Tag: Court

  • District Court Invalidates NLRB’s Joint-Employer Rule – CUPA-HR

    District Court Invalidates NLRB’s Joint-Employer Rule – CUPA-HR

    by CUPA-HR | March 13, 2024

    On March 8, 2024, the U.S. District Court for the Eastern District of Texas invalidated the National Labor Relations Board’s joint-employer final rule, meaning the rule did not go into effect on March 11, as was anticipated. The NLRB will likely appeal the ruling to the 5th U.S. Circuit Court of Appeals.

    The final rule expanded the joint-employer standard under the National Labor Relations Act, which is used to determine when two or more entities are jointly responsible for setting the terms and conditions of employment over a shared group of employees. Joint-employer status comes with significant responsibilities and liabilities under the law, including bargaining with any union representing the shared employees and being liable for any NLRA violations either employer commits against those employees.

    Traditionally, joint-employer status was only triggered if the potential joint employer exercised direct and immediate control over the shared workers’ terms and conditions of employment, including hiring, firing, disciplining, supervising, and directing the employees. The final rule, however, would have expanded joint-employer status to entities that have indirect or unexercised, reserved control over the terms and conditions of employment.

    The decision from the district court invalidates the ruling, halting implementation and reinstating the traditional joint-employer standard. As the judge in the case explained, the rule was too broad and violated the NLRA. Specifically, the judge stated it “would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly … essential terms and conditions of employment.”

    Details of the appeal and subsequent decision from the the 5th U.S. Circuit Court of Appeals will be shared in the coming months. If the NLRB wins on appeal and the rule is eventually implemented, it will apply to private-sector higher education institutions. It will impact colleges’ and universities’ relationships with many of their contractors whose employees perform work on campus, including food service, security and landscaping services.

    CUPA-HR will continue to keep members apprised of updates regarding the status of the NLRB’s joint-employer rule.



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  • Supreme Court Rules Against Affirmative Action – CUPA-HR

    Supreme Court Rules Against Affirmative Action – CUPA-HR

    by CUPA-HR | June 29, 2023

    This morning, the Supreme Court issued rulings for the cases Students for Fair Admissions v. Harvard and Students for Fair Admissions v. University of North Carolina (UNC), both of which concerned the use of race-based affirmative action in admissions decisions at colleges and universities. The court ruled in favor of Students for Fair Admissions, ultimately striking down the practice of race-conscious admissions decisions on campus.

    The Decision

    In a 6-3 decision written by Chief Justice John Roberts, the court held that Harvard’s and UNC’s admissions programs violate the equal protection clause of the Fourteenth Amendment. To summarize his arguments, Roberts noted that using a racial classification is only constitutionally permissible if doing furthers a “compelling governmental interest” and is “‘narrowly tai­lored’— meaning ‘necessary’— to achieve that interest.” He added that while “remediating specific, identified instances of past discrimination” can constitute a compelling interest that justifies race-based state action, “ameliorating societal discrimination does not.” Roberts continued by stating that “[u]niversity pro­grams must comply with strict scrutiny …  may never use race as a stereotype or negative, and — at some point — they must end.” He finished by stating the “respondents’ admissions systems — however well intentioned and implemented in good faith — fail each of these criteria [and] therefore [are invalid] under the Equal Protection Clause of the Fourteenth Amend­ment.”

    As an initial matter, Roberts noted that for universities to operate a “race-based admissions programs in a manner that” satisfies constitutional muster, it must be “‘sufficiently measurable to permit judicial [review].’” He found both universities failed to do so, stating:

    “Harvard identifies the following educational benefits that it is pursuing: (1) ‘training future leaders in the public and private sectors’; (2) preparing graduates to ‘adapt to an increasingly pluralistic society’; (3) ‘better educating its students through diversity’; and (4) ‘producing new knowledge stemming from diverse outlooks.’ (…) UNC points to similar benefits, namely, ‘(1) promoting the robust exchange of ideas; (2) broadening and refining understanding; (3) fostering innovation and problem-solving; (4) preparing engaged and productive citizens and leaders; [and] (5) enhancing appreciation, respect, and empathy, cross-racial understanding, and breaking down stereotypes.’ (…) Although these are commendable goals … it is unclear how courts are supposed to measure any of [them].”

