal district court judge handling the case that in accordance with Supreme Court precedent, the plaintiffs do not have a right under ERISA to a jury trial. They argue instead that the case should go to a bench trial, wherein the applicable sitting federal district court judge conducts the proceedings and decides the outcome.

MIT’s counsel argued that “ERISA itself provides no express right to a jury trial, and the Seventh Amendment only guarantees the right to a jury trial in suits at common law.” The counsel also argued that the Supreme Court has interpreted “suits at common law” to exclude ERISA lawsuits.

We will follow developments in this and the other university ERISA lawsuits.

California Sexual Harassment Legislation Restricting Arbitration and Non-Disclosure Agreements Headed to Governor for Signature

California lawmakers recently passed legislation which would ban mandatory arbitration of sexual harassment cases in the state and also ban the use of non-disclosure agreements prohibiting employees from disclosing sexual harassment violations. The legislation would allow for “voluntary” arbitration of sexual harassment litigation and would allow plaintiffs to request non-disclosure agreements but would ban employers from requiring them as a condition of settlement. The California legislature is also working on six other bills inspired by the Me Too movement.

New York was the first state to act in this area and already restricts mandatory arbitration of sexual harassment claims and non-disclosure agreements. In addition to employees, the New York law also protects contractors and others from workplace sexual harassment. Commentators state similar legislation is “in the works” or being considered for proposal in several other states.

Appeals Court Affirms University’s Summary Judgement Victory Rejecting Former Professor’s National Origin Discrimination Allegations and Retaliatory Discharge Claims

The U.S. Court of Appeals for the Fourth Circuit (covering Maryland, Virginia, West Virginia, North Carolina and South Carolina) affirmed a trial court’s decision to dismiss a former professor’s claims that Longwood University denied her tenure because of her national origin and denied her due process (Balas v. W. Taylor Reveley IV, et al. (4th Cir, Case #17-1991, 8/16/18)).

The plaintiff had taught at the university for seven years and claimed she was denied tenure because of her national origin and then was retaliated against by being fired after she raised the national origin discrimination claims. The trial court found that the university presented a valid reason for her tenure denial and firing (the university stated that her teaching and academic work was sub-par) and that she failed to show that the reasons proffered were pretextual.

OFCCP Issues New Enforcement Directive Calling for Investigators to Factor in Religious Freedom in Alleged LGBT Discrimination Matters

The Office of Federal Contract Compliance Programs (OFCCP) recently issued a new enforcement directive calling for investigators to factor into their investigations of LGBT cases recent U.S. Supreme Court rulings and White House Executive Orders that protect religious freedom.

Commentators say the directive was done to target the Labor Department’s ban on bias against gay and transgender workers. The acting OFCCP director stated in issuing the directive that these instructions are connected to an upcoming rulemaking that will be added to the OFCCP’s regulatory agenda.

State Marijuana Laws Conflict With Federal Mandate, Leaving Disability Cases to Be Determined Differently Depending on Employers’ State of Operations

Vermont is the latest state to legalize limited recreational use of marijuana for adults over 21 years of age (the state has already legalized the use of medical marijuana). In light of these developments, drug testing and disability cases continue to raise questions. The federal government guidance under the Americans with Disabilities Act is that an employer is not required to accommodate the use of medical marijuana, even if legally prescribed under a state law, because the use is still illegal under federal law. It is commonly interpreted even in states where recreational use and medical use of marijuana is permitted that use on the job which results in impairment is not allowed and generally can be grounds for termination. There may be exceptions under some state disability laws where medical marijuana use is permitted during working hours for a disability if the use does not create impairment and the job is not safety sensitive.

Current best practice is to seek guidance from local counsel in your state if you operate in a state which has legalized the use of medical marijuana and/or its use for recreational purposes. Employee policies and handbooks should be reviewed and revised depending on your state of operation for the latest compliance practices in your state.