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The top 7 recent employment law cases you should know

By David I. Brody

Jul. 31, 2020

When March began this year, nobody had any idea what was just around the corner – a global pandemic, a fiscal meltdown, unprecedented unemployment and a national reckoning with the terrible consequences of centuries of racial violence and inequity. Then we all witnessed a historic decision from the Supreme Court, affirming, at long last, that our family and friends in the LBGTQ community are protected from discrimination in employment under federal law.

In this ever-changing landscape, it is increasingly important to keep up to speed on the latest employment legal cases and developments. Below is a brief summary of the seven most significant employment legal cases.

1. U.S. Supreme Court Issues Landmark Civil Rights Decision

Bostock v. Clayton County, 590 U.S. (2020)

The Supreme Court has issued a landmark decision in Bostock v. Clayton County , holding that Title VII prohibits discrimination against employees based upon sexual orientation and transgender status.

In the 6-3 Opinion of the Court, written by Justice Gorsuch — who, along with Chief Justice Roberts, sided with the four “liberal” members of the Court — the majority held that a “straightforward” rule emerges from the ordinary meaning and application of Title VII’s prohibition against sex discrimination:

“[F]or an employer to discriminate against employees for being homosexual or transgender, the employer must intentionally discriminate against individual men and women in part because of sex . That has always been prohibited by Title VII’s plain terms — and that should be the end of the analysis.’”

Such discrimination has long been a violation of Massachusetts law, Chapter 151B, but with the Bostock decision, it is now clearly unlawful to discriminate in employment on the basis of sexual orientation or gender identity.

2. Unlawful Employment Practices During the COVID-19 Pandemic

During these uncertain times, employers and employees alike are struggling to understand their legal rights and obligations. To that end, there has been a great deal of COVID-specific guidance provided by state and federal agencies, including the U.S. Equal Employment Commission , Massachusetts Commission Against Discrimination , and Office of the Attorney General .

It is important to remember that neither a global pandemic nor an economic recession can be used as a shield by employers to carry out unlawful employment practices.

Indeed, as the Massachusetts Supreme Judicial Court has noted, just because an employer may be required to “reduce its workforce does not mean that it is free to make its employment decisions on impermissible grounds: ‘even during a legitimate reorganization or workforce reduction, an employer may not dismiss employees for unlawful discriminatory reasons.’” See Sullivan v. Liberty Mut. Ins. Co. , 444 Mass. 34, 41–42 (2005).

If you think that you may have been illegally targeted, seek legal counsel as soon as possible and prior to waiving any legal rights.

Hlatky v. Steward Health Care System, Inc., 484 Mass. 566 (2020)

Following a jury trial, Dr. Hlatky, an experienced cancer researcher, was awarded $10 million in damages in a breach of contract action against her former employer, Steward Health. The $10 million damage award represented the cost of reestablishing her research laboratory, which she lost as a result of Defendant’s unlawful conduct.

On appeal, the Massachusetts Supreme Judicial Court unanimously agreed the damages awarded were not too speculative, noting that the harm suffered by Dr. Hlatky, including the loss of her research laboratory, equipment, and cell samples, constituted her “life’s work.”

The Court was, however, divided regarding whether restrictions should be imposed on how Dr. Hlatky could use the $10 million award. In the six Justice decision, three Justices were concerned that, since the laboratory had not actually belonged to Dr. Hlatky, an unrestricted award might put Dr. Hlatky in a better position than she would have been had there been no breach, e.g., “[n]othing would prevent Hlatky from spending the $10 million on a house or a yacht rather than on the re-establishment of a cancer research laboratory.”

The other three Justice were not persuaded, “Whether she wishes to start again, whether she even could start again after so much time has passed and her faculty position has been lost, whether she wishes to use the money to fund different research or others; research in the same field, or whether she wants to hike the Appalachian trail — these matters simply are not our concern.”

These Justices pointed out that imposing restrictions on such a damage award would open a “Pandora’s box of unknown future harm to the predictability of contract law upon which contracting parties have relied for hundreds of years.”

As the Court was equally divided, the trial court’s award of monetary damages – without restrictions – was affirmed.

4. Non-Competition Agreements and the “Material Change” Doctrine

Now Bus. Intel., Inc. v. Donahue, C.A. No. 17-3732 (Middlesex Sup Ct. Apr. 1, 2020)

A non-competition agreement may become unenforceable if, after execution, the terms and conditions of employment are modified to the point where the parties have effectively abandoned the original employment agreement and entered into a new employment agreement. This is known as the “material change” doctrine which was delineated in F.A. Bartlett Tree Expert Co. v. Barrington, 353 Mass. 585 (1968). The application of the material change doctrine is a highly fact-specific inquiry and will focus on factors, such as promotions, changes in job duties and titles, changes in remuneration, changes to sales area, as well as the associated time periods for such changes.

In the recent case of Now Bus. Intel. Inc. V. Donahue , the Superior Court rejected an employee’s material change defense to the enforceability of his non-compete. In granting Summary Judgment in favor of the former employer, the Court ultimately held that the temporary and short-term changes to the employee’s job duties, without more, did not amount to a material change sufficient to render otherwise reasonable and valid post-employment restriction unenforceable.

5. Anti-SLAPP Motion Revived

Rosario v. Caring Bees Healthcare, Inc., C.A. No. 19-P-1223 (Mass. App. Ct. June 5, 2020)

Retaliatory lawsuits designed to silence one from speaking out are referred to as strategic lawsuits against public participation, or “SLAPP Suits,” and are expressly forbidden in Massachusetts. See the Anti-SLAPP Statute, M.G.L. c. 231, § 59H (the “Statute”). The Statute provides a quick mechanism to dispose of SLAPP suits, and it allows the victim of a SLAPP suit to recover attorney’s fees.

Here, Ms. Rosario had complained (to co-workers, her mother, the MCAD, and, finally, in court) of sexual harassment by her supervisor, Jean Paul Karangwa. In response, Mr. Karangwa counter-sued Ms. Rosario for defamation and intentional infliction of emotional distress. Relying on the Statute, Ms. Rosario moved to dismiss Mr. Karangwa’s counter-claims. The lower court denied her motion, indicating that there was a colorable basis to believe that Ms. Rosario’s statements were defamatory, i.e ., false and causing damage to Mr. Karangwa.

However, the Massachusetts Appeals Court reversed and remanded. The Court reiterated that the legal issue was not solely whether Mr. Karangwa’s claims were “colorable” but also, if so, whether or not they were retaliatory, i.e. , “primarily brought to chill [Ms. Rosario’s] legitimate petitioning activities.”

In considering whether or not Mr. Karangwa’s counterclaims were retaliatory, the lower court should consider, among other things, (1) whether the claims are ‘typical’ SLAPP claims, e.g., claims that one would not likely bring on their own, (2) the temporal proximity of when the counter-claims were brought to when Ms. Rosario engaged in escalated protected activity, e.g., when Ms. Rosario filed her claims to court, and (3) the chilling impact on such activity by, for example, increasing the cost to Ms. Rosario of complaining about sexual harassment.

The case was remanded to the lower court for a sequential application of the correct anti-SLAPP standard.

6. Enforcement of Arbitration Agreements

Theodore v. Uber Technologies, Inc., C.A. No. 18-cv-12147 (D. Mass. Mar. 3, 2020)

Many executives (and employees generally) are subject to arbitration clauses of which they are unaware until a dispute arises. The enforceability of such clauses is often hotly disputed. This is particularly true in civil rights cases, pitting two established principles against each other ( i.e. , the preference for arbitration under federal law against a strong public policy against discrimination). Enforceability is often fact-specific, such as whether the agreement to arbitrate and the waiver of judicial remedy are sufficiently obvious and clear.

Although Theodore is not an employment case, its analysis may be useful, especially regarding on-line forms that invite a user to follow one or more links which can be easily bypassed. The US District Court’s analysis involved not only a review of the text itself but also a discussion of the font size, layout, and background color on the page. The Court went so far as to include screen-shots in the decision.

Ultimately, the Court refused to compel arbitration where Uber invited a customer to click to “CREATE ACCOUNT” without “reasonably communicating” the impact of doing so.

7. The Process – and Not Just the Final Decision – Matters

Comcast Corp. v. Nat’l Assoc. of African American-Owned Media, 140 S.Ct. 1009 (2020)

In Comcast , the Supreme Court of the United States unanimously held that the but-for causation standard applies to claims of racial discrimination raised under 42 U.S.C. § 1981, a statute which guarantees all persons the same right “to make and enforce contracts . . . as is enjoyed by white citizens.” However, the Court expressly declined to decide an issue raised by Comcast, i.e , whether § 1981(a) guarantees only the right to equivalent contractual outcomes, as Comcast argued, or if it also guarantees the right to an equivalent contracting process, as the law has been interpreted for years.

In her concurrence, Justice Ginsburg addressed Comcast’s argument directly:

“I write separately to resist Comcast’s attempt to cabin a ‘sweeping’ law designed to ‘break down all discrimination between black men and white men” … Under Comcast’s view, § 1981 countenances racial discrimination so long as it occurs in advance of the final contract-formation decision. Thus, a lender would not violate § 1981by requiring prospective borrowers to provide one reference letter if they are white and five if they black. Nor would an employer violate § 1981 by reimbursing expenses for white interviewees but requiring black applicants to pay their own way … That view cannot be squared with the statute. An equal ‘right … to make… contracts’ … is an empty promise without equal opportunities to present or receive offers and negotiate over terms … It is implausible that a law ‘intended to secure … practical freedom’ … would condone discriminatory barriers to contract formation.”

As Justice Ginsburg recognized, and recent events have made abundantly clear, we must remain vigilant to protect and expand, not erode, our civil rights laws.

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20 most important Labour Law judgements every HR manager should learn about

This article is written by Gaurav Kumar , from Surendranath Law College (University of Calcutta). This article depicts the landmark judgments pertaining to labour laws.

Table of Contents

Introduction

The Labour law is the area of law that regulates the relationship between the employer and the employee. An employer could be government agencies or private entities, companies, organizations, industry. It also mediates the relation between trade unions, employing entities. Recently, the Parliament of India passed three long-awaited labour codes compiling the 29 central laws. The three codes are:

The Industrial Relations Code Bill, 2020 ;
Code on Social Security Bill, 2020 ;
The Occupational Safety, Health and Working Conditions Code Bill, 2020 .

They received Presidential assent on September 29, 2020, bringing a major change in the arena of Labour and Employment Laws. Since, “Labour” falls under the concurrent list of the Constitution of India , so both the Parliament and the State legislature can make laws on the subject. Prior to the existence of newly formed labour codes, there were more than 40 central laws related to the subject “labour and employment”.

The second National Commission on Labour (2002) found the existing laws were complex with anarchic provisions, so it proposed the consolidation of the existing laws. In this article, we will discuss twenty landmark judgements pertaining to the Labour Laws that every HR manager should learn. However, the new labour codes have not been enforced yet. It will be tentatively enforced by the upcoming financial year (April 2021).

Social Welfare Act

Workmen of m/s firestone tyre and rubber co. of india v. management, air 1973, sc 1227 air 1227, 1973 scr (3) 587.

In this case , the workmen of the Firestone Tyre and Rubber Company had a dispute with its employer as the employer had terminated its workmen on the basis of a Domestic Inquiry Finding. During the pendency of the case, the Industrial Tribunal Act was amended in 1971 and Section 11A was inserted conferring the power over the Appellate Authority to the Industrial Tribunal over the domestic enquiry into the arising disputes.

The Tribunal decided in the favour of the employer, denying to have the retrospective effect of Section 11A. Aggrieved from the decision of the tribunal, the workmen moved to the apex court against the employer.

The issue before the Supreme Court was on the interpretation of Section 11A of the Industrial Disputes Act, 1947. Since, the section was inserted through amendment amidst the pending suit, the question in issue was whether the said section shall be applicable on the case which is instituted prior to the insertion of the said section.

The Supreme Court stated that the Industrial Disputes Act, 1947 was a beneficial piece of legislation, enacted by the legislature for the betterment of the employees. The Court found the legislation to be a welfare one so it decided to apply the beneficial rule of legislation. It was further held that in case of arising disputes among the two parties, leniency will be applied over the view which will be in the best interest of employees.

However, the suit was instituted prior to the amendment so the said section shall not be applicable in this case. It shall be only applicable to the cases which are instituted after the amendment in the Industrial Dispute Act, 1947.

Appropriate Government: Central Government as well as State Government

Steel authority of india limited v. national union waterfront workers, air 2001, appeal (civil) 6009-6010 of 2001.

In this case , the appellants, a Central Government Enterprise, along with its manager is having their business of manufacturing iron and steel products. The Company is also engaged in import-export of its goods through the Central Marketing Organisation, which is the marketing unit of the company. The company has its branches located in different parts of the Indian territory. The work of goods handling at the stockyard was provided to the contractors.

The Government of West Bengal vide its notification issued under Section (10)(1) of the Contract Labour (Regulation and Abolition) Act, 1989 prohibited contract labour at four specified stockyards in Calcutta.

However, the Government of West Bengal put the said notification into abeyance through the notification vide dated August 28, 1989, but further extended that period from time to time till August 31, 1994.

The contract labourers filed a petition before the Calcutta High Court seeking the direction for the appellants SAIL for the absorption of contract labour in their regular establishment in view of the prohibition notice issued by the West Bengal State Government. The primary question in the issue was who is an appropriate government with regard to the Contract Labour (Prohibition and Regulation) Act, 1970.

The Division Bench of the Calcutta High Court dismissing the writ petition stated that on the relevant date of prohibition notification, the appropriate government was the “State Government”.

Aggrieved from the decision of the High Court, the appellant preferred an appeal before the apex court. The issue before the apex court was with regard to the correct interpretation of the term “appropriate government” as defined in Section 2(1)(a) of the Contract Labour (Regulation and Abolition) Act, 1970.

The apex court held that any company which was being run on the power bestowed by the Central Government to the central government companies or its undertaking if fails to operate due to the lack of conferment power the company shall be considered to be an industry under the Central Government. The Court held that the appropriate government was Central Government under the Contract Labour (Regulation and Abolition) Act, 1970.

State Government

Hindustan aeronautics limited v. workmen air 1975, 1975 air 1737, 1976 scr (1) 231.

In this case , the appellant Hindustan Aeronautics Limited is a company registered under Section 617 of the Company Act, 1956 . The Central Government purely owns the share of the company. This case is regarding 1000 workers who were working in the company’s repairing unit situated at Barrackpore, West Bengal. The major issues were with regard to the allowance of the education of employees, revision of lunch allowances and for the permanency of their job.

In this case the West Bengal Govt. referred to the dispute under Section 10(1) of the Industrial Dispute Act, 1947

The Industrial Tribunal partly granted relief to the workmen. The appellants approached the apex court with the issue that whether the West Bengal government was the appropriate government to refer the dispute or not. The Supreme Court held that the appropriate government was the West Bengal government as the branch or industrial unit of the company was carrying out a “separate” kind of work in West Bengal.

The workers were being paid at the company and they were totally regulated by the officials of the company’s branch at Barrackpore in West Bengal. In such a case, if any kind of disputes or disturbances arises, the onus lies on the West Bengal government for the settlement of those disputes and maintaining industrial peace.

Industry Definition

Bengaluru water supply and sewerage board v. a rajappa air 1978, 1978 air 548, 1978 scr (3) 207.

In this case , the dispute was between the appellants Bengaluru Water Supply and Sewerage Board, its management and the respondents employees. For some kind of misconduct, the board had levied a fine over the employees and recovered the money from them. The respondents approached the labour court against such a fine under Section 33C(2) of the Industrial Disputes Act, 1947 alleging that such imposition of a fine was against the principle of natural justice.

The appellant board put the contention that it was a statutory body serving the citizen, so it doesn’t come under the ambit of the definition of the term “industry” as provided in the Act. The labour court rejected the contention and held that the board comes under the ambit of “industry” as under Section 2(j) of the Industrial Disputes Act, 1947.

The board management aggrieved from the order of the Labour Court approached the High Court of Karnataka with a writ petition objecting that the board was not covered under the definition of “industry” as held by the Labour Court. The High Court of Karnataka rejected the objection, and upheld the labour court’s order.

The board management approached the Supreme Court with the issue of whether it was covered under the definition of industry or not. The apex court in order to declare the identity of industry, laid down a test to determine the activities carrying out by the industry This test was called the “Triple Test method”:

Whether there is a systematic activity carried out on the cooperation between the employer and the employee for the purpose of production and services all the satisfaction that the human being wants and wishes;
It is material to know whether there is an absence of profit gainful objective behind the corporation or venture;
The major focus is on the employer-employee relation;
If the organisation is for trade or business purpose it would not cease to be one based upon its philanthropic nature.

Hence, an organization having all the said elements not being a trade or business would be considered as an industry. The apex court held Bangalore Water Supply and Sewerage Board an industry as per section provided under the Industrial Disputes Act.

Individual dispute vs. Industrial dispute

Central provinces transport limited nagpur, v. raghunath gopal patwardhan 1957 air 104, 1956 scr 956.

In this case , respondent Raghunath Gopal Patwardhan was working under the appellant “Central Provinces Transport Limited Nagpur”. The appellant alleged that the respondent stole some of the goods from the appellant’s company. A domestic inquiry was conducted by the company where the respondent was found guilty. He was dismissed on the ground of misconduct and gross negligence.

The respondent approached the Industrial Court for reinstatement, where the appellant contented the maintainability of the case as it was an individual dispute, not an industrial dispute.

The Industrial Court decided in the favour of the respondent claiming the dispute to be an industrial one. This position was upheld by the Labour Appellate Tribunal while deciding the appeal filed by the appellant.

Aggrieved by the order of the Labour Appellate Tribunal, the appellant approached the Supreme Court. The apex court held that the dispute was an individual one and not an industrial one. The court further added that the dispute would have been industrial if the cause had been taken by the union or a mass of workmen.

The court was of the opinion that the definition of Section 2(k) of the Industrial Dispute’s Act was wide enough to include a dispute between an employer and an employee. Further, the dispute must attract the workmen’s support from the industry to become an industrial one otherwise it will be an individual one.

Employer definition

Hussainbhai calicut v. alath factory thozhilali union, air 1978, 1978 air 1410, 1978 scr (3)1073.

In this case , the petitioner was the owner of the factory engaged in the manufacturing of ropes. He had hired some contractors for the purpose of engaging workmen in his factory. Some of the workers were denied employment stating that they were not factory’s workers but hired by the contractors.

The dispute was raised by the respondent in the Industrial Court against the denial of their employment. The Industrial Court decided in the favour of the workmen union and this position was upheld by the High Court of Kerala on an appeal filed by the appellant.

The owner of the industry preferred an appeal before the Supreme Court stating that there was no employer-employee relationship between him and the workers as they were hired by the contractors.

The apex court held that in an industry or a factory where the employees produce goods and services for the business of another person, then the other person shall be the employer. In order to find whether he is an employer or not, the factors of continued employment and the economic control upon the workers by the industry is to be taken into consideration. The court further added that if the livelihood of the workmen is directly dependent on the service provided by him in the industry, then it would not leave an effect on whether there is a direct relationship or not. One who has been in charge throughout the period shall be the real employer.

