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LEGAL ISSUES

Supreme Court's Docket Puts Business in the Spotlight

A look at five pending cases that have the potential to change the way you do business.

Dennis Brack/Bloomberg

Seated from front left are Chief Justice John G. Roberts, Antonin Scalia and Clarence Thomas. Standing at rear are Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.

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The Supreme Court, minus Justice John Paul Stevens and with the addition of Elena Kagan, opens its doors today. As always, this year's cases will cover a range of legal theory. A number of the disputes this year involve business law. Here's a look at a few upcoming cases on the court's docket that could potentially affect the practices of thousands of small and midsize businesses around the country.

Kasten v. Saint-Gobain Performance Plastics Corp.


The issue: The Fair Labor Standards Act protects employees from employer retaliation after a complaint is made. In this case, the employee complained verbally, but not in writing. Are his oral complaints protected by the statute?

Kevin Kasten was employed by Saint-Gobain Performance Plastics in Wisconsin until late 2006 when he was terminated on the claim that he had violated the company's policy for punching the clock.  Kasten asserts that he told his supervisors on four separate occasions that the location of the time clock was illegal because it "prevented employees from being paid for time spent donning and doffing their required protective gear," according to the brief.  After seven out of 10 judges in the U.S. Court of Appeals for the Seventh Circuit denied his bid a rehearing in October, the Supreme Court agreed to hear Kasten's case.

Since Kasten never officially filed his complaints about the clock with a judicial or administrative body, the court must determine whether Kasten's complaints were protected by the Fair Labor Standards Act, and second, and whether unwritten verbal complaints are protected activity.

Staub v. Proctor Hospital


The issue: Under what circumstances can an employer be held liable for discriminatory actions made by managers who are not direct supervisors.

Vincent Staub, an army reservist and angiography technologist, sued his employer, the Proctor Hospital of Peoria, Illinois, after he was terminated from his position for what his employer called insubordination, shirking, and attitude problems. However, Staub claims that starting in the year 2000 his managers began to schedule him on weekend shifts, which he could not work. As an army reservist, he had to participate in drill exercises every weekend. Staub claims he complained to his superiors, but that he was scheduled on weekend shifts anyway and that his managers called his reservist duties "bullshit." According to Staub's brief, managers "would post a notice on the bulletin board stating that volunteers were needed to cover the drill weekends, portraying Staub as irresponsible."

Staub's lawyers are set to explore the legal implications of something called "the cat's paw theory," which is a "way of proving discrimination when the decision maker herself is admittedly unbiased" but influenced by biased managers, according to the brief.

Matrixx Initiatives v. Siracusano

The issue: If the number of adverse incidents in a drug study prove to be statistically insignificant, does the company still have to disclose the information? If the company does not disclose the information, are they violating federal securities laws?

Executives at Matrixx Initiatives, an Arizona-based drug company, received fewer than 100 reports from doctors around the country that the company's popular nose inhaler, Zicam, caused adverse reactions, including the loss of smell. Side effects are already required to be mentioned on TV commercials and any print or radio advertising, so the real question for the nine justices will be how much is too much information, especially when it comes to pharmaceuticals litigation. A district court threw out the securities lawsuit, but the Ninth Circuit reversed that decision.

Thompson v. North American Stainless


The issue: Does an employer violate anti-retaliation provisions of the Fair Labor Standards Act if he or she fires the spouse of an employee that made a formal complaint against the employer?

Eric Thompson worked as a metallurgical engineer for North American Stainless, the owner and operator of a stainless steel manufacturing facility in Carroll County, Kentucky until 2003, when he was fired shortly after his wife, who also worked for North American Stainless, filed a charge with the U.S. Equal Employment Opportunity Commission (EEOC) in September 2002 alleging gender discrimination. Thompson alleges that he was terminated in retaliation for his then-fiancée's EEOC charge, while North American Stainless contends that performance-based reasons supported the plaintiff's termination.

J. McIntyre Machinery v. Nicastro

The issue: Can a consumer sue
in a state court a manufacturer that is based in another country over a product that the company distributes in the U.S.?

On October 11, 2001, Robert Nicastro, an employee of Curcio Scrap Metal in New Jersey, was operating a McIntyre recycling machine used to cut metal. Nicastro's right hand got caught in the machine's blades, which severed four of his fingers.  J. McIntyre Machinery is a company incorporated in the United Kingdom but its equipment is sold through an exclusive American distributor, McIntyre Machinery America, Ltd. (McIntyre America), to Curcio Scrap Metal.

The initial complaint alleged that the machine was defective, but the court granted J. McIntyre's motion to dismiss the action, because the manufacturer was out of the court's jurisdiction. 

Last updated: Oct 4, 2010




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