May 24, 2010 Supreme Court opinions

Posted on May 27, 2010 03:02 by Lynn Darty

On Monday, the Supreme Court released two opinions which could have a huge impact on those of us who specialize in employment and employee benefits law.

In Lewis v. City of Chicago, the Court addressed the following question: When an employer adopts an employment practice that discriminates against African Americans in violation of Title VII’s disparate impact provision, must a plaintiff file an EEOC charge within 300 days after the announcement of the practice, or may a plaintiff file a charge within 300 days after the employer’s use of the discriminatory practice? In Lewis, eight African-Americans in Chicago, representing a class of more than 5,000 African-American applicants who passed a 1995 entry-level test for firefighters, but were never selected, contend that a flawed employment test becomes an act of discrimination not when the results are announced, but when actual hiring decisions are made based on test results. In 2005, a federal judge in Chicago ruled that the city had discriminated against African-American candidates and ordered the city to hire 132 randomly selected African-American applicants who scored above the minimum level on the test. In 2008, the 7th Circuit dismissed the suit because Title VII requires that an EEOC charge be filed within 300 days “after the alleged unlawful employment practice occurred,” §2000e–5(e)(1), and the workers had missed that deadline. On May 24, 2010, a unanimous Supreme Court reversed and remanded in a decision by Justice Scalia. “It may be true that the city’s January 1996 decision to adopt the cutoff score (and to create a list of the applicants above it) gave rise to a freestanding disparate-impact claim,” Scalia wrote. “But it does not follow that no new violations occurred – and no new claims could arise – when the city implemented that decision down the road. If petitioners could prove that the City 'used' the 'practice' that 'causes a disparate impact,' they could prevail.” The complete opinion is available at: http://www.supremecourt.gov/opinions/09pdf/08-974.pdf

In another unanimous decision, the Court held that prevailing party status is not necessary for an award of attorney’s fees under the Employee Retirement Income Security Act (ERISA) §502(g). An employee covered by ERISA filed suit against an insurer based on the wrongful denial of a claim for long-term disability benefits. The trial court requested that the insurer reconsider its denial and the insurer ultimately awarded the benefits. The trial court then awarded the employee almost $40,000 in attorney’s fees. The 4th Circuit reversed, holding that § 502(g)(1) provides a district court discretion to award attorney fees only to a prevailing party, and Hardt was not a prevailing party because her only request for relief was the award of benefits, which the district court did not award. On May 24, 2010, the Supreme Court reversed and remanded the lower court n a unanimous opinion by Justice Thomas. "The words 'prevailing party' do not appear in this provision," Thomas reasoned. "Nor does anything else in [the law's] text purport to limit the availability of attorney's fees to a 'prevailing party.'" Instead, a court may award fees and costs to the claimant as long as she has achieved “some degree of success on the merits.” The opinion for Hardt v. Reliance Standard Insurance Co can be found at: http://www.supremecourt.gov/opinions/09pdf/09-448.pdf

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