New Supreme Court Term: 6 Employment Cases to Watch

The U.S. Supreme Court’s 2024-25 term opened this week – and several employment issues are already on the docket. 

Here are six cases that need to be on your radar:

On the Supreme Court’s Calendar

Here’s what’s on the Court’s calendar so far:

Employee Fired Over Failed Drug Test 

In Medical Marijuana v. Horn, the Court will examine a novel claim asserting fraud under the Racketeer Influenced and Corrupt Organizations Act (RICO). 

A commercial truck driver was fired after he allegedly failed a random drug test. Specifically, he was told that he tested positive for THC – the compound in cannabis that produces a high. The driver said he used a tincture to treat injuries suffered in a car accident. He said he used a product that was marketed and sold as a natural medicine containing CBD, a compound in cannabis that does not produce a high and is generally legal. As a professional driver, he said he was very concerned about the tincture’s ingredients and sought reassurance from the CBD company that the product did not contain THC. He said that if he ingested THC, he did so unwillingly and unknowingly. 

He sued the CBD company, alleging fraud in violation of RICO. He sued to recover damages for his lost pay after termination. A federal court in New York dismissed the driver’s claim for lack of standing. On appeal, the Second Circuit vacated the summary judgment ruling in the CBD company’s favor and remanded the case. The company then appealed to the Supreme Court, which agreed to hear the case.

At issue here, the Court will determine whether economic harms resulting from personal injuries are injuries to “business or property by reason of” the defendant’s acts for purposes of a civil treble-damages action under the RICO Act.

Why it matters: The confusion about marijuana legalization and the rapidly changing landscape of state-specific cannabis laws has created a minefield for employers, according to employment attorney Todd Wulffson. Even though an employer is not a party in this case, it will be interesting to see how the Supreme Court rules on a cannabis dispute involving a novel claim. 

Oral arguments are set for Oct. 15, 2024.

In the meantime, check out Wulffson’s article, Evolving Cannabis Laws: 3 Common Mistakes Companies Should Avoid.

Employees Denied OT Pay

In E.M.D. Sales v. Carrera, the Court will decide the burden of proof for exemptions to the Fair Labor Standards Act (FLSA).

Several employees who worked as sales reps were denied overtime pay. They filed an FLSA lawsuit against their employer, asserting they worked about 60 hours per week but did not receive time-and-a-half for their overtime hours. The company argued the employees weren’t entitled to overtime under the FLSA’s “outside salesmen” exemption. 

The district court was not swayed, noting that part of the workers’ job duties included stocking shelves and issuing credits. It held the employer did not show the exemption applied. On appeal, the Fourth Circuit affirmed the decision. The company then appealed to the U.S. Supreme Court, which granted cert to hear the case.

At issue here, the Court will determine the burden of proof required to show the applicability of an FLSA exemption. The two choices before the Court are the “preponderance of the evidence” standard or the more rigorous “clear and convincing evidence” standard.

Why it matters: This case addresses a common workplace error: misclassifying employees. Regardless of which standard is selected, employers will need to know the bar that must be met to show that an exemption applies under the FLSA.

Oral arguments are set for Nov. 5, 2024.

Until then, check out the Ninth Circuit’s ruling on a long-running FLSA dispute: Must Workers Be Paid to Boot Up Computers?

When is Differential Pay Warranted?

In Feliciano v. Department of Transportation, the Court will decide whether a federal civilian employee called to active duty during a national emergency is entitled to differential pay even if the duty is not directly connected to the national emergency.

A federal district court and an appeals court affirmed the decision to deny differential pay, and the employee appealed to the Supreme Court, which agreed to hear the case.

Why it matters: While this case may seem narrow in scope, it has the potential to set a precedent for how similar cases are handled in the future, affecting not only federal employees but potentially influencing state and private sector employment policies.

Oral arguments are set for Dec. 9, 2024.

In the meantime, check out Interviewing an Internal Candidate: What a $15K Blunder Looks Like, which provides an example of how a company mishandled an employee’s short-term deployment for the National Guard.

Employment Cases Not Yet Set

The Supreme Court has also agreed to hear the following cases, although they have not yet been scheduled for oral arguments.  

• In Stanley v. City of Sanford, Florida, the Court will determine whether a retiree who earned post-employment benefits while employed loses her right to file an ADA discrimination lawsuit concerning those benefits solely because she no longer holds her job. A federal district court dismissed the claim, and the Eleventh Circuit affirmed the decision in the employer’s favor. The retiree appealed to the Supreme Court, which granted cert to hear the case.
• In Cunningham v. Cornell University, the Court will decide the appropriate pleading standards for a prohibited transaction claim under the Employee Retirement Income Security Act (ERISA). A federal district court granted judgment to the employer, and the Second Circuit affirmed. The plaintiffs appealed to the Supreme Court, which agreed to hear the case.
• In Ames v. Ohio Department of Youth Services, the Court will weigh in on so-called “reverse discrimination” claims under Title VII. Specifically, the Court will decide whether a majority-group plaintiff must show “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.” A district court and Sixth Circuit rejected a heterosexual employee’s claim that she was demoted based on her sexual orientation so a gay individual could be hired for the former role. The woman appealed to the Supreme Court, which granted cert to hear the case.

We’ll keep you posted.