Legal Docket: Age discrimination

NICK EICHER, HOST: It’s Monday morning, start of a new work week for The World and Everything in It. Today is the 29 of October, 2018.

Good morning to you, I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard.

Before we get started on Supreme Court cases, first an update on cake-baking and the Constitution.

EICHER: Last Tuesday, Sweet Cakes by Melissa owners Aaron and Melissa Klein filed a petition asking the U.S. Supreme Court to hear their case.

The Oregon Bureau of Labor and Industries levied a fine against the Kleins totaling $135,000. The state said it was compensation for the emotional distress the Kleins caused a lesbian couple.

The two women had planned to marry one another and ordered a custom wedding cake to commemorate the union. The Kleins explained that their religious beliefs inform them that marriage is the union of one man and one woman, and therefore they could not custom-design such a cake.

Because they did not, the state issued the heavy fine and that forced the Kleins to close the business.

REICHARD: First Liberty Institute represents the Kleins and I spoke to one of their lawyers, Mike Berry. I asked him a question many of you have wondered: Why wasn’t this matter resolved when the Colorado baker won his case? The facts seem similar: a same-sex couple sued Jack Phillips when he declined to create a customized cake celebrating their union.

BERRY: The Masterpiece case was really about whether Jack Phillips got a fair and impartial hearing in front of the Colorado commission and because the commission was so anti-religious, he didn’t get a fair hearing. The court really didn’t get to the underlying, the fundamental issue of, okay, let’s say he did get a fair hearing. Does that mean that the government can force you to create cakes or artistic expression, sculpture, etc. that violates your beliefs…And I think there are millions of Americans in this country who have businesses and they want to know, yeah, can the government force me to do that? 

REICHARD: Now, the Supreme Court doesn’t have to accept this case, but if it does, there’s certainly time to hear it this term and decide it by June.

EICHER: Well, the high court is getting back to work on oral arguments this morning after a two-week break. If you’ve listened to every Monday program since October 1st, then after today’s three cases, you’ll be completely caught up on all arguments from the court’s first sitting.

Now, first up today, a case having to do with two sailors who developed lung cancer after they’d worked on Navy ships and suffered asbestos exposure.

REICHARD:  Right, although the legal issue is about who can be held liable for asbestos exposure along the product line. Here, the sailors’ widows sued dozens of companies. One company makes ship components called “bare metal.” That is, parts made before insulation is added later on by a third party. In this case, the insulation was asbestos.  

The company says any connection it has to asbestos is only incidental. Lawyer Shay Dvoretzky laid it out this way.

DVORETZKY: Petitioners had no duty to warn about asbestos added to their equipment years or even decades after its sale.

He pounded on the facts. His clients didn’t make the asbestos that caused the cancer, nor did they sell it or distribute it.

But Justice Sonia Sotomayor saw a connection anyway.

SOTOMAYOR: How is your product not the cause of the injury? The asbestos as sold is perfectly safe. It’s integrated. It’s whole. It doesn’t release molecules. What causes it to degrade is your ship, is your product. Your product heats up to such an extreme degree that it degenerates the asbestos. 

Well, Dvoretzky answered, the natural course of asbestos is that it degrades over time. It has to be replaced, as happened here, even before these sailors starting working on ships. It’s sort of like gas in a car that has to be refilled once it’s used up.

But then Justice Elena Kagan picked up where Justice Sotomayor left off:

KAGAN: This is your opportunity to tell me what sense does it make to say even though you direct the use of asbestos, you can’t be liable for its harms?

DVORETZKY: Because tort law places the duty to warn and also places liability on the party that is in the best position to control or avoid the harm. And it is the — well, the subsequent manufacturer of asbestos…that is in the best position to control the harm in this situation. That party is also in the…

KAGAN: But why is that?

DVORETZKY: Once we put our product out there, we don’t control what some third party develops or sells…

KAGAN: You’ve directed it to use asbestos so they’re going to use asbestos!

REICHARD: So things weren’t going so well for the company.

The lawyer for the widows had an easier time of it. Thomas Goldstein argued this is a simple failure-to-warn case.

GOLDSTEIN: That says something that oughta be uncontroversial. And that is, if you make a product and the ordinary use or maintenance of that product is going to cause a harm that you know about, then you need to warn about that…Now why are they the most efficient party to give the warning?  First, it’s their machine. They’re much more familiar with how the parts work than the part manufacturer because the parts can be used for lots of different machines.

