Teed v. Thomas & Betts Power Solutions, LLC (7th Cir. 2013) held that a buyer of a company’s assets can’t rely on state law to keep a seller’s violations of the Fair Labor Standards Act (FLSA) from transferring to the buyer of the Seller company’s assets. This standard has been previously applied to the LMRA, NLRA, Title VII, ADEA, and FMLA.
The Seventh Circuit explained that federal labor law claims are governed by federal common law, not state law. Further, the court explained that employees do not have the power to stop an owner from selling the company. Therefore, the buyer (successor) is stuck with the seller’s (prior owner) liability regardless of what the contract states.
To determine whether successor liability will apply, the Seventh Circuit considered the following multi-part balancing test:
- Whether the successor had notice of the pending law suit;
- Whether the predecessor would have been able to provide the relief sought in the lawsuit before the sale;
- Whether the predecessor could have provided relief after the sale;
- Whether the successor can provide the relief sought in the suit (if not successor liability is a phantom); and
- Whether there is continuity between the operations and work force of the predecessor and the successor – which favors successor liability because nothing really has changed.
via Buyer Beware of Successor Liability For FLSA Claims | Sands Anderson PC – JDSupra.
On Friday, the Supreme Court granted certiorari in the University of Texas Southwestern Medical Center v. Nassar to address mixed motives in retaliation cases.
The question the Supreme Court will address is:
Whether the retaliation provision of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), and similarly worded statutes require a plaintiff to prove but-for causation (i.e., that an employer would not have taken an adverse employment action but for an improper motive), or instead require only proof that the employer had a mixed motive (i.e., that an improper motive was one of multiple reasons for the employment action).
Plainly, the Supreme Court will opine about who has the burden of proof (who has to prove that retaliation was/or-is-not improper).
- If the worker has to prove that the retaliation was improper, the worker has to show that the employer retaliated only due to the improper motive/reason (i.e. filing a lawsuit, making a complaint with HR, having a disability, due to race, gender, religion, etc.).
- If the employer has to prove that the tangible employment action (i.e. discipline, firing, transfer, demotion) was not retaliation, the employer has to show that the improper motive/reason was part of many reasons.
The SCOTUSblog file with links to documents is here.
via Workplace Prof Blog: SCOTUS grants cert in retaliation mixed motives case.