    Secondarily, Roberts found the “respondents’ admissions programs fail to articulate a meaningful connection between the means they employ and the goals they pursue,” as well as “how assigning students to (…) racial categories and making admissions decisions based on them furthers the educational benefits that the universities claim to pursue.” Roberts states that “[r]acial classifications are simply too pernicious to permit any but the most exact connection between justification and classification.” On this point, Roberts concluded that the “categories [used by the universities] are themselves imprecise in many ways” and that institutions “would apparently prefer a class with 15% of students from Mexico over a class with 10% of students from several Latin American countries, simply because the former contains more Hispanic students than the latter.”

    Additionally, Roberts states that “race may never be used as a ‘negative’ and that it may not operate as a stereotype,” and he argues the universities’ admissions policies failed because they did both. With respect to the first item, Roberts said “the District Court observed that Harvard’s ‘policy of considering applicants’ race (…) overall results in fewer Asian American and white students being admitted.’” With respect to the stereotypes, he found the policies at issue allocated preference to those “who may have little in common with one another but the color of their skin [and that t]he entire point of the Equal Protection Clause is that treating someone differently because of their skin color is not like treating them differently because they are from a city or from a suburb, or because they play the violin poorly or well.”

    Finally, Roberts found that “admissions programs also lack a ‘logical end point,’ which the majority found was needed under the court’s jurisprudence.

    The chief justice closed his opinion by stating that colleges and universities are not prohibited from considering an applicant’s “discussion of how race affected his or her life, be it through discrimination, inspiration, or otherwise,” but institutions are banned from establishing admissions programs and practices that explicitly consider race. The opinion elaborates, “A benefit to a student who overcame racial discrimination, for example, must be tied to that student’s courage and determination. Or a benefit to a student whose heritage or culture motivated him or her to assume a leadership role or attain a particular goal must be tied to that student’s unique ability to contribute to the university. In other words, the student must be treated based on his or her experiences as an individual — not on the basis of race.”

    Justices Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson issued a dissenting opinion in both cases (To note: Jackson did not take part in considering the decision in the Harvard case due to her previous connection with Harvard College). Sotomayor wrote in the dissenting opinion that the court’s decision “rolls back decades of precedent and momentous progress” and that it “holds that race can no longer be used in a limited way in college admissions to achieve such critical benefits,” which “cements a superficial rule of colorblindness as a constitutional principle in an endemically segregated society where race has always mattered and continues to matter.”

    In August 2022, CUPA-HR joined the American Council on Education and others in filing an amicus brief in support of Harvard and UNC. The brief argued that the Supreme Court should rule in favor of preserving race-conscious affirmative action, as has been made precedent for decades. The brief highlights the value of considering race and ethnicity during the admissions process and the broader impact such initiatives have for institutions’ efforts to increase diversity on campus.

    The Decision

    Prior to the rule’s issuance, stakeholders also raised concerns with the impact the decision could have on employers’ hiring and employment decisions as well as any diversity, equity and inclusion (DEI) programs or initiatives. Today’s decision to strike down race-based affirmative action in admissions practices could leave employers open to future legal challenges against their hiring decisions and other diversity programs.

    CUPA-HR strongly supports the need to create and sustain diverse, inclusive college and university communities. We’re disappointed that the Supreme Court’s action has limited our efforts. CUPA-HR’s government relations team is further analyzing the decision and will keep members apprised of any additional updates as it relates to these cases.



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  • Supreme Court: Highly Compensated Employee Entitled to Overtime Because Employer Did Not Pay on a Salary Basis – CUPA-HR

    Supreme Court: Highly Compensated Employee Entitled to Overtime Because Employer Did Not Pay on a Salary Basis – CUPA-HR

    by CUPA-HR | February 23, 2023

    On February 22, the U.S. Supreme Court issued its decision in Helix Energy Solutions, Inc. v. Hewitt, finding that an employee making over $200,000 per year was entitled to overtime pay under the Fair Labor Standards Act (FLSA) because he was not paid on a salary basis. The case is a reminder that exempt status depends not only on how much the employee is paid, but also on how they are paid. Employers may want to be particularly careful when providing exempt employees — including part-time exempt employees — with different weekly pay based on hours worked.

    Under U.S. Department of Labor (DOL) regulations, an employee must meet the following three requirements to be considered an executive, administrative or professional employee exempt from the FLSA’s overtime pay mandates: (1) perform duties consistent with those exempt categories as set forth by the DOL, (2) be paid a minimum salary (currently set at $684 per week), and (3) be paid on a salary basis. The employer in the case argued that the employee was exempt because he was paid $963 per day, therefore making at least the minimum salary of $684 per week, and he met the duties test for an executive.

