Supreme Court Employment Law Cases: What to Watch For in 2024 (and Why)

The Supreme Court has wrapped up its last argument session of 2023, with several key employment law cases still awaiting decisions by the end of the current Term in June. Others are still awaiting oral argument or a decision on whether to grant a hearing at all.

In this three-part series we explore the major employment law cases that we are keeping an eye on for 2024.

Here we will outline two major cases that have been briefed and argued, leaving us waiting in anticipation for the Justices’ decisions.

Whistleblower Protection: Murray v. UBS Securities, LLC

Status: Briefed, Argued and Awaiting Decision

On October 10, 2023, the Justices heard oral arguments in Murray v. UBS Securities, LLC, a case that will decide how high a bar whistleblowers must clear in order to seek protection from retaliation under the Sarbanes-Oxley Act.

Trevor Murray, a former research strategist at UBS Securities, reported alleged fraud to his supervisors and was then fired, an all too common form of retaliation. He took his former employer to court under Sarbanes-Oxley, which protects whistleblowers who report wrongdoing by publicly traded companies.

Murray won his retaliation case after a full jury trial, but UBS appealed, and the Second Circuit vacated the judgment on a novel reading of the statute: it said the jury should have been instructed that Murray could not prevail without proving his employer had intended to retaliate against him.

At the Supreme Court, Murray argues that the Second Circuit’s standard for retaliation under Sarbanes-Oxley is too high. He contends that whistleblowers should have to show only that their protected activity was a contributing factor in their employer’s adverse personnel action.

Then, he contends, the burden should shift to the employer to prove otherwise—that it would have taken the same adverse action regardless of the employee’s whistleblowing. At oral arguments, Justices on both sides of the Court’s ideological divide seemed skeptical of UBS’s position, given that the statute incorporates a more permissive “contributing factor” test from the Whistleblower Protection Act for federal employees.

The Court’s ruling in Murray will have enormous consequences.

Requiring whistleblowers to prove retaliatory intent, rather than shifting to employers the burden to prove its absence, is pivotal, because proving a defendant’s mindset is a steep uphill climb for any plaintiff. The same is true for requiring proof that such intent was the sole or predominant cause of the employer’s action, instead of just a contributing factor.

Making whistleblowers shoulder these heavier burdens of proof would chill even the strongest claims of retaliation and would discourage employees from shedding light on misconduct inside publicly traded companies, a result that seems antithetical to the very purpose of Sarbanes-Oxley.

Employment Discrimination: Muldrow v. City of St. Louis

Status: Briefed, Argued and Awaiting Decision

On December 6, 2023, the Court heard oral argument in Muldrow v. City of St. Louis, a challenge to a widely used but dubious interpretation of Title VII of the Civil Rights Act of 1964, the nationwide ban on discrimination in employment. The issue is how severe an employer’s action against an employee must be to trigger the law’s prohibitions.

Many courts over the years have assumed that the law requires “significant” or “material adverse action” by the employer—even though these terms aren’t in the statute—and have ruled that the only actions “adverse” enough to matter are those that reduce the employee’s earnings: firing, demotion, suspension, disciplinary docking of pay and so forth. But in all these years the Supreme Court has never spoken on the issue.

Here’s why this is so important.

Suppose a female worker is told by her new male supervisor, “I think women aren’t smart enough for professional work, so from now on you will be the janitor.” Is the employer allowed to move a worker to a job with less prestige or responsibility, even far less, based on bigotry, but escape anti-discrimination law as long as the victim’s salary remains the same?

That’s the question the Court faces in the case of Jatonya Muldrow, an intelligence officer in the St. Louis police department, who claimed that she was transferred to a much less prestigious position with fewer responsibilities because her boss wanted a man for her job, and that this was unlawful sex discrimination even without loss of pay or benefits.

The federal trial court and court of appeals both said that because the lesser job paid the same, the transfer wasn’t significant enough to count as “adverse action.” When the Supreme Court agreed to review the case, it limited the question to involuntary job transfers only, in order to avoid deciding whether Title VII covers an array of other mistreatments.

At oral argument, Justices across the ideological spectrum appeared skeptical of the City’s position, but also reluctant to invite Title VII claims over trivial differences in treatment that do not cause measurable injury. Two of the Court’s most conservative members, Justices Thomas and Barrett, tried to use civil rights advocates’ argument against them, questioning whether Muldrow’s theory would empower opponents of “diversity, equity and inclusion” programs to sue over the slightest benefit or advantage given to minority workers—a trend, incidentally, that is on the rise due to these Justices’ own votes last year to ban affirmative action to redress past racial disadvantage in college admissions.

The Court’s decision in Muldrow, expected by the end of June, could confirm and widen the trend in the lower courts toward making more actions count under Title VII—a recent D.C. Circuit ruling did just that for involuntary transfers, overruling one of its own decades-old precedents—or it could stop that trend in its tracks and even reverse it, allowing employers to avoid liability unless their actions meet some arbitrary threshold of severity.

KCNF’s own Steve Pershing co-authored pro-employee friend-of-the-court briefs in both the D.C. Circuit case, Chambers v. District of Columbia, and Muldrow itself.

Stay tuned.

This article was written by Stephen B. Pershing and Margaret S. House and originally appeared in HR Daily Advisor on January 12, 2024. Additional information can be found in the second part of this series, “Supreme Court Employment Law Cases: What to Watch For, and Why – Part 2.”