Workman definition

Arkal govind rajrao v. ciba geigy of india ltd, 1985 air 985, 1985 scr supl. (1) 282.

In this case, the appellant Arkal Govind Rajrao joined the respondent’s company as a stenographer-cum-accountant on 18 January 1956. After almost 10 years of time, the appellant was promoted to the post of assistant. However, in 1972 the company terminated him with the contention that he was not a “workman” defined as under Section 2(s) of the Industrial Disputes Act. The District Commissioner Labour (Administration), Bombay referred the dispute before the Labour Court.

The Labour Court dismissed the petition with the view that the claimant was not a workman as he was carrying out administrative and supervisory work along with clerical work, so he could not be kept under the definition of workman as provided under Section 2(s) of the Industrial Dispute’s Act.

The appellant filed an appeal in the Supreme Court against the aggrieved order of the Labour Court. The apex court was of the view that the appellant was a workman under the definition provided in Section 2(c) of the Industrial Disputes Act. The court held that the person would not be a workman if he is indulged in some supervisory activities.

The apex court further added that while adjudicating such matters one has to put in mind what are primary and basic duties along with the secondary duties of the person, as the secondary duties do not change the character and nature of the person. The court said that basic duties have to be considered first and it doesn’t affect the nature and character of the duties of the person.

National Engineering Industries Ltd. v. Kishan Bhageria, 1988 AIR 329

In this case , respondent Kishan Bhageria was working as an internal auditor. He was absent from the office for a period of time, so the company stopped his salary and sent him on suspension. The respondent filed an application but he was dismissed from the service.

The respondent filed an application before the Labour Court against his dismissal. The appellant contended that respondent’s claim was not maintainable as he was not under the term “workman” provided under the act. The Labour Court held that the respondent was a workman as under the definition of Section 2(s) of the Industrial Disputes Act.

The appellant moved the High Court of Rajasthan against the order. The single bench judge of the Rajasthan High Court held that respondent Kishan Bhageria was not a workman as under the said act. The appeal was again filed before the Division Bench of High Court where the order of the Ld. single bench judge was reversed.

The management company moved to the apex court against the order. The Supreme Court stated that the fact in issue was whether the person was working for the managerial post or supervisory post, and for the purpose of deciding it, one has to look into the nature of the duties of the claimant.

The Supreme Court stipulated that a supervisor is a person taking decisions on the behalf of the company. The person can’t be held as a supervisor if he is merely reporting the affairs of the company and the management.

In the said matter the apex court held the respondent as “workman” as he was not engaged in managerial work or administration work. The Court also held that the person if would have been engaged in work of assigning duties among the other staffs then he shall qualify the criteria of being a “supervisor”.

Strikes and lockout

Syndicate bank and ors v. k. umesh nayak, 1995 air 319, 1994 scc (5) 572.

In this case , the major issue before the Supreme Court was whether the workmen were to get paid during the period of strike despite the fact that the strike was legal or illegal. The apex court decided the matter in the light of conflicting opinions rendered by itself in other decisions of the smaller bench.

The apex court held that the strike can be held illegal if it contravenes the provisions of the Industrial Disputes Act, 1947. For the purpose of deciding the legality of the strike the Court had to take certain things into consideration such as; whether the demands of the workmen like pay scale, service issues were justified or not. The Court stated that in every case the detailed inquiry on facts and circumstances of the strike shall be taken into consideration.

The SC held that the strike is a result of a long struggle between the employer and the employee. It is the last weapon available to the employees in order to allow their demands to be fulfilled by the industry. The court stated it as an abnormal act and the Industrial Legislation doesn’t deny the worker’s right to protest and it seeks the concept of the strike to be regulated with the right of the employer to lockout and provide machinery for peaceful inquiry and settlement of disputes between them. The court ordered the employer to pay the workers for the “strike period”.

Excel Wear v. Union of India, 1979 AIR 25, 1979 SCR (1)1009

In this case , Excel Wear is a garment manufacturing firm/petitioner having 400 employed workers in its firm. The relationship between the employer and employee deteriorated as the workers became very militant and aggressive. The appellant was the management of Excel Wear. The workers of the company started doing unjustifiable strikes.

The petitioner approached the government-respondent for the closure of the undertaking. The Government disallowed the closure of the undertaking.

Aggrieved from the order of the government/respondent, the appellant approached the Supreme Court of India. The apex court held that the right to business is not equal to the carry on business as both things can’t go together. The court further held that the right to close the business is not an absolute one and can be restricted and regulated by the legal provisions.

The Constitutionality of Section 25(o) of the Industrial Disputes Act, 1947 was scrutinized and the court found it unconstitutional. The said section didn’t require the government to provide any reasons for the closure of the business. However, in this case, as the workers had become violent, it was not safer for the employer to continue the business.

The Court added that the employer’s life can’t be put at risk.

Retrenchment

Municipal corporation of greater bombay v. labour appellate tribunal of india, air 1957 bom 188.

This question of retrenchment was discussed in this case. The term “retrenchment” means the termination of the employee by the employee for reasons other than awarding punishment by way of disciplinary action, as defined under Section 2 (gg)(oo) of the Industrial Disputes Act, 1947. The section also states providing compensation to the employee. Retrenchment of employees is generally done so as to relieve them from a job in good faith.

In this case, the employee company sent the show-cause notice to the employer with regard to some misconduct as an inquiry was held. The employee was found guilty and thus unfit for the company. So, the company terminated him from the service.

The claimant filed the petition against the company for reinstatement and compensation as he claimed that the company had illegally terminated him. The Labour Court found merits in the case and allowed the claim of the claimant.

Aggrieved from the order of the Labour Court the appellant approached the High Court of Bombay. The Bombay High Court held that there was no retrenchment in this case as the claimant was removed on the basis of the disciplinary proceedings initiated against him. The High Court further held that retrenchment can only take place when the employer is relieved from the services in good faith and not as a disciplinary action taken as a punishment.

Management of Kairbetta Estate, Kotagiri Po v. Rajamanickam, 1960 AIR 893, 1960 SCR (3) 371

In this case , Ramkrishna Iyer the manager of the appellant was violently assaulted by the workers which resulted in serious injury along with multiple fractures. The staff of the company was also threatened by the workers. The staff of the lower division denied going on work in the lower division as a threat to their lives. The management closed the company’s lower division for a period of time.

The respondents filed a complaint in the Labour Court under Section 33A of the Industrial Disputes Act, 1947 as they contended that the work in the division was stopped without any prior notice. The said section deals with the adjudication of the disputes whether the conditions of the service changed during the pendency of the proceedings. The respondents also claimed compensation for the layoff as under Section 25 of the Industrial Disputes Act, 1947. The Labour Court allowed the claim of the respondents.

Aggrieved from the order of the Labour Court the appellant approached the apex court. The apex court while deciding the issue made the distinction between the layoff and the lockout and held that the present case was “lockout” not “lay-off” as there was a work stoppage initiated by the management of the company due to the labour dispute. In the layoff, the management has to provide compensation if the work is stopped due to different reasons such as shortage of coal or anything similar.

The lockout was a tool available to the employer to force his demands against the employee. The Supreme Court held that in this case, the workmen had become aggressive and went out of control of the employer and not adhering to his request, so the employer can make a closure and such closure shall be considered as a lockout not layoff, hence no compensation shall be provided to the workman.

Suits of Employment

Indian express newspaper v. state of west bengal (2005) iillj 333 cal.

In this case , the appellant was Indian Express, a print media agency. The claimant was posted in the Calcutta office of the appellant the Indian Express. The claimant was transferred to Bombay from the Calcutta office but he didn’t join the office at the prescribed time. The appellant served him with show-cause notice and the domestic inquiry was conducted against him. Subsequently, the appellant terminated him from the service.

An industrial dispute had arisen and it was referred for adjudication by the Government of West Bengal/respondent. The appellant contended that the reference had no jurisdiction in the case, the appropriate government for the referral was not the Government of West Bengal, as the claimant was transferred to Bombay.

The dispute was sent before the Labour Court for adjudication, and the court held that the appropriate government was the Government of West Bengal.

Aggrieved from the order of the Labour Court the appellant approached the High Court of Calcutta. The High Court stated that the situs of the employment needs to be kept in mind as to where the dispute arose. The court held that the transfer order was made to Bombay and mere the presence of the termination order at Calcutta doesn’t provide the cause of action to the State of West Bengal for adjudication.

The situs of the employment is more important than the control of the employer over the employee for the purpose of referring to the dispute before the Industrial Tribunal.

Bata Shoe Co. Ltd. v. D.N Ganguly, 1961 AIR 1158, 1961 SCR (3) 308

A dispute arose between the Bata Company/appellant and the workers/respondent. The dispute went in course of the conciliation where the parties in disputes amicably reached a settlement. However, after the settlement, the workers went on strike. The company claimed the strike as illegal and irrelevant in light of the settlement done by the respondent. The company held the inquiry and dismissed the workers who had gone on strike.

With regard to the dispute of termination of workers, the conciliation proceeding was again preferred reaching an agreement signed by both parties of the dispute. However, in the whole process of conciliation, no conciliation officer was present.

The question in issue before the apex court was whether the settlement was done by the company and the workers were as per as provided under Section 12 and Section 18 of the Industrial Dispute Act, 1947. The apex court held the settlement at which the parties had arrived was according to the provisions of the sections provided under the Industrial Dispute Act and the settlement was binding over the parties as they can’t deny the terms at which they had arrived upon at the time of settlement.

However, the court further held that the second settlement done by the parties after the first one was non-binding as it was contrary to the provided provisions of the Industrial legislation.

Execution proceedings

M/s kasturi and sons pvt ltd. v. n. salivateswaran, 1958 air 507.

In this case , the respondent/Salivateswaran used to work with the private newspaper company appellant- The Hindu. The respondent was a journalist who used to share the news with different journals, newsagencies. He worked in the said company on an honorarium basis. Contrary to the advice and instructions of the appellant the respondent left India for Zurich and came back after a short period of time. The appellant relived him from his services, under the arrangement he was supplying news to the company. On his return to India, he requested the company to reconsider his termination decision but the company refused reconsideration. The respondent approached the Labour Minister of Bombay against the order of the company under Section 17 of the Working Journalist Act, 1955 . The State of Bombay on receiving the application of the respondent appointed M.R Mehar (Retired ICS) as the second respondent for the inquiry in the application of the First respondent’s claim.

The appellant contended on the basis of the jurisdiction issue, but respondent no-2 found that it was having the appropriate jurisdiction to inquire of the matter as under Section 17 of the Journalist Act.

Aggrieved from the order of the appointed respondent the appellant filed a petition in the Supreme Court with regard to the arising jurisdiction issue in the matter.

The apex court in this case exhaustively dealt with Section 17 of the Working Journalist Act in this case. The court said that Section 17 of the said act was similar to Section 33C of the Industrial Disputes Act. The Court further held that Section 17 of the act, provides the mechanism for the recovery of the amount which is due from the employer towards his employee. However, the same can only be done once the due amount is decided by the Labour Court.

Equal work is equivalent to equal pay

Randhir singh v. union of india, 1982 air 879.

In this case , petitioner Randhir Singh was a driver working with the Delhi Police Force. He claimed that his salary was not as per standard with the other drivers working in the Delhi Administration. It was stated that the drivers of the Delhi Administration perform a similar function as the drivers of the other department.

The apex court while dealing with the matter said that the Constitution of India doesn’t include the provisions for equal pay, and so it can’t be kept under the ambit of the fundamental right. However, Article 39(d) of the Constitution of India provides the provision for equal pay for equal work for both man and woman, and it is included under the Directive Principles of the State Policy.

The apex court interpreted Article 14 and Article 16 of the Constitution of India in the light of the Directive Principles of the State Policy as provided under Article 39(d) and construed the principle of equal pay for equal work. According to such interpretation, the apex court ordered the Delhi Police to fix the salary of the driver in accordance with the other drivers working under the Delhi Administration.

Bonded Labour

Bandhua mukti morcha v. union of india, 1984 air 802.

In this case , the petitioner- an association wrote a letter to Justice P.N Bhagwati with regard to the poor condition of the large number of reinforced workers who were working in the stone quarries in some part of Faridabad, Haryana. The association described the brutal and insufferable conditions of the labourers and stated the different provisions of the Constitution of India that was not being actualized with respect to these workers. The petitioner in the letter referred to the name of the stone quarries and the point of interest of the workers to be implored under a writ as the different social welfare legislation provides for the same.

The letter of the petitioner was treated as a writ petition and the apex court constituted a commission for the inquiry into the truth of the matter as stated by the petitioner. The commission inquired into the matter and found the statement of the petitioner to be true as bonded labour existed there, and there were severe violations of the labour laws.

The apex court on the basis of inquiry made by the commission held the petition maintainable stating that it was the duty of the state government to make rectification as it failed to ensure proper compliance of the labour laws. The apex court further added that the workmen were being held under bondage and in pathetic condition, and it not only violated the Constitutional provision of Article 21 but also the human right laws. Such act of the stone quarries companies had curtailed the fundamental rights of the petitioner as Article 21 provides that the “right to live with dignity” is a part of the fundamental rights and the onus is on the State for proper compliance of such rights if it is curtailed.

Miscellaneous

People union for democratic rights v. union of india, 1982 air 1473.

In this case , the PUDR, which is an organization formed for the purpose of protecting the democratic rights of the Citizen, appointed three scientists for the purpose of inquiry to be made in the ASIAD Projects.

Based on these investigations, the petitioner wrote a letter to Justice P.N Bhagwati which further transformed into Public Interest Litigation. In the letter, allegations of violation of various labour laws were stated and the apex court was requested to intervene in the issue. The letter was treated as a writ petition by the Supreme Court and notices were issued to the Union Government, Delhi Development Authority and the Delhi Administration.

The major allegations made in the letter were the violation of the Equal Remuneration Act, 1976 as the women workers were not paid properly and there was a misappropriation of money. There was a violation of Article 24 of the Constitution of India and the Employment of Children Act, 1938 and 1970 as the children below 14 years were deployed at the construction site by the contractors. There were also violations of the Contract Labour (Regulation and Violation) Act, 1970 which had resulted in the exploitation of the workers and denial of their various rights.

The apex court in this case found serious violations of the labour laws as the workers were not being paid adequately and there was a misappropriation of the funds. The court also found that there was a disparity in the remuneration paid to the male and female workers.

The court said that the workers were forced to work taking fewer wages against the minimum per-day wages fixed by the government. The court held that there were violations of labour laws in masse and the State was obligated to take action against such violation ensuring that the fundamental rights of the labourers are protected.

Delhi Transport Corporation v. D.T.C Mazdoor Congress, 1991 AIR 101

In this case , the respondent/D.T.C Mazdoor Congress were the regular employees working under the appellant-Company Delhi Transport Corporation. The respondents were alleging that they were being terminated by the appellant on the ground of non-satisfactory work.

They were terminated from their job paying reverence over the regulation of the transport corporation which allowed them to terminate their workers from the job by providing 1-month notice or 1-month pay in lieu of notice.

The matter reached before the apex court by the appellant. The apex court held that the regulation of the corporation of terminating their permanent employees without hearing them and just providing one-month prior notice or one-month pay in lieu of notice was contrary to the principles of natural justice, as there was no reasonable cause.

The court found the regulation of the corporation arbitrary, unreasonable and in violation of Article 14 of the Indian Constitution. The court held that the principle of audi alteram partem is a part of Article 14 and it is equally applicable over the regulations of the corporation. Hence, the termination of the employees was held unreasonable.

Marathwada Gramin Bank Karmchari Sangthan v. management of Gramin Bank, (2011) 9 SCC 620

In this case , Marathwada Gramin Bank is the respondent Bank. The provisions of the Employees Provident Fund Scheme, 1952 became applicable in the bank from 1979.

The respondent till 1981, complied with the provisions of the said scheme and after that, it formed its new scheme by establishing its new trust for the payment of provident fund to its employees. So, the employees were getting the provident fund in excess of the Employees Provident Fund Scheme, 1981. The Regional Provident fund Commissioner vide a notification dated 29.09.1981 permitted the bank with regard to its own trust and compliance with the new scheme, but later on it cancelled and the bank was directed to comply with the provided statutory rule for the purpose of paying provident fund to its employees.

The respondent Bank issued a notice under Section 9A of Industrial Disputes Act, 1947 expressing its intention to discontinue the provident fund in excess of its statutory liability, but it continued to continue towards the Employee Provident Fund.

The Central Government referred the dispute to the Central Government Industrial Tribunal, Nagpur. The Tribunal relied upon the Employees Provident Fund and Miscellaneous Provisions Act, 1952 held that the management can’t reduce the wages of the employees directly and indirectly to whom the scheme of the said act applies. The Tribunal further directed that the employees can draw an equal amount of money from the provident fund as earlier according to the scheme without any ceiling cap on their salary.

Aggrieved from the order of the tribunal the respondent bank filed a writ petition before the Ld. Single Judge Nagpur Bench of Bombay High Court. The High Court reversed the order of the Labour Court and the same was upheld by the Division Bench of the High Court.

The appellants filed an appeal before the Supreme Court. The apex court held that the action of the respondents was not contrary to the law, as they had continued to pay the Provident fund, but the contributions were made limited which was required by the statute to pay. The apex court further held that the employer can’t be compelled to pay more than the provided statutory ceiling.

The twenty aforementioned law judgements are the important ones that a human resource manager in every company needs to learn. The judgements have brought a new discourse in the jurisprudence of labour law. The precedent set by the apex court helps the judicial bodies across the country to decide the cases, if they face matters on similar issues. Since, the Industrial Disputes Act, 1947 has been stated as the law made by the parliament to protect and serve for the welfare of the employees against their employer.

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The 10 most important employment law cases in 2021

Despite the coronavirus pandemic, HR professionals have had their fair share of employment law rulings to keep track of in 2021. We count down the 10 most important judgments of the year that every employer should know about.

10. Male directors dismissed to improve gender pay gap

Bayfield and another v Wunderman Thompson (UK) Ltd and others (employment tribunal)

The employment tribunal upheld two male directors’ claims after their advertising agency dismissed them in a bid to “obliterate” its reputation as a “Knightsbridge boys club”, in this cautionary tale for employers that are seeking to correct overnight the systemic issues that influence a gender pay gap.

Not long after publishing a “horrible” and “embarrassing” gender pay gap, the advertising agency held a conference to address the lack of diversity in which reference was made to the agency wanting to “obliterate” its reputation that it was full of “white, British, privileged, straight, men”.

Keep track of key employment law cases on appeal

In a decision that the tribunal found to be discriminatory and unfair, the advertising agency subsequently made two creative directors redundant. It selected two straight white British men for redundancy, both of whom had been among those who had complained about the presentation.

9. Failure to consider furlough affected redundancy’s fairness

Mhindurwa v Lovingangels Care Ltd (employment tribunal)

In one of the first cases to examine the furlough scheme, the employment tribunal held that the employer’s failure to consider the possibility of furloughing a care worker as an alternative to redundancy resulted in her dismissal being unfair.

