Significant Cases from the U.S. Supreme Court 2017-2018 Term

By: Melanie M. Dunajeski

The Supreme Court of the United States (“SCOTUS”) wrapped up its 2017-2018 term in June without any true “blockbuster” cases, but some of the cases that they did decide will have far-reaching implications. Here are a few for your consideration.

In Epic Systems Corp. v. Lewis (together with companion cases Ernst & Young LLP v. Morris and National Labor Relations Board v. Murphy Oil USA, Inc.), the Court took up the question of whether an employment agreement that requires employees to individually arbitrate employment disputes with their employer (“bi-lateral arbitration”) as opposed to engaging in a class or collective action violated federal labor law.  The National Labor Relations Board took the position that employee rights under the National Labor Relations Act encompassed the right to bring a class or collective action, trumping the provisions of the Federal Arbitration Act. In an opinion authored by the newest Justice Neil Gorsuch, SCOTUS rejected the NLRB’s interpretation and held that bi-lateral arbitration agreement with employees are enforceable and do not represent an exception to the Federal Arbitration Act.

In Murphy v. National Collegiate Athletic Association (consolidated with New Jersey Thoroughbred Horsemen’s Association Inc. v. National Collegiate Athletic Association), the Court took up the question of whether the provisions of the Professional and Amateur Sports Protection Act (PASPA) that prohibit state authorization and licensing of sports gambling schemes violate the Constitution’s anti-commandeering rule.  The SCOTUS decision determined that the anti-betting provisions of PASPA were unconstitutional, removing the federal ban on sports betting and returning to the states the regulation of the same. The Court noted, however, that Congress could step in to regulate sports betting if it chooses to do so.

Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission considered whether a baker’s declining to bake a wedding cake for a same-sex couple that was held discriminatory by the Colorado Civil Rights Commission violated the baker’s first amendment rights because of his genuinely held religious beliefs. In a narrow ruling that satisfied few, SCOTUS held that the Colorado Commission’s open hostility to the baker’s religious beliefs during its hearing violated the baker’s constitutional rights—so it was the way that the commission handled the case and not the substance of potential LGBTQ discrimination that was the basis for the decision.

Encino Motorcars, LLC v. Navarro took up the question of whether car dealership Service Advisors were exempt from the Fair Labor Standards Act Overtime provisions as “salesmen.” The Court rejected the “narrow construction” rule for construing exemptions from the Fair Labor Standards Act overtime provisions that had been in place for more than 70 years “as a useful guidepost for interpreting the FLSA.” The result should mean that it will be easier for employers to classify employees as falling within overtime exemptions under federal law.

Janus v. American Federation of State, County, and Municipal Employees Council 31 overruled longstanding precedent in Abood v. Detroit Board of Education and held that non-union state employees could not be required to pay “fair share” fees to the union to cover costs to represent them. The case was founded on the First Amendment free speech rights of the non-consenting employees. In striking down the required payment system, the Court held that the arrangement violated the free-speech rights of non-members by compelling them to subsidize speech on matters of substantial public concern.  The holding is limited to unions serving public employees.

South Dakota v. Wayfair overruled prior longstanding SCOTUS authority (Quill Corporation v. North Dakota and National Bellas Hess v. Department of Revenue of Illinois) to hold that states can permit out of state sellers with no physical presence in the state to collect and remit sales taxes on the goods the seller ships to consumers in the state. This case effectively permits states to extend their taxing reach to require anyone shipping to that state to collect and remit sales tax.

The Court begins its 2018-2019 term on the first Monday in October.