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High Court to test FMLA

The Supreme Court will consider important workplace issues including the FMLA, and the definition of "damages."

November 28, 2002
Related Topics: Miscellaneous Legal Issues, Employee Leave, Discrimination and EEOC Compliance
The Supreme Court will consider only a handful of cases this session thatdeal with workplace legalities. Cheryl A. Harris, a partner in the New York Cityoffice of Heidell, Pittoni, Murphy & Bach, LLP, breaks down the threeemployment law cases that HR professionals should keep an eye on.

The first case is Nevada Department of Human Resources v. Hibbs. What’s theissue here?
This case involves the FMLA--the law where employees can qualify for up to 12weeks of leave to care for a major illness or that of a dependent family member.The question here is whether an individual can sue a state for violation of theFMLA. Hibbs sued the Nevada Department of Human Resources after he was denieduse of FMLA leave. The Nevada Department of Human Resources is claiming in itscase that the FMLA is an improper exercise of congressional power--and that itviolates the 11th Amendment right of states to be free from suit.
What happened then?
The lower-court judge [agreed with Nevada’s argument and dismissed Hibbs’scase]. Hibbs then appealed, and the court of appeals reversed the lower court.Its reasoning: There are two tests as to whether Congress can pass a piece oflegislation--in this case the FMLA--that bypasses the 11th Amendment [i.e.,sovereign immunity of the state].
What are the two tests?
The first test is that Congress has to have an express intention to [bypasssovereign immunity] in the piece of legislation they’re acting under. Thecourt’s finding is that if you look at the FMLA, you find an express intent byCongress to have this applied to public entities as well. The second test isthat [the legislation] has to be a valid exercise of congressional power. Todetermine that, you have to see where the exercise is coming from, which for theFMLA is the 14th Amendment. The FMLA emanates from the 14th Amendment right toallow gender rights and equality to be maintained and upheld in the workplace.Once you pass those two tests, Congress is free to pass a law, even if it meansindividuals can drag the state into court. That’s what the appeals court said.
What will the Supreme Court consider?
The issue now up for review is whether the Supreme Court is going to agreewith that argument. Or whether it will return to what the lower court ruled andsay, "We agree with you, the guy has no right to take the state of Nevada tocourt under the FMLA."
What’s the predicted outcome?
I expect the Supreme Court will uphold the finding of the appeals court.Otherwise, it would basically be saying that states are free to disobey themandate of the FMLA, and it would be excluding a substantial amount of workers.If you want to say the FMLA doesn’t offer protection to this whole group ofpeople, that would be a stupendous ruling.
The second case is Norfolk & Western Railway Co. v. Ayers. What’s atissue here?
This is an interesting case about damages. It has to do with whether an awardgiven for emotional distress under the Federal Employers’ Liability Act wasproperly awarded. The people who brought this claim simply alleged that theywere afraid of getting cancer. They did not bring any evidence of physicalmanifestation or any corroboration of injury other than this amorphous fear ofgetting cancer. Usually the common-law principle is that in order to getdamages, you have to show some physical injury. For emotional-distress damages,you have to show some rational basis for the emotional distress. In asexual-harassment context, for instance, the woman says, "I’ve been sexuallyharassed for the last two years, and it got to the point where I couldn’tfunction. I couldn’t do my job because of the catcalls and threats. I had toget medication to calm me down." That’s generally how emotional distressgets manifested. But you usually can’t just say you have emotional distress.You have to [offer] some kind of proof. You have witnesses, a partner or friend,that can say you weren’t able to function. You can’t just say you wereafraid and have that be that.
So what are the appellants saying?
They’re saying, "We’re appealing this award of damages because at trialthey did not bring forth any kind of evidence that they suffered any outwardmanifestation of this emotional distress, yet they were awarded money." That’sthe first issue.
What’s the second issue?
Apparently there was no apportionment of damages. Usually, if there are twoor more people who are alleged to have caused the damage, the court is obligedto say, "This party did 70 percent of the damage, this party did 30 percent."Because often there’s insurance coverage underneath these claims, and thecompanies need to know who’s going to pay what. That’s important for HRpeople who have to counsel companies in-house and risk managers who say, "Ifyou take this case to trial, this is what you’d likely pay." When damagesdon’t get apportioned, obviously the whole picture is very cloudy in terms oftrying to evaluate what a case is worth and decide whether it should be settledor taken to trial.
With the third case, Clackamas Gastroenterology Associates v. Wells, what’sat stake?
This is an interesting case for small businesses. There are four physicianshareholders of this small corporation. In order for the plaintiffs to bring anemployment-discrimination case under Title VII, the company has to have 15employees. That’s the requirement of the statute. So in order to [reach theminimum requirement of] 15 employees, the plaintiff had to argue that the fourshareholders should be considered employees.
Why should that concern employers?
I think small businesses will be jittery about this because normally if you’rea shareholder of the business, you’re not an employee. You’re an owner ofthe business. The plaintiff is asking the court if certain circumstances piercethe corporate veil: for tax purposes the shareholders will be considered owners,and for liability purposes they’ll be considered employees.
What do you predict the court will rule?
I believe it’s likely going to rule that the same treatment shareholdersget for the purposes of the tax code, they will get for the purposes of decidingwhether the threshold has been made for bringing an employment-discriminationcase.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Workforce, December 2002, pp. 78-79 -- Subscribe Now!

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