    The court found, however, that the employee was not paid on a salary basis as set forth in Section 541.602 of DOL regulations and was therefore not exempt. Section 541.602 requires exempt employees to receive the full pre-determined salary for any week in which they perform any work without regard to the number of days or hours worked. Specifically, the court said the employee “did not get a salary (of $963 or any other amount) because his weekly take-home pay could be as little as $963 or as much as $13,482, depending on how many days he worked.” The court did say, however, that daily-rate workers could qualify as paid on a salary basis if the pay met the conditions set out in DOL regulations §541.604(b).

    In a dissenting opinion, Justice Brett Kavanaugh contended that the salary threshold and salary basis test — both of which DOL created through regulations — may not be consistent with the FLSA itself. Specifically, Kavanaugh said:

    “The Act focuses on whether the employee performs executive duties, not how much an employee is paid or how an employee is paid. So it is questionable whether the Department’s regulations — which look not only at an employee’s duties but also at how much an employee is paid and how an employee is paid — will survive if and when the regulations are challenged as inconsistent with the Act. It is especially dubious for the regulations to focus on how an employee is paid (for example, by salary, wage, commission, or bonus) to determine whether the employee is a bona fide executive. An executive employee’s duties (and perhaps his total compensation) may be relevant to assessing whether the employee is a bona fide executive. But I am hard pressed to understand why it would matter for assessing executive status whether an employee is paid by salary, wage, commission, bonus, or some combination thereof.”

    Since the employer in this case failed to raise the challenge to the regulations properly, the issue was not considered before the court.  As such, it remains unclear how many justices agree with Kavanaugh and whether the majority of the court would overturn the DOL’s salary basis and threshold tests.

    CUPA-HR continues to monitor all updates relating to the FLSA and its implementing regulations and will keep members apprised of significant news with respect to the overtime issue.



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  • Supreme Court Issues Decision Regarding Retirement Plan Fiduciary Duties in Hughes v. Northwestern – CUPA-HR

    Supreme Court Issues Decision Regarding Retirement Plan Fiduciary Duties in Hughes v. Northwestern – CUPA-HR

    by CUPA-HR | March 18, 2022

    On January 24, the Supreme Court issued its unanimous decision in Hughes v. Northwestern University, a case dealing with 403(b) retirement plan fiduciary duties under the Employee Retirement Income Security Act (ERISA). The court criticized the standard applied by the lower courts and sent the case back to the 7th Circuit to reevaluate the plaintiffs’ allegations.

    In the case, the three plaintiffs, all current or former employees of the university, alleged the plan fiduciaries violated the duty of prudence standard under ERISA by “(1) failing to monitor and control recordkeeping fees, resulting in unreasonably high costs to plan participants; (2) offering mutual funds and annuities in the form of ‘retail’ share classes that carried higher fees than those charged for otherwise identical share classes (institutional share class) of the same investments; and (3) offering investment options that were likely to confuse investors.”

    In their decision, which was written by Justice Sotomayor, the court explained that, when determining if a plan fiduciary violated the duty of prudence standard under ERISA, courts must engage in “a context-specific inquiry of the fiduciaries’ continuing duty to monitor investments and to remove imprudent ones” as articulated in Supreme Court precedent, Tibble. The court said the 7th Circuit was wrong in concluding that by providing a choice of investment options, plan fiduciaries insulated themselves from liability claims. It is important to note that the court chose not to weigh in on the plausibility of the plaintiffs’ claims, only on the standard applied by the lower courts.

    CUPA-HR, along with 17 other higher education associations, participated in an amicus brief filed in the case. In the brief, we supported the 7th Circuit’s decision in favor of Northwestern University. We explained, “The question in this case is whether petitioners have pleaded sufficient facts to state a plausible claim for breach of fiduciary duty in administering a retirement plan” under ERISA, but the complaints in this case “overlook important features of the university retirement system and ignore the discretion ERISA affords to plan fiduciaries.” We also clarified that universities and plan fiduciaries “must have the flexibility o administer the plans based upon the particular needs and preferences of the plan participants, without constant second-guessing.”

    The 7th Circuit now has the opportunity to revisit the case. It may choose to dismiss much of the case or review the record again.

    Following the decision, our amicus briefing counsel was quoted saying, “Despite some of the early headlines that have already been written suggesting this case is a really big deal, in fact, I view this as a limited ruling… [T]he Supreme Court did not reach any specific or detailed conclusions that any of the investments offered by the defendants in this case are actually inappropriate, nor did the justices come down and say a fiduciary can never offer retail shares of funds within their institutional retirement plans. Instead, what they said, in a nutshell, is that the 7th Circuit simply did not give enough consideration of the duty-to-monitor precedents set by Tibble.”

