Courts grappled with a number of important employment issues in 2010. Noteworthy cases include the following:

Supreme Court

  • Text Messages - City of Ontario v. Quon, 130 S. Ct. 2619 (2010): The Court held that the employer did not violate an employee’s Fourth Amendment rights when it reviewed text messages sent and received by the employee on an employer-issued pager. While the decision focuses on the Fourth Amendment’s application to a government employer, it has implications for private employers as well. Indeed, the Court observed, “employer policies concerning communications will of course shape the reasonable expectations of their employees, especially to the extent that such policies are clearly communicated.” Accordingly, all employers should develop communications policies, convey them to their employees, have employees acknowledge receipt, and enforce them consistently.  
  • Arbitration - Rent-a-Center v. Jackson, 130 S. Ct. 2772 (2010): The Court held that the Federal Arbitration Act (FAA) permits parties to delegate to an arbitrator, rather than a court, the power to decide whether the arbitration agreement is unconscionable. However, a challenge to that delegation provision must be resolved by the court. To improve the likelihood of enforceability, an arbitration agreement should expressly state that challenges to the enforceability of the agreement will be decided in arbitration.  
  • ERISA - Hardt v. Reliance Std. Ins. Co., 130 S. Ct. 2149 (2010): The Court held that, in lawsuits seeking benefits under ERISA, workers covered by an employee benefit plan are entitled to recover attorneys’ fees even if they are not the prevailing party, as long as they have achieved “some degree of success on the merits.”  

Tenth Circuit

  • ADA Reasonable Accommodation - Duvall v. Georgia-Pacific Consumer Products., L.P., 607 F.3d 1255 (10th Cir. 2010): The court held that positions filled by temporary contract workers are not “vacant” under the Americans with Disabilities Act (ADA). Under the ADA, reassignment to a vacant position may be required as a reasonable accommodation of a disability. However, this decision clarifies that the employer need not displace any another worker - temporary or permanent - in order to accommodate the disabled employee.  
  • Pretext - Medlock v. United Parcel Service, Inc., 608 F.3d 1185 (10th Cir. 2010): UPS terminated a driver after he was involved in an “avoidable runaway accident” and refused to reinstate the driver on the grounds that he had failed to admit fault. The driver sued under the Age Discrimination in Employment Act (ADEA). The court held that UPS had refuted any inference of pretext by demonstrating that younger drivers involved in accidents were also reinstated only after admitting responsibility and expressing remorse for the accident. This case illustrates the importance of consistent treatment of similarly-situated employees.  
  • Employee Handbooks - Gosline v. Sisneros, 361 Fed. Appx. 8 (10th Cir. 2010) (unpublished): The court held that an employment manual’s reference to “reasonable grounds” for a termination did not create an implied employment contract because the manual’s explicit statements indicated that the employment was at-will. In order to avoid any confusion, however, employment handbooks should avoid any reference to “reasonable grounds” or “good cause” for termination.  
  • Immigration - Chamber of Commerce v. Edmondson, 594 F.3d 742 (10th Cir. 2010): The court struck down two provisions of Oklahoma’s immigration law, finding them preempted by federal immigration law. The first would have allowed terminated employees to sue for discrimination if the employer hired a worker that the employer knew or should reasonably have known was unauthorized to work in this country. The second provision would have required employers to use E-Verify to verify the lawful work status of independent contractors or pay a punitive tax. The court upheld a third provision, which requires all state contractors and subcontractors to use E-Verify to verify the lawful work status of newly-hired employees. This provision is similar to a law already in effect in Colorado.

Ninth Circuit

  • Independent Contractors - Narayan v. EGL Inc., 616 F.3d 895 (9th Cir. 2010): The court held that an employer could not escape application of the California Labor Code by requiring workers to sign agreements stating that they were “independent contractors” and that Texas law would apply. The court concluded that California law applied and remanded to the district court to determine whether the workers were actually employees under California law. This case reminds all employers to carefully evaluate whether their “independent contractors” may actually be employees under federal or state law.  
  • FLSA - Rutti v. Lojack Corp., Inc., 596 F.3d 1046 (9th Cir. 2010): The court held that an employee’s time spent commuting to worksites in a company car and certain other preliminary and postliminary activities, such as receiving his assignments and mapping his route in the morning and transmitting his daily report electronically in the evening, were not compensable under the Fair Labor Standards Act (FLSA). Employers should note that whether off-the-clock activities are compensable is a very fact-specific determination.  
  • ADA Reasonable Accommodation - EEOC v. UPS Supply Chain Solutions, 620 F.3d 1103 (9th Cir. 2010): The court found genuine issues of material fact as to whether UPS “reasonably” accommodated a deaf employee who had made multiple requests for an interpreter and had informed his supervisors that he had trouble comprehending a written warning. This case reminds employers to engage in an interactive dialogue with a disabled employee who requests accommodation, in order to determine whether there is a reasonable accommodation that will not cause the employer undue hardship.