This Week’s News: Arbitration Agreements and the NLRA; Employer Attorneys’ Fees; Statute of Limitations
Three significant decisions in the employment law arena were issued over the last ten days, two by the United States Supreme Court and one by the Seventh Circuit Court of Appeals. First, the Supreme Court issued its opinion in Green v. Brennan, holding that the statute of limitations for a constructive discharge claim under Title VII begins to accrue on the date an employee resigns, and not on the date of the discriminatory action that allegedly led the employee to resign. The high court reasoned that statutes of limitation ordinarily do not begin to run until the plaintiff has a "complete and present cause of action." A constructive discharge claim has two elements: (1) discriminatory conduct that would compel a reasonable employee to feel forced to resign; and (2) actual resignation. Because resignation is an element of the claim, the employee does not have a present cause of action until he or she resigns. Based on this reasoning, the Court rejected the employer's argument that the statute of limitations begins to run prior to resignation on the date of the discriminatory conduct that allegedly made the employee feel forced to resign.
The Supreme Court also issued its decision in CRST Van Expedited v. EEOC, holding that an employer need not necessarily prevail on the merits in order to recover attorneys' fees in a Title VII case. In a case that received a lot of publicity, the EEOC was found to have not adequately attempted to conciliate the dispute prior to filing a lawsuit. Ultimately, the EEOC's case was dismissed as a result of this failure. The district court then awarded the employer its attorneys' fees as the prevailing party in the case. The Eighth Circuit Court of Appeal reversed, however, holding that an employer must obtain a ruling on the merits in its favor in order to be a prevailing party eligible to recover attorneys' fees. Last Thursday, the Supreme Court reversed the Eighth Circuit's ruling and held that an employer need not obtain a ruling on the merits in order to "prevail." Here, the employer "prevailed" by virtue of the dismissal of the EEOC's claims against it. The Court ruled, however, that prevailing is not alone enough to warrant an award of attorneys' fees under Title VII. Applying long-standing precedent, the Court held that a prevailing employer may only recover attorneys' fees in a Title VII case upon a showing that the plaintiff's (in this case the EEOC's) action was frivolous, unreasonable, or groundless, or that the plaintiff continued litigating it after it clearly became so. The Court did not decide whether the EEOC's action was frivolous, unreasonable, or groundless, but instead remanded that issue back to the lower court to determine.
Finally, on the subject of employment arbitration agreements, the Seventh Circuit Court of Appeals issued a surprising decision yesterday in Lewis v. Epic Systems Corp., agreeing with the NLRB's highly publicized position that class and collective action waivers in arbitration agreements violate employees' NLRA right to engage in concerted activity and are, therefore, unenforceable. This newly published decision directly conflicts with the Fifth Circuit Court of Appeal's decision in D.R. Horton, which flatly rejected the NLRB's position on this issue. With the split of authority among the Circuit Courts, it is possible that the issue will make its way to the United States Supreme Court to decide and resolve the conflict. In the meantime, the enforceability of employment arbitration agreements remains significantly dependent on the forum for deciding the issue.