10/04/2005
This week marks the start of the Supreme Court’s 2005-2006 term. This year promises to be a most interesting year at the Supreme Court. The court is headed by newly confirmed Chief Justice John Roberts and cases heard by the court will be sure to have an impact on the bottom lines of American businesses. Decisions are expected in a number of areas, including employment discrimination, labor law, arbitration and benefits.
Over the past year, the Supreme Court has received an extraordinary amount of publicity, with the death of Chief Justice William Rehnquist coming shortly after the announcement by Associate Justice Sandra Day O’Connor that she would retire. The last few months aside, the Supreme Court does not usually garner headlines like Congress or the president. But its influence is undeniable. As the highest federal court in the country, its decisions may not be appealed to any other body. As Justice Robert H. Jackson once famously remarked, "We are not final because we are infallible, but we are infallible only because we are final." It is the only court established by the U.S. Constitution; all other federal courts are created by Congress. The Constitution also provides that justices "shall hold their Offices during good Behavior"; the term "good behavior" is interpreted to mean life. All this means that the influence of the nine justices (each of whom is appointed by the president with the "advice and consent" of the Senate) has the potential to extend beyond that of Congress or the president.
There is no question that the Supreme Court’s decisions impact the small business community. If you ever doubted the importance of the Supreme Court, consider the outrage generated by the court’s June 23 decision in Kelo v. New London. The five-to-four ruling by the court gave federal, state and local government the power to use eminent domain to take private property for private economic development. But the Court’s influence extends beyond the front-page headlines. In fact, studies have shown that more than 40 percent of the court’s cases deal with issues that directly affect the business community. Those issues include employment, civil rights, insurance, workplace injury, environmental regulations and product liability issues.
With John Roberts now in place as chief justice, President Bush must still oversee the confirmation of a successor for Justice O'Connor, although O’Connor said at the time of her retirement announcement that she would remain until a replacement is seated. Yesterday, Bush nominated White House Counsel Harriet Miers for the position. While most of the news coverage of the Supreme Court has focused on potential nominations of new justices and social issues, small-business owners should pay careful attention to the court's docket. In the upcoming year, the Court has agreed to hear a number of cases that will impact businesses throughout the country. Consider the following:
Arbaugh v. Y & H Corp.
The Supreme Court will decide whether the definition of an "employer" in the 1964 Civil Rights Act, 42 U.S.C. § 2000e-(b), as an "employer . . . .who has fifteen or more employees," limits the jurisdiction of the federal courts and cannot be waived. The Supreme Court’s decision will be of interest to any small employer who may face future liability under any employment discrimination statute such as Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Family and Medical Leave Act.
* The NFIB Legal Foundation will be filing a brief in this case.
IBP v. Alvarez
In IBP, the Supreme Court will decide whether employers must compensate employees under the Fair Labor and Standards Act and the Portal-to-Portal Act for time spent walking to the worksite wearing required protective clothing. Should the Supreme Court rule in favor of the employees, small businesses could face increased labor expenses.
Domino's Pizza v. McDonald
The court here will decide whether a shareholder of a corporation can bring a claim under the Civil Rights Act of 1866, 42 U.S.C. §1981, which prohibits discrimination in the making and enforcement of contracts, even if the shareholder is not a party to the contract. This case should be of interest to any business that forms contractual relationships, since the decision could greatly expand the group of people who may assert race discrimination in the making and enforcing of contracts.
Starting this week, the NFIB Legal Foundation will prepare previews for cases coming before the Court that could affect small business. Summaries of these cases can be found at the NFIB Legal Foundation Web site. These cases clearly demonstrate the impact of the Supreme Court on free enterprise – an impact that rivals the other two branches of the federal government and should not be ignored.
