The U.S. Supreme Court begins its 2008-09 term with several cases related to labor and employment, raising issues that include the protection afforded employees who participate in sexual harassment investigations, management’s right to require union employees to arbitrate discrimination claims rather than raise them in court, and whether employers calculating pension benefits must credit employees for the time they missed work for pregnancy leaves taken before pregnancy discrimination was outlawed. These cases are summarized below.

Crawford v. Metropolitan Government of Nashville, No. 06-1595.

Question: Does Title VII’s protection against retaliation make it illegal to fire an employee because she mentions, during the employer’s internal investigation of a co-worker’s sexual harassment complaint, that she was also sexually harassed by the same person?

Title VII of the Civil Rights Act of 1964 prohibits retaliation against employees because they oppose conduct they reasonably believe violates workplace discrimination law. It also protects employees who file formal charges with the Equal Employment Opportunity Commission (“EEOC”) or participate in an EEOC investigation. But what about employees who do not come forward with complaints and have no involvement with any EEOC investigation, but simply answer questions when their employer investigates a co-worker’s internal complaint? This case will decide if such employees are protected against retaliation.

Here, in the course of investigating an employee’s sexual harassment complaint, the employer interviewed one of her co-workers, Crawford, who said that she had been sexually harassed by the same man. After the employer later fired Crawford, she sued, claiming she had been subjected to unlawful retaliation. The district court, affirmed by the Sixth Circuit Court of Appeals, dismissed Crawford’s suit on the grounds that answering questions during the employer’s internal investigation did not protect her from retaliation, because it was neither “overt opposition” to suspected discrimination nor, in the absence of any pending EEOC charge, protected “participation.”

Crawford argues that that outcome conflicts with decisions by several other circuit courts, as well as the EEOC’s interpretation of Title VII. The U.S. Solicitor General submitted a brief outlining the federal government’s position that, echoing the EEOC, supports Crawford’s view that her activity was protected from retaliation. The employer, however, argues that the Sixth Circuit’s decision was correct, and that Crawford’s approach would deter employers from conducting internal investigations out of fear that they could never take action against anyone who answered questions as part of such an investigation without creating a real risk of being sued for retaliation. The Supreme Court’s decision could affect how employers plan and carry out such investigations. With the recent explosion in retaliation claims, employers are taking reasonable steps aimed at reducing the risk of such liability. If the Court holds that every employee interviewed during an internal harassment or discrimination investigation is thereby protected from retaliation, employers may become much more selective about who they interview in order to minimize how many employees might be able to claim retaliation if they suffer an adverse employment action after being interviewed. For instance, an employer may be leery of interviewing an employee whose job is in jeopardy, out of concern that if the employee is terminated soon after being interviewed, he or she will have a ready-made retaliation claim. At the same time, if an employer interviews too few employees, it runs the risk of having a judge or jury decide that it failed to take adequate steps in responding to the internal complaint.

Oral argument in this case is set for October 8.

14 Penn Plaza LLC v. Pyett, No. 07-581.

Question: Can employees represented by a union be prevented from filing a discrimination claim in court, and instead be required to arbitrate the claim, based on a provision in the collective bargaining agreement between their union and employer?

Contracts between employers and labor unions almost always include provisions requiring the parties to resolve disputes through arbitration rather than in court. The Supreme Court has long recognized the value of such arbitration, which promotes labor peace and saves the time and cost of having courts resolve such disputes.

At the same time, over the past 20 years, a growing number of employers have required individual non-union employees to sign agreements to have any claims against their employer decided by an arbitrator rather than by a judge or jury. Such employers view arbitration as faster, less expensive, and more confidential than litigation, avoiding juries who may sympathize with employees. The courts have generally upheld such arbitration agreements so long as certain standards are met, including a “clear and unmistakable” statement that the employee is giving up his or her right to sue.

This case brings together those two approaches. Here, the employer and union had a collective bargaining agreement (“CBA”) that not only contained sections describing employees’ wages, hours, and so on, but also had a provision prohibiting age discrimination against employees that described arbitration as the “sole and exclusive” forum for resolving any such claims. When several employees covered by the CBA filed an age discrimination suit in federal court, the employer moved to dismiss the suit and to compel the employees to arbitrate, arguing that the discrimination and arbitration provisions in its CBA precluded the employees from suing in court, even though none of them had ever signed an individual agreement to arbitrate. The employees, however, said that their right to have a court decide their discrimination claims was too individual and important to be waived by a union contract that gave the union discretion to decide whether any given case was worth taking to arbitration. The district court, affirmed by the Second Circuit Court of Appeals, sided with the employees, denying the employer’s attempt to force the employees into arbitration. The appellate court held that even the broadest and most unequivocal arbitration clause in a CBA cannot force employees to arbitrate discrimination claims.

