March 20, 2017

As Judge Neil Gorsuch proceeds through the Senate confirmation process, we are continuing to review his jurisprudence in order to assess how he might affect the Supreme Court should the Senate approve his nomination.  In the coming weeks, we will be publishing our analyses in a series of client alerts focusing on individual subject matters.  This alert focuses on labor and employment law.

Judge Gorsuch's labor and employment opinions reflect his methodical approach to statutory interpretation, which focuses on the text of the relevant statutes, as well as his skepticism of agency attempts to broaden their authority and expand the scope of statutes.  If confirmed to fill Justice Scalia's vacant seat, Judge Gorsuch could cast a deciding vote on important class-arbitration cases currently pending before the Court.  And in the years ahead, he could play a significant role in shaping the Court's approach to whistleblower, retaliation, and other employment claims--subject matters that often closely divide the Justices.

Judge Gorsuch strongly believes that "the separation of powers" serves as "a vital guard against governmental encroachment on the people's liberties, including all those later enumerated in the Bill of Rights."  Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th Cir. 2016) (Gorsuch, J., concurring).  This belief has informed his approach to statutory interpretation in two significant respects that are likely to have a material impact on the Court's analysis of labor and employment laws.  First, Judge Gorsuch is a strict textualist who often decides cases by carefully reviewing the text of the relevant statute without resorting to legislative history and broad entreaties to the statutory purpose.  Second, as we have previously explained, Judge Gorsuch has questioned the correctness and continued viability of the Supreme Court's decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), which instructs courts to grant deference to executive agencies' reasonable interpretations of ambiguous statutes.  See, e.g., Gutierrez-Brizuela, 834 F.3d at 1152 (Gorsuch, J., concurring) (opining that Chevron deference is "no less than a judge-made doctrine for the abdication of the judicial duty" to say what the law is).

Judge Gorsuch's recent dissenting opinion in TransAm Trucking, Inc. v. Administrative Review Board, 833 F.3d 1206 (10th Cir. 2016), illustrates how his approach to statutory interpretation may play out in the labor and employment context.  In TransAm Trucking, the Tenth Circuit reviewed a final order of the Department of Labor ("DOL") Administrative Review Board finding that the employer had impermissibly terminated a trucker in violation of the whistleblower provisions of the Surface Transportation Assistance Act ("STAA").  In relevant part, the STAA "makes it unlawful for an employer to discharge an employee who 'refuses to operate a vehicle because . . . the employee has a reasonable apprehension of serious injury to the employee or the public because of the vehicle's hazardous safety or security condition.'"  Id. at 1211.  The DOL ruled that the employer had violated this provision when it terminated a trucker who unhitched his truck from his trailer and "abandon[ed] the trailer" on the side of the road after the "brakes on his trailer froze because of subzero temperatures."  Id. at 1209.  The employer had instructed the trucker to either "drag the trailer with its frozen brakes or remain with the trailer until [a] repairperson arrived."  Id.  Siding with the DOL, the majority ruled that the trucker qualified for protection under the STAA.  In so doing, the majority afforded Chevron deference to the agency's interpretation of the statutory phrase "refuses to operate a vehicle," extending it to "cover a situation in which an employee refuses to use his vehicle in the manner directed by his employer even if that refusal results in the employee driving the vehicle."  Id. at 1211-12 (emphasis added).

Judge Gorsuch dissented.  Relying strictly on the statutory text, Judge Gorsuch opined that the "statutory phrase 'refuse[ ] to operate'" could not be read "to encompass its exact opposite and protect employees who operate their vehicles in defiance of their employers' orders."  TransAm Trucking, 833 F.3d at 1216 (Gorsuch, J., dissenting).  Because this text was not ambiguous, Judge Gorsuch opined that no deference was due to the agency's interpretation.  The majority's contrary opinion, Judge Gorsuch asserted, would "allow the Department to write [the statute] in Congress's place."  Id.

