Reading Between the Lines: Is Supreme Court Nominee Neil Gorsuch Good for Employers?

By M. Kimberly Hodges

No sooner had President Trump announced his nomination of 49-year old Tenth Circuit judge, Neil Gorsuch, to the United States Supreme Court, than speculation began as to what his elevation to the high court would mean for businesses and employers. Gorsuch is a jurist with an ivy-league pedigree and a reputation for being a persuasive writer who leaves behind the complex legal jargon typically found in federal court opinions. A solidly conservative judge with more than ten years of experience on a federal appeals court, Gorsuch has a large body of published opinions which employment lawyers have quickly begun to mine for clues as to what kind of Supreme Court Justice he would be if confirmed.

Gorsuch’s interpretation of employment law does not fit neatly within either a conservative or liberal ideology. A review of his opinions shows he typically applies the law fairly and consistently, utilizing a direct writing style easy to comprehend for lawyers and non-lawyers alike. Although many characterize Gorsuch as pro-employer, it is difficult to reconcile a strong leaning in either direction with his written opinions. He has both affirmed and reversed summary judgment to employers, affirmed successful employee trial verdicts and awards of attorneys’ fees, and written an opinion concluding that plaintiffs may not maintain an employment discrimination action under Title II of the ADA. However, there are some aspects of his prior rulings which have garnered particular interest.

Less Deference to Executive Branch Agencies?

One consistent theme in Judge Gorsuch’s judicial record is his dislike of so-called Chevron deference, which stems from a 1984 Supreme Court opinion in Chevron v. Natural Resources Defense Council that says courts should grant wide leeway to executive branch agencies when they reasonably interpret ambiguous law. Under this doctrine, so long as the agency has not interpreted a statute in an unreasonable manner, federal courts will defer to the meaning the agency assigns to it. Conservatives have said this principle gives too much power to the executive branch. Others are alarmed that it would be a way for courts to routinely rule against the party in power. Gorsuch, who is famously a “textualist,” believes in a strict reading of a statute and has said the world would be just fine without this concept. “There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron . . .permits executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design,” Gorsuch wrote. “Maybe the time has come to face the behemoth.”

In one particular case, Trans Am Trucking v. DOL Administrative Review Board, Judge Gorsuch disagreed with his colleagues who ruled that the company violated whistleblower provisions of the Surface Transportation Assistance Act (STAA) when it fired an employee who abandoned cargo after being told to work in unsafe conditions. Gorsuch’s sharply worded dissent took the majority to task for permitting the Department of Labor a loose interpretation of a purportedly vague portion of the STAA, subsequently deferring to the agency’s interpretation under Chevron. Gorsuch used the case as a vehicle to make a broader point about the court’s role in interpreting legislation, specifically, that courts should not look beyond the law as written to determine legislative purpose. “It is our obligation . . . not to use the law as a sort of springboard to combat all perceived evils lurking in the neighborhood,” he wrote. “Whatever the case, it is our job and work enough for the day to apply the law Congress did pass, not to imagine and enforce one it might have but didn’t.”

Support for Mandatory Class Action Waivers?

Gorsuch’s wariness of agency overreach might come into play very early and very publicly in his high court tenure on the issue of mandatory class action waivers. Agreements requiring employees to submit workplace claims to an arbitrator instead of a court have become increasingly commonplace. These agreements are favored by employers because they lower the cost of litigation and introduce much-welcomed efficiency to the resolution of employee disputes. Over the past six years, series of victories at the Supreme Court cited the “liberal federal policy favoring arbitration agreements,” making the use of mandatory arbitration agreements a safer and more predictable practice.

However, mandatory arbitration agreements by themselves do not protect employers from the expense of a class or collective action. Consequently, rather than simply requiring employees to bring workplace claims through arbitration instead of court, employers have regularly incorporated into their agreements class and collective action waivers in which employees agree not to pursue claims against their employer on a class or collective basis. The result is that an employee’s only recourse is limited to single-plaintiff arbitration hearings.

The National Labor Relations Board (NLRB) disfavors class action waivers. It reasons that class and collective action waivers violate Section 7 of the National Labor Relations Act because they interfere with workers’ rights to engage in concerted activity for their mutual benefit and protection (in this case, class or collective action litigation).

The federal appeals courts are split over the issue of whether to allow mandatory class action waivers and, given the significance of the topic, it was not surprising when the Supreme Court took up this dispute. Many legal observers have opined that the eight justices currently seated on the court will split on the issue in a 4-4 tie. However, now the Supreme Court has decided to delay taking up this issue until the 2017-2018 term when, presumably, Gorsuch will have been confirmed and can participate in the ruling. If Gorsuch is confirmed to occupy the critical ninth seat on the bench, his presence would break the expected tie between the current justices and bodes very well for employers.

The case is not a slam dunk for employers, though. Although Judge Gorsuch is largely employer-friendly and has shown he is generally skeptical of the power of administrative agencies, he has consistently upheld decisions issued by the NLRB. Some of these decisions have aided unions and some have aided employers, so this pattern does not necessarily reveal any anti-employer (or anti-union) leaning. No matter what happens, there is no question that this will be a closely watched issue, as it promises to be one of the most significant employment law decisions in years.

The End of the McDonnell Douglas Framework?

Although Gorsuch’s employment discrimination opinions don’t offer much in the way of prediction, they are remarkable for their apparent disdain for the McDonnell Douglas burden-shifting framework. The Supreme Court decided McDonnell Douglas Corp. v. Green in 1973, in which it established the test for plaintiffs who only have circumstantial evidence of discrimination. In most cases of alleged discrimination, the employee does not have “direct” evidence, such as evidence of supervisor telling a female employee she has been refused a promotion because of her gender. The vast majority of cases are instead based on circumstantial evidence, for example, evidence that only male employees were promoted. The McDonnell Douglas framework is currently used by courts to evaluate these types of cases. Under this test, a plaintiff has the initial burden of establishing a prima facie case of discrimination by showing:

(i) she belongs to a protected class, such as a racial minority or a qualified individual with a disability; (ii) that she was qualified for the employment benefit at issue; (iii) she suffered an adverse employment action; (iv) she was treated less favorably than others outside her protected class.
If the employee can meet this relatively easy burden, the burden then shifts to the employer to articulate a “legitimate, nondiscriminatory reason” for the adverse employment action, such as a lack of qualifications for the promotion. If the employer does this, the burden then shifts one final time to the employee, who must show that the employer’s legitimate reason is false or a “pretext” for discrimination.

This has long been the established test for evaluating employment discrimination cases based on circumstantial evidence. However, Gorsuch disfavors it. For example, in an age discrimination case, he criticized the test for “improperly diverting attention away from the real question posed by the [Age Discrimination in Employment Act] — whether age discrimination actually took place — and substituting in its stead a proxy that only imperfectly tracks that inquiry.”

Notably, Gorsuch is not the only critic of McDonnell Douglas. But as a potential Supreme Court Justice, he may become one of the first critics of the test to be in a position to actually change or eliminate it. Gorsuch has never stated what framework he would prefer or how he might revise the McDonnell Douglas test. Nevertheless, any revision of it, no matter how small, could cause a significant change in how employment discrimination lawsuits are prosecuted and defended.

Kimberly Hodges, Shareholder Ogletree Deakins Memphis kim.hodges@ogletreedeakins.com www.ogletreedeakins.com

Kimberly Hodges, Shareholder
Ogletree Deakins Memphis
kim.hodges @ogletreedeakins.com
www.ogletreedeakins.com