U.S. Supreme Court October 2024 Term Preview: Cases For Employers to Watch

The next United States Supreme Court term begins on October 7, with several cases on the Court’s docket that will likely affect both private and government employers. We will monitor these cases for updates and additional employer-related cases the Court adds to its docket this term (it will continue adding cases through the early part of 2025). For now, here is a preview of the cases we will be watching on behalf of employers this term:

Fair Labor Standards Act: E.M.D Sales v. Carrera, No. 23-217
The justices are poised to decide what burden of proof will apply to employers claiming an exemption from overtime pay requirements established by the Fair Labor Standards Act. The case is expected to clarify whether employers must prove an overtime exemption by clear and convincing evidence or by a mere preponderance of evidence, with the former being a more stringent standard for employers to meet. The case is on appeal from the United States Court of Appeals for the Fourth Circuit, which affirmed the district court ruling applying the “clear and convincing evidence” standard to the employer’s defense. The Court will hear oral argument on November 5, 2024.

Attorney's fees recovery under certain civil rights laws:
Lackey v. Stinnie, No. 23-621
In another case coming up from the Fourth Circuit, the Court will consider whether a party who obtains a preliminary injunction, without later prevailing on the merits, is still a “prevailing party” for purposes of being entitled to attorney’s fees under 42 U.S.C. § 1988. Section 1988 provides that a “prevailing party” in certain civil rights actions can recover their reasonable attorney's fees. While the Lackey case is not an employment dispute (it involves plaintiffs who had their driver’s licenses suspended under a Virginia law for failing to pay court fees and fines), the Court’s ruling may nevertheless affect employers since § 1988 attorney’s fees are available to a prevailing party in race-based employment discrimination claims under 42 U.S.C. § 1981. Oral argument is scheduled for October 8, 2024.

Americans With Disabilities Act: Stanley v. City of Sanford, No. 23-997
The Stanley case presents the question of whether a former employee has the right to sue for discrimination under the Americans with Disabilities Act (ADA) regarding their post-employment distribution of fringe benefits. The United States Court of Appeals for the Eleventh Circuit said “no” in Stanley, aligning with the United States Courts of Appeals for the Sixth, Seventh, and Ninth Circuits. Creating a circuit split, the United States Courts of Appeals for the Second and Third Circuits have held the opposite: that a former employee does not lose the ability to sue their employer for discrimination even if they no longer hold or seek to hold their former position. As posited by the petitioner, this issue “affects millions of Americans who are currently disabled and who rely on retirement benefits that they earned while employed” and who “are unlikely to know about their employer’s discriminatory benefits policies until they become disabled and are forced to retire—the exact moment that they lose their right to sue under the law of the Sixth, Seventh, Ninth, and Eleventh Circuits.” A resolution of the circuit split in favor of the Eleventh Circuit means expanded ADA liability for employers and the need to pay closer attention to the administration of post-employment benefits.
 
Federal Differential Pay Statute: Feliciano v. Dep’t of Transp., No. 23-861
The Court will consider the United States Court of Appeals for the Federal Circuit’s denial of differential pay to an Armed Services reservist who was called to active duty several times from 2012 to 2014. A “reservist” is a civilian who serves in the military while maintaining a civilian career. “Differential pay” is the difference between civilian and (usually lower) military salaries. The federal differential pay statute requires federal employers to provide federal civilian employees differential pay when called or ordered to active duty pursuant to other federal laws enumerated in the differential pay statute. Private sector employers may voluntarily provide differential pay. The petitioner’s certiorari brief argues that affirming the Federal Circuit’s denial of differential pay would affect private employers too, including the possibility of criminal liability if private employers were to (voluntarily) provide differential pay to a reservist called to active duty under a provision of law not expressly enumerated by the differential pay statute.

Civil Rights Violations Brought Pursuant to 42 U.S.C. § 1983: Williams v. Washington, No. 23-191
With oral argument scheduled for opening day of the October 2024 term, the Court will review a decision of the Supreme Court of Alabama to determine whether exhaustion of state administrative remedies is required to bring claims under § 1983 in state court. Section 1983 allows individuals to sue certain government entities and their employees for civil rights violations. In Williams, those individuals were Alabama citizens who sued the Alabama Department of Labor after experiencing delays in processing their unemployment compensation claims during the COVID-19 pandemic. Section 1983 is also a vehicle by which a public employee can sue their employer for discrimination. Since the Supreme Court’s 1982 decision in Patsy v. Board of Regents, the rule in federal court is that exhaustion of state administrative remedies is not required as a prerequisite to an action brought pursuant to § 1983. The Alabama Supreme Court, however, held that Patsy does not apply in state court and dismissed the petitioners’ lawsuit for failure to exhaust the state’s administrative appeals process governing unemployment compensation claims. If the Court affirms Williams, public employers facing discrimination claims brought pursuant to § 1983 will have an additional defense in state court proceedings—or may otherwise find themselves litigating those claims more in federal court.

BONUS CASE: Med. Marijuana, Inc. v. Horn, No. 23-365
While the Court’s decision in Horn may not impact employers directly—although it could, as employees can and do bring civil RICO claims against their employers—it may be of interest for employers imposing drug tests and otherwise navigating the everchanging legal landscape on marijuana. Mr. Horn was a commercial truck driver who bought and used what was marketed as a hemp-based CBD supplement not containing THC (which, different from CBD, is the psychoactive component in cannabis that produces a “high”). When Mr. Horn was selected by his employer for a routine drug test, however, he tested positive for THC and was fired. Mr. Horn brought a civil RICO claim against the CBD supplement manufacturer, claiming fraud. The district court entered summary judgment for the manufacturer, finding that, in line with the Sixth, Seventh, and Eleventh Circuits, a civil RICO action does not cover economic harms arising from personal injuries. The Second Circuit reversed, declaring the other circuits’ decisions as “backwards,” and aligned with the Ninth Circuit to hold that civil RICO reaches any economic harm to someone’s business or property, even if that harm stems from personal injuries. Oral argument is scheduled for October 15, 2024.

We will be closely monitoring these decisions, and as decisions are issued, we will send out legal alerts with our insights into what employers can do to navigate any impact from the decisions.