REICHARD: It seems the rules for assigning liability ought to be worked out by now, but the  lower court in this case used a different type of analysis. That created a circuit split.

However the justices rule, this is a big one: It will affect product liability across the board.

My second case today pits business against labor. And the outcome will affect workers and consumers.

Here are the facts. Dominic Oliveira worked as a long-haul truck driver. For a time, he was set up to work as an independent contractor for the trucking company. Classifying workers that way can save employers a lot in wages in benefits. In an industry with slim margins like trucking, that’s attractive.

But Oliveira saw his employer dictate his schedule, his vacations, and monitor his truck with a tracking device. His boss had a lot of control over him.

So he terminated the independent contractor agreement and starting working as an employee, with mostly identical responsibilities.

Oliveira argues he was improperly categorized before, and is owed money. He brought a class-action suit alleging violations of the Fair Labor Standards Act.

The legal question here is highly technical: is Oliveira entitled to a court hearing, or does he have to use arbitration? He wants a court hearing. The company wants arbitration.

It all revolves around the meaning of the Federal Arbitration Act. It exempts certain workers in the transportation industry from mandatory arbitration agreements. But that depends on whether the worker is an independent contractor or an employee.

Chief Justice John Roberts prefers the plain meanings of words. Here he addresses the lawyer for the trucking company:

ROBERTS: People think naturally of employing an independent contractor. The question is not “employee/employer.” It’s employment.

REICHARD: And Justice Neil Gorsuch prefers original meanings of words at the time of passage. Here, almost 100 years ago when Congress passed the Federal Arbitration Act.

GORSUCH: Your colleague on the other side has documented that back in 1925, which is when the statute was enacted, and I think you would agree we have to interpret it as a reasonable reader would at that time, didn’t necessarily distinguish between independent contractors and employees with the same degree of care that the law has subsequently come to use.

REICHARD: Truckers endure a hard life on the road. The industry has at times been called “sweatshops on wheels.”  Labor doesn’t want to give employers an incentive to avoid fair pay by classifying workers unfairly. Yet consumer prices will have to increase to cover a win for the truckers.

Which is what it looks like to me.

Both conservative and liberal justices pushed back hard on the trucking company’s argument.

My final case today deals with age discrimination.

A budget shortfall meant the Mt. Lemmon, Arizona, fire district had to let some people go. The two oldest, men over the age of 40, received pink slips despite their high credentials, and the company replaced them with younger men.

So they sued under the Age Discrimination in Employment Act. It aims to prohibit arbitrary age discrimination for people over 40. Jeffrey Fisher, lawyer for the firemen, had the most direct opening argument that the law favors his clients. You’ll hear him refer to the law by the initialism ADEA.

FISHER: Mr. Chief Justice, and may it please the Court: The plain text of the ADEA makes absolutely clear that it covers political subdivisions regardless of size.  And there’s nothing odd, much less absurd, about that result.

REICHARD: But that “political subdivision,” the fire district, argues that four of five circuits that have ruled on the matter agree: small government agencies are exempt from age-discrimination laws, just as small private businesses are. The fire district only had 13 employees at the time. The law applies only where 20 or more employees work.

But here’s where poorly written laws hurt what otherwise might be an open-and-shut case. Fire district lawyer Joshua Rosenkranz had an uphill battle because of it.

ROSENKRANZ: I am attributing rationality to someone who was obviously not doing his job very well…  This is a strange statute that was written in a strange way. There is a reason for that. This gets to one of my other of my statutory clues…

REICHARD: Rosenkranz urged the court to put aside that crummy writing. Congress never meant to put burdens on small local governments that it didn’t want put on small private business.

Proof? Just look at another anti-discrimination law, Title VII. It doesn’t apply to private-sector businesses with fewer than 20 employees. Rosenkranz argued the ADEA should be read like that as well.

The justices didn’t signal one way or the other on an ultimate outcome. But with nearly 40,000 special districts in this country, the stakes are enormous.

Some fear if the former firemen prevail and small entities can be sued for age discrimination, it could burn down already weighed-down agencies.

And that’s this week’s Legal Docket.

(AP Photo/J. David Ake) In this Oct. 5, 2018 photo the U. S. Supreme Court building stands quietly before dawn in Washington. 

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