More furlough cases

In the early days of the pandemic, a live-in care worker was made redundant, despite her request to be furloughed. She brought a successful unfair dismissal claim, citing in particular her employer’s failure to consider her furlough request seriously.

The tribunal highlighted that the purpose of the furlough scheme was to avoid laying off employees because of the pandemic and this was exactly the type of situation that the furlough scheme envisaged. In the tribunal’s view, a reasonable employer would have considered if she could be furloughed to avoid redundancy.

8. ‘Stale’ training no defence for racist jibes

Allay (UK) Ltd v Gehlen (EAT)

In this case, the Employment Appeal Tribunal (EAT) held that the employer’s diversity training was insufficient to amount to a “reasonable steps” defence in a claim of racial harassment committed by one of its employees.

Diversity and inclusion training

Line manager briefing: discriminatory behaviour

Line manager briefing: protected characteristics

Employers are liable for acts of harassment committed by their employees against other employees in the course of their employment, unless they can show that they took reasonably practicable steps to prevent those acts.

The EAT agreed with the employment tribunal that the “reasonable steps” defence was not valid here because the training that the staff in question had received several years earlier was “clearly stale” and required refreshing.

7. Absence of appeal not determinative of redundancy’s fairness

Gwynedd Council v Barratt and another (Court of Appeal)

In this decision, the Court of Appeal neatly answered a question that is frequently asked during a redundancy procedure: if a proper consultation process is followed, must employers still give employees the right to appeal against the decision to make them redundant?

Redundancy procedures

Model redundancy policy

Must employers give employees the right to appeal against a decision to make them redundant?

The Court of Appeal held that the absence of an appeal in an otherwise fair redundancy process does not, of itself, render the dismissal unfair. According to the Court of Appeal, it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing.

However, the Court of Appeal did say that the absence of an appeal is one of many factors to consider in determining the overall fairness of a redundancy. In this case, the tribunal had been entitled to consider all the relevant circumstances, which included a lack of consultation as well as the absence of an appeal.

6. Office-based role discriminated against primary carer

Follows v Nationwide Building Society (employment tribunal)

While it is a non-binding first-instance decision, this case provides a timely reminder for employers that a non-disabled employee may bring a claim for indirect disability discrimination if they suffer a particular disadvantage because of their association with a disabled person.

More disability cases

Employment tribunal round-up: Reasonable adjustments in the workplace

The most likely scenario is where a primary carer is disadvantaged by their employer’s inflexible policies. That was the case here, where the employer’s requirement for a senior manager, the primary carer for her disabled mother, to be office based was found to be indirectly discriminatory.

The decision shows how important it is for employers to support employees with caring responsibilities and ensure that they are not treated less favourably than employees who are not carers. Employers should put in place clearly framed policies, such as a carers policy and a policy on requesting flexible working.

5. Menopausal symptoms can be disability

Rooney v Leicester City Council (EAT)

Law firm Linklaters has highlighted the rising number of tribunal cases in which employees are alleging menopause-related discrimination , prompting the firm to call for more awareness and support for staff experiencing it.

Menopause support

Model policy on supporting employees experiencing menopause

How to support employees experiencing the menopause

In this key 2021 case, the Employment Appeal Tribunal (EAT) ruled that an employment tribunal had wrongly decided that a woman suffering with menopausal symptoms was not disabled.

While the case law in this area develops, employers should ensure that line managers understand how menopausal symptoms can impact an employee’s wellbeing, performance and attendance. This will help line managers to have sensitive and supportive conversations with affected employees, as well as reduce the risk of discrimination claims.

4. Shop workers can compare themselves with depot workers

Asda Stores Ltd v Brierley and others (Supreme Court)

In this long-running equal pay saga, the Supreme Court confirmed that workers in Asda supermarkets are entitled to compare their pay with the pay of depot workers.

While this decision resolves the comparator issue in this case, the employment tribunal has still to decide if the claimants performed work of equal value and, if so, whether there are any non-discriminatory reasons for Asda’s failure to pay the two roles equally.

This case has been blighted by challenges on technical points of law at every turn. In its decision, the Supreme Court advised tribunals to avoid overly complicated assessments when considering cross-establishment comparisons and to discourage appeals, which may make it easier for claimants to overcome this first hurdle in an equal pay claim.

3. Uber drivers are workers entitled to basic employment rights

Uber BV and others v Aslam and others (Supreme Court)

In this high-profile case, the Supreme Court had little hesitation in finding that Uber drivers are workers and are entitled to receive the national minimum wage and paid annual leave.

The decision is consistent with the direction of travel of the case law on the employment status of gig-economy workers, with the Uber drivers being successful at every stage of the legal process when arguing that they are workers and not self-employed.

In recent years, rulings in this area have had a significant business implications on employers in the gig economy. Many gig-economy employers have had to rethink the terms on which they engage workers, offering them basic employment rights from day one.

2. Sleep-in care workers not entitled to minimum wage while asleep

Tomlinson-Blake v Royal Mencap Society; Rampersad and another (t/a Clifton House Residential Home) v Shand (Supreme Court)

In this long-awaited decision – the case was heard in February 2020 but the ruling published only in March 2021 – the Supreme Court found that sleep-in care workers are entitled to be paid the national minimum wage only when they are awake for the purposes of working, not when they are sleeping.

Covid case law

Covid-related employment cases: 10 key lessons for employers

Employment tribunal round-up: Employees raising health and safety concerns

The judgment was a bitter blow for sleep-in care workers, with unions, charities and campaign groups believing that the national minimum legislation covering sleep-in payments is out of date and unfair.

However, the Supreme Court’s remit in this case was narrow. Its job was to interpret the wording of the national minimum wage legislation to decide if it requires sleep-in workers to receive the minimum wage only when they are awake and “available” to work. According to the Supreme Court, the legislation is quite clear and issues of general fairness could not influence its decision.

1. Direct pay offers to workers during collective bargaining unlawful

Kostal UK Ltd v Dunkley and others (Supreme Court)

In the most important trade union case for years, the Supreme Court held that trade union legislation prevents employers from bypassing the union and making direct offers to employees while the collective bargaining process is ongoing.

In this case, the employer had reached a stalemate with the recognised trade union over a pay package and Christmas bonus. It wrote to its workforce directly, offering them a deal and threatening consequences if they rejected it.

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The Supreme Court made clear that a direct approach can be made after the collective bargaining process has been followed and exhausted. However, the Supreme Court warned that what an employer cannot do with impunity is to make offers to workers before the collective bargaining process has been exhausted.

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Labor & Employment Supreme Court Cases

Many of the labor and employment cases that have reached the Supreme Court involve claims of discrimination, harassment, or retaliation in the workplace. These may arise under Title VII of the Civil Rights Act of 1964, which prohibits adverse employment actions based on the race, color, religion, sex, or national origin of an employee. The Supreme Court also has reviewed cases under parallel anti-discrimination laws, such as the Americans With Disabilities Act and the Age Discrimination in Employment Act.

Meanwhile, the Employee Retirement Income Security Act of 1974 imposes rules for pension, health, and other benefit plans in the private sector. The Supreme Court has clarified ERISA terms and requirements, in addition to determining whether ERISA preempts various state laws. The ERISA preemption clause provides that the law supersedes any state laws to the extent that they relate to employee benefit plans. However, the ERISA savings clause allows states to regulate the business of insurance.

Other workplace issues addressed by the Supreme Court include employee privacy, wage and hour rules under the Fair Labor Standards Act, and the free speech rights of government employees. The Court also has discussed the use of arbitration to resolve labor and employment disputes.

Below is a selection of Supreme Court cases involving labor and employment, arranged from newest to oldest.

Author: Clarence Thomas

The traditional four-factor test for a preliminary injunction governs NLRB requests for a preliminary injunction from a federal district court while administrative enforcement proceedings take place.

Author: Elena Kagan

Although an employee must show some harm from a forced job transfer to prevail in a Title VII claim, they do not need to show that the injury satisfies a significance test.

Author: Samuel A. Alito, Jr.

Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business. The impact on coworkers is relevant only to the extent that it goes on to affect the conduct of the business.

Author: Neil Gorsuch

An employer that fires an individual merely for being gay or transgender violates Title VII.

The federal-sector provision of the ADEA demands that personnel actions be untainted by any consideration of age.

The state's extraction of agency fees from non-consenting public-sector employees violates the First Amendment.

Author: Ruth Bader Ginsburg

Dodd-Frank's anti-retaliation provision does not extend to an individual who has not reported a violation of the securities laws to the SEC.

Author: Stephen Breyer

When an employer demotes an employee out of a desire to prevent the employee from engaging in protected political activity, the employee is entitled to challenge that unlawful action under the First Amendment and Section 1983 even if the employer's actions are based on a factual mistake about the employee's behavior.

Author: Anthony Kennedy

ERISA preempts a state law that governs or interferes with the uniformity of plan administration.

Author: Antonin Scalia

To prevail in a disparate treatment claim, an applicant needs to show only that their need for an accommodation was a motivating factor in the employer's decision. They do not need to show that the employer had knowledge of their need.

Time spent waiting to undergo and undergoing security screenings is not compensable under the FLSA.

Author: Sonia Sotomayor

A public employee's sworn testimony outside the scope of their ordinary job duties is entitled to First Amendment protection.

Title VII retaliation claims must be proved according to traditional principles of but-for causation.

An employee is a supervisor for the purposes of vicarious liability under Title VII only if they are empowered by the employer to take tangible employment actions against the victim.

Author: John Roberts

The Establishment and Free Exercise Clauses bar lawsuits brought on behalf of ministers against their churches, claiming termination in violation of employment discrimination laws.

A government employer's allegedly retaliatory actions against an employee do not give rise to liability under the Petition Clause of the First Amendment unless the employee's petition relates to a matter of public concern.

In an employment discrimination class action, the conceptual gap between an individual's discrimination claim and the existence of a class of persons who have suffered the same injury must be bridged by significant proof that an employer operated under a general policy of discrimination. More generally, a class in a proposed class action has common questions of law or fact if their claims depend on a common contention of such a nature that it is capable of classwide resolution, which means that determination of its truth or falsity will resolve an issue that is central to the validity of each of the claims in one stroke.

If a supervisor performs an act motivated by discriminatory animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, the employer is liable.

A government employer had a right to read text messages sent and received on a pager that the employer owned and issued to an employee.

Before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe that it will be subject to disparate impact liability if it fails to take the race-conscious, discriminatory action.

A plaintiff bringing an ADEA disparate treatment claim must prove that age was the but-for cause of the adverse employment action.

A provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.

Author: David Souter

An employer defending a disparate impact claim under the ADEA bears both the burden of production and the burden of persuasion for the “reasonable factors other than age” (RFOA) affirmative defense.

The anti-retaliation provision of Title VII covers only those employer actions that would have been materially adverse to a reasonable employee or applicant. The plaintiff must show that the challenged action well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.

When public employees make statements pursuant to their official duties, the Constitution does not insulate their communications from employer discipline.

Author: John Paul Stevens

When employees must don protective clothing on the employer's premises before they engage in the productive labor for which they are primarily hired, the time that employees spend walking between the changing area and the production area is compensable under the FLSA. However, the time that employees spend waiting to put on the protective gear is not compensable.

While the ADEA authorizes recovery in disparate impact cases, ADEA Section 4(f)(1) significantly narrows its coverage by permitting any otherwise prohibited action when the differentiation is based on reasonable factors other than age.

ERISA prevents individuals from suing HMOs in state court for pure eligibility decisions. Also, if an individual at some point in time could have brought their claim under ERISA Section 502(a)(1)(B), and no other independent legal duty is implicated by a defendant's actions, the individual's cause of action is completely preempted.

A plaintiff alleging sexual harassment can establish constructive discharge if they can show that the abusive working environment became so intolerable that their resignation qualified as a fitting response. An employer may assert the Faragher affirmative defense unless the plaintiff quit in reasonable response to an adverse action officially changing their employment status or situation.

Direct evidence of discrimination is not required for a plaintiff to obtain a mixed motive jury instruction under Title VII.

The common-law element of control is the principal guidepost to be followed in deciding whether director-shareholder physicians in a medical clinic should be counted as employees for the purposes of the ADA. Factors to be considered in deciding whether a shareholder-director is an employee include whether the organization can hire or fire the individual or set rules for their work, whether the organization supervises their work, whether they report to someone higher in the organization, whether they can influence the organization, whether written agreements or contracts show that the parties intended the individual to be an employee, and whether the individual shares in the profits, losses, and liabilities of the organization.

HMOs may be insurers and thus subject to state regulation of insurers. State laws directed toward the insurance industry are saved from preemption under ERISA's saving clause.

An agreement between an employer and an employee to arbitrate employment-related disputes does not bar the Equal Employment Opportunity Commission (EEOC) from pursuing victim-specific judicial relief, such as backpay, reinstatement, and damages, in an ADA enforcement action.

Author: Per Curiam

Judicial review of a labor arbitration decision pursuant to a collective bargaining agreement is very limited. Courts are not authorized to review an arbitrator's decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement. Even when the arbitrator's award may properly be vacated, the appropriate remedy is to remand the case for further arbitration proceedings.

A retaliation claim will not withstand a summary judgment motion when nobody could reasonably believe that the incident of which the plaintiff complained violated Title VII.

The exemption in Section 1 of the Federal Arbitration Act, which excludes contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce, is confined to transportation workers.

Author: Sandra Day O’Connor

A prima facie case of discrimination, combined with sufficient evidence for a reasonable jury to reject the employer's non-discriminatory explanation for its decision, may be adequate to sustain a finding of liability for intentional discrimination under the ADEA.

Mixed treatment and eligibility decisions by health maintenance organization (HMO) physicians are not fiduciary decisions under ERISA.

An employer's conduct does not need to be independently egregious to satisfy the requirements for a punitive damages award in a Title VII case. However, in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents when these decisions are contrary to the employer's good-faith efforts to comply with Title VII.

For a union to waive employees' rights to a federal judicial forum for statutory anti-discrimination claims, the agreement to arbitrate these claims must be clear and unmistakable.

An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate or successively higher authority over the employee. When no tangible employment action is taken, the employer may raise an affirmative defense if they can show that they exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and the plaintiff unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

Under Title VII, an employee who refuses the unwelcome and threatening sexual advances of a supervisor, yet suffers no adverse, tangible job consequences, may recover damages from the employer without showing that the employer was negligent or otherwise at fault for the supervisor's actions, but the employer may interpose an affirmative defense. (The defense consists of the elements in Faragher below.)

Sex discrimination consisting of same-sex sexual harassment is actionable under Title VII.

The power to amend or abolish an employee welfare benefit plan does not include the power to discriminate against the plan's participants and beneficiaries for the purpose of interfering with their attainment of rights under the plan.

The salary-basis test denies exempt status under the Fair Labor Standards Act when employees are covered by a policy that permits disciplinary or other deductions in pay as a practical matter. That standard is met if there is either an actual practice of making such deductions or an employment policy that creates a significant likelihood of such deductions.

When employers or other plan sponsors adopt, modify, or terminate pension plans, they do not act as fiduciaries but are analogous to settlors of a trust.

The fact that one member of a protected class lost out to another member is irrelevant to an employment discrimination claim so long as they lost out because of their protected trait.

A law operating as an indirect source of merely economic influence on administrative decisions should not suffice to trigger ERISA preemption.

An employee discharged in violation of the ADEA is not barred from all relief when, after their discharge, their employer discovers evidence of wrongdoing that, in any event, would have led to their termination on lawful and legitimate grounds had the employer known of it.

Title VII is violated when the workplace is permeated with discriminatory behavior that is sufficiently severe or pervasive to create a discriminatorily hostile or abusive working environment. This standard requires an objectively hostile or abusive environment, as well as the victim's subjective perception that the environment is abusive.

An employment decision based on years of service is not necessarily age-based, since this factor is analytically distinct from age.

The common-law test for determining who qualifies as an employee under ERISA considers the hiring party's right to control the manner and means by which the product is accomplished. Other factors to consider include the skill required, the source of the instrumentalities and tools, the location of the work, the duration of the relationship between the parties, the extent of the hired party's discretion over when and how long to work, and the method of payment, among others.

Author: Byron White

An ADEA claim can be subjected to compulsory arbitration.

ERISA's deemer clause demonstrates Congress' clear intent to exclude from the reach of the saving clause self-funded ERISA plans by relieving them from state laws purporting to regulate insurance. State laws directed toward such plans are preempted because they relate to an employee benefit plan but are not saved because they do not regulate insurance.

The proper comparison in a disparate impact employment discrimination case is generally between the racial composition of the at-issue jobs and the racial composition of the qualified population in the relevant labor market.

Author: William Brennan

In the specific context of sex stereotyping, an employer that acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.

A policy of paying discharged employees for their unused vacation time does not constitute an employee welfare benefit plan within the meaning of ERISA, and a criminal action to enforce that policy is not foreclosed.

For disclosure purposes, a “participant” in an ERISA plan means an employee in currently covered employment (or reasonably expected to be in currently covered employment), or a former employee who has a reasonable expectation of returning to covered employment or who has a colorable claim to vested benefits. To establish that they may become eligible for benefits, a claimant must have a colorable claim that they will prevail in a suit for benefits, or that eligibility requirements will be fulfilled in the future.

The National Labor Relations Act does not permit a union, over the objections of dues-paying non-member employees, to expend funds collected from them on activities unrelated to collective bargaining activities.

Disparate impact analysis in an employment discrimination claim may be applied to subjective employment criteria.

To be preempted by ERISA, a state statute must have some connection with or reference to a plan.

ERISA preempts state common law tort and contract actions asserting improper processing of a claim for benefits under an insured employee benefit plan.

Both the inception and the scope of the intrusion must be reasonable when a public employer intrudes on the constitutionally protected privacy interests of government employees for non-investigatory, work-related purposes, as well as for investigations of work-related misconduct.

Author: William Rehnquist

A claim of hostile environment sexual harassment is a form of sex discrimination that is actionable under Title VII.

Author: Harry Blackmun

A law relates to an employee benefit plan for ERISA purposes if it has a connection with or reference to such a plan.

When a public employee speaks as an employee on matters only of personal interest, a federal court is generally not the appropriate forum to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior.

A non-job-related test that has a disparate impact and is used to limit or classify employees is used to discriminate within the meaning of Title VII, even if it was not designed or intended to have this effect and even if an employer tries to compensate for its discriminatory effect.

Author: Lewis Powell

When a plaintiff in a Title VII case has proved a prima facie case of employment discrimination, the defendant bears only the burden of explaining clearly the non-discriminatory reasons for its actions. It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff.

Author: Potter Stewart

A regulation could permit private employees of a private employer to avoid workplace conditions that they believe pose grave dangers to their own safety, when the employees have no power under the regulation to order their employer to correct the hazardous condition or to clear the dangerous workplace of others.

A public employee does not forfeit their First Amendment protection when they arrange to communicate privately with their employer, rather than expressing their views publicly.

To establish a prima facie case of employment discrimination, a plaintiff need only show that facially neutral standards select applicants for hire in a significantly discriminatory pattern. If the employer proves that the challenged requirements are job-related, the plaintiff may show that other selection devices without a similar discriminatory effect would also serve the employer's legitimate interest in efficient and trustworthy workmanship.

