Supreme Court on Small Business

There is no question that U.S. Supreme Court’s decisions impact small business. More than 40 percent of the court’s cases directly affect the business community, including employment, civil rights, insurance, workplace injury, environmental regulations and product liability issues. Unfortunately, the 2007-2008 term is likely to receive mixed reviews from the business community.

Victories

In Chamber v. Brown, the court rejected California’s attempt to restrict employers’ communication with employees during a union drive. This decision will allow California small business owners the rights provided to them under the National Labor Relations Act, and serves as a warning to other state legislatures considering regulating employers’ speech.

Small business owners deserve the right to communicate with employees in a non-coercive manner. NFIB’s friend-of-the-court brief argued for a balance of rights between labor and management.

In Sprint v. Mendelsohn, the court ruled that courts are not required to admit “me-too” evidence — testimony by non-parties — in employment law discrimination cases. If trial courts were required to admit “me-too” evidence, then in every employment discrimination case, an employer would face litigating not only the decision being challenged, but also the circumstances of every termination or other adverse employment action taken against each of the “me-too” witnesses.

Yet for the most part, the court’s decisions will make filing lawsuits against employers even easier. The rulings are troublesome when one considers that, on average, 550 employment lawsuits are filed in the United States every day, and the cost to defend an employment case through trial can exceed $150,000.

Ruling Against Employers

The decision in Meacham v. Knolls will make it easier for workers to pursue age discrimination lawsuits. When older workers are disproportionately affected by employment decisions, the employer bears the burden of showing that reasons other than age discrimination were responsible for the outcome.

In Federal Express Corp. v. Holowecki, the court sided with employees who had argued that filing an intake questionnaire is tantamount to filing a charge of discrimination. This decision may allow certain informal filings to be recognized as a charge for discrimination purposes.

In CBOCS West v. Humphries, the court ruled that retaliation claims can be brought under both Title VII and Section 1981 of the Civil Rights Act. NFIB believes expansion of Section 1981’s authority will be detrimental because it lacks the safeguards contained in Title VII for employers to fairly defend their actions against a retaliation claim..

In the non-employment arena, the decision in Hall Street Associates v. Mattel will preclude parties from contracting for expanded judicial review of arbitration decisions under the Federal Arbitration Act.

And in U.S. v. Clintwood Elkhood Mining, the court ruled that taxpayers have just three years to file a claim for a refund of an unconstitutional tax assessment.

These decisions reaffirm how important it is for the Supreme Court to understand how its decisions impact small businesses.

Topics USA Legislation Commercial Lines Business Insurance