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U.S. Supreme Court Issues Landmark Ruling that Could Radically Change Employee Discipline

3/11/2015

In a slip opinion released on Monday, March 9, 2015, styled Perez v. Mortgage Bankers Ass’n, No. 13-1041, slip op. (U.S. Mar. 9, 2015), the United States Supreme Court effectively gave federal agencies carte blanche to interpret the regulations promulgated by those agencies without using the notice and comment procedure.

This reverses nearly two decades of precedent established by Paralyzed Veterans of America v. D.C. Arena L.P., 117 F. 3d 579 (1997), which required that an agency use the notice and comment procedures set forth in the Administrative Procedure Act (5 U.S.C. Sec. 553(b)(A)) when it wished to issue a new definition or interpretation of a regulation that deviates significantly from one previously adopted by the agency.

In a Bulletin that we issued on October 23, 2014 (which can be viewed here), we commented on a supplemental notice of rulemaking that would expand the definition of whistleblower under Section 11(C) of the Occupational Safety and Health Act. Under that expanded definition, employers would be prohibited from engaging in a number of activities, including:

  • Mandating drug testing every time an employee reports an injury (unless there is a reason to suspect drug use).
  • Demanding that employees report illnesses and injuries within a certain time after being injured or becoming ill.
  • Requiring employees report injuries and illnesses in-person to someone at a distant location.
  • Terminating employees who are injured because they failed to abide by the employer’s safety rules.
  • Disciplining employees who report injuries or illnesses or terminating employees who have more than X injuries.
  • Enforcing vague safety rules like “situational awareness” and “work carefully” only after an employee is injured.
  • Continuing with “Repeat Offender” programs.

Recent comment from USDOL OSHA indicated that the new rule, as well as the new definition, would likely not go into effect until August of 2015. Given the Supreme Court’s decision today, we anticipate that OSHA will issue a new definition of the term whistleblower in the near future and bypass the notice and comment period relative to the rule that definition.