Wednesday, August 24, 2016

Seventh Circuit Joins Fourth and Fifth Circuits in Disapproving of Racially Discriminatory Voting Restrictions


As a result of three new appellate court rulings, more voters of
color in Wisconsin, Texas, and North Carolina will likely be able 
to participate in the general election on November 8, 2016.
On Monday, the U.S. Court of Appeals for the Seventh Circuit denied Wisconsin’s motion to stay a district court ruling striking down a provision in the state’s voter suppression law that significantly reduced early voting, as well as assorted voter ID requirements in the law. As the district court found, in removing early voting on evenings and weekends, the Wisconsin legislature targeted African-American and Latino voters, who disproportionately took advantage of the extended voting hours. In particular, eliminating early voting on Sundays has become a common tactic to reduce African-American voting by directly targeting “Souls to the Polls” events where churches provide transportation to polling locations after Sunday services. The three-judge panel of the Seventh Circuit was composed entirely of Republican appointees, who denied the stay request without a written opinion.

Earlier this summer, the Fifth Circuit questioned the legitimacy of Texas’s strict voter ID law in an en banc ruling, noting that the law required forms of identification that voters of color were much less likely to possess. It further noted that Texas failed to take any reasonable steps to ameliorate the discriminatory effects of the strict voter ID requirement.

Just a few weeks ago, the Fourth Circuit struck down a much wider range of voting restrictions in North Carolina as racially discriminatory – including strict voter ID, a ban on same-day registration, and cutbacks in early voting (including Sunday voting). The Fourth Circuit took the district court to task for its “failure of perspective [which] led the court to ignore critical facts bearing on legislative intent, including the inextricable link between race and politics in North Carolina.”  The district court had approved the restrictions as grounded in partisanship rather than race, justifying them as “politics as usual.” Noting the strong correlation between party identification and race in North Carolina, the Fourth Circuit held that such an explanation “cannot be accepted where politics as usual translates into race-based discrimination.”

Both the Wisconsin district court and the Fourth Circuit found that the plaintiffs had met the difficult burden of showing that the voting laws were enacted with discriminatory intent, in addition to the discriminatory effect the laws would have on voters of color. The Fifth Circuit found that Texas’s law had a discriminatory effect, but remanded to the district court for reconsideration of whether the law also reflected the legislature’s intent to discriminate. Only a finding of discriminatory impact is required to obtain relief under the Voting Rights Act, but a finding of discriminatory intent allows for broader remedies.

The new rulings are a welcome development for voting rights advocates, who had been playing defense since the U.S. Supreme Court’s 2013 ruling overturning Section 5 of the Voting Rights Act of 1965 in Shelby County v. Holder. Section 5 required that jurisdictions – including both counties and entire states – with a record of racially discriminatory voting practices submit any proposed changes to voting laws to the Department of Justice for preclearance. Section 5 recognized the practical problem that an individual denied access to the polls on Election Day might have to wait years for the courts to sort out whether a violation had occurred. Section 5 instead placed the burden on the state seeking to introduce a new election law to show that it would not have a discriminatory effect on access to the polls. Despite of Section 5’s record of success (or perhaps because of it) and its bipartisan reauthorization by Congress in 2006, Justice Roberts wrote for a five-justice majority of the Court and concluded: “Our country has changed, and while any racial discrimination in voting is too much, Congress must ensure that the legislation it passes to remedy that problem speaks to current conditions.”*

The aftermath of Shelby County was predictable: with the protections of Section 5 gone, states across the country enacted (or began enforcing) voter suppression laws which directly targeted voters of color. For instance, the day of the Shelby County ruling Texas announced  that it would begin enforcing its strict photo ID law, which had been blocked by Section 5 due to its racially discriminatory effects. North Carolina then passed one of the most comprehensive voter suppression laws in the country after the legislature conducted studies which found that African-Americans would be impacted most by the new voting requirements. (Wisconsin was not covered by Section 5’s preclearance requirement.)

The spate of activity in the voting rights arena this summer has led many to ask: why now? An obvious answer may be that with the 2016 presidential election fast approaching, this summer marked the last reasonable opportunity for courts to intervene. Some commentators have pointed to the recent passing of Justice Antonin Scalia and the absence of a fifth vote on the high court to uphold racially discriminatory voting restrictions (or put more charitably, to interpret such restrictions as motivated by race). Linda Greenhouse of The New York Times argues that the decisions overturning voter suppression laws are part of a larger trend of federal courts being increasingly willing to look beyond phony motives offered by legislatures, particularly in the context of laws which purport to solve imaginary problems like in-person voter fraud. As Judge Catharina Haynes of the Fifth Circuit stated as to the Texas law: “We cannot say the district court had to simply accept that legislators were really so concerned about this almost nonexistent problem.” Similarly, Judge Diana Gribbon Motz of the Fourth Circuit reasoned with respect to North Carolina’s law: “Although the new provisions target African Americans with almost surgical precision, they constitute inapt remedies for the problems assertedly justifying them and, in fact, impose cures for problems that did not exist.”

Although the general election is only 75 days away, this story is far from over, as the Supreme Court may still intervene: North Carolina has already requested a stay of the Fourth Circuit’s ruling, and Wisconsin may yet seek similar relief. Still, it appears unlikely there are enough votes on the eight-member high court to disrupt these appellate court rulings before Tuesday, November 8.

