Supreme Court Cases:
The 10 Corporate Counsel Need to Know
Robert Devine, Winn Dixie Stores, Inc.
Hala Sandridge, Fowler White, Boggs P.A.
David Burns, Fowler White Boggs P.A.
Thursday May 3, 2012
Jacksonville, FL
Arbitration Cases
• Arbitration important to
corporate counsel because
 eliminate jury passion
 reduce expense
 eliminate protracted
pretrial procedure
 control location and
speed of resolution
Moses H. Cone Memorial Hospital v. Mercury
Constr. Corp., 460 U.S. 1 (1983).
• Federal Arbitration Act (FAA), 9 USC §§ 1 to-16,
expresses a “liberal federal policy favoring arbitration
agreements.”
• FAA establishes that, as a matter of federal law, any
doubts concerning the scope of arbitrable issues should be
resolved in favor of arbitration
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Waiver
Ambiguities
• Completed a federalization of arbitration law
• Since Moses Cone, Court has widened scope of the FAA to
cover arbitration of many issues
Volt Info. Sciences, Inc. v. Bd. of Trustees of
Leland Stanford Jr. Uni., 489 U.S. 468 (1989).
• Just as [parties] may limit by contract the issues which
they will arbitrate, so too may they specify by contract the
rules under which that arbitration will be conducted.
• Takeaway: you can change the following to your liking
 rules of procedure
 equitable relief
 attorney’s fees
 discovery
 appellate rights
Mastrobuono v. Shearson Lehman Hutton, Inc.,
514 U.S. 52 (1995).
• Parties may contract to arbitrate dispute under the FAA
even if state law would prevent arbitration.
• See also AT&T v. Concepcion, 131 S. Ct. 1740 (2011).
California’s rule prohibiting contractual waivers of class
actions in arbitration pre-empted by the FAA.
• See also Marmet Health Care v. Brown Marmet Health
Care Center, Inc. v. Brown, 565 U.S. __ (2012), which
invalidates West Virginia's prohibition against predispute
agreements to arbitrate personal-injury or wrongful-death
claims against nursing homes because it is a categorical
rule prohibiting arbitration of a particular type of claim,
contrary to the terms and coverage of the FAA.
Circuit City Stores, Inc. v. Adams,
532 U. S. 105 (2001).
• Agreements to arbitrate employment disputes as a
condition of employment enforceable under the FAA.
 Includes statutory employment discrimination claims
(Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20,
(1991))
 “specific arbitral forum provided under an arbitration
agreement must nevertheless allow for the effective
vindication of that claim.”
• e.g. unilateral control over the pool of potential arbitrators
• remember “pigs get fed, hogs get slaughtered.” See Hooters of
America v. Phillips, 173 F.3d 933 (4th Cir. 1999), for example
of one-sided employer arbitration agreement.
Green Tree Financial Corp. v. Randolph,
531 U.S. 79 (2000).
• Where a party seeks to invalidate an arbitration agreement on the
ground that arbitration would be prohibitively expensive, that party
bears the burden of showing the likelihood of incurring such costs.
• Mere “risk” that a party will be saddled with prohibitive costs is too
speculative to justify the invalidation of an arbitration agreement
• Takeaway:
 be careful of “fee splitting”: risk invalidating the arbitration provision
(although some courts will simply eliminate fee splitting and require
defendant to bear all costs)
 consider equating fees for arbitration to judicial filing fees
 permit arbitrator to apportion, defer, or reduce the administrative fees
based upon ability
 require that party show its financial resources
 argue overall costs in arbitration much less than in court
Raymond James v. Phillips, ___ So. 2d ___(Fla.
2d DCA, Nov. 16, 2011) (rev. pending).
• Statute of limitations may not apply
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Florida statutes of limitations only apply to “actions”
Court held that arbitration not an “action”
Florida S/L does not apply unless expressly
incorporated into arbitration provision
Not enough to say “all state and federal statute of
limitations apply.”
Employment cases
• Employment cases
important because
 Expanded employer’s
liability
 Provide perimeters for
employer to protect itself
from this liability
Griggs v. Duke Power Co., 401 U.S. 424 (1971).
• Title VII proscribes “not only overt discrimination but also practices
that are fair in form, but discriminatory in operation.”
• Employer has burden of showing that any given requirement must
have a manifest relationship to the employment in question.
• Subsequent decisions required employment tests to be validated as job
related and the Court finally extended a version of the disparate impact
analysis to age discrimination cases in Smith v. City of Jackson,
Mississippi, 544 U.S. 228 (2005)
• Takeaway:
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Corporate counsel, preferably in a privileged context, should statistically analyze
any tests used for selection or promotion to determine if they have a disparate
impact on any protected group, and if so, make sure the tests are validated.