Judge Gorsuch's respect for the separation of powers is also reflected in his review of federal agency actions, including actions by federal agencies charged with the enforcement of labor and employment laws.  For instance, Judge Gorsuch has opined that "federal agencies must take care to respect the boundaries of their congressional charters" and that they "may not depart from their own existing rules and precedents without a persuasive explanation."  NLRB v. Cmty. Health Servs., 812 F.3d 768, 780 (10th Cir. 2016) (Gorsuch, J., dissenting). 

Applying these principles, Judge Gorsuch recently dissented from the majority's decision upholding a change in the National Labor Relations Board's longstanding policy "governing the calculation of backpay in cases where a collective bargaining employer unlawfully reduces the hours of unionized employees."  Id.  The Board primarily defended "its new policy of refusing to deduct interim earnings in hours-reduction cases" on the ground that it would "allow employees who take on second jobs to keep both their interim earnings and backpay for the same hours they would have worked for their primary employer," thereby "promoting production and employment."  Id. at 782 (internal quotation marks omitted).  Judge Gorsuch firmly rejected this "line of argument" as "fundamentally misconceiv[ing] the Board's remedial charter."  Id.  Quoting the statutory text, Judge Gorsuch explained that "[t]he Board's statutory charge isn't to promote full employment," but rather to provide "'backpay arising from 'unfair labor practices.'" Id. (quoting 29 U.S.C. § 160(c)).  In his view, the Board's new policy stemmed from "a frustration with the current statutory limits on its remedial powers--a frustration that it cannot pursue more tantalizing goals like punishing employers for unlawful actions or maximizing employment."  Id. at 786.  The proper solution for that frustration, Judge Gorsuch opined, is "new legislation, not administrative ispe dixit."  Id.  This reasoning may foreshadow Judge Gorsuch's view of the NLRB's recent decision to discard its longstanding test for assessing joint-employer status under the National Labor Relations Act.  See Browning-Ferris Indus. of Cal., Inc., 362 NLRB No. 186 (Aug. 27, 2015).  That decision is currently on review at the D.C. Circuit and may make its way up to the Supreme Court in the years to come.

Judge Gorsuch has also strictly construed the scope of other antidiscrimination and whistleblower statutes, using textualist reasoning:

  • In Almond v. Unified School District No. 501, 665 F.3d 1174 (10th Cir. 2011), Judge Gorsuch rejected an expansive interpretation of the Lilly Ledbetter Fair Pay Act, which resets the 300-day administrative limitations period for certain discrimination claims each time an employer issues a new paycheck reflecting or effecting an act of discrimination.  Based on an exhaustive assessment of the Act's text and structure--as well as the statute's history and purpose--Judge Gorsuch concluded that the Act's more generous accrual provision applies only to claims alleging unequal pay for equal work, not to claims "alleging discrimination in hiring, firing, demotions, transfers, or the like."  Id. at 1183.
  • In Genova v. Banner Health, 734 F.3d 1095 (10th Cir. 2013), Judge Gorsuch wrote for a unanimous panel and rejected a claim that an employer had violated the whistleblower provisions of the Emergency Medical Treatment and Active Labor Act (EMTALA) by discharging an employee who had reported overcrowded emergency room conditions.  Relying solely on the text of the statute, Judge Gorsuch concluded that EMTALA protects only employees who report a hospital's improper transfer of patients, not employees who report a hospital's refusal to transfer patients.  Id. at 1098.  Judge Gorsuch acknowledged that hospital overcrowding might lead to violations of EMTALA, but declined to extend the statute to cover "imminent but as-yet unrealized statutory violations."  Id. at 1099.  He explained:  "Where, as here, the statute's language is plain and not absurd on its face, the sole function of the courts is to enforce it according to its terms."  Id. (quotation marks and alteration omitted).

