June 24, 2013 12:13PM

Vance, Nassar, Mutual: The High Court’s Ballad of Impossible Tasks

In the "impossible tasks" genre of folk song, the best-known in English probably being Scarborough Fair, the sweetheart is given a set of impossible tasks to perform -- make a shirt with no stitch, gather an acre of land between the sea and the beach, and so forth. Law, unlike the realm of fable, shouldn't set impossible tasks, which is why we should be glad the Supreme Court's five-Justice "conservative" majority prevailed today in three cases -- the employment-law cases Vance v. Ball State and University of Texas Southwestern v. Nassar and the pharmaceutical-preemption case Mutual v. Bartlett.

Impossible Task #1: undertake hierarchical liability for non-hierarchical workforce arrangements. Vance raised the question of who counts as a "supervisor" for purposes of harassment liability. Under existing Court precedent, employers are closer to automatically liable when a "supervisor" engages in harassment. When it's a co-worker, they are still frequently liable -- e.g., if they have received a complaint about it but not fixed things, or if they have negligently allowed the situation to develop -- but liability isn't as close to automatic. As all Justices recognized, however, the old model of a workplace with a military-like chain of command is fast giving way to newer models in which it is extremely hard to tell who is supervising whom, and in particular work orders ("Here, do this for me.") can issue in multiple directions, not just from "up" to "down." The four liberal justices were happy to blur the lines by saying that the more people are doing supervisor-like things, the more employees' misconduct will be imputed automatically to the employer with no chance for it to raise counterarguments that it had acted properly. The majority led by Justice Alito more reasonably recognized that the ability to take tangible employment actions against a co-worker is a better test of "supervisor" than the ability to ask them to undertake some work responsibility. 

Impossible Task #2: if an employee is suing the organization, keep everyone in the loop from being even slightly swayed by that fact. "Retaliation" is the favorite claim of employment plaintiff's lawyers, because even if an underlying claim of discrimination or harassment is destined for quick refutation, it is part of human nature that many office-mates will be unable to forget that a given employee is leveling horrible-sounding charges against the employer (and perhaps against named co-workers and supervisors). Yet the law bans "retaliation," which can include actions as drastic as firing or as subtle as "cold shoulder" treatment in the cafeteria or a less appealing choice of vacation weeks. And proving retaliation can be the ticket to a large monetary recovery -- again, even if the underlying discrimination claim proves baseless. The Court's four-Justice liberal minority wanted to assign monetary liability any time animosity based on the lawsuit could be demonstrated during a subsequent employment decision even if the decision wound up being no different. The majority more reasonably held that complainants must at least prove that the decision (on a later promotion, say, or any other change in terms of employment) came out differently than it would have because of the ill feeling.

Impossible Task #3: Run a generic-drug company -- that is, one that produces cheap off-patent drugs and has no research branch -- that is simultaneously sophisticated enough to reject drug designs the FDA accepts as safe and effective.  The federal Food and Drug Administration had ruled that a particular compound was safe and effective as a whole, even though it very rarely caused a very serious side effect. A sympathetic plaintiff, injured by that side effect, claimed (contra the FDA) that the drug's benefits were not worth its risks and argued "that generic manufacturers facing design-defect claims could comply with both federal and state law simply by choosing not to make the drug at all." Incredibly, a four-Justice minority of the Court found that a perfectly acceptable argument. A majority more reasonably held that an FDA approval pre-empted state tort law from deciding in retrospect that a green light was actually red.

All three cases turned on relatively obscure issues of federal law. If Congress revisits employment or FDA law, it should heed the wisdom of the Court majority, and refrain from setting business impossible tasks.

P.S. While we're at it, I've got a new post up at Overlawyered, complete with song clip, questioning whether last week's decision in American Express v. Italian Colors Restaurant really spells the end of the world for class action lawyers..