Once a prima facie case has been established by statistical workforce disparities, the employer must have an opportunity to show that the claimed discriminatory pattern was a product of pre-Title VII hiring, rather than unlawful post-Title VII discrimination.

In cases alleging a pattern or practice of employment discrimination, the government must show that discrimination was the standard operating procedure of the defendant. Statistics may be used in proving discrimination.

An employee's statutory right to trial de novo under Title VII is not foreclosed by prior submission of their claim to final arbitration under the non-discrimination clause of a collective bargaining agreement.

In a private, non-class action complaint under Title VII charging racial employment discrimination, the complainant has the burden of establishing a prima facie case, which they can satisfy by showing that they belong to a racial minority, they applied and were qualified for a job that the employer was trying to fill, they were rejected, and the employer continued to seek applicants with their qualifications.

Author: Warren Burger

An employment practice that operates to exclude members of a protected group is prohibited if it cannot be shown to be related to job performance, even if the employer lacked discriminatory intent.

Author: Thurgood Marshall

When a public employee's false statements concerned issues that were currently the subject of public attention and did not interfere with the performance of their duties or the general operation of their employer, they were entitled to the same protection as if the statements had been made by a member of the general public.

Author: Robert H. Jackson

Rulings, interpretations, and opinions of agency administrators are not controlling on courts but provide a body of experience and informed judgment that courts can use for guidance. The weight of such a judgment depends on the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors that give it power to persuade, if lacking power to control. Also, no principle of law precludes a determination that waiting time is working time under the Fair Labor Standards Act.

The fact that an employer has individual contracts of employment with a majority of its employees does not preclude the employees from exercising their right under the National Labor Relations Act to choose a representative for collective bargaining, nor does it warrant refusal by the employer to bargain with this representative regarding terms covered by the individual contracts.

Author: Charles Evans Hughes

In recognizing the right to strike, the National Labor Relations Act contemplates a lawful strike. When a strike, even if it arose from unfair labor practices, is initiated and conducted in lawlessness by the seizure and retention of the employer's property, and the strikers are discharged because of their lawlessness, they do not remain employees under the NLRA.

A restraint or regulation of the liberty to contract is due process if it is reasonable in relation to its subject and adopted for the protection of the community against evils menacing the health, safety, morals, and welfare of the people. Also, in dealing with the relation of employer and employed, the legislature has a wide field of discretion in order that there may be suitable protection of health and safety, and that peace and good order may be promoted through regulations designed to ensure wholesome conditions of work and freedom from oppression.

Author: George Sutherland

Legislation fixing hours or conditions of work may properly take into account the physical differences between men and women, but the doctrine that women of mature age require (or may be subjected to) restrictions on their liberty of contract that could not lawfully be imposed on men in similar circumstances must be rejected.

Author: David Josiah Brewer

The regulation of the working hours of women falls within the police power of the state, and a statute directed exclusively to such regulation does not conflict with the Due Process or Equal Protection Clauses.

Author: John Marshall Harlan

It is not within the power of Congress to make it a criminal offense against the United States for a carrier engaged in interstate commerce to discharge an employee simply because of their membership in a labor organization. A provision to that effect is an invasion of personal liberty and the right of property and is unenforceable under the Due Process Clause.

A U.S. court has no jurisdiction under the Thirteenth Amendment or other federal laws of a charge of conspiracy made and carried out in a state to prevent citizens of African descent, because of their race and color, from making or carrying out contracts and agreements to labor.

Author: Rufus Wheeler Peckham

The general right to make a contract in relation to one's business is part of the liberty protected by the Fourteenth Amendment, and this includes the right to purchase and sell labor, except as controlled by the state in the legitimate exercise of its police power.

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Area of Interest Employment and Labor Law

Harvard Law School is a center of expertise and action in the fields of employment law, which defines the relationships between individual employers and employees, and labor law, which defines protections for workers when they act collectively, such as in unions. Students have the opportunity to learn from leading scholars, practitioners, government officials, and labor advocates about the laws that govern the quickly evolving experience of work.

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Key Legislation

Government agencies, judicial/administrative decisions, study aids & practice materials, current awareness, professional, advocacy, & research organizations, getting help, getting started.

Labor vs. Employment Law?

Labor law and employment law are related but the terms should not be used interchangeably. Labor law in the United States typically focuses on unions and collective bargaining between unions and employers. By contrast, employment law governs the employment relationship between individual employees and their employer. The two areas of law are closely related but are often distinct areas of legal practice.

This guide will focus on the laws that govern collective bargaining and labor relations in both the private and public sectors and research resources you may find useful. A separate research guide on employment law is in the works.

Federal Legislation - Private Sector

Railway Labor Act May 20, 1926, ch. 347, 44 Stat. 577 (1926); 45 U.S.C. §§151-188 Regulates the labor-management relations of railroads and airlines. Created the National Mediation Board and the National Railroad Adjustment Board.
Norris-La Guardia Act (a/k/a the Anti-Injunction Bill) The Act of March 23, 1932 (Ch. 90, 47 Stat. 70); 29 U.S.C. §§101-115 Established the right of employees to form unions without employer interference, prevented federal courts from issuing injunctions in nonviolent labor disputes, and made "yellow-dog contracts" (where employees agree to not join a labor union as a condition of employment) unenforceable in federal court.
National Labor Relations Act (a/k/a Wagner Act) Pub. L. No. 74-198, 49 Stat. 449 (1935); 29 U.S.C. §§151-169 Guaranteed the right of private sector employees to organize, form union, and bargain collectively with their employers. Created the National Labor Relations Board.
Labor Management Relations Act (a/k/a Taft-Hartley Act) Pub. L. No. 80-101, 61 Stat. 136 (1947); 29 U.S.C. §§141-187 Amended the National Labor Relations Act by adding a list of unfair labor practices (by unions) and other requirements and restrictions imposed mainly on unions.
Labor-Management Reporting and Disclosure Act (a/k/a Landrum-Griffin Act) Pub. L. No. 86-257, 73 Stat. 519 (1959); 29 U.S.C. §§401-531 Regulates the relationship between a labor organization and its members and imposes certain reporting requirements and fiduciary obligations on labor organizations and their officers. The Department of Labor has exclusive enforcement authority for certain provisions of this statute relating to reporting requirements, trusteeships, and elections. Other provisions of this statute may be enforced by individual union members in federal district court.

Federal Legislation - Public Sector

Federal Service Labor-Management Relations Statute (a/k/a The Civil Service Reform Act of 1978 or simply, The Statute) Pub.L. No. 95–454, 92 Stat. 1111 (1978); 5 U.S.C. §§7101-7135 Law establishing collective bargaining rights for federal employees. (Title VII of the Civil Service Reform Act of 1978.) Abolished the U.S. Civil Service Commission and created the Office of Personnel Management, the Merit Systems Protection Board, and the Federal Labor Relations Authority.

Federal Legislative History

U.S. Federal Legislative History Library (HeinOnline) Background on the above federal statutes can be found in the collections made available by HeinOnline. The statutes may be searched by Publication Title, Public Law Number, or by the Popular Name of the statute.

State Legislation - Public Sector

American Federation of State, County, and Municipal Employees (AFSCME) A collection of links to state public sector collective bargaining laws.

National Labor Relations Board (NLRB)

The National Labor Relations Board (NLRB) is the federal agency charged with the administration and enforcement of the National Labor Relations Act. Consists of two branches: the General Counsel and the National Labor Relations Board. The General Counsel is granted investigative and prosecutorial authority and issues guidance to NLRB staff in the form of memoranda. The 5-person National Labor Relations Board is an adjudicative tribunal that interprets the statute and issues decisions that may be appealed to the US Circuit Courts of Appeal.

NLRB Website
Regulations (29 C.F.R. § 100.101-103.100) Found in Title 29 Subtitle B Chapter I of the Code of Federal Regulations.
NLRB Decisions and Orders The NLRB acts primarily through its decisions and orders, where it either agrees or disagrees with an earlier administrative law judge's ruling on the matter. An NLRB decision may then be appealed directly to the U.S. Circuit Courts of Appeal (as opposed to being appealed at the district court level of the federal courts).
Reports & Guidance
NLRB Legal Research Resources & Tools

National Mediation Board (NMB)

The National Mediation Board (NMB) is a federal agency designed to facilitate labor-management relations in the nation's railroad and airline industries. Specifically, the NMB regulates the procedures for evaluating requests by employee groups for union representation, acts as a mediator in disputes regarding the terms and conditions of employment, and interprets contract language it helped finalize. Matters in which the NMB has exclusive jurisdiction are subject to very limited review by federal courts.

NMB Website
Regulations (29 C.F.R. § 1200-1299) Found in Title 29 Subtitle B Chapter X of the Code of Federal Regulations.
NMB Determinations

National Railroad Adjustment Board

The National Railroad Adjustment Board (NRAB) is a standing arbitration board that hears and decides disputes regarding the application and interpretation of collective bargaining agreements. Matters in which the NRAB has exclusive jurisdiction are subject to very limited review by federal courts.

NRAB Website
Regulations (29 C.F.R. § 301.1-301.9) Found in Title 29 Subtitle B Chapter III of the Code of Federal Regulations.

Federal Labor Relations Authority

The Federal Labor Relations Authority (FLRA) is an independent federal agency that governs labor relations between the federal government and its employees.

FLRA Website
Regulations (5 C.F.R. § 2411.1-2473.1) Found in Title 5 Chapter XIV of the Code of Federal Regulations.
FLRA Decisions Includes FLRA Decisions, Administrative Law Judge Decisions, Solicitor's Briefs, archival decisions, and legislative history.

Office of Labor-Management Standards

Part of the Department of Labor, the Office of Labor-Management Standards (OLMS) administers and enforces most provisions of the Labor-Management Reporting and Disclosure Act of 1959. Maintains copies of financial and other reports filed by unions, union officers, employers, etc., as well as union constitutions, by-laws, and collective bargaining agreements. Be sure to also check the website of a particular union, as relevant documents may be posted there as well.

OLMS Website
Regulations (29 C.F.R. § 400-499) Found in Title 29 Subtitle B Chapters II and IV of the Code of Federal Regulations.
Agency Determinations/Decisions Includes Election Decisions, Trusteeship Decisions, and other types of decisions/determinations made by the OLMS.
Criminal and Civil Enforcement Actions
Online Public Disclosure Room Includes union reports, collective bargaining agreements, and other documentation.

State Labor Agencies

US Dept of Labor links to all state labor offices
Association of Labor Relations Agencies (ALRA) Links to U.S. state labor relations and mediation agencies and boards.

Agency Websites

Agency websites generally provide access to more recent agency decisions and determinations, though commercial legal research platforms may be easier to search. (See "Government Agencies," above, for more information and links to relevant agencies.)

Commercial Legal Research Platforms

Bloomberg Law/BNA's Labor PLUS Bloomberg Law's Labor PLUS component (previously known as "BNA Labor PLUS") allows you to access an NLRB Elections database, Work Stoppages database, Unfair Labor Practice Charges database, Settlement Summaries database, Contract Expirations database, and a Collective Bargaining Agreements database. You can also find a Labor Arbitration Awards tracker and more.

Practice Materials

NLRB Casehandling Manual Available from NLRB.gov website In 3 Parts (PDF format). Part 1 - Unfair Labor Practice Proceedings; Part 2 - Representation Proceedings; and Part 3 - Compliance Proceedings.
NLRB Forms Available from NLRB.gov website (PDF format). Includes Unfair Labor Practice (ULP) Case Forms, Representation (R) Case Forms, and others.

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Onlabor.org OnLabor is a blog devoted to workers, unions, and their politics, founded by Harvard Law School professors Benjamin Sachs and Jack Goldsmith.

Professional Associations

ABA Section on Labor and Employment Law The Section's members represent all perspectives of labor and employment law (i.e., management, union, plaintiff, neutral and public) and strives for a balanced discussion of employment issues throughout the world.
Labor and Employment Relations Association (LERA) The Labor and Employment Relations Association (LERA) is where professionals interested in all aspects of labor and employment relations network to share ideas and learn about new developments, issues, and practices in the field.

Advocacy & Research Groups

AFL-CIO (American Federation of Labor and Congress of Industrial Organization) Website for the largest federation of unions in the U.S. (consisting of 56 national and international unions).
The Worker Institute (at Cornell University's ILR School) The Worker Institute engages in research and education on contemporary labor issues, to generate innovative thinking and solutions to problems related to work, economy and society.
United Association for Labor Education The United Association for Labor Education is an organization of labor educators launched at the start of the century to promote and encourage the development of labor and worker education, to make labor education accessible to all working people, and to promote collective bargaining and the right to organize.
Labor Research & Action Network The Labor Research and Action Network (LRAN) connects academics and labor practitioners to build workplace and economic power for working people in the US.

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Employment & Labour – Top Ten Cases Of 2021

Contributor.

It is no secret that over the past year the COVID-19 pandemic has been the subject of much discussion in the realm of employment and labour law. In 2021, we saw courts and administrative tribunals alike grapple with the question of how the pandemic has impacted, or not impacted, our established employment and labour standards. Few employment contracts and collective bargaining agreements had previously contemplated a global pandemic, leaving issues such as sick leave, employee health and safety, and work stoppage in uncertain territory. However, 2021 was not all about the pandemic (believe it or not). We continued to see growth in the areas of human rights, occupational health and safety, and termination of employment relationships.

Below we have summarized what we believe are the top 10 Canadian employment and labour cases of 2021 that employers should be aware of:

Northern Regional Health Authority v. Horrocks, 2021 SCC 42

Labour arbitrators have exclusive jurisdiction over human rights disputes arising from collective agreements.

In 2021, the Supreme Court of Canada made a final decision on the exclusive jurisdiction of labour arbitrators over human rights disputes that arise under a collective agreement. We previously wrote about that decision here.

The respondent employee was suspended for attending work while under the influence of alcohol, and disclosed to the employer that she had an alcohol dependency. As a result, the employer required that the employee sign a "last chance agreement" to abstain from alcohol and undergo treatment. The employee refused to enter the agreement and was terminated.

The Union grieved the termination, and the employee was reinstated. However, the employee was terminated again shortly thereafter for alleged breach of the reinstatement terms. The employee filed a discrimination complaint with the Manitoba Human Rights Commission. The employer contested the jurisdiction of the human rights adjudicator and argued that disputes under the collective agreement were the exclusive jurisdiction of a labour arbitrator. The adjudicator found that she had jurisdiction and went on to find that the employer had discriminated against the employee. This decision was judicially reviewed and ultimately appealed by the employer to the Supreme Court of Canada.

The Court reiterated the well-established principle that labour arbitrators can decide on human rights claims which fall within collective agreement disputes. Justice Brown, writing for the majority, determined that exclusive jurisdiction is guided by an analysis of the relevant legislation. To this end, various provincial labour relations legislation expressly requires that each collective agreement contain a clause which provides arbitration as the exclusive and final step for dealing with interpretation, application, or violation of the agreement.

The Court decided that a labour arbitrator will not have exclusive jurisdiction if there is another piece of legislation which includes clear language providing another tribunal with jurisdiction over the subject matter. In Horrocks, there was no counter-prevailing legislation that provided the Manitoba Human Rights Commission with jurisdiction. In other words, the Commission did not have jurisdiction to adjudicate her claim and the exclusive venue for determination was through the arbitration process.

The Court was careful to note that this decision does not necessarily preclude all workplace-related actions in the court. An arbitrator's exclusive jurisdiction extends to human rights disputes arising from the interpretation, application, or alleged violation of a collective agreement, meaning an employee is precluded from filing a human rights complaint in relation to such matters unless the legislation specifically provides for concurrent jurisdiction.

Slater v. Halifax Herald Limited, 2021 NSSC 210

Cerb benefits are not deducted from wrongful dismissal damages - or are they.

After nearly four decades working for the Halifax Herald, a 61-year-old employee was temporarily laid off without pay in March 2020 due to the onset of the COVID-19 pandemic. The employee was originally told that the lay-off would last about three months, but rather than being reinstated, the employee was terminated three months later. The employer offered to pay the employee for an additional ten weeks, although they maintained that they were not obligated to do so. The employee claimed wrongful dismissal and sought damages.

Initially, the employer argued that through frustration of contact they had no legal obligations to the employee. Eventually, the employer acknowledged that it owed the employee some damages. However, in the meantime, the employee had begun to collect income replacement in the form of Canada Emergency Response Benefit ("CERB") payments from the Government of Canada. The employer argued that CERB payments should be deducted from any required damages.

The federal government administered CERB to people who had to stop work as a result of the pandemic. At the time of this litigation, the government had yet to clearly set out the rules and repayment terms regarding CERB as they were focused on providing pandemic assistance to Canadians without delay. Applicants were simply told that they may have to repay the benefit if a later evaluation revealed they did not meet the necessary criteria. The court considered the existing rules regarding Employment Insurance ("EI") and damages. EI is not deducted from damages, because if the employee is successful against the employer, the onus is on the employee to remit any benefits back to the government. The court determined that in light of the uncertainty in repayment of CERB, it should air on the side of caution and not deduct CERB from any wrongful dismissal damages.

Slater is only one of a handful of cases to determine the status of CERB within wrongful dismissal damages. Similar cases in other provinces have yielded mixed results, and some courts, particularly those in British Columbia, have concluded that CERB payments should be deducted. In Slater, the court definitively held that damages should not be adjusted to consider CERB payments. It would be unfair to deduct CERB payments from damages, especially given the fact that many of those who received CERB payments will likely have to repay them. The employee was awarded pay in lieu of 24 months' notice, which he would be owed based on his long service, age, and the nature of his employment. As this issue has yet to come before an appellate court, the final determination is yet to come.

The Worker v The District Managers, 2021 BCHRT 41

Human rights tribunal dismisses religious discrimination complaint from worker refusing to wear a mask.

One of the most contentious issues arising from the COVID-19 pandemic are the federal and provincial mandates around mask-wearing in public places and private businesses. We previously wrote about two such decisions here and here . The Worker is the second screening decision we wrote about, published by the British Columbia Human Rights Tribunal (the "Tribunal") regarding the mandatory requirement to wear masks in public places (the first decision we wrote about pertained to a dispute between a customer and a store). Screening decisions are rarely publicized, as they are typically sent privately to the complainant informing them if their human rights claim will or will not proceed to a hearing. When screening decisions are published, it is usually for the purposes of educating the public.

In the Worker , the Tribunal considered whether an employer discriminated against an employee on the grounds of religious belief for refusal to wear a mask. The employee was contracted to do work at a district facility. When he arrived, he refused to wear a mask and alleged it was his religious creed. The employee was subsequently terminated for refusal to wear a mask.

In a screening decision, the Tribunal dismissed the employee's complaint and gave reasons surrounding the validity of mask mandates. The employee could not demonstrate any facts which support that wearing a mask is subjectively or objectively prohibited by any religion. They found that much of the employee's arguments were personal and not rooted in any legitimate religious grounds.

