Key Employment Issues Reach The Supreme Court In December 2012

January 23, 2013

By: Jennifer R. Russell

In December 2012, the United States Supreme Court considered several cases of interest to all employers:

  • On December 26, 2012, the Court rejected a request by Hobby Lobby Stores for temporary injunctive relief from a $1.3 million per day fine for not complying with the Patient Protection and Affordable Care Act (“the Act”) Hobby Lobby Stores, Inc. v. Sebelis, 133 S. Ct. 641 (Dec. 26, 2012). Under the Act, non-grandfathered group health plans must cover “all Food and Drug Administration…approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity…”  Hobby Lobby alleges that their constitutional rights and rights under the Religious Freedom Restoration Act of 1993 would be violated if they were required to provide coverage for drugs and devices that can cause abortions. The Supreme Court agreed with the lower courts’ decisions to deny the preliminary injunction, since Hobby Lobby had not proved the injunction was “[n]ecessary or appropriate in aid of [the court’s] jurisdiction” and that “the legal rights at issue are indisputably clear.”  This is one of many pending cases regarding the religious exemption aspects of the Act.

The Court will review two decisions concerning the definition of marriage, which could affect federal and state employment law.

  • In Hollingsworth v. Perry, No. 12-144, the Court will consider whether the Equal Protection Clause of the 14th Amendment prohibits the State of California from defining marriage as the union of a man and a woman. In 2008, California voters approved Proposition 8, the California Marriage Protection Act (“Prop. 8”), which prohibited same-sex marriage. In February 2012, the 9th Circuit held that Prop. 8 is unconstitutional.  Oral argument is scheduled for March 26, 2013.
  • In United States v. Windsor, No. 12-307, the Court will consider whether Section 3 of the Defense of Marriage Act (DOMA) deprives same-sex couples, who are lawfully married under the laws of their states, of equal protection.  Section 3 of DOMA defines “marriage” for all purposes under federal law as “only a legal union between one man and one woman as husband and wife.”  The U.S. District Court for the Southern District of New York ruled that Section 3 is unconstitutional.  The 2nd Circuit affirmed in October 2012.  Oral argument is scheduled for March 27, 2013.

Rulings in both cases may be issued by June 2013.

  • The Court also agreed to review Oxford Health Plans v. Sutter, No. 12-135, in which Oxford Health is contesting an arbitrator’s conclusion that class action suits against it must be settled through arbitration.  The company argues that, despite a ruling of the 3rd Circuit upholding the arbitrator’s decision, there is no contractual basis to conclude that it agreed to arbitrate class claims.  The Court will examine whether parties to an arbitration agreement authorize class arbitration when the agreement only provides that “any dispute” will be arbitrated.  The case could impact employers that are relying upon existing arbitration agreements to compel the arbitration of class action disputes filed against them.  Oral argument is set for March 25, 2013.

Decisions by the United States Supreme Court on these issues will continue to change the landscape of employment law.  Our firm stands ready to analyze these issues and to provide sound advice to minimize legal exposure while simultaneously fostering a productive relationship between the employer and their workforce.

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