Here’s how five key decisions in the last SCOTUS session will affect small business—from workplace practices to property rights.
In late June, the United States Supreme Court wrapped up the 2018 session with various major decisions. Here are five Court decisions that will shape small business policy, according to NFIB’s Small Business Legal Center Executive Director Karen Harned.
Kisor v. Wilkie
In June, the Court considered overturning two cases that have established the precedent that courts should defer to an agency’s interpretation of its own regulations when issues or questions arise.
NFIB’s amicus brief argued this precedent is an unconstitutional violation of the separation of executive and judicial powers. While the Court upheld the previous cases, it also limited their scope by articulating the agency interpretations that qualify.
“While the Supreme Court did not tell judges they could never give federal bureaucrats the benefit of the doubt concerning how they interpret their own regulations, the Court did significantly limit how often they will defer to federal agencies moving forward,” Harned says. “As a result, small business will have a much stronger chance of defeating a federal agency trying to change the rules of the game after the fact than they did before this decision.”
Knick v. Township of Scott, Pennsylvania
Under a previous Supreme Court precedent, landowners seeking just compensation from government property seizures must sue in state court first, which prevents them from litigating in federal court if they lost. However, the Court reconsidered and sided with NFIB by overturning the requirement.
“Small business owners now have access to federal courts when they want just compensation for a taking of their property by a state or local government,” Harned says.
Food Marketing Institute v. Argus Leader
In 2011, the United States Department of Agriculture denied a FOIA request by Argus Leader Media seeking the names, addresses, and annual redemption data of retail stores participating in the Supplemental Nutrition Assistance Program. The Court considered whether federal agencies could deny FOIA requests for information on businesses.
NFIB’s amicus brief argued that confidential information should be protected. The Court agreed, ruling that when private information is shared with the government with an understanding of continued privacy, the information is confidential and protected under FOIA Exemption 4.
“Many times small businesses are asked to provide the government with confidential business information,” Harned says. “As a result of this decision, small businesses can be assured that this confidential information cannot be disclosed to private third parties.”
Fort Bend, Texas v. Davis
This case dealt with whether an employee can file a federal employment discrimination lawsuit under the Civil Rights Act’s Title VII before completing the law’s required administrative process—first submitting a discrimination claim with the Equal Employment Opportunity Commission.
NFIB’s amicus brief argued that employers and employees have the right to resolve discrimination claims before escalating to litigation. However, the Court ruled that in certain circumstances, a Title VII lawsuit may proceed without meeting the administrative process requirements.
“With this decision, the Supreme Court is allowing an employee alleging discrimination to run immediately to the courthouse rather than first trying to work out the disagreement with their employer,” Harned says. “We are very concerned this decision could lead to even more frivolous litigation.”
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Air Liquid Systems v. DeVries
After two U.S. Navy veterans passed away from cancer, their widows sued the manufacturers of the bare metal ship components, which they claimed contained asbestos and caused the cancer. The plaintiff argued that the manufacturer was negligent in failing to warn about the harms of asbestos.
NFIB filed an amicus brief contending that companies aren’t liable for damage caused by asbestos-containing products they didn’t manufacture, sell, or install. However, the Court ruled a manufacturer has a duty to issue a warning when its product requires incorporation of another part and the integrated product could be dangerous.
“Many small business owners live in fear of a lawsuit that could put them out of business,” says Harned. “With this decision, the Supreme Court has provided a pathway for plaintiffs’ lawyers to make more manufacturers liable when a part they make is incorporated into a final product that ultimately does harm.”