The end result: the employee's beliefs were not protected on the basis of religion, as they were born out of personal disagreement with mask mandates. This decision suggests an employee will face a relatively high bar in convincing a decision maker that opposition to masks or other COVID measures, such as vaccines, are actually based in a religious belief rather than some other non-protected opposition.

Wong v Polynova Industries Inc., 2021 BCSC 603

Employers must communicate repudiation of the employment contract in writing.

The plaintiff employee was 70 years old and had worked for the employer continuously for 15 years at the relevant time. Through a text message service, WeChat, the employee indicated to his supervisor that he would be absent from work due to illness. The employee indicated this would be approximately a two-week period due to COVID isolation. However, this absence extended for a two-month period. The employee did not communicate at all with the employer during his absence. Twice throughout the two-month absence, the employer attempted to call the employee's landline, which had been disconnected. The employer made no further efforts to contact the employee.

During the employee's absence, the employer trained new personnel to effectively replace the employee. To the employer's surprise after the two-month absence, the employee arrived for a regularly scheduled shift. The employer told the employee he had abandoned his job, and therefore he was no longer employed, and he was owed no compensation in lieu of notice. The employee disagreed, and alleged he was terminated without notice.

At the outset of the court's decision, they emphasized that employment is a contractual relationship. While an employee can repudiate their employment contract through abandonment, an employer must accept this repudiation. In this case, the employer did not communicate acceptance of this repudiation. Since communication of repudiation never occurred, the employment contract remained intact. As a result, the employee was entitled to damages in lieu of notice.

The court held that an employer can accept repudiation through several methods, but importantly, it should always be done in writing. One simple way of accepting repudiation of the employment contract is by issuing a Record of Employment.

EN v Gallagher's Bar and Lounge, 2021 HRTO 240

Misgendering employees is a serious ground for human rights complaints against employers.

The employer operated a bar and restaurant. Four persons were employed in the kitchen of the restaurant. One employee identified as gender queer and two employees identified as non-binary. All three employees use they/them pronouns. The employees each brought a human rights complaint against their employer on the grounds of gender discrimination. The employees recounted their employer misgendering them throughout their employment. Specifically, the employees alleged there was an incident where the employer made transphobic statements to customers about his kitchen staff. Shortly after this incident, the employees ceased working at the restaurant due to the employer's conduct and the lack of a safe and discrimination free workplace.

The employer denied these allegations and did not respond to the human rights complaint. The human rights tribunal found that the complaints of the employees were substantiated, and both the misgendering and transphobic statements constituted discrimination. Each of the employees were awarded $10,000.00 for lost wages and compensation for injury to dignity, feelings, and self-respect.

This case serves to remind employers that allegations of misgendering and transphobic environments are serious. Employers must take appropriate action to create a discrimination free workplace for gender queer, non-binary, and trans employees.

Hucsko v A.O. Smith Enterprises Limited, 2021 ONCA 728

Refusal to participate in remedial action following a workplace sexual harassment investigation constitutes just cause for dismissal.

The employee was a senior product designer who had been working for the employer for 20 years. The employee was accused of making sexual innuendos towards a female project manager on four occasions. An investigation was conducted and found that the comments made by the employee constituted sexual harassment. The employee was provided with a copy of the investigation report and a letter requiring him to take part in sensitivity training and give the complainant an apology. The employee accepted training but refused to apologize to the complainant, and was dismissed as a result.

The trial judge was asked to examine if the comments made by the employee constituted sexual harassment. The trial judge declined to determine if the comments constituted sexual harassment because the actual reason for dismissal was listed as "serious and wilful insubordination", which the judge took as a reference to the employee's refusal to issue an apology. The trial judge was also of the opinion that the investigation had never concluded that the employee's conduct was in fact sexual harassment. The trial judge determined that the employee's refusal to apologize did not create an irreparable breakdown in the employment relationship.

The case made its way to the Ontario Court of Appeal, where the trial decision was overturned. The Court of Appeal found, based on the workplace investigation, that the employee's conduct definitively constituted sexual harassment. The court emphasized the seriousness of the misconduct and that the refusal to apologize created a sufficiently serious breakdown in the employment relationship to warrant termination. The court decided that though the employee was not initially terminated, a refusal to agree to the remedial efforts of the investigation constituted just cause for dismissal.

This case serves as a reminder to employees and employers alike, that sexual harassment in the workplace is a serious matter which, on its own, can justify termination. Further, a failure by the employee to accept the remedial action(s) required by the employer following a fair investigation may constitute just cause for termination, even where the original conduct was not deemed sufficiently serious.

Kraft v Firepower Financial Corp, 2021 ONSC 4962

Employee hardship during the pandemic can result in employers owing employees longer notice periods at common law.

Employers should be aware that the ongoing pandemic can result in employers owing employees longer notice periods at common law. In Kraft, the employee's position as a salesperson in the field of investment banking was terminated without cause in March 2020. The employee had worked for the company for six years and sued for pay in lieu of notice.

The employee argued that they were entitled to more notice due to the difficulties that the pandemic creates in finding employment. The court reviewed the evidence from the employee about his failed job search with over 70 job applications which were unsuccessful. The court agreed in this case, that the economic hardship of the job market should be reflected in the damages awarded to the employee. At paragraph 22, the court found that "there is evidence that the pandemic impacted on the Plaintiff's ability to secure new employment. In light of that evidence, he deserves to receive at least somewhat above the average notice period". The court modestly increased the notice period by one month greater than what the employee would normally be entitled, for a total of 10 months' notice.

Though notice is examined on a case-by-case basis, employers should be aware that the pandemic can be a factor which could increase the common law notice period. We previously wrote about pandemic-related notice periods and their mixed jurisprudence across courts and jurisdictions here .

Rahman v Cannon Design Architecture Inc. , 2021 ONSC 5961

Despite the onca's decision in waksdale , the enforceability of termination provisions continues to be an evolving area of law.

Last year, we listed Waksdale v. Swegon North America Inc. , 2020 ONCA 391 as one of our Top Ten of 2020 (find it here ). The Ontario Court of Appeal held that employment contracts, and especially termination clauses, are to be read as a whole, so that if one clause is found to be statutorily invalid (such as the just cause termination provision), all are invalid (including the without cause termination provision). This year, we saw parties to an alleged wrongful dismissal claim attempt to apply the Waksdale principles. In Rahman , the defendant sought summary judgement for a wrongful dismissal claim. The defendant is a subsidiary of the US-based Cannon Corporation and has one Canadian office located in Toronto. The plaintiff was employed at the Toronto office.

In response to COVID-19, the parent company instituted lay-offs and salary reductions, which resulted in a reduction of the plaintiff's salary and eventually her employment was terminated without cause. The plaintiff argued that the termination provisions in her written employment agreement were void because they allegedly violated the minimum standards of Ontario's Employment Standards Act , 2000, SO 2000, c 41 (" ESA ").

Upon her hiring in February 2016, the plaintiff had been provided with an offer letter which was specific to her position, and a general "Officer's Agreement" which formed part of her terms of hiring. She reviewed both with a lawyer prior to accepting the position. The court quickly dismissed four of the plaintiff's five claims on the basis that the offer letter clearly stated that it would prevail in the event of a conflict between the two documents. It was therefore unnecessary to consider arguments centering on the wording of the Officer's Agreement where the offer letter complied with the ESA . The court was left to consider whether the "just cause" termination provision in the offer letter permitted termination without notice in circumstances beyond those permitted by the ESA . If that were the case, the plaintiff argued, then following Waksdale, the without cause termination provision would be void.

The judge found that not only was Ms. Rahman sophisticated when it came to negotiating contracts, but also that she and her lawyer had not raised any concerns with the termination provision during negotiations.

Further, Ms. Rahman had negotiated a more beneficial termination clause, which entitled her to the greater of her statutory entitlement, or two months' pay in lieu of notice if terminated without cause in the first five years, provided she agree to sign a release. Her statutory entitlement under the ESA was only one month. The defendants argued, and the court agreed, that if it were to side with the plaintiff, the unintended effect would be to potentially allow employers to deprive employees of fairly-negotiated benefits that exceed the common law standard.

When drafting employment contracts, the best practice for employers is to include a "saving provision", which stipulates that employment legislation standards constitute the minimum entitlement. Additionally, employers should strongly encourage potential employees to seek independent legal advice and carefully review all terms prior to signing employment contracts.

United Nurses of Alberta v Alberta Health Services, 2021 ABCA 194

Family status protection under human rights legislation continues to be subjected to conflicting standards across canada.

This appeal stems from a judicial review of an Arbitration Board decision concerning a nurse who was denied a change in rotation based upon family status accommodation. The reviewing judge at the Alberta Court of Queen's Bench found the Arbitration Board's majority decision to be unreasonable, and Alberta Health Services (the employer) appealed. The Alberta Court of Appeal sought to determine the applicable test for prima facie discrimination in family status human rights cases.

The central issue involves two competing lines of jurisprudence: the general test as set out by the Supreme Court of Canada in Moore v British Columbia (Education) , 2012 SCC 61, and the Federal Court of Appeal's slightly more recent decision in Canada (Attorney General) v Johnstone , 2014 FCA 110, which builds off Moore . The general test for discrimination from Moore indicates that a complainant must show:

They have a characteristic protected from discrimination;
They experienced an adverse impact on account of the challenged norm; and
The protected characteristic was a factor in the adverse treatment.

However, that test has not necessarily been strictly followed in "family status" discrimination cases, which looks at discrimination based on a parent-child relationship.

In Johnstone , the Federal Court considered a case where an employee alleged discrimination on the basis that the employer failed to accommodate as necessary to meet childcare needs. The Federal Court decided that discrimination would only be established ".if the employee has sought out reasonable alternative childcare arrangements unsuccessfully and remains unable to fulfil his or her parental obligations". Many have pointed out that this imposes a self-accommodation standard on the employee not contemplated by the Moore test.

Since Johnstone , many arbitrators across Canada have begun to apply the new, more onerous standard in family status cases while others have adopted modified approaches. The Alberta Court of Appeal clarified the issue for tribunals in Alberta and decided that Moore is the proper test, and Johnstone has no legal justification or imposition. The court found that the Moore test provides certainty and uniformity, whereas the Johnstone test is "fundamentally flawed". In dismissing the appeal, the court found that "imposing a more onerous self-accommodation burden in this manner perpetuates rather than ameliorates human rights inequality."

It will be interesting to see if other jurisdictions follow Alberta on this matter, as jurisdictions across the country continue to rely upon Johnstone as well as other modified tests . Until there is clarification from the Supreme Court of Canada, both employers and claimants may continue to be subject to uncertainty and potentially differing standards in litigating family status cases.

United Food and Commercial Workers Union, Canada Local 333v Paragon Protection Ltd (unreported, 9 November 2021, Von Veh) (ON Arb) and Electrical Safety Authority v Power Workers' Union (unreported, 11 November 2021, Stout) (ON Arb)

Case law developing on workplace vaccine mandates produces mixed results.

Increasingly workplaces in Canada have begun to implement mandatory COVID-19 vaccination policies. In November 2021 we canvassed two early arbitrations where unions challenged mandatory workplace vaccine policies (found here ). We have chosen these two cases to demonstrate the mixed arbitration results of mandatory workplace vaccination policies.

In United Food and Commercial Workers Union, Canada Local 333 v Paragon Protection Ltd the employer implemented a policy where all workers had to be fully vaccinated, subject to any valid human rights exemptions. The employer was a security company, employing 4,400 security guards across 450 sites in Ontario. The union grieved the policy, alleging that it breached the collective agreement, labour relations legislation, and the human rights code. The arbitrator found that the policy was reasonable and enforceable. The arbitrator made a number of significant findings that supported the policy including that it was created in recognition that most of the sites where the employer provided services already had their own mandatory vaccination policies. Further, the collective agreement already contemplated that the employer could require employees to be vaccinated for certain job sites and that employees may generally be required to be inoculated. Overall, the arbitrator found that the policy struck a balance in providing a safe workplace because it still allowed for valid vaccine exemptions.

In Electrical Safety Authority v Power Workers' Union, the mandatory workplace vaccination policy was not upheld by the arbitrator. The arbitrator warned that this decision is not about the merits of being vaccinated or the effectiveness of vaccination against COVID-19. They emphasized that the science is clear that COVID-19 vaccines are safe and effective at reducing the likelihood of serious illness or death, particularly with respect to the Delta variant. However, the arbitrator found that the policy represented a significant over-reaching of management rights, as unvaccinated employees were subject to discipline up to and including termination. The arbitrator found that the employer's regular testing and masking policies were already effective at reducing the risk of workplace transmission, and the majority of employees had continued to work remotely. If there was a client that required a vaccinated employee, the employer was able to schedule to meet this requirement. Overall, the arbitrator found there was no evidence that the unvaccinated employees created real problems for the company's business. The arbitrator warned that this analysis was subject to the present conditions of the pandemic, and at another point in time it could be considered reasonable.

While both cases are early decisions, they demonstrate that mandatory vaccination policies are assessed on a case-by-case basis and are largely fact-specific. However, in consideration of the recent exponential increase in COVID-19 cases, stronger government mandates, and more evidence that vaccines reduce hospitalization, these cases should not necessarily be taken as how decisions will be resolved today. Mandatory workplace vaccination policies continue to be a live issue in employment and labour law. With the increasing spread and prevalence of the Omicron variant, we are interested to see how the case law further develops. We encourage employers to consider their approach to vaccine mandates and reach out for advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Foundation Supreme Court Cases

The following links will take you to Foundation-won Supreme Court precedents, Court of Appeals precedents, other federal cases, relevant federal labor law, state Right to Work laws, and other available information resources. While this list is not exhaustive, it is an excellent resource for becoming familiar with current federal labor law as it applies to compulsory unionism.

Note: Links on this page are updated on an ongoing basis as cases are revised or as new cases or case law are established. Please check this page frequently for such updates. If you have any suggestions for additional labor-related case law or statutory law for this page, please contact us .

Foundation Supreme Court Precedent:

2018 – janus v. afscme.

The U.S. Supreme Court held five-to-four that non-union government workers cannot be required to pay union fees as a condition of working in public service. The Court overturned Abood , which upheld forced fees imposed on public employees to the extent that they are used for collective bargaining. Requiring public employees to pay any union fees is compelled speech and association that is unconstitutional under the First Amendment.

(Download our one sheet PDF printout on understanding your Janus rights here .)

2014 – Harris v. Quinn

The Court held five-to-four that an Illinois requirement that nonunion Medicaid-funded home-care personal assistants pay union fees violates the First Amendment. The Court refused to extend Abood , which upheld forced fees imposed on public employees to the extent that they are used for collective bargaining, to the “new situation” before it, “[b]ecause of Abood’s questionable foundations, and because the personal assistants are quite different from full-fledged public employees.” This holding renders unconstitutional similar forced-fee schemes imposed on providers in at least thirteen other states. Significantly, much of the Court’s opinion details how the “ Abood Court’s analysis is questionable on several grounds.” Among other things, the majority recognized that the “core isues” in public-sector collective bargaining, “such as wages, pensions, and benefits are important political issues.” This criticism of Abood suggests that, if a case involving actual public employees comes before the Court, a majority of the Justices would be willing to overrule Abood and hold that public-sector forced fee requirements are unconstitutional.

2013 – Mulhall v. UNITE HERE Local 355

The court of appeals held that organizing assistance an employer promised to a union in a “neutrality and card-check agreement” could be a “thing of value” that could violate the U.S. statute making it unlawful for an employer to give or a union to demand or receive any “thing of value.” The dissent suggests that the appeal was dismissed because the agreement had expired or because there was a question as to whether the plaintiff employee had standing. The dismissal left intact the Foundation’s precedential victory in the court of appeals.

2012 – Knox v. Service Employees International Union

The Court held 5-4, in an opinion by Justice Alito, joined by Chief Justice Roberts, and Justices Scalia, Kennedy, and Thomas, that “when a public sector union imposes a special assessment or dues increase, the union must provide [a notice of the purpose of the assessment or increase] and may not exact any funds from nonmembers without their affirmative consent.” The Court also held that the union could not constitutionally charge nonmembers for its expenses opposing ballot questions even if they “may be said to have an effect on present and future contracts between public-sector workers and their employers.” Justice Sotomayor, joined by Ginsburg, concurred in the favorable judgment, but agreed only that “[w]hen a public-sector union imposes a special assessment intended to fund solely political lobbying efforts, the First Amendment requires that the union provide nonmembers an opportunity to opt out of the contribution of funds.”

2007 – Davenport v. Washington Education Association

The Court unanimously ruled that, because unions have no constitutional right to collect fees from nonmembers, a state may require unions to obtain affirmative consent before spending nonmember public employees’ forced fees on political activities. The Court’s decision also reiterated that, as the Court had originally decided in 1949, Right to Work laws are constitutional.

1998 – Marquez v. Screen Actors Guild (SAG)

The Court held that a union does not breach its duty of fair representation “merely by negotiating” a compulsory unionism provision that says that employees must be union “members in good standing” as condition of employment without expressly explaining, in the agreement, that the National Labor Relations Act does not permit unions and employers to require that employees become formal union members. However, for the first time, the Court declared that, if a union negotiates a compulsory unionism provision, it must notify workers that they may satisfy its requirement merely by paying fees to support the union’s “representational activities” in collective bargaining and contract administration without actually becoming members.

1998 – Air Line Pilots Association v. Miller

The U.S. Supreme Court ruled 7-2, in an opinion authored by Justice Ruth Bader Ginsburg, that employees who did not agree to union arbitration procedures cannot be required to exhaust the arbitration process before challenging the amount of their fees for collective bargaining in a federal court action.

This is a complete victory in the battle against phony internal union “arbitration” schemes, long used by union chiefs to block the full impact of the Beck decision.

1991 – Lehnert v. Ferris Faculty Association

Summarizing its earlier decisions from Hanson through Ellis , the Court concluded that union activities are not lawfully chargeable to objecting non-members unless they both are “‘germane’ to collective-bargaining activity” and do “not significantly add to the burdening of free speech that is inherent in allowance of an agency or union shop.” Applying this test, the Court ruled that objecting public employees may not be charged for litigation not directly concerning their bargaining unit, lobbying (except for ratification or implementation of their collective bargaining agreement), public relations activities, and illegal strikes. However, the Court also held that the First Amendment does not limit lawfully chargeable bargaining-related costs to the objecting employees’ bargaining unit.

1988 – Communications Workers of America v. Beck

The Court determined that Congress intended the substantially “identical” authorizations of compulsory unionism arrangements in the National Labor Relations and Railway Labor Acts “to have the same meaning.” The Court, therefore, held that the former statute, like the latter, “authorizes the exaction of only those fees and dues necessary to ‘performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues.'” As a result, private sector employees have the same right not to subsidize union non-bargaining activities as railway, airline, and public employees, and are entitled to the procedural protections outlined in Chicago Teachers Union v. Hudson .

Beck , Ellis , Abood , and Hudson , taken together, break down the artificial barriers between private-sector, government, and transportation workers to empower all employees to withhold forced union dues for all activities unrelated to collective bargaining.

