Two petitions from North Carolina seek to resolve pay and benefits for public employees

Petitions of the Week
A courier drops off a package at the Supreme Court

The Petitions of the Week column highlights a selection of cert petitions recently filed in the Supreme Court. A list of all petitions we’re watching is available here.

This week, we highlight cert petitions that ask the court to consider, among other things, whether two groups of North Carolina employees were denied pay or benefits by the state in violation of a federal employment law and the Constitution.

Emergency Medical Services employees in Cleveland County, North Carolina, work long shifts, and as a result are eligible for a mix of “straight-time” and overtime pay under the Fair Labor Standards Act. County EMS employees are salaried based on an hourly rate that complies with the FLSA. In calculating that hourly rate, however, the county includes all time worked by EMS employees, both straight-time and overtime hours. EMS employee Sara Conner sued the county in federal district court, arguing that this formula violates the FLSA by artificially deflating the effective straight-time wage she was promised in her salary – known in employment law as a “gap-time” claim.

Siding with Conner and a group of EMS employees, the U.S. Court of Appeals for the 4th Circuit viewed the FLSA as “silent” on the question of gap-time wages. To resolve the stalemate, the court granted deference under Skidmore v. Swift & Co. to a regulation by the Department of Labor that reads the act in the employees’ favor. Under Skidmore deference – a more lenient standard than the more widely known Chevron deference – courts may choose, but are not required, to agree with an agency’s reasonable interpretation of an ambiguous law if they view that interpretation as persuasive. In Cleveland County v. Conner, the county asks the justices to decide whether Skidmore deference was appropriate here, as well as whether gap-time claims exist at all under the FLSA.

In Cleveland County and beyond, the state of North Carolina offers several medical-insurance plans to all retired state employees. In 2011, the state legislature amended one of those plans to begin requiring a small monthly premium. In doing so, it relied on a clause in the original statute stating that the legislature “reserves the right to alter, amend, or repeal” the health benefits for retired employees at any time. That change triggered a lawsuit from a group of retired state employees, which was certified as a class action on behalf of the more than 220,000 former workers who could have signed up for the previously premium-free plan.

The North Carolina Supreme Court ruled for the employees. The contracts clause in Article I, Section 10 of the Constitution provides that “No State shall … pass any … Law impairing the Obligation of Contracts.” Although the right-to-amend clause indicates that the legislature never intended to establish a “contract” with retired state employees for health benefits, the court held, the reliance of those former employees on the state plans nevertheless creates a contractual right, and the state violated that right by amending its plan. In State Health Plan for Teachers and State Employees v. Lake, North Carolina asks the justices to decide whether a law with a right-to-amend clause like its own can create a contractual right under the Constitution.

A list of this week’s featured petitions is below:

Cleveland County, North Carolina v. Conner
Issues: (1) Whether the Fair Labor Standards Act allows an employee, who has been paid at least the required minimum wage and overtime pay at a rate that is at least one and one-half times her regular rate, to sue her employer for and recover unpaid straight-time wages earned in weeks when she worked overtime; and (2) whether Skidmore v. Swift & Co. allows courts to independently evaluate an agency’s nonbinding interpretation of a statute.

State Health Plan for Teachers and State Employees v. Lake
Issue: Whether a state legislature’s express reservation of the right to amend a statute providing benefits to government employees bars a claim under the Constitution’s contracts clause based on the legislature’s later decision to amend those benefits.

Biogen International GmbH v. Mylan Pharmaceuticals Inc.
Issue: Whether 35 U.S.C. § 112’s requirement that a patent specification “contain a written description of the invention” is met when the specification describes the invention, or whether the specification must also disclose data that demonstrates the claimed invention is “effective” and emphasize the claimed invention by singling it out and describing it more than once.

Spade v. Department of Justice
Issue: Whether federal courts have subject-matter jurisdiction to address what injuries fall within the scope of the Federal Employees’ Compensation Act.

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