Supreme Court Cases: The 10 Corporate Counsel Need to Know

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Supreme Court Cases The 10 Corporate Counsel
Need to Know

• Robert Devine, Winn Dixie Stores, Inc.
• Hala Sandridge, Fowler White, Boggs P.A.
• David Burns, Fowler White Boggs P.A.
• Thursday May 3, 2012
• Jacksonville, FL

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Arbitration Cases

• Arbitration important to corporate counsel
  because
• eliminate jury passion
• reduce expense
• eliminate protracted pretrial procedure
• control location and speed of resolution

3
Moses H. Cone Memorial Hospital v. Mercury
Constr. Corp., 460 U.S. 1 (1983).

• Federal Arbitration Act (FAA), 9 USC 1 to-16,
  expresses a liberal federal policy favoring
  arbitration agreements.
• FAA establishes that, as a matter of federal law,
  any doubts concerning the scope of arbitrable
  issues should be resolved in favor of arbitration
• Waiver
• Ambiguities
• Completed a federalization of arbitration law
• Since Moses Cone, Court has widened scope of the
  FAA to cover arbitration of many issues

4
Volt Info. Sciences, Inc. v. Bd. of Trustees of
Leland Stanford Jr. Uni., 489 U.S. 468 (1989).

• Just as parties may limit by contract the
  issues which they will arbitrate, so too may they
  specify by contract the rules under which that
  arbitration will be conducted.
• Takeaway you can change the following to your
  liking
• rules of procedure
• equitable relief
• attorneys fees
• discovery
• appellate rights

5
Mastrobuono v. Shearson Lehman Hutton, Inc., 514
U.S. 52 (1995).

• Parties may contract to arbitrate dispute under
  the FAA even if state law would prevent
  arbitration.
• See also ATT v. Concepcion, 131 S. Ct. 1740
  (2011). Californias rule prohibiting contractual
  waivers of class actions in arbitration
  pre-empted by the FAA.
• See also Marmet Health Care v. Brown Marmet
  Health Care Center, Inc. v. Brown, 565 U.S. __
  (2012), which invalidates West Virginia's
  prohibition against predispute agreements to
  arbitrate personal-injury or wrongful-death
  claims against nursing homes because it is a
  categorical rule prohibiting arbitration of a
  particular type of claim, contrary to the terms
  and coverage of the FAA.

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Circuit City Stores, Inc. v. Adams, 532 U. S.
105 (2001).

• Agreements to arbitrate employment disputes as a
  condition of employment enforceable under the
  FAA.
• Includes statutory employment discrimination
  claims (Gilmer v. Interstate/Johnson Lane Corp.,
  500 U.S. 20, (1991))
• specific arbitral forum provided under an
  arbitration agreement must nevertheless allow for
  the effective vindication of that claim.
• e.g. unilateral control over the pool of
  potential arbitrators
• remember pigs get fed, hogs get slaughtered.
  See Hooters of America v. Phillips, 173 F.3d 933
  (4th Cir. 1999), for example of one-sided
  employer arbitration agreement.

7
Green Tree Financial Corp. v. Randolph, 531
U.S. 79 (2000).

• Where a party seeks to invalidate an arbitration
  agreement on the ground that arbitration would be
  prohibitively expensive, that party bears the
  burden of showing the likelihood of incurring
  such costs.
• Mere risk that a party will be saddled with
  prohibitive costs is too speculative to justify
  the invalidation of an arbitration agreement
• Takeaway
• be careful of fee splitting risk invalidating
  the arbitration provision (although some courts
  will simply eliminate fee splitting and require
  defendant to bear all costs)
• consider equating fees for arbitration to
  judicial filing fees
• permit arbitrator to apportion, defer, or reduce
  the administrative fees based upon ability
• require that party show its financial resources
• argue overall costs in arbitration much less than
  in court

8
Raymond James v. Phillips, ___ So. 2d ___(Fla. 2d
DCA, Nov. 16, 2011) (rev. pending).

• Statute of limitations may not apply
• Florida statutes of limitations only apply to
  actions
• Court held that arbitration not an action
• Florida S/L does not apply unless expressly
  incorporated into arbitration provision
• Not enough to say all state and federal statute
  of limitations apply.

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Employment cases

• Employment cases important because
• Expanded employers liability
• Provide perimeters for employer to protect
  itself from this liability

10
Griggs v. Duke Power Co., 401 U.S. 424 (1971).

• Title VII proscribes not only overt
  discrimination but also practices that are fair
  in form, but discriminatory in operation.
• Employer has burden of showing that any given
  requirement must have a manifest relationship to
  the employment in question.
• Subsequent decisions required employment tests to
  be validated as job related and the Court finally
  extended a version of the disparate impact
  analysis to age discrimination cases in Smith v.
  City of Jackson, Mississippi, 544 U.S. 228 (2005)
• Takeaway
• Corporate counsel, preferably in a privileged
  context, should statistically analyze any tests
  used for selection or promotion to determine if
  they have a disparate impact on any protected
  group, and if so, make sure the tests are
  validated.
• Similarly, counsel should review the impact on
  any protected category (especially age) in any
  proposed reduction in force.

