Supreme Court Term Includes Several Business Cases

October 23, 2010 (Press-News.org) Several business-related cases appear on the docket for the U.S. Supreme Court, continuing the recent trend of the Roberts' Court. The numbers so far show that 23 business cases will be heard this session. Despite hearing more business cases, this does not mean that the Court will necessarily be creating a pro-business agenda. This article will examine five of these cases that may be of interest to business owners and corporations, and how the potential decisions may impact businesses going forward.

Matters Related to Employer - Employee Issues

Three cases fit into the category of employer and employee relations. In all three of these cases, Justice Kagan is recusing herself because she had prior connections as Solicitor General. The cases below present opportunities for the Court to extend further protections to workers, which could adversely impact employers and businesses.

Kasten v. Saint-Gobain Performance Plastics Corp. is a case from the 7th Circuit. This case deals with the Fair Labor Standards Act. An employee received warnings on different occasions for time-clock matters. The employee expressed concerns that the time clock for punching-in and out was not in a legal location. Each time, these concerns were expressed verbally to management, but they were never written down. The employee was suspended and eventually terminated. The employee claimed he was being retaliated against because he made verbal claims regarding the location of the time clock, and filed suit under the FLSA. The 7th Circuit found that the employee did not engage in any protected activity since his claims were verbal, not written. The Supreme Court is examining the issue of whether protected activity under the FLSA can be verbal, or if must be written down.

Thompson v. N. Am. Stainless, LP is a 6th Circuit decision that also addresses an employee's retaliation claim. Thompson was fired after his fiance filed a gender discrimination claim. He argued that he was terminated in retaliation of the claim being filed. The 6th Circuit ruled that since Thompson did not personally engage in protected activity, he had no claim under Title VII. The Court is reviewing whether or not there is a third-party claim for retaliation if protected activity is not present.

Staub v. Procter Hospital, again from the 7th Circuit, concerns employment discrimination. An employee brought suit under the Uniformed Services Employment and Reemployment Rights Act, alleging that his employer terminated him because of his military service commitments. The reason this case has made it to the Supreme Court is because of the way in which the discrimination allegedly occurred. Staub felt that he was terminated because a supervisor who did not have decision-making authority had it in for him. Staub argued that this animosity should be transferred to his employer, thus making his firing discriminatory. The Court is examining the "cat's paw theory", in which discrimination is imputed to the hospital due to the actions of its employees.

Personal Jurisdictional Questions

These two cases are of great interest to those watching the Court this term. The Court has not examined personal jurisdiction as applied to foreign corporations since the 1980s. Since that time, business has become much more global. The concepts of personal jurisdiction at that time may not have realized the relative ease in which global transactions could take place. In both of these cases, state courts have made it much easier for their residents to sue foreign corporations, and the Court will need to determine if these rulings were appropriate.

Goodyear Lux. Tires, SA v. Brown comes from North Carolina. Two North Carolina residents died in a bus crash in France, and sued several foreign corporations in North Carolina state court. The question was whether or not the state court had personal jurisdiction over the foreign tire companies. The state court held that since the companies each had affiliates in the U.S. that purposely sold products in North Carolina, they could be subject to North Carolina courts. The Supreme Court will examine personal jurisdiction in greater detail.

J. McIntyre Machinery v. Nicastro is a New Jersey case also dealing with personal jurisdiction. A New Jersey worker was injured using a machine made by a British company. He sued in New Jersey state court, and the court found that they had jurisdiction using a "stream-of-commerce" analysis. The court concluded that the British company knew or should have known its distribution system included the entire U.S., and also that the company took no steps to prevent its products from reaching New Jersey. The question that the Supreme Court must answer is if the foreign company is subject to the New Jersey court's jurisdiction even if the company had no direct connection with the state.

Effect on Your Company's Future

Businesses will want to pay close attention to how the Court decides these cases. The Court could open the door to more litigation for businesses. Lawsuits would be allowed to proceed, forcing corporations to tie up more of their assets in defending themselves against various claims. If you have questions on how these cases may impact your corporation or business, please contact an experienced attorney in your area.

Article provided by Raymond & Bennett LLC
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