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2001 Term, Number 1 / September 25, 2001

Today the Supreme Court granted certiorari in two cases of potential interest to the business community. Amicus briefs in support of the petitioners are due on Thursday, November 15, 2001, and amicus briefs in support of the respondents are due on Monday, December 17, 2001. Any questions about these cases should be directed to Eileen Penner (202-263-3242) in our Washington office.

1. Title VII — ADEA — Fact Pleading Requirements. The Supreme Court granted certiorari in Swierkiewicz v. Sorema N.A., No. 00-1853, to determine whether, to withstand a motion to dismiss for failure to state a claim, an employment discrimination plaintiff must plead specific facts that give rise to an inference of discrimination. 

Akos Swierkiewicz sued his former employer, Sorema, under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act (ADEA), alleging that Sorema had demoted and subsequently discharged him because of his national origin and age. The complaint alleged that, in 1995, Swierkiewicz, who is of Hungarian descent, was demoted and replaced by a much younger, French employee. The complaint also alleged that the Chief Executive Officer, Francois Chavel, stated that he took this action in order to "energize" the department Swierkiewicz had supervised. Over the next two years, the complaint alleged, Chavel, who is a French national, isolated Swierkiewicz, while hiring and promoting other French nationals and substantially younger employees. In 1997, Sorema fired Swierkiewicz. 

The district court for the Southern District of New York dismissed Swierkiewicz's suit on the ground that, although the complaint repeatedly alleged that Swierkiewicz had suffered adverse employment actions on account of his age and national origin, the complaint failed to plead any specific facts that gave rise to an inference of discriminatory motive. The Second Circuit affirmed. In an unpublished opinion, the court explained that a discrimination plaintiff must plead facts sufficient to support each element of a prima facie case of discrimination, as articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). 

The Second Circuit's decision appears to conflict with the decisions of several other circuits regarding the degree of factual specificity required in pleading civil rights claims. The Seventh Circuit, for example, has held that "[c]omplaints need not * * * match facts to every element of a legal theory" and that "all a [discrimination] complaint has to say" is "‘I was turned down for a job because of my race.'" Bennett v. Schmidt, 153 F.3d 516, 518 (7th Cir. 1998). It explained that a bare "claim of racial ‘discrimination'" implies an allegation of intent and nothing further is required under Federal Rule of Civil Procedure 9(b), which provides that "‘[m]alice, intent, knowledge, and other condition of mind of a person may be averred generally.'" Ibid. (quoting Fed. R. Civ. P. 9(b)). The Seventh Circuit also invoked Rule 8(a)(2), which requires that a complaint contain only "a short and plain statement of the claim showing that the pleader is entitled to relief." Id. at 517. 

This case is of great significance to the business community. It likely will explain how the concept of "notice pleading" set forth in Rules 8 and 9 applies in civil rights cases, and the degree of factual specificity the Rules require of complaints generally. If adopted, the requirement endorsed by the Second Circuit — that plaintiffs plead specific facts to support each element of their discrimination claims — would enable quick dismissal of frivolous suits.

2. National Labor Relations Act — Backpay for Illegal Aliens. The Supreme Court granted certiorari in Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, No. 00-1595, to decide whether an employer found to have violated the National Labor Relations Act (NLRA) can be compelled to provide backpay to an employee who turns out to have been an undocumented alien not legally authorized to work in the United States. The courts of appeals are split on this question.

Hoffman fired Jose Castro after he helped organize a unionization drive. An administrative law judge found Hoffman's action to have been an unfair labor practice under the NLRA. The National Labor Relations Board (NLRB) ordered Hoffman to reinstate Castro and others who had been similarly treated, and to remit back pay to them. It later came to light that Castro was an undocumented alien who had obtained his job at Hoffman by presenting a false birth certificate. The NLRB then held that Castro was not entitled to reinstatement, but allowed back pay up to the date of the discovery of Castro's immigration status.

Hoffman's petition for review was denied by a divided panel of the D.C. Circuit, see 208 F.3d 229 (2000), and then by the full court sitting en banc, see 237 F.3d 639 (2001). The en banc majority rejected Hoffman's contention that the case was controlled by Sure-Tan, Inc. v. N.L.R.B., 467 U.S. 883 (1984), in which the Supreme Court stated that, "‘in computing backpay * * * employees must be deemed ‘unavailable' for work (and the accrual of backpay therefore tolled) during any period when they were not lawfully entitled to be present and employed in the United States.'" 237 F.3d at 642 (quoting Suretan, 467 U.S. at 903). The en banc majority found the cited language to be dictum that was inconsistent with other language and the ultimate holding in that case. See id. Judge Sentelle and three other judges dissented, relying primarily on the Supreme Court's statement in Sure-Tan.

This case is of substantial importance to all employers who may be subject to claims for backpay by undocumented workers under the NLRA, and perhaps under civil rights laws as well.

* * * 

The Court invited the Solicitor General to express the views of the United States in three cases of interest to the business community:

American Insurance Association v. Low, No. 00-1926: The questions presented are (1) whether the Ninth Circuit erred in refusing to apply the foreign affairs doctrine of Zschernig v. Miller, 389 U.S. 429 (1968), to a California law directed at the foreign activities of European insurance companies, which has been declared by the federal government to be in direct conflict with United States foreign policy and which has generated strong protests from affected foreign nations; and (2) whether the McCarran-Ferguson Act, 15 U.S.C. 1011-1015, authorizes California to regulate overseas activities of insurance companies having no connection with the State. Mayer, Brown & Platt is counsel of record for petitioners American Insurance Association and American Re-Insurance Company. Decision below: 240 F.3d 739.

Memorial Hospitals Ass'n v. Humphrey, No. 00-1860: The questions presented are whether (1) when it has become apparent that an employee is performing inadequately because of her disability despite a previous accommodation, an employer must offer an alternative accommodation that the employee already had rejected before terminating her employment; and (2) an employer is required to offer, as a reasonable accommodation, an indefinite leave of absence that might "plausibly" allow the employee to return to work, or instead only a leave of absence that is definite in duration when such a leave is "likely" to enable the employee to return to work. Decision below: 239 F.3d 1128.

Statoil ASA v. HeereMac VOF, No. 00-1842: The question presented is whether the federal antitrust laws apply to a claim that arises directly out of anticompetitive conduct but does not arise out of that conduct's effects within the United States. Decision below: 241 F.3d 420 (5th Cir. 2001).

This Mayer, Brown, Rowe & Maw Supreme Court Docket Report provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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