If the Supreme Court rules that a contract provision like the one in this case prevents employees covered by the contract from bringing discrimination claims in court, many unionized employers can be expected to propose similar clauses in their next labor negotiations. But most unions can be expected to resist such proposals, reasoning that such arbitrations would be more costly to pursue than other types of grievances, and that any union decision not to take such a case to arbitration could lead the employee to sue the union for breaching its duty of fair representation. If, on the other hand, the Court holds that unions cannot waive the right of individual employees to go to court with discrimination claims, unionized employers may start directly asking employees to sign individual agreements to arbitrate such claims, even where such employees are represented by a union.

Oral argument is scheduled for December 1.

AT&T Corp. v. Hulteen, No. 07-543.

Question: In calculating benefits based upon an employee’s service with the employer, does an employer need to credit the employee for a period during which she was on pregnancy leave, where the leave and the decision not to credit that period took place before Congress outlawed pregnancy discrimination?

In 1978, Congress passed the Pregnancy Discrimination Act (“PDA”), which requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as they treat non-pregnant employees who are similar in their ability or inability to work, including benefits and leave time. Before that law took effect, however, employers were free to treat employees who were absent for pregnancy leave less favorably than they treated employees absent because of other temporary disabilities.

In calculating employee benefits based on length of service before the PDA took effect, AT&T did not award full service credit for the time employees spent on such leaves—a decision that was, at the time, lawful. When the PDA took effect, AT&T changed its policies going forward to award the same service credit for pregnancy leaves as it awarded for other types of temporary disability leaves, but did not go back and restore such credit for women who had taken pregnancy leaves before the new law went into effect. When these women retired, AT&T calculated their pension benefits using the seniority they had accrued during their careers, including the service credit awarded decades earlier under the company’s then-lawful pre-PDA leave policies.

The plaintiffs, who are women who were denied full service credit for pregnancy leaves they took before the PDA went into effect, argue that by calculating their pension benefits without crediting them for the time they were on such leaves, AT&T discriminated against them based on their pregnancies. An en banc panel of the Ninth Circuit Court of Appeals agreed, holding that the relevant point for deciding whether AT&T had discriminated was when it calculated the plaintiffs’ pension benefits, and that by awarding pension benefits based on a service date that did not credit employees for the time they were on pregnancy leave, the company violated the PDA.

In its appeal to the Supreme Court, AT&T argues that the Ninth Circuit’s approach gives impermissible retroactive effect to the PDA, punishing the company for decisions it made before Congress outlawed pregnancy discrimination. AT&T also argues that even if its earlier service credit decisions were unlawful, the period during which they could be challenged has long since expired. In effect, AT&T argues, the Ninth Circuit’s decision treats as unlawful the cuirrent effect of decisions made before the law took effect, a position it describes as conflicting with Supreme Court precedent. Although the EEOC argued to the Ninth Circuit that the plaintiffs were correct, the federal government has filed a brief with the Supreme Court that supports AT&T’s position.

The outcome of this case will affect employers who determine and calculate employee benefits based on employees’ length of service (typically, pension benefits) with respect to employees who took pregnancy leaves before the PDA took effect in 1978. The case also touches on another question that the Court grappled with last year—whether an employee can challenge a recent act by an employer that has its roots in a decision made long ago. In Ledbetter v. Goodyear Tire & Rubber Co. (2007), the Court held that an employee cannot claim sex discrimination based on a recent paycheck when the original pay decision was made years earlier. Somewhat similarly in this case, the employer argues that employees should not be able to claim sex discrimination based on a recent decision not to undo a decision made years earlier, when that earlier decision was lawful when it was made.

Oral argument in the case is set for December 10.

The Court will also decide two other cases that touch on labor issues, although they will have much less impact on most employers. Locke v. Karass, No. 06-1747, will decide whether a public-sector union may use “agency fees” that it collects from employees who have opted out of union membership but are covered by the union’s collective bargaining agreement, to help fund litigation that was not undertaken specifically on behalf of those employees, but rather by or on behalf of other bargaining units or the union’s national affiliate. The First Circuit Court of Appeals held that a union may do so, so long as the litigation in question is “germane” to the union’s collective bargaining duties with respect to the employees. And in Ysursa v. Pocatello Education Ass’n, No. 07-869, the Court will determine whether, under the First Amendment, a state legislature can prohibit its political subdivisions from making payroll deductions for political activities. The Ninth Circuit said no, holding that because the state did not manage local government workplaces, its effort to control how those governments administered their payroll systems was an unconstitutional effort to stifle political speech. Oral arguments in these two cases are scheduled for, respectively, October 6 and November 3..