1986 – Chicago Teachers Union v. Hudson

The Court unanimously held that First Amendment due process requires that certain procedural safeguards be established before compulsory union fees can be collected from public employees: adequate advance notice of the fee’s basis (including an independent audit), reasonably prompt impartial review of non-members’ challenges, and escrow of “amounts reasonably in dispute” while challenges are pending. Because the Court had earlier ruled in Railway Employes’ Department v. Hanson that constitutional limitations apply to the Railway Labor Act, these procedural safeguards also must be established by railway and airline unions.

In setting aside the “pure rebate” concept, the Court required that employees be provided with information supporting the union’s financial breakdown of forced dues; that those figures be verified by independent audit; and that employees have an opportunity for a prompt, impartial review of the union’s forced-dues calculations.

1984 – Ellis v. Brotherhood of Railway, Airline and Steamship Clerks, et al.

The Court held that the Railway Labor Act not only prohibits coerced financial support of union politics and ideological activities, but also coerced support of other activities unrelated to collective bargaining and contract administration, such as organizing, litigation not concerning objecting employees’ bargaining unit, and the parts of union publications reporting on non-chargeable activities. The Court also ruled that a “union cannot be allowed to commit dissenters’ funds to improper uses even temporarily,” prohibiting “rebate” schemes under which unions collect full dues, use part for improper purposes, and only later refund that part to the employees.

This Foundation-won case signaled a closing of the Abood loophole, because a phony union “rebate” scheme is equated with an involuntary loan from an employee and is illegal.

1977 – Abood v. Detroit Board of Education

A six-member majority of the Court rejected arguments that requiring public employees to pay agency fees to keep their jobs violates the First Amendment. The Court ruled that the agency shop as such is constitutionally valid, but only “insofar as the service charges are applied to collective-bargaining, contract administration, and grievance-adjustment purposes.” The Court unanimously agreed that “a union cannot constitutionally spend [objectors’] funds for the expression of political views, on behalf of political candidates, or toward the advancement of other ideological causes not germane to its duties as collective-bargaining representative.”

A Brief Outline of U.S. Supreme Court Precedent Concerning Compulsory Unionism:

1937 – virginian railway v. system federation no. 40 , 300 u.s. 515 and nlrb v. jones & laughlin steel corp. , 301 u.s. 1.

The Court held that compulsory collective bargaining is constitutional, but declined to address the constitutionality of exclusive representation because these cases were brought by employers, not employees forced to accept a union as their exclusive bargaining representative.

1944 – J.I. Case Co. v. National Labor Relations Board , 321 U.S. 332 and Order of Railroad Telegraphers v. Railway Express Agency, Inc. , 321 U.S. 342

The Court interpreted the National Labor Relations and Railway Labor Acts as prohibiting individual employees from negotiating their own terms and conditions of employment where an exclusive bargaining representative has been recognized. Constitutional questions were not raised.

1944 – Steele v. Louisville & Nashville R.R. , 323 U.S. 192

The Court recognized that exclusive representation presents constitutional problems, but again ducked the issue by holding that exclusive representatives have a duty of representing non-members “fairly.”

1949 – Lincoln Federal Labor Union v. Northwestern Iron & Metal Co. , 335 U.S. 525

The Court ruled that state Right to Work laws are constitutional.

1949 – Algoma Plywood Co. v. Wisconsin Bd. , 336 U.S. 301

The Court held that the National Labor Relations (“Wagner”) Act permitted state Right to Work laws even before Congress passed the 1947 Taft-Hartley Act amendments.

1954 – Radio Officers’ Union v. National Labor Relations Board , 347 U.S. 17

The Court ruled that compulsory unionism agreements may not be used “for any purpose other than to compel payment of union dues and fees,” that is, that employees may not be required to be formal union members and abide by internal union rules to keep their jobs.

1956 – Railway Employes’ Department v. Hanson , 351 U.S. 225

The Court held that “union shop” agreements authorized by the Railway Labor Act are constitutional, because the only condition of employment that the Act authorizes is “financial support” of “the work of the union in the realm of collective bargaining.” The Court suggested that if compulsory dues are used “for purposes not germane to collective bargaining, a different problem would be presented” under the First Amendment.

1961 – Machinists v. Street , 367 U.S. 740

Again ducking constitutional questions, the Court ruled that the Railway Labor Act prohibits unions from using objecting nonmembers’ compulsory dues for political purposes. The Court did not clearly define political purposes, nor did it address whether unions could lawfully use objectors’ monies for nonpolitical activities unrelated to collective bargaining. Justice Black dissented and predicted that the Court’s rebate remedy would be ineffective and would have held the statute unconstitutional.

1963 – Railway Clerks v. Allen , 373 U.S. 113

The Court found that, since unions hold all pertinent facts and records, they must prove the proportions of their expenses that are lawfully chargeable to objecting nonmembers. However, the Court reaffirmed Street ‘s rulings that only nonmembers who notify their union that they object are entitled to relief and that the appropriate remedies are refunds and reductions in future exactions.

1963 – National Labor Relations Board v. General Motors , 373 U.S. 734

The Court reiterated that the “union shop” is “is whittled down to its financial core,” that is, unions may require payment of initiation fees and dues as a condition of employment, but may not require formal membership.

1963 – Retail Clerks Local 1625 v. Schermerhorn , 373 U.S. 747 , 375 U.S. 96

The Court held that state Right to Work laws may prohibit “agency shop” agreements under which employees are required to pay fees to unions to defray the costs of collective bargaining. In a second decision in the same case, the Court ruled that the state courts, not just the National Labor Relations Board, can enforce state Right to Work laws. (The National Right to Work Committee financed this case in the Supreme Court for the nonmember plaintiffs.)

In 1968 the National Right to Work Legal Defense Foundation was established. (Unless otherwise noted, all subsequent cases listed were brought by Foundation attorneys.)

1976 — City of Charlotte v. Firefighters Local 660, 426 U.S. 283

The Court ruled that a public employer is not constitutionally obligated to provide payroll deductions for union dues. The Foundation was not involved in this case.

1976 — Oil Workers v. Mobil Oil Corp., 426 U.S. 407

The Court held that the employees’ “predominant job situs” determines whether a state Right to Work law applies, and that seamen employed primarily on the high seas are not protected by the Right to Work law of the state in which they were hired. The Foundation filed an amicus brief urging that Texas’ Right to Work law protected the seaman.

1976 – City of Madison Joint School District No. 8 v. Wisconsin Employment Relations Commission , 429 U.S. 167

The Court ruled that a state may not constitutionally require school boards to prohibit nonunion teachers from speaking against agency shop agreements at public meetings. The Foundation filed an amicus (friend of the court) brief supporting the nonunion teachers’ free speech rights.

1977 – Abood v. Detroit Board of Education, 431 U.S. 209

1979 — smith v. arkansas state highway employees, 441 u.s. 463 (per curiam).

The Court held that the “First Amendment does not impose any affirmative obligation on the government…to recognize [a labor] association and bargain with it.” The Foundation was not involved in this case.

1983 — Knight v. Minnesota Community College Faculty Association, 460 U.S. 1048

Without an opinion giving its reasons, the Court affirmed a lower court decision rejecting arguments that exclusive representation of public employees by a union such as the National Education Association is unconstitutional because it forces association with a political action organization.

1984 — Minnesota State Board for Community Colleges v. Knight, 465 U.S. 271

The Court ruled that a state may constitutionally bar non-members from participating in their public employers’ “meet and confer” sessions with the employees’ exclusive bargaining representative on policy questions relating to employment, but outside the scope of mandatory collective bargaining.

1984 — Ellis v. Railway Clerks, 466 U.S. 435

1985 – pattern makers v. national labor relations board.

The Supreme Court affirmed private-sector workers’ unqualified right to resign their union membership immediately. (Not argued by Foundation attorneys, but supported with a friend-of-the-court brief filed by Foundation attorneys in agreement with the prevailing position.)

This private-sector case provides a key legal precedent for the Foundation’s legal action to establish the right of employees to resign their union membership.

1986 — Chicago Teachers Union v. Hudson, 475 U.S. 292

1988 — communications workers v. beck,487 u.s. 735.

1991— Lehnert v. Ferris Faculty Association, 500 U.S. 507

1998 — air line pilots association v.miller, 523 u.s. 866.

The Court ruled that non-members who do not agree to union-established arbitration procedures cannot be required to use those procedures before bringing a federal court action challenging the amount of their compulsory fees for collective bargaining.

1998 — Marquez v. Screen Actors Guild, 523 U.S. 866

The Court held that a union does not breach its duty of fair representation “merely by negotiating” a compulsory unionism provision that says that employees must be union “members in good standing” as condition of employment without expressly explaining, in the agreement, that the National Labor Relations Act does not permit unions and employers to require that employees become formal union members. Importantly, for the first time, the Court declared that, if a union negotiates a compulsory unionism provision, it must notify workers that they may satisfy the provision’s requirement merely by paying fees to support the union’s “representational activities” in collective bargaining and contract administration, without actually becoming members.

2007 — Davenport v. Washington Education Association, 551 U.S. 177

The Court unanimously ruled that, because unions have no constitutional right to collect fees from non-members, a state may require unions to obtain affirmative consent before spending non-member public employees’ forced fees on political activities. The Court’s decision also reiterated that, as the Court had decided in 1949, Right to Work laws are constitutional.

2008 — Chamber of Commerce v. Brown, 554 U.S. 60

The Court ruled that the National Labor Relations Act preempts a state statute prohibiting companies that receive state grants or program funds from using those monies to deter union organizing. Significantly, the Court emphasized that the 1947 amendment to the Act that guarantees the right to refrain from union activities “calls attention to the right of employees to refuse to join unions, which implies an underlying right to receive information opposing unionization.” The Foundation filed an amicus brief that made this very point.

2009 — Locke v. Karass, 555 U.S. 207

The Court held that the First Amendment permits a local union to charge non-member public employees for national litigation expenses for other bargaining units if the litigation is related to collective bargaining or contract administration and the charge is reciprocal in nature, i.e., if the national union and other locals would similarly contribute to the cost of litigation for the non-members’ unit should the need arise. A concurring opinion by three Justices noted that the Court’s decision did not decide what “reciprocity” means or what burden a union has to establish true reciprocity, because in this case the parties assumed that reciprocity existed.

2012 — Knox v. SEIU Local 1000, 132 S. Ct. 22777 .

2014 – harris v. quinn, 134 s. ct. 2618..

Circuit Court of Appeals Precedents:

United Food and Commercial Workers Union, Local 1036 v. NLRB , 249 F.3d 1115, 167 L.R.R.M. 2161 (9th Cir. 2001)
Shea v. International Association of Machinists , 154 F.3d 508 (5th Cir. 1998)
Machinists v. NLRB and Strang , 133 F.3d 1012, (1998)
Ferriso v. NLRB , 125 F.3d 865 (D.C. Cir. 1997)
Abrams v. Communications Workers , 59 F.3d 1373 (D.C. Cir. 1995)
Tierney v. City of Toledo , 824 F.2d 1497 (6th Cir. 1987), further proceedings 917 F.2d 927 (6th Cir. 1990) ( Summary only )
Russell v. National Mediation Board , 714 F.2d 1332 (5th Cir. 1983) ( Summary only )

Other Federal Case Law:

California Saw and Knife , 320 N.L.R.B. 224 (1995)

Federal Labor Law:

National Labor Relations Act, 29 U.S.C. 151
Landrum-Griffin Act, 29 U.S.C. § 401 et seq.
“Bill of Rights of Members of Labor Organizations” § 101(a)(5), (29 U.S.C. § 411(a))
Railway Labor Act, 45 U.S.C. 151
Government Employee Labor Law: 5 U.S.C. 7102
Postal Employee Labor Law: 39 U.S.C. 1209

State Right to Work Laws:

NOTE: State laws are in a constant state of flux. Before relying on the text of any state Right to Work statute, you should check the most recent edition of your state laws.

Click here for a map of Right to Work states and laws.

Other Resources:

For an excellent yet concise summary of discipline-related labor law issues, read Union Discipline and Employee Rights , by Foundation Attorneys Rossie Alston, Jr . and Glenn M. Taubman .
For an historical perspective on the evolution of compulsory unionism in labor law, read Policy Analysis: The Permissible Use of Forced Union Dues From Hanson to Beck by Charles Baird, published by the Cato Institute.
Issue Briefing: Employees in Right to Work States provides basic information regarding the rights of employees in Right to Work states.
Employees with sincerely held religious objections to joining or financially supporting a union will find An Employee’s Guide to Union Dues and Religious Do Nots , by Foundation attorney Bruce N. Cameron , both informative and useful.
For a handy guide for charter school teachers and employee, read Know Your Workplace Rights: A Guide for Charter School Teachers and Employees .

Big Labor’s Top Ten Special Privileges Your Right to Work Rights – In Three Minutes Right to Work Frequently-Asked Questions Foundation Supreme Court Cases NLRB Watch featuring former National Labor Relations Board (NLRB) Member John Raudabaugh Highlighted case: Janus v. AFSCME Information for Media Special Legal Notices What workers say about the Foundation

© 2024 NRTWLD&EF, Inc All Rights Reserved. National Right to Work Legal Defense and Education Foundation, Inc. 8001 Braddock Road / Springfield, Virginia 22160 (703) 321-8510 | (800) 336-3600 / (703) 321-9613 fax - general (703) 321-9319 fax - legal department

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Unique to this database is a chart of landmark court cases related to labor and employment law.

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Who will be cheering and who will be jeering in this new decade may depend on the outcome of several key cases, pending regulations, and potential state and local law reforms. Below, we provide you with a brief overview of some key issues that may dominate the legal landscape in 2020 and beyond.

Notable Cases With Potentially Far-Reaching Impact

Us supreme court decisions regarding lgbt rights.

This is undoubtedly the most hotly-anticipated court outcome of the coming year because of its significant impact on the civil rights of more than 8 million LGBT individuals in this country. On October 8, 2019, the United States Supreme Court heard oral argument in three cases involving employees who allege they were terminated from their employment because of their LGBT statuses in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”); specifically, the statute’s prohibition on discrimination “because of sex.” Two of the three cases – Altitude Express v. Zarda (2d Circuit) and Bostock v. Clayton County, Georgia (11th Circuit) – involve employees alleging their respective employers discriminatorily ended their employment because they were gay. In the third case, R.G. & G.R. Harris Funeral Homes v. EEOC (6th Circuit), the federal government argued that the employer terminated an employee based on transgender status in violation of Title VII.

Aside from these three cases before the nation’s highest court, the protection of LGBT rights has garnered widespread attention in the private and public sector alike. Examples include The Business Statement for Transgender Equality , a letter penned by some of the nations’ largest employers that censures any reduction in LGBT rights, and the Equality Act , a bill passed in the U.S. House of Representatives that seeks to modify civil rights statutes to expressly protect LGBT individuals in the same manner as race, sex, national origin, and religion. Since its passage in the House, the Equality Act has sat at the Senate without much activity, however, the pressure to address the bill may build as the clock ticks on the Supreme Court’s forthcoming decision, due from the Court before the close of the 2019-2020 session on June 30, 2020.

US Women’s National Soccer Team Eyes New Goal Of Equal Pay

In March 2018, members of the United States Soccer Women’s National Team (“WNT”) sued the United States Soccer Federation, Inc. (“USSF”) in the Central District of California seeking injunctive relief, back pay, and punitive damages under the federal Equal Pay Act – an amendment to the Fair Labor Standards Act that requires equal pay for men and women for equal work – and Title VII. The lawsuit, a class and collective action, was filed by female WNT players including Alex Morgan, Megan Rapinoe, Carli Lloyd, and Julie Ertz, who have become household names due to their overwhelming success in the international soccer world. Four World Cup championship titles, four Olympic gold medals, and the Number 1 world ranking in 10 of the last 11 years, among other factors, lead the WNT to argue that they unfairly receive lower pay and inferior playing, training, travel, and other conditions of employment when compared to those benefits provided to their Male National Team (“MNT”) colleagues, who have not enjoyed similar playing successes as the women.

This case is unique, not only because of its high-profile parties, but also because Defendant USSF does not appear to deny paying less to WNT players than MNT players, and instead asserts that “market realities” dictate their lower pay. The WNT is fighting this assertion with data they argue indicates the WNT not only is more successful on the field, but generates significantly more revenue for USSF than the MNT. Many compare this case to Billie Jean King’s efforts in the 1970s to equalize pay for women in professional tennis, and see it as another opportunity to increase awareness of unequal pay for women in sports and other industries. The case is currently set for trial in May 2020, just three months before the summer Olympics, where the WNT is expected, once again, to be a strong contender for the gold medal.

Online Ad Practices Alleged to Profile Younger Applicants

The Communications Workers of America (“CWA”) filed Communications Workers of America v. T-Mobile US, et al. in May 2018, as a proposed class action lawsuit alleging that many major employers including Amazon, T-Mobile, and others yet to be named have used a paid advertisement posting platform on Facebook to post job opportunities and exclude older workers from applying. The suit alleges that Facebook’s platform allows posters to identify parameters for their employment ads to reach only targeted audiences, and thereby exclude potential audiences in a certain age brackets. CWA asserts in its lawsuit that this practice by employers violates the Age Discrimination in Employment Act, which prohibits discrimination on the basis of an employee’s or prospective employee’s age. The case is still in its early stages and has largely focused on whether CWA is a proper plaintiff in the lawsuit, but it is expected to gain attention as the case progresses. Similar lawsuits have been filed in other jurisdictions, and to add fuel to the fire, the Equal Employment Opportunity Commission (“EEOC”) issued a decision in September 2019 that the agency found “reasonable cause” to determine that seven employers, including Capital One and Edward Jones, had discriminated against females and older workers by posting job listings on Facebook using audience parameters including age and gender. In response, Facebook has reportedly modified its advertisement posting platform so that it prevents self-identified employers from posting job ads using age or gender-based audience-selection criteria. Skeptics may argue this is not enough because employers who do not self-identify their ad as a job posting may circumvent the restrictions and continue to exclude ad viewers based on legally-protected characteristics. Stay tuned as this topic develops both in and outside of court.

Facebook Challenges Notice of Collective Action to Employees Who Waived Class Claims

Facebook is also taking a front seat in further defining the contours of the impact of Epic Systems v. Lewis (which we blogged about here ), the United States Supreme Court decision that authorized the use of mandatory arbitration agreements as a condition of employment.

In Bigger v. Facebook , the United States District Court for the Northern District of Illinois certified a collective action under the Fair Labor Standards Act that includes allegations that Facebook failed to properly pay overtime to certain groups of employees. As part of the Court’s order certifying the collective action, the District Court Judge authorized plaintiffs’ counsel to send an approved notice of collective action to all potential class plaintiffs, including those who signed arbitration agreements that waived their right to bring or participate in class or collective litigation.

Facebook has appealed this decision, arguing that the class waivers render these employees ineligible to participate in the District Court collective action litigation, therefore the notices about the class proceeding should not be sent to them. Facebook asserts that the Court’s order improperly treats the arbitration agreements as presumptively invalid and will result in an unnecessary expansion of the litigation and “amplify settlement pressure.” Although the case is still in its earliest stages, the United States Court of Appeals for the Seventh Circuit agreed to hear Facebook’s interlocutory appeal (an appeal that occurs before and often results in a temporary stay on the completion of the trial court litigation).