    Importantly, the final sentence of the Supreme Court’s decision provided a silver lining; “At times, the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs, and courts must give due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise.” The court here is clarifying that fiduciaries must be given due deference when making tough decisions.

    That being said, the decision could pave the way for more cases on fiduciary duties to be filed, as plaintiffs’ attorneys may take advantage of the potential opening in order to force settlements.



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  • Supreme Court Blocks OSHA Vaccine and Testing ETS and Upholds CMS Healthcare Worker Vaccine Mandate – CUPA-HR

    Supreme Court Blocks OSHA Vaccine and Testing ETS and Upholds CMS Healthcare Worker Vaccine Mandate – CUPA-HR

    by CUPA-HR | January 14, 2022

    On January 13, the U.S. Supreme Court blocked enforcement of the Occupational Safety and Health Administration (OSHA)’s Emergency Temporary Standard (ETS) that would mandate vaccines or testing requirements for employers with 100 or more employees, but reinstated enforcement of the Centers for Medicare and Medicaid Services (CMS)’s mandate that would require COVID-19 vaccinations for healthcare workers working at facilities that participate in Medicare and Medicaid.

    In December, the U.S. Court of Appeals for the 6th Circuit vacated the 5th Circuit Court’s nationwide emergency motion to stay the OSHA ETS, paving the way for OSHA to continue enforcement of the ETS vaccine and testing requirements. The decision led several business groups and Republican-led states to file emergency applications with the Supreme Court seeking to reinstate the stay. The Supreme Court heard oral arguments on the OSHA mandate on January 7, leading to the court’s decision to block the vaccine and testing mandate.

    Additionally, the Supreme Court heard oral arguments on the CMS healthcare worker mandate on January 7. They ultimately ruled in favor of allowing the CMS healthcare worker vaccine mandate to take effect while the mandate is being litigated in several U.S. district courts and circuit courts. The CMS mandate was previously stayed in 25 states after four lawsuits were filed against CMS in district courts in Missouri, Louisiana, Florida and Texas.

    Though not heard or ruled on by the Supreme Court, the federal contractor vaccine mandate, which requires all federal contractors to mandate COVID-19 vaccinations for their employees, remains stayed by the U.S. District Court for the Southern District of Georgia, which issued a nationwide preliminary injunction against the mandate on December 7. The Biden administration has appealed the decision to the 11th Circuit Court, which has since upheld the lower court’s injunction but has not yet ruled on the legal merits of the mandate. Litigation continues for this rule in the 11th Circuit Court.

    The Supreme Court’s decisions bring the rules back to the lower courts to continue litigation on their merits; however, the recent decisions do signal how the Supreme Court would likely rule on the merits of the cases if they are once again appealed to the higher court.

    CUPA-HR will continue to keep members apprised of any legal updates as they relate to the fate of the OSHA ETS, the CMS healthcare vaccine mandate, and the federal contractor vaccine mandate.



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  • Federal Court Reinstates OSHA Vaccination and Testing ETS – CUPA-HR

    Federal Court Reinstates OSHA Vaccination and Testing ETS – CUPA-HR

    by CUPA-HR | December 20, 2021

    On December 17, the 6th U.S. Court of Appeals vacated the 5th Circuit Court’s emergency motion to stay the Occupational Safety and Health Administration (OSHA)’s COVID-19 Vaccination and Testing Emergency Temporary Standard (ETS), paving the way for OSHA to continue implementing and enforcing the vaccination and testing requirements for covered employers with 100 or more employees.

    The ETS requires covered employers and employees to be fully vaccinated or in compliance with testing requirements by January 4, 2022. The stay, which was granted in November, temporarily halted OSHA from implementing and enforcing the vaccination and testing requirements. While the stay was in place, it was unclear whether or not OSHA would be able to fully implement the ETS by January 4 or any time after.

    With the recent decision from the 6th Circuit Court, OSHA now plans to implement the ETS as quickly as possible. To account for the timing uncertainty created by the stay, however, OSHA also has announced that it will not issue non-compliance citations for any of the requirements of the ETS before January 10, 2022, and it will not issue non-compliance citations specifically for the ETS’s testing requirements until February 9, 2022, “so long as an employer is exercising reasonable, good faith efforts to come into compliance with the standard.” OSHA has also vowed to provide compliance assistance to help employers navigate these new requirements and timelines.