The timing could not be more critical, with Republican nominee Donald Trump running an unprecedented campaign (at least, in recent history) founded on racist statements and appeals concerning Latinos, Muslims, and African Americans, among other groups. Thanks to an emerging consensus among the Circuit Courts of Appeal, a broader and more diverse community of Americans will be able to exercise their right to vote in Wisconsin, North Carolina, and Texas this November. Voters should seize the opportunity to send a clear message that such racist appeals have no place in American politics.

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* Technically, the Court struck down the coverage formula for Section 5 (contained within Section 4(b) of the Act) and left Section 5 in tact. However, without a coverage formula, Section 5 is toothless. In theory, Congress could pass a new coverage formula to put the teeth back in Section 5, but that would require Congress to agree on a new coverage formula.

Tuesday, August 23, 2016

D.R. Horton Rising: The Ninth Circuit Sides with the Seventh Circuit and the National Labor Relations Board on Class Action Waivers, in Morris v. Ernst & Young, LLP

In the Ninth and Seventh Circuits, employers cannot force
employees to sign class action waivers as a condition of 
employment, because the NLRA provides employees the 
right to vindicate employment rights collectively.
Yesterday, the Ninth Circuit took sides in a major split within the U.S. Courts of Appeals over the enforceability of class arbitration waivers. In Morris v. Ernst & Young, LLP, No. 13-16599, Slip. Op. (9th Cir. Aug. 22, 2016), the Ninth Circuit held that employers violate Sections 7 and 8 of the National Labor Relations Act (“NLRA”) by requiring employees covered by the NLRA to waive, as a condition of their employment, participation in “concerted activities” such as class and collective actions. (Slip Op. at 1.)

By this holding, the Ninth Circuit joins the Seventh Circuit, which in Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. May 26, 2016) adopted the National Labor Relations Board (“The Board”) position in D.R. Horton, Inc., 357 NLRB No. 184 (2012). Under this line of authority, the Federal Arbitration Act (“FAA”) does not mandate enforcement of a contract that waives the substantive federal right to engage in concerted action established in Section 7 of the NLRA. (Slip Op. at p. 18-19.) Bryan Schwartz Law blogged in detail about the Lewis v. Epic Systems Corp. decision, here.

In Morris, two employees filed a class and collective action alleging that their employer had misclassified workers as exempt and deprived them of overtime in violation of the Fair Labor Standards Act (“FLSA”) and California labor laws. As a condition of employment, the employees were required to sign contracts containing a “concerted action wavier” that obligated them (1) to pursue legal claims against their employer exclusively through arbitration and (2) to arbitrate individually in “separate proceedings.” Based on these agreements, the employer moved to compel the employees to arbitrate their claims individually. The U.S. District Court granted the employer’s motion. (Slip Op. at p. 4-5.)

The Ninth Circuit reversed, reviewing the decision to compel arbitration de novo. Chief Judge Sidney R. Thomas explained in the opinion:

This case turns on a well-established principal: employees have the right to pursue work-related legal claims together. 29 U.S.C. § 157; Eastex, Inc. v. NLRB, 437 U.S. 556, 566 (1978). Concerted activity – the right of employees to act together – is the essential substantive right established by the NLRA. 29 U.S.C. § 157. Ernst & Young interfered with that right by requiring its employees to resolve all of their legal claims in “separate proceedings.” Accordingly the concerted action waiver violates the NLRA and cannot be enforced.

(Id. at p. 6.)

The Ninth Circuit explained that the FAA does not dictate a contrary result. (Id. at 14.) While the FAA creates a “federal policy favoring arbitration” clause enforcement, the Act contains a savings clause that prohibits enforcement of arbitration agreements that defeat substantive federal rights, including the right to engage in concerted activity under the NLRA. (Id. at 15, 26.) In Morris, employees’ waiver was illegal not because it required the employees to pursue their claims in arbitration, but rather, because they could not do so in concert. (Id. at p. 16.)

Other circuit courts have taken a contrary position, enforcing employers concerted action waivers under the FAA. See Cellular Sales of Missouri, LLC v. N.L.R.B., 824 F.3d 772, 776 (8th Cir. June 2, 2016); Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013 (5th Cir. 2015); Owen v. Bristol Care, Inc., 702 F.3d 1050, 1053-54 (8th Cir. 2013); D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 361 (5th Cir. 2013); Sutherland v. Ernst & Young LLP, 726 F.3d 290, 297 n.8 (2d Cir. 2013).

As more circuits choose sides on whether class action waivers in arbitration agreements are enforceable, Supreme Court review becomes an inevitability. 

The High Court would also be wise to resolve a disagreement between the Ninth and Seventh Circuits regarding such waivers. In the Seventh Circuit, any “[c]ontracts that stipulate away employees’ Section 7 rights . . . are unenforceable.” Epic, 823 F.3d at 1155. The Ninth Circuit precedent is narrower, making such contracts enforceable if employment is not conditioned on agreeing to the clause. (Slip. Op. 11, n. 4.) For example, if an employee has the opportunity to opt-out of a class action waiver and keep his or her job, but chooses not to, that waiver would be enforceable by the employer in the Ninth Circuit. (Id. (citing Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1076 (9th Cir. 2014))). The Seventh Circuit provides a clearer rule, one that better comports with the purposes of the NLRA, and one that the Supreme Court should adopt.

For now, workers in the Ninth and Seventh Circuits, as well as their advocates, should take note that employers cannot force employees to sign class action waivers as a condition of employment, because Epic and Morris tell us that the NLRA provides employees with the right to vindicate their employment rights collectively.