Notably, on February 19, 2019, while the Bigger Court was considering plaintiffs’ class certification but before it issued its order allowing the notices to be sent to employees who signed class waivers, the United States Court of Appeals for the Fifth Circuit considered the same issue and ruled, contrary to the Illinois District Court, that plaintiffs should not be authorized to provide notice to putative class members who are not able to participate in the class proceedings because they have signed arbitration agreements containing class waivers. A different outcome in the Seventh Circuit would create a split and possibly tee up the issue for further consideration by the Supreme Court.

Federal Agency Regulations To Address Joint Employer Classification

As we reported to you previously , three major federal agencies that enforce employment laws – the National Labor Relations Board (“NLRB”), Department of Labor (“DOL”), and the EEOC – all promised to revise their standards for determining when multiple, otherwise unrelated entities can be considered “joint employers” of an employee or group of employees. On January 12, 2020, the DOL issued its final rule regarding joint employment and the Fair Labor Standards Act, which is expected to take effect in mid-March 2020 and finalizes the proposed rule unveiled last year. The DOL’s rule replaces a much laxer test that said employers jointly employ workers whose work for one “is not completely disassociated” from their work for the other. Under the newly announced rule, the DOL will apply a four-factor balancing test to determine whether two or more affiliated businesses jointly employ workers in situations where workers perform tasks for one employer that simultaneously benefit another business or individual. These factors include (1) whether a business can hire or fire employees, (2) whether it controls their schedules or conditions of employment to a substantial degree, (3) whether it determines workers’ pay rates and the methods by which they are paid, and (4) whether a business maintains workers’ employment records.

The NLRB and EEOC’s joint employment guidance is also expected this year. The NLRB has issued proposed rules, on which it has accepted public comment, and final rules are believed to be imminent. The EEOC indicated it planned to issue a notice of proposed rulemaking at the end of 2019, but the end of the year came and went without this notice. Employers are hopeful that the agencies will issue consistent rules and provide useful and practical guidance for employers as they consider the pros and cons of entering into various contracting and leasing relationships.

State and Local Law Developments

California, as you know, is often a leader in employee rights’ reform, and last year was no exception. Enacted last year, California Assembly Bill 5 (“AB5”) became effective January 1, 2020 (except for a limited exception for truckers) and codifies the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court , which we posted about here . AB5 adopts the “ABC test” utilized in Dynamex to determine whether a worker is an employee or independent contractor. The test is considered restrictive and would result in more workers being classified as employees. Other states, including New York, New Jersey, and Illinois, have also begun working on similar independent contractor standards modeled after AB5, and are expected to submit those for passage into law perhaps this year. For a more in-depth review of AB5 and its history, read our post here .

Another development arising from the Golden State, arbitration law reform Assembly Bill 51 enacted in response to the Epic Systems decision (discussed further above), seeks to criminalize arbitration agreements required as a condition of employment, even when employees are allowed to opt out. The law has been challenged on constitutional grounds and was stayed by the United States District Court for the Eastern District of California, pending further hearings on the matter. Other states may consider similar laws and use the pending litigation as a lesson learned in drafting their own versions of the law so as to avoid the potential legal pitfalls of the pioneer laws in this area.

Finally, state law overtime requirements that exceed the federal law standards, paid and legally-protected family and sick leave, and predictable work scheduling are all areas in which there is a growing trend for states and local governments to enact worker-protective laws. Expect additional legislation on both a state and local level in these areas as well.

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28 May 2024
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14 Sep 2023

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08 Aug 2023

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24 Jul 2023

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Why Aren’t Business Leaders More Vocal About Immigration Policy?

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03 Oct 2022

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10 Important Cases of Labour Law

This article presents a comprehensive overview of ten landmark cases that have significantly influenced the evolution of labour laws in india..

The article '10 Important Cases of Labour Law' presents a comprehensive overview of ten landmark cases that have significantly influenced the evolution of labour laws in India.

Labour law covers employment contracts, wages, health and safety, fair treatment of employees, dispute resolution mechanisms and so on and so forth. It provides regulations that govern the relationship between an employee and the employer in a workplace. Labour laws play an important role in the protection of the rights of employees. The cases discussed below aim to cover various aspects of labour laws.

1. Workmen of M/S Firestone Tyre and Rubber Co. of India v. Management [1]

In the instant case, the workers of the Firestone Tyre & Rubber Company were terminated from their employment by the employer as a result of the Domestic Inquiry Finding. Meanwhile, during the pendency of the suit, the amendment to the Industrial Tribunal Act in 1971, brought in Section 11 A which conferred Industrial Tribunal with the Appellate Authority power over domestic inquiries into emerging disputes. The Tribunal gave a decision in favour of the employer and therefore dissatisfied with the decision; the aggrieved workers appealed to the Apex court against the order passed by the tribunal. The Supreme Court considered on the understanding of Section 11A of the Industrial Disputes Act, 1947 and acknowledged the Industrial Disputes Act, 1947 as a beneficial legislative measure drafted for the welfare of employees.

However, the court ruled that since the lawsuit was started before the amendment, the said section would not be applicable in this case. It would only be relevant to cases started after the amendment to the Industrial Dispute Act, 1947.

2. Bandhua Mukti Morcha v. Union of India [2]

A PIL was filed by an organization named Bandhua Mukti Morcha who were actively fighting against the abhorrent practice of bonded labour. The organisation outlined a survey report, conducted in stone quarries in the Faridabad district which revealed numerous workers facing inhuman & intolerable conditions, with a drive of forced labour.

In response to the highlighted facts, the Court recognized guidelines for identifying bonded labourers and directed that state governments must locate, release, and rehabilitate the bonded labourers. The court also declared that a person being a bonded labourer is deprived of liberty, and is a slave with no freedom in choosing employment.

The court also ruled that if it is established that a worker is engaged in forced labour, the presumption is that economic deliberations are involved, and therefore, the worker is a bonded labourer. This presumption can only be refuted by the employer & the state government if they deliver satisfactory evidence.

3. Steel Authority of India Limited v. National Union Waterfront Workers [3]

The Government of West Bengal originally forbade contract labour at specified stockyards in Calcutta by virtue of the Contract Labour (Regulation and Abolition) Act, 1989. The prohibition was temporarily put off through a notification dated August 28, 1989, but it was extended until August 31, 1994. The contracted labourers of a central government enterprise which were primarily involved in manufacturing iron and steel products and engaged in import-export had its branches across India, petitioned the Calcutta High Court to direct the appellants, SAIL, to fascinate them into their consistent establishment due to the West Bengal government's prohibition. The Calcutta High Court, considering the State Government as the appropriate authority dismissed the writ petition. In response to this, the appellants appealed to the Supreme Court, putting in question, the interpretation of "appropriate government" enshrined in Section 2(1)(a) of the Contract Labour (Regulation and Abolition) Act, 1970.

The apex court lined that any company working under the authority of the Central Government undertakings, which fails to function due to a lack of conferred power, is considered an industry under the Central Government. Subsequently, the court determined that as per the Contract Labour (Regulation and Abolition) Act, 1970, the appropriate government was the Central Government.

4. People’s Union for Democratic Rights v. Union of India [4]

The PUDR is an organization formed to protect the democratic rights of the Citizens. In the instant case, PUDR appointed three scientists for the inquiry to be conducted in the ASIAD Projects. Based on the investigation report the petitioner addressed a letter to Justice P.N Bhagwati which served as a Public Interest Litigation. The letter highlighted violations of various labour laws and the apex court was requested to look into the issue. The letter was considered as a writ petition by the Supreme Court. Notices were issued to the Union Government, the Delhi Development Authority & the Delhi Administration.

The major allegations highlighted-

The violation of the Equal Remuneration Act, 1976( women workers were not paid properly; misappropriation of money).

The violation of Article 24 of the Constitution of India, the Employment of Children Act, 1938 & 1970 as the children below 14 years were engaged at the construction site by the contractors.

The violations of the Contract Labour (Regulation and Violation) Act of 1970, resulted in the maltreatment of the workers and denial of their various rights.

The apex court in this case found that the stated violations did happen and at a gross means. The court held that there were abuse of labour laws in mass and the State was obliged to take action against such violation ensuring that the fundamental rights of the labourers are safeguarded.

5. Syndicate Bank and Ors v. K. Umesh Nayak [5]

The major issue in the instant case before the Apex Court was whether the workmen were entitled to get paid during the period of strike despite the strike’s nature, legal or illegal.

The Apex Court held that unless a strike contradicts the provisions of the Industrial Disputes Act, 1947, it would be considered legal. Close scrutiny is essential to be applied to the particular factual condition of each claim.

In the instant case, the strike was a result of longstanding disputes between employees and employers. It is the last resort available to the employees for their demands to be fulfilled by the industry. The Industrial Legislation provides for worker’s right to protest and the right of the employer to lockout & provide machinery for peaceful inquiry & clearance of disputes between them. Therefore, the Court ordered that the employees be paid for the strike period.

6. Municipal Corporation of Greater Bombay v. Labour Appellate Tribunal of India [6]

Retrenchment was questioned in this case. The term retrenchment amounts to the termination done by the employer of the employee for reasons other than giving punishment through disciplinary action. It is generally done to relieve them from a job in good faith. In this particular case, the employer sent a show cause notice to the employee after leading an inquiry into misconduct. As a result, the employee was terminated being found guilty and unfit for continued employment with the company. The terminated employee filed a petition seeking restoration and compensation on grounds of termination. The Labour Court ruled in favour of the employee. This decision was challenged by the appellant in Bombay High Court. The High Court decided that this case did not involve retrenchment because the employee’s termination was based on misconduct.

7. M.C. Mehta v. State of Tamil Nadu [7]

In the instant case, Shri MC Mehta invoked Article 32, for violation of fundamental rights of children guaranteed under Article 24. The Court found Sivakasi was the main offender who was employing many child labourers, engaging them in the manufacturing process of matches and fireworks which is qualified as a hazardous industry and held employing children under the age of 14 years in this industry is prohibited.

The Court restated that children below the age of fourteen must not be engaged in any hazardous industry and must ensure all children get free education till the age of 14 years. The Court further also looked at Article 39 (e) which states that the children’s tender age should not be exploited but instead, the opportunities for their healthy growth and development. Therefore, the Court directed the employer Sivakasi must pay a compensation of Rs. 20,000 for violation of the Child Labour (Prohibition and Regulation) Act, 1986.

8. Hindustan Aeronautics Limited v. Workmen [8]

The appellant Hindustan Aeronautics Limited is a company registered under Section 617 of the Companies Act, 1956, belonging to the Central Government. The case is about 1000 workers, working in the company’s repairing unit at Barrackpore, West Bengal were facing issues w.r.t the allowance of the employee’s education, revision of lunch allowances and job permanency. The dispute was then taken by the West Bengal Government under Section 10 (1) to the Industrial Tribunal. The Industrial Tribunal partly awarded some relief to the workers. As a result, the Appellants took their case to the Apex Court and questioned whether the West Bengal government was an appropriate government or not, to resolve the dispute.

The Supreme Court held that the West Bengal government is the appropriate government keeping in mind the company’s subsidiary in West Bengal carried on different business.

Therefore, when there arises a situation of conflict or breakdown, the government of West Bengal has the authority to settle any dispute and keep industrial peace.

9. Bata Shoe Co. Ltd. v. D.N Ganguly [9]

The case is related to a dispute that emerged between Bata Company and the workers. The parties opted for the process of Conciliation to reach a settlement. But the workers initiated a strike post-settlement for which the company declared the strike illegal, stating its contradiction to the earlier settlement. Accordingly, the company conducted an inquiry and terminated the striking workers. In executing the termination dispute, another conciliation proceeding arose, resulting in a signed agreement between both parties. Remarkably, no conciliation officer was present throughout this process.

The main issue before the apex court was whether a settlement executed between the company and the workers could exist in accordance with Section 12 and Section 18 of the Industrial Disputes Act, 1947. The apex court held that the first settlement was binding since it was in accordance with the specified sections however the subsequent settlement remains non-binding since it was contrary to the specified provisions of the Industrial legislation.

10. Bangalore Water Supply v. A. Rajappa & Others [10]

A. Rajappa was an employee of the Bangalore Water Supply and Sewerage Board. A labour dispute was persisting between the employee and the board. A. Rajappa along with several other workmen were fined by the Board for misconduct. A hefty amount was recovered from them which was not reasonable. Therefore A. Rajappa along with other workmen approached the Labour Court. The issue was whether Bangalore Water Supply and Sewerage Board fell within the definition of industry under Section 2(j) of the Industrial Dispute Act, 1947. The Supreme Court of India dismissed the Bangalore Water Supply and Sewerage Board's appeal and held it within the industry definition under the Industrial Dispute Act, 1947.

[1] 1973 SCR (3) 587

[2] AIR 1984 SC 802

[3] Appeal (Civil) 6009-6010 of 2001

[4] 1982 AIR 1473

[5] 1994 SCC (5) 572

[6] AIR 1957 Bom 188

[7] AIR 1997 SC 699

[8] 1975 AIR 1737

[9] 1961 AIR 1158

[10] AIR 1978 SC 548

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EMPLOYMENT LAW CASE STUDIES

The Employment Law team at IBB has a wealth of experience in working with individuals to achieve the best solutions to a wide range of employment issues. Below are just a few examples of the recent work we have done:

Our client was employed as a solicitor in a regional firm of solicitors. He was accused of misconduct. We successfully argued that the allegation had no merit. We then negotiated a favourable severance for our client.

Our client was employed as a recruitment manager for a global firm of solicitors. She returned from maternity leave and was informed her role was redundant. We represented our client in the employment tribunal. Our client won her claims for pregnancy and maternity discrimination and unfair dismissal. We then negotiated a favourable out of court settlement for our client. Her case was widely reported in the media.

Our client was employed as a paralegal for a global beverage company. She was informed that her role was redundant and was offered a settlement agreement. We argued that the company had failed to follow a proper process. We negotiated a more favourable settlement for our client.

Our client was the CEO of a charity. He was dismissed due to matters unrelated to his work. We represented our client in the employment tribunal. Our client won his claim for unfair dismissal and was awarded compensation by the tribunal.

Our client was the MD and shareholder of an IT company. He was dismissed for gross misconduct. We represented our client in the employment tribunal. Our client won his claim for unfair dismissal. We then negotiated a favourable out of court settlement for our client, which was more than he would have been awarded by a tribunal at a remedy hearing.

Our client was employed as an executive in a global bank. He was informed that his role was redundant. Our client believed that the real reason for his selection was due to his sexual orientation. We presented an employment tribunal claim for sexual orientation discrimination. We then negotiated a favourable severance for our client.

Our client was employed as a teacher for college. He was bullied due to his disability and resigned. We represented our client in the employment tribunal. Our client won his claim for unfair dismissal and was awarded compensation by the tribunal.

Our client was employed as senior nurse in an NHS Trust. Our client was accused of bullying. She raised a grievance against the accusers for race discrimination. She was victimised for doing this. Our client had less than 2 years’ service to bring a claim for constructive unfair dismissal. We negotiated a favourable severance for our client.

Our client was employed as senior manager in a local authority. Our client was bullied by colleagues and believed that this was because of his race. We presented an employment tribunal claim for race discrimination. We then negotiated a favourable out of court settlement for our client.

Our client was employed as an HR manager for a pharmaceutical company. She was informed her role was redundant. Our client believed that the real reason for her selection was due to her age. We then negotiated a favourable severance for our client.

We were contacted by an employee representative and negotiate a template settlement agreement with the company on more favourable terms. We then acted for all employees, which the company likes, as they like to deal with one firm of solicitors rather than various firms.

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If you would like to discuss your employment situation whether that be reviewing your employment contract or dealing with a dispute then call us today in confidence on 03456 381381 , or email your details to [email protected] .

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Employment & Labour – Top Ten Cases of 2020

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In a year like no other, there have been steady developments in the landscape of employment & labour and human rights law. Some of these developments were long anticipated, including the effect of termination on bonus compensation and the legality of mandatory arbitration clauses in the gig economy. Perhaps the most interesting cases, however, are those that relate directly to the major issues of this past year including the COVID-19 pandemic and widespread movement for racial justice and equality.

Below, we provide a summary of the top 10 Canadian decisions we believe Atlantic Canadian employers should be aware of going into 2021.

IBEW Local 1620 v Lower Churchill Transmission Construction Employers’ Assoc. Inc., 2020 NLCA 20 [IBEW]

Accommodating cannabis use in a safety-sensitive environment: Duty to accommodate requires employer to consider all possible options. Insufficient for an employer to show that only some of the possible accommodations are unreasonable.

We previously wrote about the arbitrator’s decision in IBEW here and here .

The grievor, a construction labourer, suffered from Crohn’s disease and osteoarthritis. To manage the associated pain, he used medically prescribed cannabis. This pain management regimen was in place when, in 2016, he applied for a labourer position on a construction project. He was hired pending satisfactory drug and alcohol screening. The grievor tested positive for drug use. Upon learning of the underlying medical reasons, the employer made numerous requests for additional medical evidence regarding his capacity to perform work safely. In the end, the employer refused the grievor employment on the ground that his medicinal cannabis use created an unacceptable safety risk. The Union grieved the decision, alleging a failure to accommodate.

The arbitrator denied the grievance on the basis that that the grievor’s position was deemed to be “safety-sensitive”, meaning that any performance limitations due to substance use could result in significant injury. The Union brought an application for judicial review to the Supreme Court of Newfoundland and Labrador. The applications judge found that the arbitrator’s decision was within the range of reasonable outcomes. The Union then appealed to the Court of Appeal and the sole question on this appeal was whether the applications judge reasonably concluded that the employer could not accommodate the grievor without undue hardship. Central to the issue is the fact that current science is not capable of assessing a person’s individual level of impairment due to cannabis use, nor can it accurately determine how recently cannabis was taken given the fact that cannabis can be detected in a person’s body long after it has been consumed.

The Newfoundland and Labrador Court of Appeal held that it was insufficient for the employer to rely on the dearth of scientific tests for impairment to discharge their onus of accommodating the grievor. The employer did not, for example, consider alternatives to scientific or medical tests such as functional assessments of the employee. The court did not purport to say that such tests would be adequate, only that all reasonable options need be considered. The Court of Appeal found that the applications judge erred in concluding that the arbitrator’s decision was reasonable as the arbitrator did not complete the necessary analysis. The matter was remitted back to arbitration for a complete and holistic analysis of the employer’s duty to accommodate. It will be interesting to see whether the arbitrator determines that accommodation without undue hardship is possible in a safety-sensitive work environment on this broadened analysis.

Uber Technologies Inc. v. Heller, 2020 SCC 16 [Heller]

When there is a pronounced power imbalance between parties to a standard form contract, forced arbitration clauses which prevent the weaker party from meaningfully pursuing disputes will be considered unconscionable.

We previously wrote about the Ontario Court of Appeal’s decision in Uber here .

The Supreme Court of Canada’s decision in Uber expands the role of the doctrine of unconscionability in standard form contracts, particularly with respect to arbitration agreements.

