Justice Kennedy's Retirement and the Potential Impact on the Future of Labor and Employment Law

By Allison J. Hartnett - McMahon Berger, PC

July 2, 2018

Justice Anthony Kennedy recently announced his retirement from the United States Supreme Court, effective July 31, 2018. This announcement came only hours after the Court handed down its ruling in Janus v.  American Federation of State, County, and Municipal Employees, Council 31, et al, which held that public employees do not have to pay agency fees as a condition of employment.

Although appointed by Republican President Ronald Reagan, Kennedy has long been hailed as the Court’s swing vote. His judicial philosophy – which frequently focused on the “dignity” of the parties before the Court – fell between that of conservative (and pro-employer) Justices Alito and Thomas and the traditionally liberal (pro-worker) Justices Sotomayer and Ginsburg. Kennedy voted with the Court’s conservative Justices on decisions like Janus v. AFSCME Council 31, Wal-Mart Stores, Inc. v. Dukes (which set a high-bar for certifications of class actions based on alleged company-wide discrimination), and NLRB v. Noel Canning in 2014 (which invalidated President Barack Obama’s three recess appointments to the National Labor Relations Board). However, he frequently sided with the Court’s more liberal justices on issues involving both gay and abortion rights. Indeed, Kennedy’s opinions in the area of gay rights  has been seen as contributing to the present federal appeals court splits on whether Title VII of the 1964 Civil Rights Act protects against sexual orientation discrimination.

So what does his retirement potentially mean in the area of labor and employment law?

Currently, the federal appeals courts are divided over the applicability of federal civil rights laws to LGBTQ workers. Both gay rights advocates and the U.S. Equal Employment Opportunity Commission have pushed for a broad interpretation of federal civil rights laws to include “sexual orientation” and “transgender” as a form of sex discrimination. Many believed that Justice Kennedy’s traditional concern for the “dignity” of the parties before the Court would cause him to side with the Court’s more liberal Justices and result in a broad interpretation of the federal civil rights laws. With Kennedy’s retirement, it is unknown how the Court will resolve these issues.

Prior to his retirement announcement, the Supreme Court agreed to hear four cases related to labor and employment issues during the upcoming 2018-2019 term. The cases involved the following issues:

• Whether class-action arbitrations will be allowed when an employment contract is silent on the issue;

• Whether interstate truck drivers must arbitrate their federal wage-and-hour claims and who (a court or an arbitrator) decides if a Federal Arbitration Act exemption for transportation workers applies to drivers’ employment contracts;

• Whether state political subdivisions with less than 20 employees, such as a fire district, must adhere to discrimination protections under the Age Discrimination in Employment Act; and

• Whether a railroad’s payment to an employee for lost work time is taxable under the Railroad Retirement Tax Act.

As all of the cases will be heard following Justice Kennedy’s retirement, the outcome of such matters could depend on the speed at which the nomination process progresses.  President Trump is expected to move quickly to nominate a solidly conservative justice.  Currently, the Senate – which must confirm the nominee – is controlled by Republicans by a narrow margin of 51 to 49.  That could change during the upcoming midterm elections.  If the Democrats recapture the Senate in November, any Trump Supreme Court nominee could languish indefinitely. Such a scenario could revive the situation which occurred after Justice Scalia’s death; where the Court had only 8 Justices, and resulted in several 4-4 splits – meaning that the appeal court’s ruling below stands. If, however, the current Senate quickly confirms President Trump’s replacement for Kennedy with a solidly conservative justice, it will likely mean more employer wins in future labor and employment cases.

In the meantime, the remaining Supreme Court Justices may proceed with caution when granting review of what may be seen as controversial cases before a ninth judge is seated. Currently, twenty-four petitions regarding labor and employment law issues are with the Court. Two pending petitions—seeking review of rulings by federal appeals courts in New York and Georgia—raise the question of whether Title VII’s sex discrimination protections encompass bias based on sexual orientation. Other pending petitions ask the justices to decide whether federal law bars Los Angeles from requiring businesses to agree to labor provisions before they can operate at LAX Airport and when certain successorship rules apply in labor cases.

While the future of the Court remains unknown, it is almost certain that the upcoming confirmation battle over Justice Kennedy’s replacement will be a heated one.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years and are available to discuss these issues and others. As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.