Legal Docket: Discrimination’s threshold

MARY REICHARD, HOST: It’s The World and Everything in It for this Monday, the 15th day of January, 2024. We’re so glad you’ve joined us today. Good morning! I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. It’s time for Legal Docket.

Three items on the docket today: one of them dealing with employment discrimination. That’s a live case before the Supreme Court, and it appears likely that the case will get at the question. What’s the tipping point for the courts to get involved in discrimination cases? It can’t entertain every single allegation. So what cases go to court? And what cases don’t? That’s one.

REICHARD: Two, a dispute that’s not currently before the court, but does fall into a broad category this court has been interested in—and that is, how much power should the administrative state have?

EICHER: And three, The Chief Justice and his annual report on the federal judiciary. Close to half of the report is a statistical snapshot of the workload of the judiciary, but the first part is topical: it deals with the role of technology in the legal profession. Chief Justice Roberts chose three images to illustrate his essay: the first was the early technology of the quill and inkwells, the second showed a justice using an electric typewriter in the 1960s, and the third, a justice using a desktop computer in the 90s.

REICHARD: I want to start there. And yes, the chief’s choice of images was strategic, I think. The computer user you described was Justice Sandra Day O’Connor who died last year. And as it happened, the main image on the first page was a striking photo of a federal court building in Arizona named for Justice O’Connor.

So there was that tribute, but what was on the chief’s mind was the rise of artificial intelligence in the legal profession.

He did make note that the profession is “notoriously averse to change.” Those last four words are a direct quote. And perhaps being averse to change is understandable, because he raises the question of whether AI will replace lawyers and judges!

Although he quickly adds that AI will transform the judicial system, but not necessarily replace lawyers—whew!

And he points out a big upside to AI, that it likely means cheaper access to the courts for the people. You can get basic questions answered along with forms to use without paying exorbitant lawyer fees.

EICHER: But he also notes some downsides.

Maybe you recall the news out of New York last year when some lawyers used ChatGPT to write briefs that cited case law that didn’t actually exist. Of course, that we know about it means they didn’t get away with it. The court fined and sanctioned those lawyers.

REICHARD: Uh, right, don’t do that!

AND THAT’S another noted downside of AI in the law: that is, the human side.

Reminds me of a famous, fictional scene from the movie Sully, about US Airways pilot Sully Sullenberger who made an emergency landing in the Hudson River in 2009.

Again, the filmmakers took considerable artistic license in portraying the safety board using computer simulations to blame Sully for making the wrong decision.

Actor Tom Hanks portrays Sully in this exchange with a board member.

TOM HANKS: We’ve all heard about the computer simulations and now we are watching actual sims but I can’t quite believe you still have not taken into account the human factor.

GOVERNMENT: Human piloted simulation show that you could make it back to the airport.

HANKS: No, they don’t. These pilots were not behaving like human beings. Like people who are experiencing this for the first time.

EICHER: The human factor would prevail here. And in court, human factors count, too, as the Chief pointed out in his report: a moment of hesitation by a witness during testimony, or hands shaking in anxiety, or an assessment of whether someone is lying.

Those are human factors that judges are arguably better at assessing than a computer. For now. We’ll see.

And I mentioned the back half of the report, the courts by the numbers. Here are a few: petitions to the Supreme Court fell last year by 15%. Bankruptcy filings went up a 13% increase. Civil cases filed in federal district court went up by a lot, an increase of almost 25% over the previous year.

That’s it.

REICHARD: Alright. I’ll put this next item in the “what’s cooking” department.

The Supreme Court this term has several opportunities to rein in the vast powers of the administrative state. I want to tell you about a particular dispute that hasn’t made it yet, but I think could.

The issue is what’s known as the “no admit, no deny policy” of the Securities and Exchange Commission. It’s also known as the “gag rule.”

It says that when a person settles with the SEC after being accused of violating securities rules, that person cannot publicly deny the allegations.

That person can’t even create the impression of innocence, even if he or she is innocent.

The New Civil Liberties Alliance represents three clients who did settle and have since petitioned the SEC to end this practice. Peggy Little is one of its attorneys:

PEGGY LITTLE: The whole reason for the First Amendment is to allow us to criticize the government. And yet they are demanding the gag as a condition of settlement … . A lot of people settle their cases with the SEC just because they don't have the time or resources to fight them.

I did contact the SEC for comment, but received no response in time for today. It’s not too late. If I hear back, I’ll tell you about it.

So I was left with what I was able to gather from SEC statements—and it’s this: that the gag rule protects the agency’s reputation and encourages faster settlements. Aside from that, the agency says people are free not to settle and take it to court.