    Shortly after the 6th Circuit’s order, a number of groups challenging the ETS filed emergency applications with the Supreme Court seeking to reinstate the stay. Meanwhile, the federal contractor vaccine mandate and the Centers for Medicare and Medicaid Services’ (CMS) healthcare worker vaccine mandate remain stayed as litigation continues in several federal courts.

    CUPA-HR will keep members apprised of any future legal challenges and decisions made on the OSHA ETS, federal contractor vaccine mandate, and healthcare worker vaccine mandate.



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  • Biden Administration’s Vaccine Mandates Face Legal Challenges in Court – CUPA-HR

    Biden Administration’s Vaccine Mandates Face Legal Challenges in Court – CUPA-HR

    by CUPA-HR | December 9, 2021

    Over the past several months, the Biden administration announced and implemented several vaccine and testing mandates for federal workers, federal contractors and private employers. States and business stakeholders quickly responded with lawsuits against the administration’s mandates, which continue to be challenged in courts around the country. To keep CUPA-HR members apprised of the legal challenges, we have detailed below the most recent litigation updates for the federal contractor vaccine mandate, the Occupational Safety and Health Administration (OSHA)’s Emergency Temporary Standard (ETS), and the Centers for Medicare and Medicaid Services’ (CMS) vaccine mandate for healthcare workers — all three of which are on hold pending the various lawsuits’ outcomes.

    Federal Contractor Vaccine Mandate

    On September 9, President Biden issued Executive Order 14042 (EO), “Ensuring Adequate COVID Safety Protocols for Federal Contractors,” as part of his “Path Out of the Pandemic” plan. The EO tasks the Safer Federal Workforce Task Force with implementing guidance that requires all federal contractors to mandate COVID-19 vaccinations for their employees. The current effective date is January 4, 2022, meaning all covered contractor employees must be fully vaccinated by January 18, 2022. A federal court recently enjoined the government from implementing the EO, however, so it remains unclear when, if ever, the mandate will go into effect.

    Numerous lawsuits have been filed against the mandate arguing that the Biden administration does not have authority to require vaccinations, and two federal courts have already issued decisions. On November 30, the U.S. District Court for the Eastern District of Kentucky issued a preliminary injunction against the mandate, stopping enforcement in Kentucky, Ohio and Tennessee only. On December 7, a federal judge at the U.S. District Court for the Southern District of Georgia granted a motion for a nationwide preliminary injunction against the vaccination mandate for federal contractors, halting enforcement for federal contractors in all states. The Biden administration is expected to challenge this decision.

    OSHA Emergency Temporary Standard

    On November 5, OSHA issued its COVID-19 Vaccination and Testing ETS requiring employers with 100 or more employees to implement vaccination or testing policies for their workers. As it currently stands, the ETS requires covered employers and employees to be fully vaccinated by January 4, 2022. A federal court has enjoined OSHA from implementing the ETS, however, and it remains unclear whether the ETS will be in effect on January 4 or anytime thereafter.

    Over three dozen lawsuits were filed against the rule, with at least one in all 12 circuit courts in the country. On November 6, the U.S. Court of Appeals for the 5th Circuit granted an emergency motion to stay the ETS, and on November 12, it extended the stay while it further reviewed the motion for a permanent injunction, ordering OSHA to stop implementation and enforcement of the ETS until further court order. Due to the high volume of cases at various circuit courts, a lottery was held on November 18 to determine which circuit court would hear the case to make a sweeping decision, which the 6th Circuit won, meaning the stay remains in place until the 6th Circuit makes a decision on the motion. It is likely the stay will remain in place until at least December 10; that said, the 6th Circuit can decide to lift the stay before that if it chooses to do so.

    CMS Vaccine Mandate for Healthcare Workers

    On November 5, the Centers for Medicare and Medicaid Services (CMS) issued a rule requiring healthcare workers in facilities that receive Medicare or Medicaid funds be vaccinated against COVID-19 by January 4, 2022. This rule also has been stayed by federal courts.

    Four lawsuits were filed against CMS challenging the agency’s authority to issue the rule. On November 29, the District Court for the Eastern District of Missouri blocked implementation and enforcement in the 10 states that challenged the rule: Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota and New Hampshire. On November 30, the District Court for the Western District of Louisiana issued a preliminary injunction blocking enforcement of the mandate nationwide, except in the 10 states impacted by the Missouri ruling. Decisions in the two other lawsuits are still pending.

    CUPA-HR continues to monitor the ongoing litigation for all of the vaccine and testing mandates and will keep members apprised of any decisions that will impact institutions’ compliance efforts.



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