In short, Judge Gorsuch's strict adherence to the metes and bounds of statutory text has consistently led him to reject expansive interpretations of labor and employment laws, leaving for Congress the task of extending legal protections to new classes of employees.  If confirmed, Judge Gorsuch's approach to statutory interpretation may thus have significant implications in cases pending before the Supreme Court.

For example, if confirmed in time for the upcoming October 2017 Term, Judge Gorsuch will have the opportunity to weigh in on a trio of consolidated cases involving the legality of class-action waivers in employment agreements.  See Epic Sys. Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; NLRB v. Murphy Oil USA, Inc., No. 16-307.  These cases call for the Court to resolve a potential conflict between two federal statutes: the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA).  In two closely divided decisions authored by Justice Scalia--AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), and American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013)--the Supreme Court ruled that, under the FAA, class-action waivers are enforceable in arbitration agreements.  But in D.R. HortonInc., 357 NLRB 2277 (2012), the NLRB ruled that class-action waivers in employment arbitration agreements violate the NLRA because they prevent employees from engaging in the "concerted activity" of bringing a class claim against employers.  Given his consistent enforcement of statutory limits, Judge Gorsuch might be inclined to adopt the Fifth Circuit's take on this issue--namely, that "the Board has not been commissioned to effectuate the policies of the Labor Relations Act so single-mindedly that it may wholly ignore other and equally important Congressional objectives."  D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 356 (5th Cir. 2013).

One additional aspect of Judge Gorsuch's labor and employment jurisprudence warrants discussion before we conclude our analysis.  Judge Gorsuch has been an outspoken critic of the burden-shifting framework under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), given its "many complications and qualifications."  Walton v. Powell, 821 F.3d 1204, 1210-12 (10th Cir. 2016).  The Supreme Court adopted the McDonnell Douglas burden-shifting framework to help guide courts in evaluating Title VII claims based on circumstantial evidence.  Judge Gorsuch, however, has opined that this "test has proven of limited value."  Walton, 821 F.3d at 1210.  Consistent with this view, he has declined to extend its burden-shifting framework to First Amendment claims alleging retaliation based on political association, endorsing instead "a more conventional and straightforward test of liability" that asks whether the plaintiff has proven "(using either direct or circumstantial evidence) that her political affiliation was a 'substantial' or 'motivating' factor behind the adverse employment action."  Id. (quoting Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 287 (1977)).

Importantly, Judge Gorsuch has indicated his willingness to reconsider the continued viability of the McDonnell Douglas framework "even in its native waters."  Walton, 821 F.3d at 1210; see also id. ("Of course, we have to make our own independent judgment and cannot simply follow the tide of authority like lemmings.").  In the years ahead, Judge Gorsuch's concerns about the McDonnell Douglas framework--if shared by four other Justices--could alter how the Court approaches employment-discrimination claims, particularly at the summary judgment stage.  This may lead the Court to adopt a more "simple" and "straightforward standard for liability (Mt. Healthy) for all cases at all stages in the litigation rather than devise special and idiosyncratic (McDonnell Douglas) rules that depend on what kind of proof you allege, what kind of case you allege, and where in the life of the litigation you happen to find yourself."  Id. at 1212.


Gibson Dunn's lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm's Appellate and Constitutional Law or Labor and Employment practice groups, or any of the following:

Appellate and Constitutional Law Group:
Theodore J. Boutrous, Jr. - Los Angeles (+1 213-229-7000, tboutrous@gibsondunn.com)
Mark A. Perry - Washington, D.C. (+1 202-887-3667, mperry@gibsondunn.com)
James C. Ho - Dallas (+1 214-698-3264, jho@gibsondunn.com)
Caitlin J. Halligan - New York (+1 212-351-4000, challigan@gibsondunn.com)

Labor and Employment Group:
Catherine A. Conway - Los Angeles (+1 213-229-7822, cconway@gibsondunn.com)
Jason C. Schwartz - Washington, D.C. (+1 202-955-8242, jschwartz@gibsondunn.com)


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