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Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541
(2011).

• Supreme Court disapproves class comprising about
  one and a half million plaintiffs, current and
  former female employees of petitioner Wal-Mart
  who allege that the discretion exercised by their
  local supervisors over pay and promotion matters
  violates Title VII by discriminating against
  women because common contention was not of such a
  nature that it was capable of class-wide
  resolution.
• Holding militates in favor of large
  multi-location operations having de-centralized
  employment decision-making however, inconsistent
  approaches at different locations can create
  other legal problems in the employment context.

12
Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57
(1986).

• Two distinct types of sexual harassment
  recognized under Title VII quid pro quo
  discrimination and hostile work environment
• For harassment to be actionable, it must be
  sufficiently severe or pervasive to alter the
  conditions of the victim's employment and
  create an abusive working environment
• Recognized the futility of grievance procedure
  where the first step is to the alleged harasser.
  
• Later Supreme Court cases effected an affirmative
  defense where the employer communicates an
  effective complaint procedure and the claimant
  fails to use it, e.g., Faragher v. City of Boca
  Raton, 524 U.S. 775 (1998).
• .

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Meritor Savings Bank continued

• Takeaway
• ensure policies in place prohibiting sexual and
  other unlawful harassment which contains a
  complaint procedure with at least two avenues for
  complaints.
• education and training on the policy is important
  (required in California)
• those who would be tasked to investigate
  harassment claims need to be well trained in
  being thorough and as confidential as possible in
  the investigation and with authority to make or
  effectively recommend any corrective action.

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Attorney/Client Privilege

• Why its important to understand the process
• need full and frank communication between
  attorneys and their clients
• ability to conduct thorough investigation depends
  upon the lawyer's being fully informed
• applies to civil and criminal matters,
  increasingly important in internal investigations
  

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Upjohn Co. v. United States, 449 U.S. 383 (1981).

• Communications by a corporation's employees to
  its counsel governed by the attorney-client
  privilege however
• lawyers represent company, not witness
  individually
• privilege belongs to the company, not the witness
  
• company may disclose information discovered
  during interview at the companys sole discretion
• When do in-house attorneys need to provide an
  Upjohn warning to employees?
• similar to interviews conducted by outside
  counsel
• generally, the more substantive the interview,
  senior the witness or involvement of employee in
  question, greater likelihood need Upjohn warning

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Upjohn takeaway

• Very early in any internal investigation, assess
  whether potential conflicts of interest might
  arise
• When interviewing a company employee, always
  administer a full Upjohn warning
• Upjohn warnings generally necessary to employee
  witness in federal court cases, check rule in
  different states
• Warning should explain that
• lawyer represents the company, not the individual
  
• anything revealed during the course of interview
  is only privileged between lawyer and company.
• employee has no control over whether company
  decides to waive privilege

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Upjohn takeaway continued

• Advise that might be in best interest to obtain
  separate counsel
• Consider getting Upjohn notice in writing
• Written Upjohn warning not necessarily
  replacement for a conflict waiver
• if you decide to represent both the company and
  an individual employee, obtain a written conflict
  waiver.
• possibly employ separate counsel for employee

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American Bar Associations White Collar Crime
Committee Working Group Upjohn warning,

• I am a lawyer for Corporation A. I represent only
  Corporation A, and I do not represent you
  personally.
• I am conducting this interview to gather facts in
  order to provide legal advice for Corporation A.
  This interview is part of an investigation to
  determine the facts and circumstances of X in
  order to advise Corporation A how best to
  proceed.
• Your communications with me are protected by the
  attorney-client privilege. But the
  attorney-client privilege belongs solely to
  Corporation A, not you. That means Corporation A
  alone may elect to waive the attorney-client
  privilege and reveal our discussion to third
  parties. Corporation A alone may decide to waive
  the privilege and disclose this discussion to
  such third parties as federal or state agencies,
  at its sole discretion, and without notifying
  you.
• In order for this discussion to be subject to the
  privilege, it must be kept in confidence. In
  other words, with the exception of your own
  attorney, you may not disclose the substance of
  this interview to any third party, including
  other employees or anyone outside of the company.
  You may discuss the facts of what happened but
  you may not discuss this discussion.
• Do you have any questions?
• Are you willing to proceed?

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Select material on Upjohn warning

• Upjohn Warnings Recommended Best Practices When
  Corporate Counsel Interacts With Corporate
  Employees, http//meetings.abanet.org/webupload/co
  mmupload/CR301000/newsletterpubs/ABAUpjohnTaskForc
  eReport.pdf
• Upjohns Importance, Inside Counsel Magazine,
  June 2011, http//www.insidecounsel.com/2011/06/01
  /upjohns-importance