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BizVoice/Indiana Chamber – November/December 2017

The Department of Labor (DOL) rescinded its

“persuader rule” that would have required employers to

disclose who advises them on how to discourage union

organizing activity. The Equal Employment

Opportunity Commission (EEOC) suspended its

implementation of a revised EEO-1 report that would

have placed onerous salary reporting requirements on

employers. And the DOL has reversed course on an

overtime rule that would have doubled the salary

requirement to exempt employees from overtime.

More upheaval is on the horizon in 2018, with the

judiciary taking center stage. Below is a preview of two

significant changes anticipated in 2018.

Class action waivers

On October 2, the Supreme Court of the United

States heard oral arguments in three consolidated cases

that will decide the future of class action waivers in the

employment context. The high court will resolve a

dispute that has grown since the National Labor

Relations Board (NLRB) issued its controversial 2012

decision in

D.R. Horton

. In that case, the NLRB held for

the first time that the National Labor Relations Act

(NLRA) bans class action waivers in employment

arbitration agreements.

The overwhelming majority of federal and state

courts, including the Second, Fifth and Eighth Circuit

Courts, have disagreed with the NLRB’s

D.R. Horton

decision and refused to enforce it. Undeterred, the

NLRB continues to adhere to its position. In 2016, the

Seventh and the Ninth Circuit Courts of Appeals

became the first federal appellate courts to side with the

NLRB, followed by the Sixth Circuit in 2017.

In recent years, the Supreme Court has issued a

number of decisions regarding the enforceability of

action waivers in arbitration agreements under the

Federal Arbitration Act (FAA). Many of the justices’

views on arbitration and class action waivers are fairly

well known and split along ideological lines. With the

passing of Justice Scalia, who was frequently in the

majority of 5-4 decisions, all eyes have turned to the

Court’s newest appointee, Justice Gorsuch.

During oral arguments on the first day of the new

term, Justices Breyer, Kagan, Sotomayor and Ginsburg

asked passionate questions indicating support of the

NLRB and employees’ position, leaving observers with

little doubt of their impressions.

Chief Justice Roberts and Justice Alito, on the

other hand, posed more subtle questions that appeared

to support the employers’ arguments. Justice Thomas

was predictably silent. To the surprise of many

observers, Justice Gorsuch did not say a word, in

contrast to his noted style of active questioning during

oral arguments. At this point, the only thing certain is a

divided opinion.

The Supreme Court’s decision, expected in

January or February 2018, is highly anticipated because

of the uncertainty created by some courts enforcing

arbitration agreements while the NLRB files unfair

labor practice charges against employers that maintain

those agreements. The Supreme Court’s forthcoming

decision promises to bring much-needed clarity for

employers in crafting and enforcing arbitration


Sexual orientation discrimination

Until 2017, the United States Circuit Courts of

Appeal had long held that sexual orientation is not a

protected class under Title VII. On April 4, 2017, the

Seventh Circuit Court of Appeals issued its decision in

Hively v. Ivy Tech Community College of Indiana

, departing

from its own legal precedent and becoming the first

federal appellate court to find that sexual orientation is

encompassed in Title VII of the Civil Rights Act of

1964’s definition of sex.

Following the Seventh Circuit’s lead, the Second

Circuit granted rehearing in

Zarda v. Altitude Express

, in

which a skydiving instructor claimed a violation of Title

VII, alleging he was terminated after telling a customer

he was homosexual. In a curious twist, two federal

government divisions, the EEOC and the Department

of Justice (DOJ), each filed amicus briefs on opposite

sides of the Zarda case.

The EEOC maintained its position, held since

2013, that Title VII prohibits sexual orientation

discrimination. DOJ took the opposite position, noting

that “the EEOC is not speaking for the United States

and its position about the scope of Title VII is entitled

to no deference beyond its power to persuade.”

With splits in the Circuit Courts and among

different federal agencies, it seems inevitable that this

issue will find its way to the Supreme Court, perhaps in

2018. Until then, Indiana employers are advised to treat

sexual orientation as a protected class under Title VII.

Employers with operations outside of the Seventh

Circuit’s jurisdiction (Illinois, Indiana and Wisconsin)

are advised to take seriously any claim of discrimination

or harassment based on sexual orientation as those may

be subject to a patchwork of state or local regulations

and/or an EEOC investigation.


Charles B.

Baldwin is managing

director and Brian D.

Burbrink an associate at

the Indianapolis office of

Ogletree Deakins. They

can be reached at

(317) 916-1300 or

What to Expect in 2018

Legal Changes to Affect Employers

In 2017, the Trump administration set a course to dismantle former President Barack

Obama’s labor and employment regulatory legacy.


Charles B. Baldwin

Brian D. Burbrink