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EMPLOYEE BENEFITS

How 3 New Supreme Court Decisions Will Affect Your Business

The Supreme Court handed down a couple of big wins for employers and one big game changer.
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The Supreme Court handed down three decisions this week that will affect your business, regardless of how big you are or what you do. It's good to keep on top of these things so you don't get hit with a surprise--for example a lawsuit because you didn't know that the law had changed (or been clarified).

In Vance v. Ball. St. University the court determined there is a different standard between supervisors and coworkers when it comes to harassment and "vicarious liability." At issue is the a tangible employment action--if there isn't one it makes a big difference. The employer can "escape liability" if they can show that they exercised reasonable care (for instance, having a policy against harassment and have a way to correct harassment if it occurs) and that the person suing failed to take advantage of these policies and procedures.

Employment Attorney, Jon Hyman explains:

Make no mistake, this is a huge victory for employers. Vicarious liability for unlawful harassment is a huge problem for employers. It means that that if the unlawful harassment occurred, the employer is liable, whether or not it knew about it, should have known about, or even took efforts to stop it from occurring. This case limits that vicarious liability only to those are in an actual position to affect the plaintiff's terms and conditions of employment.

So, this establishes firmly that there is a difference between supervisors and coworkers. This is good for your business. You should absolutely make up an organizational chart and keep hire/fire/promotion/raise/other supervisory actions within the scope of that org chart. You don't want the court to determine that since your CFO controls the money, he has supervisory authority over people because he chooses the raises. Keep him setting budgets, but direct supervisors should have ultimate authority. It lowers the number of people who can get your company in trouble. Be clear about this. It can keep you out of court.

In University of Texas South Western Medical Center vs Nassar the court determined that, as far as retaliation is concerned, there is a "but for causation" standard. In this particular case, Nassar complained he was a target of discrimination, and after he complained he didn't get a permanent position. The Medical Center argued that there were perfectly legal reasons that they didn't hire him, and therefore the retaliation argument was irrelevant. The court agreed.

What this means to you is that when you are in the process of, for instance, working through a performance improvement plan (PIP) with an employee, you don't need to panic when that person files a discrimination complaint. If the complaint has  merit, you need to, of course, address it and remedy it. However, you don't have to pull back the PIP and stop that process for fear of being hit with a retaliation suit. You would have taken this action even if the employee hadn't complained of being discriminated against.

Both of these decisions are big wins for employers. The third decision is not so clear cut. The DOMA decision, which struck down the federal legal definition of marriage as only between one man and woman woman would, on it's face, seem to not affect your business, but you'd be wrong.

How this will all work out is yet to be seen, but there are some areas which will immediately be affected. For instance, if you have 50 or more employees, you're subject to the Family Medical Leave Act (FMLA). Attorney and FMLA expert, Jeff Nowak explains:

If an employee is married to a same-sex partner and also lives in a state that recognizes same-sex marriage, the employee will be entitled to take FMLA leave to care for his/her spouse who is suffering from a serious health condition, for military caregiver leave, or to take leave for a qualifying exigency when a same-sex spouse called to active duty in a foreign country in the military.

Got that? If you live in a state that recognizes same sex marriage you weren't obligated to allow an employee time off to take care of an ill same gendered spouse. You are now.  If you terminate an employee who is eligible for continued health insurance through COBRA, in the past the same gender spouse wasn't eligible. They are now.

The rest of this will have to be worked out. But keep your eyes and ears open. And consult with your own attorneys before making decisions.

 

IMAGE: iStock
Last updated: Jun 27, 2013

SUZANNE LUCAS | Columnist

Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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