Articles

High court to review key employment law cases

By Marshall H. Tanick

As the U.S. Supreme Court opened its current term last week, a pair of employment law cases of special interest to Minnesota attorneys loomed large. An unprecedented case from the University of Minnesota and another from the 8th U.S. Circuit Court of Appeals are among the featured employment law cases on the high court's 2001-02 docket.

Both cases have somewhat convoluted facts. However, at root each case involves many nondispositive legal issues. The outcome of these two cases probably will have a significant impact on Minnesota employment law practice.

'U' turn

The University of Minnesota apparently has never been a party in a case before the U.S. Supreme Court. It's now the U's turn in an unusual age discrimination claim that raises issues under both federal and state laws.

In Raygor v. Regents of University of Minnesota, No. 00-1514, a pair of university employees challenge a decision of the Minnesota Supreme Court that barred their age discrimination claims under the Minnesota Human Rights Act (MHRA) on grounds of the expiration of the one-year statute of limitations.

The case dates back to 1995, when the employees filed age discrimination charges with the Minnesota Department of Human Rights (MDHR), which were dismissed in the summer of 1996. The two employees then filed separate lawsuits in federal court alleging violations of the federal Age Discrimination in Employment Act (ADEA), 29 U.S.C. secs. 621-634, and its state counterpart.

The University asserted immunity under the 11th Amendment and lack of jurisdiction as affirmative defenses. After the lawsuits were combined, the federal court dismissed the consolidated cases on grounds that the 11th Amendment bars a federal court lawsuit against the state, a determination that the employees appealed to the 8th Circuit.

The appeal was stayed pending determination by the U.S. Supreme Court of Kimel v. Florida Board of Regents, 520 U.S. 62 (1999), which upheld the 11th Amendment as a valid defense to a federal age discrimination claim against a state. As a result, the 8th Circuit dismissed the Raygor appeal.

The employees then began anew with a state court lawsuit under the MHRA. The university moved to dismiss on grounds that the claim was barred by the statute of limitations, which requires that the claimant file a lawsuit in state District Court within 45 days after dismissal of a charge by the MDHR under Minn. Stat. sec. 363.06, subd. 3, and sec. 363.14, subd. 1(a)(1).

The two lower courts split on whether the 45-day limitation period was tolled during the pendency of the federal court litigation. The trial court said it was not, and the Court of Appeals said it was.

The issue, as presented to the Minnesota Supreme Court, was whether the tolling provision of the Federal Supplemental Jurisdictional Statute, which was the jurisdictional basis for the state law claim in federal court, applies to toll the statute of limitations for a state law claim against a state defendant, "in light of the immunity afforded the state by the 11th Amendment." The court concluded that the tolling provision under sec. 1367(d) constitutes an infringement on state sovereignty in violation of the 11th Amendment and, therefore, the case is untimely and cannot proceed. 620 N.W.2d 680 (Minn. 2001). That issue is now before the U.S. Supreme Court.

The university argues, as it successfully maintained before the state Supreme Court, that the 11th Amendment constitutes an automatic jurisdictional bar. Therefore, the tolling provision under section 1367(d) does not apply and, if it did, it would be unconstitutional.

The employees, however, contend that the 11th Amendment constitutes a waivable affirmative defense. Accordingly, supplemental jurisdiction can attach until a final determination is made whether immunity has been successfully asserted. Accordingly, in their view, the statute of limitations can be tolled during the pendency of a claim in federal court predicated upon supplemental jurisdiction.

The fact pattern of the case may be unusual, but the underlying issue concerning sovereign immunity under the 11th Amendment is an important one. The U.S. Supreme Court has increasingly indicated an aversion to allow federal statutory claims to be asserted against state government entities under the 11th Amendment, as reflected in its decision in Kimel that the 11th Amendment bars a claim against the state under the ADEA. See also, Alden v. Maine, 527 U.S. 706 (1999) (state employer is immune from claim for violation of overtime provisions of the Federal Fair Labor Standards Act); Board of Trustees of the University of Alabama v. Garrett, 531 S.Ct. 356 (2001) (11th Amendment bars claim under Americans with Disabilities Act against state government entity).

The Raygor case may flush out the scope of the 11th Amendment barrier in general as well as its application to federal claims brought under state law.

Leave law

An unresolved issue under the Family and Medical Leave Act (FMLA) also will be addressed by the high court during this term. Arising out of the 8th Circuit, the case addresses the issue of whether employer-provided leave counts against the 12-week leave that an employee is entitled to under the FMLA if the employer fails to designate its leave as falling under the statute.

The 8th Circuit, in Ragsdale v. Wolverine Worldwide, Inc., 218 F.3d 933 (8th Cir. 2000), disagreed with regulations promulgated by the Department of Labor, which oversees the FMLA, and held that the employer-provided leave counted against the statutorily mandated 12-week leave. The U.S. Supreme Court will now review that issue, deciding whether the validity of the Department of Labor regulations that say that unless an employer designates the leave as being provided under the FMLA, it will not fulfill the 12-week guaranty under the federal law.

The case began with an Arkansas factory worker who, after being diagnosed with cancer, received seven months leave of absence under her employer's own policy. When granting the leave, the employer did not notify her of her eligibility for leave under the FMLA, nor did it designate her leave as falling under the statute. The employee was then fired after she exhausted her seven months of company-provided leave and was unable to return to work. She then asked for more leave under the FMLA or the ability to work on a reduced schedule. The employer rejected both requests. The employee sued, claiming that the leave that she had been provided by the employer should not count against the 12-week leave that employers with more than 50 employees must provide their workforce. She asserted that she was not told of the availability of the FMLA leave nor informed that the company-provided leave would count against the 12 weeks to which she was entitled by law.

The 8th Circuit rejected the argument, holding that the department's regulation — that employer-provided leave does not count against FMLA leave unless the employer so advises the employee — is in doubt because it would "improperly convert the statute's minimum of federally-mandated unpaid leave into an entitlement to an additional 12 weeks of leave unless the employer specifically and prospectively notifies the employee" that FMLA leave is being used.

The government has taken the side of the employee, arguing that the employer-provided leave should not count against the FMLA leave. Defending the Department of Labor regulation, the government argues that the department's rule "is designed to insure that employees covered by the FMLA are able to make informed choices concerning the exercise of their statutory rights."

The company argues, as it successfully did in the 8th Circuit, that not counting employer-provided leave against the 12 weeks mandated by federal law would "discourage employers from granting generous benefits."

The issue is an important one because of the growing use of FMLA within the workplace. The statute has been viewed as providing a minimum of 12 weeks of unpaid leave of absence for qualifying employees, with the understanding that employers could provide greater leave, with or without pay, under their own internal policies. The Ragsdale ruling, however, seemingly compresses the statutory minimum into a workplace maximum. As the 8th Circuit stated, the statute contemplates "12 weeks of leave [as] both the minimum the employer must provide and the maximum that the statute requires."

The Supreme Court's resolution of this issue will have broad impact on FMLA practice throughout the country, including Minnesota and the rest of the 8th Circuit.

These two cases are among a number of employment-related matters that the U.S. Supreme Court will hear this term. They both raise important issues, but they will attract particular attention from Minnesota practitioners because of their source in this state and the 8th Circuit.

Marshall H. Tanick is an attorney with the law firm of MANSFIELD, TANICK & COHEN, P.A., in Minneapolis and St. Paul. He is certified as a Civil Trial Specialist by the Minnesota State Bar Association (MSBA) and represents employers and employees in a variety of workplace related matters.