EICHER: But others say that’s hardly good enough to justify a blatant violation of due process and free speech that even silences those falsely accused.

One of the clients of the New Civil Liberties Alliance is the former CFO of Xerox. He was accused by the SEC of certain accounting errors. Barry Romeril settled with the SEC because he wanted to move on and avoid wasting time and money.

But he maintains he’s innocent, and yet he can’t defend himself because of the gag rule. Again, Peggy Little:

LITTLE: He is dying to tell the truth about his case. Barry is almost 80 years old. And he settled his case in 2003. And he is desperate to talk about why. I mean, it's very poignant and very disturbing that he could die before he's able to defend his reputation in the public sphere.

REICHARD: I asked her for concrete examples. Here’s one:

LITTLE: We've had other situations we’re aware of where there has been a perjured witness. You have someone who spoke at the original prosecution that has since been shown to have committed perjury. Of course, if you settle that case, you should be able to say, you know, the guy that was the whistleblower turns out to be a liar.

Still, the Supreme Court rejected Romeril’s petition in June 2022. No reason given, which is customary. And no court has yet ruled against the SEC on this issue, although some judges have called the “no admit, no deny” rule troubling on several fronts. I suspect this matter will continue to be litigated.

EICHER: On now to employment discrimination, an oral argument heard before the holidays.

The case is Muldrow v City of St. Louis, Missouri.

And here are the facts. Jatonya Muldrow is a sergeant with the St. Louis Metro Police Department. She’d been assigned to work in the Intelligence Division. She did that job for nine years.

But in 2017, a new supervisor transferred Muldrow along with several other officers, both male and female. The supervisor moved them to other positions with different responsibilities and schedules.

REICHARD: So Muldrow sued. She claims she was transferred because the new supervisor was looking to put a man in her old job. She says that’s sex discrimination under Title VII of the Civil Rights Act of 1964.

But she lost her case at trial and in her appeal, because she hadn’t shown she’d suffered some material harm. For example, she couldn’t show she’d been demoted. She couldn’t show she was paid less.

The Supreme Court took up her appeal. Muldrow’s lawyer, Brian Wolfman:

BRIAN WOLFMAN: Title VII bars an employer from discriminating against an employee with respect to the terms, conditions, or privileges of her employment because of the employee's sex. Respondent now concedes that a lateral transfer changes the terms, conditions, or privileges of employment. After all, a transferred employee cannot show up the next day and do her old job. Her job tasks have changed, and that's the most basic term of employment. So the only question left is whether transferring an employee because of sex is discrimination against that person. It is.

EICHER: Big clarifying moment here by Justice Clarence Thomas. Listen as he tries to get at the core of what counts as workplace discrimination.

JUSTICE THOMAS: So it doesn't matter if her salary is the same, the work arrangements are the same. I know your argument in the briefs is that her assignments changed, but her pay did not and her rank did not. But none of that is necessary under your argument to make a claim?

WOLFMAN: That is correct, Your Honor.

And that brought the hypotheticals.

Justice Amy Coney Barrett wondered: what about a law firm trying to increase female leadership? When you promote only women is that discrimination?

What about police departments putting only black or Latino officers on certain neighborhood beats? Is that discrimination?

And Justice Elena Kagan pointed out there are different kinds of harm:

JUSTICE KAGAN: I mean, our discrimination law has recognized for many, many years that there are stigmatic injuries, right, where just the -- even if it's a very, very minor thing, you know, sending one set of people to one water fountain and another set of people to another water fountain is stigmatic injury. So I accept that point. But are you saying that all discrimination is stigmatic injury? 

Lawyer Robert Loeb represented the City of St. Louis. He argued that if you intend to prevail under Title VII, you need more than a mere allegation of discrimination:

ROBERT LOEB: It's not a high bar, but there needs to be something more than mere personal preferences and -- and subjective sensitivities of the particular employee. So it's a material objective harm. It's through the lens of an objective employee, not the frailties of a particular sensitive employee.

REICHARD: Justice Samuel Alito acknowledged that treating people differently based on a protected characteristic is wrong. He uses the legal term disparate treatment, saying such disparate treatment is wrong, but …

ALITO: I think the insight—right or wrong— of the courts that have imposed something like a significant disadvantage requirement is that although disparate treatment based on one of these characteristics is wrong, there should be some sort of threshold before it gets into court…

The Eighth Circuit developed a threshold test. It’s called the “significant disadvantage” test. And it is supposed to help establish whether someone can sue for discrimination in a job transfer.

Justice Alito said he wasn’t certain about that threshold, and perhaps that’s what the court will wind up deciding. Hard one to predict, other than we should know by the end of June.

And that’s this week’s Legal Docket!

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