Similarly, counsel should review the impact on any protected category (especially
age) in any proposed reduction in force.
Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011).
• Supreme Court disapproves class comprising about one and a half
million plaintiffs, current and former female employees of petitioner
Wal-Mart who allege that the discretion exercised by their local
supervisors over pay and promotion matters violates Title VII by
discriminating against women because common contention was not of
such a nature that it was capable of class-wide resolution.
• Holding militates in favor of large multi-location operations having decentralized employment decision-making; however, inconsistent
approaches at different locations can create other legal problems in the
employment context.
Meritor Savings Bank, FSB v. Vinson,
477 U.S. 57 (1986).
• Two distinct types of sexual harassment recognized under
Title VII: quid pro quo discrimination and hostile work
environment
• For harassment to be actionable, it must be sufficiently
severe or pervasive to alter the conditions of [the victim's]
employment and create an abusive working environment
• Recognized the futility of grievance procedure where the
first step is to the alleged harasser.
• Later Supreme Court cases effected an affirmative defense
where the employer communicates an effective complaint
procedure and the claimant fails to use it, e.g., Faragher v.
City of Boca Raton, 524 U.S. 775 (1998).
• .
Meritor Savings Bank continued
• Takeaway:
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ensure policies in place prohibiting sexual and other
unlawful harassment which contains a complaint
procedure with at least two avenues for complaints.
education and training on the policy is important
(required in California)
those who would be tasked to investigate harassment
claims need to be well trained in being thorough and as
confidential as possible in the investigation and with
authority to make or effectively recommend any
corrective action.
Attorney/Client Privilege
• Why it’s important to understand the
process:
 need full and frank communication
between attorneys and their clients
 ability to conduct thorough
investigation depends upon the
lawyer's being fully informed
 applies to civil and criminal matters,
increasingly important in internal
investigations
Upjohn Co. v. United States, 449 U.S. 383 (1981).
• Communications by a corporation's employees to its
counsel governed by the attorney-client privilege;
however:
 lawyers represent company, not witness individually
 privilege belongs to the company, not the witness
 company may disclose information discovered during
interview at the company’s sole discretion
• When do in-house attorneys need to provide an Upjohn
warning to employees?
 similar to interviews conducted by outside counsel
 generally, the more substantive the interview, senior the
witness or involvement of employee in question, greater
likelihood need Upjohn warning
Upjohn takeaway:
• Very early in any internal investigation, assess whether
potential conflicts of interest might arise
• When interviewing a company employee, always
administer a full Upjohn warning
• Upjohn warnings generally necessary to employee witness
in federal court cases, check rule in different states
• Warning should explain that:
 lawyer represents the company, not the individual
 anything revealed during the course of interview is only
privileged between lawyer and company.
 employee has no control over whether company decides to
waive privilege
Upjohn takeaway continued……
• Advise that might be in best interest to obtain
separate counsel
• Consider getting Upjohn notice in writing
• Written Upjohn warning not necessarily
replacement for a conflict waiver;
if you decide to represent both the company and
an individual employee, obtain a written
conflict waiver.
possibly employ separate counsel for employee
American Bar Association’s White Collar Crime Committee
Working Group Upjohn warning,
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I am a lawyer for Corporation A. I represent only Corporation A, and I do not represent
you personally.
I am conducting this interview to gather facts in order to provide legal advice for
Corporation A. This interview is part of an investigation to determine the facts and
circumstances of X in order to advise Corporation A how best to proceed.
Your communications with me are protected by the attorney-client privilege. But the
attorney-client privilege belongs solely to Corporation A, not you. That means
Corporation A alone may elect to waive the attorney-client privilege and reveal our
discussion to third parties. Corporation A alone may decide to waive the privilege and
disclose this discussion to such third parties as federal or state agencies, at its sole
discretion, and without notifying you.
In order for this discussion to be subject to the privilege, it must be kept in confidence.
In other words, with the exception of your own attorney, you may not disclose the
substance of this interview to any third party, including other employees or anyone
outside of the company. You may discuss the facts of what happened but you may not
discuss this discussion.
Do you have any questions?
Are you willing to proceed?
Select material on Upjohn warning
• Upjohn Warnings: Recommended Best Practices When Corporate
Counsel Interacts With Corporate Employees,
http://meetings.abanet.org/webupload/commupload/CR301000/newsletterpubs
/ABAUpjohnTaskForceReport.pdf
• Upjohn’s Importance, Inside Counsel Magazine, June 2011,
http://www.insidecounsel.com/2011/06/01/upjohns-importance