- Curtis Dubay, The Heritage Foundation
The Federal Arbitration Act (FAA), passed in 1925, generally requires courts to look favorably upon all arbitration agreements. In 2011, the Supreme Court upheld an arbitration agreement in a contract for mobile phone services that contained a class action ban. The court ruled that a state law that prevented the class action ban from being enforced was “an obstacle to the accomplishment of the FAA’s objectives.”
However, Congress passed the Dodd-Frank Act in 2010, which authorizes the Consumer Financial Protection Bureau (CFPB) to study arbitration agreements in consumer contracts and limit or prohibit them if doing so would be in the public interest and for the protection of consumers. In May 2016, the CFPB issued a proposed rule that would ban arbitration agreements that acted to prevent class action lawsuits and would further establish certain reporting requirements for other arbitrations that are filed between consumers and providers.
Our experts discussed this proposed rule, including the history that led us to this point and the potential impact it will have if it is finalized.
Friedrichs v. California Teachers Association was anticipated to be one of the most significant cases of the Supreme Court’s term. In Friedrichs, the Court was considering whether to overrule its prior decision in Abood v. Detroit Board of Education (1977), which held that public employees can be required to financially support union collective-bargaining with government, but not union political activities. In 2014, the Court sharply criticized Abood’s rationales in Harris v. Quinn, but stopped short of overruling it. Friedrichs was primed to be the final word on Abood’s continuing validity. However, with Justice Scalia’s passing in February, the Court deadlocked 4-4 in Friedrichs, and Abood remains the law of land.
This Teleforum explored the legal landscape post-Friedrichs. This includes the other cases challenging Abood that are pending in the lower courts, and the legal arguments for and against upholding Abood. It also includes cases that concern related matters, such as whether individuals can be required to affirmatively object to paying “non-chargeable” union dues under Abood, and whether individuals who are not full-fledged employees can be included in systems of exclusive representation in the wake of Harris.
On May 18, 2016, President Obama and the Secretary of Labor announced new overtime regulations that will increase the number of workers receiving overtime to all those making under $913/week. In doing so, 4.2 million more workers will be eligible for overtime by December 1, 2016. Advocates assert that the new regulation will bring more families closer to a living wage. Businesses argue that the regulations will inflict costs they will not be able to cover without decreasing base salaries or lowering the number of employees. Legislation is pending in the House and Senate that would prevent the Department of Labor from passing the regulation until they have completed “full and complete economic analysis” and worked to “minimize the impact on such employers, before promulgating any substantially similar rule” (H.R. 2016). Business interests are mobilizing to file a complaint as well. Our labor and employment experts discusses the case.
On May 19, 2016, the Supreme Court decided CRST Van Expedited, Inc. v. EEOC. In 2007, the Equal Employment Opportunity Commission (EEOC) filed a sexual harassment suit against CRST Van Expedited (CRST) on behalf of approximately 270 female employees. When a number failed to appear for depositions, however, the district court barred the EEOC from pursuing their claims as a discovery sanction. The remaining claims were dismissed on various other grounds, including 67 claims that the district court dismissed for failure of the EEOC to separately investigate, find reasonable cause for, or attempt to conciliate them. In addition, the court awarded CRST some $4.46 million in attorney’s fees and expenses, on the basis that the claims were frivolous, unreasonable, or without foundation. On appeal, the U.S. Court of Appeals for the Eighth Circuit affirmed the dismissal of all but two claims, vacated the award of fees and costs, and remanded the case. On remand, one of the remaining claims was withdrawn and the other settled. CRST renewed its petition for fees, costs, and expenses, and the district court again awarded it approximately $4.6 million.
On a second appeal, the Eighth Circuit again reversed the award, finding that claims which had been dismissed for the EEOC’s failure to meet presuit obligations could not serve as grounds for a fees award, and remanding for an individualized determination as to whether other claims were frivolous, unreasonable, or without foundation.
The U.S. Supreme Court granted CRST’s subsequent petition for certiorari, vacating the judgment of the Eighth Circuit and remanding the case by a vote of 8-0. Justice Kennedy’s opinion for a unanimous Court held that a favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party for purposes of awarding attorney’s fees award. Justice Thomas filed a concurring opinion.
To discuss the case, we have Kenton J. Skarin, who is an Associate at Jones Day.