By way of background, to become a driver for Uber, drivers had to accept the terms of the service agreement, which specified that all disputes with Uber were required to go to mediation and then arbitration in the Netherlands. This process involved an upfront administrative cost- to be paid by the driver- of US$14,500, amounting to nearly a year’s salary and not inclusive of other costs and legal fees.

The Respondent, Heller, was the named plaintiff in a class action against Uber Technologies seeking a declaration that drivers are employees of Uber and, accordingly, entitled to the benefits of the Ontario’s Employment Standards Act, 2000 (“ ESA ”). He further sought a declaration that Uber violated the ESA . While the Ontario Superior Court of Justice stayed this action in favour of arbitration, the Ontario Court of Appeal found that the arbitration clause was unconscionable. As this was a preliminary motion, Justice Nordheimer (writing for the ONCA) assumed the drivers to be Uber employees as pleaded. On this view of the arrangement, the arbitration clause was invalid as it ousted provisions of the ESA (namely its complaints procedure) out of which employers cannot lawfully contract. Justice Nordheimer allowed the appeal on this basis, noting that he also would have set the arbitration clause aside for unconscionability in forcing drivers to pursue their claims in a foreign country. Uber appealed this decision to the Supreme Court of Canada.

Notably, the Supreme Court of Canada declined to deal with the ESA argument, clarifying that the question before them was limited to who has the authority to decide whether an Uber driver is an employee- the courts of Ontario or an arbitrator in the Netherlands. On this point, the Supreme Court of Canada agreed with the Ontario Court of Appeal calling it a “classic case of unconscionability.” The Supreme Court of Canada found that both traditional elements of unconscionability were met: inequality of bargaining power and an improvident bargain. Arbitration is meant to be a cost-effective and efficient option for parties seeking to resolve their disputes, but when it is not realistically attainable by one of the parties, it “amounts to no dispute resolution mechanism at all”. This decision enables Mr. Heller to proceed with his class action against Uber.

Lyft Canada Inc. v United Food and Commercial Workers International Union, Local 1518 , 2020 BCLRB 35 [ Lyft ]

British Columbia Labour Review Board finds nothing prevents ride-sharing services Uber and Lyft from hiring their drivers as independent contractors; no violation of Labour Relations Code .

In a big year for ride-sharing service cases, both Uber Canada Inc. and Lyft Canada Inc. (together, the “App”) were named in an application to the British Columbia Labour Review Board (“BCLRB”) on behalf of their respective ride-share drivers, seeking a declaration that said drivers be characterized as employees of the services. This declaration is contrary to the relationship clause contained in the Lyft Terms of Service, which categorizes the drivers as independent contractors. A similar clause is contained in the Uber Terms of Service. The drivers, represented by the United Food and Commercial Workers International Union, Local 1518 (“Union”), claimed that they should be considered employees under the British Columbia Labour Relations Code (the “ Code ”) and that Uber and Lyft had breached their employee rights under the Code . In this respect, this case mirrors the Ontario class action pursued by Uber drivers in the Heller case discussed above.

In this matter, the BCLRB dismissed both arguments, finding that the Respondents had not disingenuously represented their business or their relationships with their drivers, at least not as far as the Union had shown. The drivers were required to agree that they were independent contractors before being able to accept riders through the service, and contractually cannot assert they are employees of the Respondents. In contrast to Heller , the BCLRB did not find that the Respondents had structured their businesses in a “disingenuous manner in order to frustrate any rights Drivers may have under the Code ”. It is noteworthy that the BCLRB released their decision on Lyft three months before the Supreme Court of Canada released their decision in Heller. Had the BCLRB been informed by the Supreme Court’s finding that the power imbalance between the parties created an unconscionability issue in the contracts, their decision may have been different. It is likely that Canadian courts will see this issue arise again in light of the decision in Heller .

Unifor Local 823 v K+S Windsor Salt Ltd., 2020 CarswellNS 546 [ Windsor Salt ]

Employer’s duty to accommodate for alcohol use disorder is engaged despite employee’s failure to expressly acknowledge their alcohol use disorder.

The grievor was a full-time mine shaftsman at the time of his termination in September 2019. The employer, K+S Windsor Salt, terminated the grievor’s employment after he breached his Last Chance Agreement (“LCA”) put in place following a history of absenteeism. The grievor suffered from alcohol use disorder which contributed to his repeated failure to show up for scheduled shifts at the mine. He sought treatment on multiple occasions and his family physician was apprised of the situation and communicated with the employer, albeit never referring specifically to alcohol use disorder. Many of the grievor’s absences were addressed by his physician, but others went unexplained.

The employer’s substance use policy required that employees suffering from substance use disorders self-disclose in order to ensure that they benefit from the policy. The employer argued that the grievor failed to disclose his diagnosis as required by the policy. The employer further asserted that they followed proper disciplinary steps by implementing the LCA, and that the grievor’s failure to abide by the agreement justified his termination. The Union argued on behalf of the grievor that his failure to explicitly address his alcohol use disorder with the employer was a result of the stigma attached to such a diagnosis. They further submitted that the LCA failed to address the root cause of the problem. To support their argument, the employer referred to the Supreme Court of Canada’s approach to substance use in Stewart v. Elk Valley Coal Corp ., 2017 SCC 30 (“ Elk Valley “). In Elk Valley, the employer was held to have acted reasonably in terminating an employee with a substance use disorder due to their failure to abide by company policy.

The arbitrator distinguished the finding in Elk Valley on the basis that in that case, the employer was not aware of the substance use disorder prior to the LCA, and in this instance the employer either knew or strongly suspected that the grievor suffered from an alcohol use disorder. The grievor communicated with the employer, either directly or through his family physician, that he was attending “programs” and on at least one occasion referred to the Springhill detox program. The facts also indicate that the Union president was aware of the nature of the problem and informed the employer of that before the LCA was signed.

The arbitrator therefore found that even if an employer only suspects there could be a substance or alcohol use disorder at play, they have a duty to address that suspicion with the employee before taking any action. Despite finding there is a strong presumption in favour of enforcing LCAs, the arbitrator agreed with the Union that the LCA in question was designed to deal with the grievor’s absenteeism, but did not address the cause of the absenteeism and therefore was insufficient in the circumstances. The arbitrator found that the grievor “was doomed to breach the LCA because it made no attempt to accommodate the disability that was causing the absenteeism that so rightly concerned the employer”. As such, the employer could not reasonably expect that the grievor would be able to meet the terms of the LCA. The employer’s duty to accommodate was engaged before it entered into the LCA despite the lack of disclosure on the grievor’s behalf.

Abrams v. RTO Asset Management, 2020 NBCA 57

Employers must be clear in their communication with terminated employees as to the cause of termination, or lack thereof.

We previously wrote about Abrams here .

Mr. Abrams was dismissed from his position as Regional Manager of a furniture and appliance leasing business in May 2017. He had commenced work with the employer nearly 30 years prior, although there was some disagreement as to continuity as Mr. Abrams had taken multiple leaves and changed positions several times during his employ. The most recent employment contract between the parties set the notice period for termination without cause to four weeks, which is the minimum under the New Brunswick Employment Standards Act (“ ESA ”). Mr. Abrams brought a wrongful dismissal action seeking reasonable notice under common law.

The employer argued that there was just cause for dismissal as Abrams had entered into a romantic relationship with one of his subordinates, provided her with confidential information, and had promoted her without disclosing their relationship to the employer. However, Mr. Abrams’ termination letter and Record of Employment both indicated that he was terminated “on a without cause basis”. Furthermore, he was provided four weeks’ pay in lieu of notice (in accordance with the terms of his Employment Contract and the ESA) and at his final meeting with the employer he was informed that he was being terminated without cause. Mr. Abrams argued that the employer had clearly communicated that his termination was without cause.

At trial, the motion judge found that his relationship with a subordinate would have constituted just cause for termination and therefore the employee was not entitled to reasonable notice of termination. Mr. Abrams appealed, and the New Brunswick Court of Appeal determined that the motion judge erred in finding that he was dismissed with cause when the employer had been very clear in their communications with Mr. Abrams that they were dismissing him without cause.

The court went on to consider the enforceability of the without cause termination of Mr. Abrams’s contract, and held that it was void for attempting to contract out of the benefits provided under the ESA . Since the most recent contract also did not contain a clause precluding consideration of previous years of service, the Court of Appeal found it reasonable to consider all of Mr. Abrams’ nearly thirty years of service across his various positions and awarded damages for 24 months’ notice.

This case should serve as a cautionary example for employers to take care when drafting termination letters and contractual provisions. In the meantime, leave for appeal has been filed with the Supreme Court of Canada. Stay tuned for further updates.

Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26 [Matthews]

Employers should revisit their incentive clauses and plans, including employee stock ownership plans (ESOP), following the Supreme Court of Canadas (SCC) determination that common language is not sufficient to preclude employee entitlements under these plans over a common law notice period.

We previously wrote about Matthews here .

In short, Matthews was a senior employee at Ocean Nutrition Canada who eventually left the company, due to mistreatment by the COO. The company was sold thirteen months later, which, had he still been employed, would have triggered a payout under the employee Long-term Incentive Plan (“LTIP”). The Nova Scotia Supreme Court determined that Matthews was constructively dismissed from his senior management position and was entitled to damages equal to fifteen months’ notice, but the question was whether he was also entitled to the LTIP payout given that the sale occurred during what would have been Matthew’s notice period. The wording of the LTIP specifically excluded employees who were not employed full-time on the date that the LTIP came into effect, including those that had resigned or had been terminated. While the Nova Scotia Court of Appeal found that this language was sufficient to oust Matthews’ entitlement to the LTIP payout during the notice period, the Supreme Court of Canada disagreed.

The Supreme Court found that whether damages for breach of employment contract should include compensation for loss of the LTIP entitlement is a two-step process:

Would the employee have been entitled to the bonus or benefit as part of their compensation during the reasonable notice period?
If so, do the terms of the employment contract or bonus plan unambiguously take away or limit that common law right?

The SCC concluded that the language in the LTIP was insufficient to rebut the common law presumption, and held that Matthews was entitled to the LTIP payment. In order to rebut the common law presumption, contractual language must be “absolutely clear and unambiguous.” Unfortunately, the Supreme Court did not provide examples of such clear and unambiguous language but it does put employers on notice that they will be held to a high standard in clarity of language should they wish to exclude incentive entitlements over a reasonable notice period.

United Steel Workers Local 2251 v Algoma Steel Inc ., 2020 CanLII 48250 (ON LA) [ United Steel ]

A global pandemic does not discharge employers from their duty to accommodate.

COVID-19 has left no area of law untouched, and employment law is no exception. United Steel involved an employee of a steel manufacturing plant in Sault Ste. Marie impacted by the mandatory quarantine order. The grievor is a dual citizen of Canada and the United States, and a single father to two children, both living in the United States. Although the grievor was exempt from the federally mandated self-isolation period as an essential worker, the employer implemented its own 14 day self-isolation policy independent of the one implemented under the Quarantine Act . The employer’s policy was implemented under the authority of the Ontario Health and Safety Act , which stipulates that employers must take every reasonable precaution to protect their employees.

The grievor therefore had to choose between either continuing to attend work or maintaining access to his children during a global pandemic. The Ontario arbitrator weighed the grievor’s argument that the policy was unreasonable and violated his right to equal treatment on the basis of family status against the employer’s argument that the policy was reasonable in the circumstances, given the high infection rates in the United States.

The arbitrator determined that, on the evidence, the employer’s COVID-19 policy was arbitrarily applied. The evidence revealed that some employees had spouses who worked in the United States but otherwise lived in the same home, and these employees were not subject to the self-isolation requirement despite having the same exposure risk. The arbitrator found that the employer had failed to reasonably accommodate the grievor, and could have found alternative work arrangements to limit contact with other co-workers. The arbitrator also determined that as part of the agreement to allow the grievor to continue to work without isolating, it would be reasonable to limit the grievor from travelling within the United States to any COVID-19 “hot spots”. Facing an unprecedented modern health crisis, the arbitrator in this decision was able to find a balance between individual employee family-status rights and the health and safety of the workplace.

NK v Botuik , 2020 HRTO 345

Consent to sexual activity is vitiated when one party uses their position of power, such as a supervisory position, over the other party in order to convince them to give consent.

The Applicant, known as NK, was a Direct Care Worker at two group homes for people with disabilities owned by Alan Stewart Homes Limited (“Alan Stewart Homes”). Over the course of her employment, the Applicant alleged that she was sexually harassed, propositioned, and assaulted by the Respondent who was also her supervisor at her first group home, violating her right to equal treatment without discrimination based on sex, right to freedom from harassment in the workplace based on sex, and right to be free from sexual solicitation. The Applicant reached an agreement with Alan Stewart Homes with respect to the matter and withdrew her claim against them. The Respondent, Botuik, never responded to the application and therefore forfeited his right to notice and participation.

The Applicant was a single mother who had a history of abuse by older men and substance use disorder, the latter of which she had worked hard to overcome. She was pleased to have secured employment with Alan Stewart Homes but immediately found herself subject to unwanted attention from her supervisor, the Respondent Botuik. He made it clear to her that important decisions related to her position, such as scheduling, fell to him alone. The Applicant testified that the Respondent initiated sexual contact with her, with increasing intensity, over the course of her employment, always ignoring her objections and reminding her that he was a very important part of the company and had a lot of power. Once her three-month probationary period ended, the Applicant immediately applied for a position at a different group home and was transferred. When she finally attempted to tell the Respondent that she was ending their relationship, he became violent and sexually assaulted her in her home, then left her and filed a police report against her for assault.

Shockingly, NK was subsequently terminated from her employment following an investigation done by an external lawyer. The lawyer found that NK and Boutik each engaged in inappropriate conduct in the workplace and that the employer behaved appropriately at all points. The report did not find any violation of a harassment or workplace safety policy as it concluded the relationship between NK and the Respondent was consensual. Despite being directly referenced in a letter NK wrote to Alan Stewart Homes, there was no mention of the sexual assault in the investigative report. The matter with Alan Stewart Homes was settled ahead of the hearing so, unfortunately, we will not know the extent of liability that may have been found, if any.

However, the Human Rights Tribunal of Ontario found several clear violations of the Ontario Human Rights Code by the Respondent Botuik. The Respondent’s wielding of his position with the company in order to force the Applicant into a sexual relationship with him vitiated any consent that the Applicant may have appeared to give. Despite the fact that the (final) assault did not occur at the workplace, it was still a consequence of the forced relationship that resulted from the Respondent leveraging his position over the Applicant.

Notably, NK sought compensation of $100,000 but was awarded $170,000 due in large part to the uniquely egregious nature of the harassment and culminating assault.

Sole Cleaning Inc . v Chu , 2020 ONSC 7226 [ Sole Cleaning ]

In assessing defenses to an injunction based on defamatory statements against an employer alleging racism, the experiences of racialized peoples should be given appropriate consideration.

Sole Cleaning pertains to the ability of employees to publicly criticize their former employers. The employer brought a motion for an injunction against a terminated employee who had accused them of racist acts by posting on her social media accounts. Ms. Chu was one of eight employees at the shoe and handbag cleaning business owned by the employer, and her employment was terminated in June 2020. The employer claims Ms. Chu was terminated for her hostile attitude and damage done to a customer’s shoes, but Ms. Chu claims her termination stemmed from her support of the Black Lives Matter (“BLM”) movement.

Following the start of the global BLM protests in May, Ms. Chu alleged that she encouraged her employer to make a statement in support of the movement. Although the employer agreed to do so, Ms. Chu argued that they were largely dismissive of the issues and that their actions were performative at best. Ms. Chu argued that not only were all of the employees of the business “BIPOC” (Black, Indigenous, and/or People of Colour) as opposed to the two owners who were both white, but that the majority of Sole Cleaning’s customers were BIPOC with the employer relying heavily on the business of their BIPOC customers.

Following her termination, Ms. Chu posted a number of statements on her Instagram and Twitter accounts. The statements alleged that she had been unjustly terminated from her employment for supporting the BLM movement, that the employers were racists and had used racist epithets, that the employers did not care about Black people and only wanted to profit off of Black culture, and that they treated their BIPOC employees poorly. In response to these social media posts, most of the other employees quit, and the business was subject to negative attention in the media. Sole Cleaning sought injunctive relief to stop Ms. Chu’s statements that alleged racist behaviour.

The Ontario Superior Court Justice noted that only five cases across Canada were cited as granting injunctive relief in similar situations, making it a rarely acceptable remedy. In contemplation of Ms. Chu’s defence of justification and fair comment, the judge elected to consider all of the evidence as a whole, including a number of hearsay statements included in Ms. Chu’s affidavit, as part of a contextual approach. The judge highlighted the duty of the court to consider “the experiences of racialized persons and how their experiences can be seen through a lens that differs from those of us who are not members of racialized communities”. On the defence of fair comment, the legal test is whether any person could honestly express the same opinion on those facts, and the court found that the lived experience of BIPOC cannot be ignored when assessing the objectivity component of the fair comment test, especially when dealing with allegations of racism. While the employer’s argument could succeed at trial, the judge could not find that the defences raised by Ms. Chu would inevitably fail and therefore the injunction was not granted and the motion was dismissed.

This case will be one to follow as the defamation case proceeds to trial. In the meantime, it serves as a cautionary example to employers considering similar action.

Waksdale v. Swegon North America Inc. , 2020 ONCA 391 [ Waksdale ]

Ontario Court of Appeal holds that employment contracts, and especially termination clauses, are to be read as a whole, therefore if one clause is statutorily invalid, all are invalid, regardless of which clause was actually applied.

In Waksdale , a short term employee was terminated on a without cause basis. Pursuant to his employment contract – which contained the standard with and without cause termination provisions, he was provided two weeks’ pay in lieu of notice.

Following the termination, the employee commenced a wrongful dismissal action against the employer. In response, the employer argued that the employee was terminated pursuant to the without cause provision. The employee argued that while the “without cause” provision was valid, the “for cause” provision was not, as it attempted to contract out of the ESA . The employee submitted that the two provisions must be read as a whole, rendering both provisions unenforceable. The Ontario Superior Court of Justice agreed with the employer that the without cause provision was valid and could stand on its own.

On appeal, the Ontario Court of Appeal found that the motion judge had erred in interpreting the employment contract, and that individual termination provisions should be read together rather than on a piecemeal basis. If one termination provision is in violation of the ESA , then the whole employment contract is void regardless of whether the termination was effected under the enforceable provision. The fact that the employee was terminated under the enforceable provision was of no consequence to the court – the only relevant question was the enforceability of provisions at the time the agreement was executed. In their decision, the Ontario Court of Appeal also considered the power imbalance inherent in the employee/employer relationship, declining to avail themselves of the severability clause for a provision that attempted to contract out of the ESA.

The employer sought leave to appeal to the Supreme Court of Canada. While employers should stay tuned for further developments, those who intend to limit employee rights on termination without cause should be careful in ensuring all of the termination provisions of the employment contract are compliant with applicable legislation.

This article was written with assistance from Erin Mitchell, an Articled Clerk in Cox & Palmer’s Halifax office. 902.491.1282 [email protected]

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