United States: A Review Of Key Cases And New Laws Affecting Employers

Keywords: litigation, hobby lobby, ACA, NLRB, social media

Hobby Lobby—The US Supreme Court Invalidates ACA Contraceptive Access Requirements for Closely Held Corporations with Religious Objections

Decision:The US Supreme Court recently decided two cases concerning contraception and the Affordable Care Act (ACA). Both Burwell v. Hobby Lobby Stores, Inc.,and Conestoga Wood v. Burwell involved owners of closely held for-profit corporations that alleged they have "sincere Christian beliefs that life begins at conception" and that "it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point." The owners in both cases asserted that four of the 20 contraceptive methods that are required to be covered under the ACA fell within that category.

While the Court's decisions encompass a number of nuances, the primary holdings are that: (i) the Religious Freedom Restoration Act (RFRA) applies to regulations that govern the activities of closely held for-profit corporations; (ii) the contraception coverage regulations promulgated under the ACA "substantially burden" the plaintiffs' exercise of religion; and (iii) the government failed to show that the contraceptive mandate is the least restrictive means of guaranteeing cost-free access to the challenged contraceptive methods despite there being a compelling governmental interest in doing so. Although Conestoga also raised the issue whether the contraceptive mandate was unconstitutional under the First Amendment, the Court did not reach that question because it decided the cases completely on RFRA grounds. The majority's opinion was the subject of a lengthy and pointed dissent written by Justice Ginsburg.

Impact: The full impact of the Court's decision remains to be seen. For example, while the Court limited its decision to closely held for-profit corporations, the Court did not provide much reasoning for its limitation, stating only that it would be "improbable" for a publicly traded corporation to be operated according to religious beliefs. The limited reasoning stated for the closely held corporation distinction will undoubtedly lead to more cases that test the limits of the Court's holdings.

Noel Canning Decision Means NLRB Must Review Social Media Decisions

Decision: President Obama's January 2012 appointments of Terence Flynn, Richard Griffin and Sharon Block to the National Labor Relations Board (NLRB or Board) were ruled unconstitutional by the US Supreme Court in National Labor Relations Board v. Noel Canning et al. The appointments occurred while the Senate was holding pro forma sessions every few days, which meant that the Senate was not on a sufficiently long break for the President's nominations to fall within the scope of the US Constitution's appointments clause.

Impact: Because the NLRB cannot conduct business without a three-member quorum, the Supreme Court's ruling means that the Board's decisions made while Flynn, Griffin and Block were members are invalid and may need to be reconsidered by the newly constituted Board. Many of these decisions involve novel legal issues or overturn long-standing Board precedent. Among the affected decisions are Banner Health System, Costco Wholesale and Hispanics United of Buffalo. These three decisions deal with two issues that have played a prominent role in recent NLRB decisions: employer confidentiality policies and social media.

In Banner Health System, the NLRB addressed an employer confidentiality policy. The Board held that Banner violated the National Labor Relations Act by maintaining a policy prohibiting employees from discussing ongoing investigations into potential employee misconduct. In Costco Wholesale, the NLRB found that the retailer's social media policy was overbroad because employees might interpret it as prohibiting criticisms of the company or working conditions. In Hispanics United of Buffalo, the NLRB determined that the company's termination of five employees as a result of their postings on Facebook was unlawful because the posts constituted protected concerted action. The Supreme Court's decision in Noel Canning means that the NLRB may have to reconsider these cases, which could result in new standards being applied to employer policy and social media cases going forward. In the meantime, however, employers would be prudent to treat these cases as if they are still good law.

California Supreme Court Eases the Way for Certification in Independent Contractor Misclassification Cases

Decision: In Ayala v. Antelope Valley Newspapers, Inc., the plaintiffs sought certification of a class of newspaper home delivery carriers, alleging that they were deprived of wage and hour protections by being misclassified as independent contractors rather than employees. The trial court denied class certification, holding that individual issues predominated because of variations in how the carriers performed their jobs. The California Supreme Court reversed the decision and provided a roadmap for class certification in independent contractor misclassification cases.

According to the court, when deciding whether workers are independent contractors or employees, "what matters under the common law is not how much control a hirer exercises, but how much control the hirer retains the right to exercise." The California Supreme Court found that the relevant inquiry at the class certification stage is whether there is a common way to show that the hirer possessed the same legal right to control with respect to each of its service providers. The employer in Ayala,like many employers, used a form contract with all its carriers. Because the degree of control spelled out in the form contract was uniform across the class, this led the court to find that the misclassification was susceptible to class-wide proof. Ultimately, once common and individual factors are identified by the court, the costs and benefits of jointly trying the issues must be weighed; individual issues do not render class certification inappropriate, so long as they can be effectively managed.

Impact: Ayala eases the way for employees in independent contractor misclassification cases to achieve class certification in California. The decision reflects a continued effort by California courts to take an evidence-based approach to class certification and to leave the liability/merits portion of the case to the post-certification stage of the litigation. Employers may consider implementing an arbitration agreement with a class action waiver as a part of their independent contractor agreements, with the partial goal of reducing the likelihood of class certification.

Learn more about our Employment Litigation & Counseling practice.

Visit us at mayerbrown.com

Originally published July 2014

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2014. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. 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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions