Supreme Court Upholds City's Review of Employees' Text Messages
In a unanimous decision, the U.S. Supreme Court held that the City of Ontario did not violate its employees' Fourth Amendment right to be free from unreasonable searches by reviewing the employees' text messages sent on pagers provided by the City. See City of Ontario v. Jeff Quon (June 17, 2010). The Court did not rule on whether the employees had a privacy interest in the text messages, but instead assumed that they did and held that regardless of such interest, the City's review of the messages did not violate the Fourth Amendment. The Court held that the City's review of the messages did not violate the Fourth Amendment because the search was "justified at its inception" – the City had a legitimate interest in determining that its employees were not being forced to pay out of their own pockets for work-related expenses and that the City was not paying for extensive personal communications – and the measures the City used were "reasonably related to the objectives of the search and not excessively intrusive in light of the circumstances giving rise to the search." For a more detailed discussion of the Court's decision, please see our June 22 Legal Alert, "Supreme Court Upholds City's Review of Employees' Text Messages," located on our web site at: http://www.fordharrison.com/shownews.aspx?Show=6296.
Arbitrator, Not Court, Decides Issue of Unconscionability
On June 21, 2010, the U.S. Supreme Court held that under the Federal Arbitration Act (FAA) an arbitrator, not a court, should decide whether an arbitration agreement is unconscionable when the parties have delegated the determination of that issue to the arbitrator. See Rent-A-Center West v. Jackson (June 21, 2010). The Court's decision overturns that of the Ninth Circuit, which held that the court has exclusive jurisdiction to determine the issue of unconscionability, even though the parties' arbitration agreement gave the arbitrator that authority.
This case involved an employment-related arbitration agreement that included a clause giving the arbitrator "exclusive authority to resolve any dispute relating to the . . . enforceability . . . of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable." After Jackson was discharged, he sued Rent-A-Center in federal court and the company moved to compel arbitration in accordance with the arbitration agreement. Jackson opposed arbitration claiming the agreement was unconscionable. Rent-A-Center argued that the issue of unconscionability was for the arbitrator to decide, pursuant to the delegation provision quoted above.
The Supreme Court held that the arbitration agreement was the underlying contract and the delegation provision was an agreement to arbitrate threshold issues concerning the arbitration agreement. Previous Supreme Court decisions held that under the FAA, a court must determine challenges to the validity of the agreement to arbitrate, while an arbitrator must determine challenges to the contract as a whole. Because Jackson challenged the arbitration agreement as a whole and not the delegation provision specifically, the Court held that the arbitrator must decide whether the arbitration agreement was unconscionable.
For a more detailed discussion of the Court's decision, please see our June 21 Legal Alert, "Supreme Court holds that Arbitrator, not Court, Should Decide Issue of Unconscionability," available on our web site at: http://www.fordharrison.com/shownews.aspx?show=6295.
Supreme Court Holds that Two-Member NLRB Lacked Authority to Issue Rulings
In a 5-4 decision, the U.S. Supreme Court held that the National Labor Relations Board (NLRB) improperly delegated its authority to a two-member group after the expiration of two Board members' appointments in December 2007. See New Process Steel v. National Labor Relations Board (June 17, 2010). Accordingly, the two-member Board did not have authority to issue decisions on unfair labor practice and representation cases. It is not clear what will happen with regard to the almost 600 decisions issued by the two-member group from January 1, 2008 until March 27, 2010, when President Obama made two recess appointments to the Board. We will keep you updated as more information becomes available on this issue.
For a more detailed discussion of this case, please see our June 22, 2010 Legal Alert, "Supreme Court Holds that Two-Member NLRB Lacked Authority to Issue Rulings," available on our web site at: http://www.fordharrison.com/shownews.aspx?Show=6297.