Business waits on Supreme Court rulings

US companies are facing high-stakes litigation at the Supreme Court starting on Tuesday, as the justices begin a two-week session in which they will hear several important business cases from employment discrimination to punitive damages.

The court of Chief Justice John Roberts, which has largely proved friendly to US business, will on Tuesday hear the first of three cases that could have a big impact on job retaliation lawsuits: suits brought by workers who claim that they have been dismissed, demoted or otherwise penalised because they complained about job discrimination.

The number of retaliation claims has risen rapidly over the past decade, to nearly
30 per cent of all discrimination claims filed with the Equal Employment Opportunity Commission (EEOC).

Legal experts say the Supreme Court’s last foray into retaliation law, the 2006 decision Burlington Northern v. White, might have boosted such lawsuits as it lowered the threshold for proving that retaliation had occurred under the main federal job discrimination law.

Tuesday’s case was brought by a black man fired from his job by the Cracker Barrel restaurant chain. It could have a big impact on the size of damages in such cases, on the cost of litigation, and a particularly big effect on small employers. The case will test whether employees can sue for retaliation under a post-Civil War rights law, known as Section 1981, that does not specifically mention retaliation.

If the justices allow retaliation claims to be brought under the law, it will allow them to avoid damages caps imposed by the main job discrimination law, Title VII of the Civil Rights Act of 1964. Section 1981 allows plaintiffs considerably more time to file claims than is permitted under Title VII.

“Allowing such suits will frustrate Congress’s objective in Title VII of ensuring that retaliation claims are brought before memories fade, witnesses disappear, and personnel documents are discarded in the regular course of business,” the US Chamber of Commerce said in a brief to the court. “And allowing such suits will frustrate Title VII’s laudable statutory goal of promptly notifying employers of claims against them so that they can attempt to conciliate, and salvage ongoing employment relationships, before formal litigation – with all of its attendant
burdens on both sides – commences.”

The court will also hear a second retaliation case this week testing the rights of federal employees to claim retaliation under the age ­discrimination law.

Next week, Exxon will try to persuade the Supreme Court that it should not have to pay $2.5bn (€1.7bn, £1.2bn) in punitive damages to victims of the 1989 Exxon Valdez oil spill. US business groups are hoping the court will use the case to limit the size of punitive damage awards even outside the shipping industry.

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