Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

At a conference of the American Bar Association this morning, UC Irvine Law Dean Erwin Chemerinsky reviewed the last term of the U.S. Supreme Court and gave a sneak preview of the 2008-2009 term that starts on Monday.  Besides being an official law school dean (opening fall of 2009), this Constitutional Law guru is not shy about sharing his views of the current Court. 

Among his observations from the last term:

• The Supreme Court is definitely turning into a "pro-business" court.  He noted that issues like preemption of state laws were not falling along some ideological lines, but rather reflected a overall view that tends to remove restrictions on businesses.We''re likely to see this theme repeated this year.
• The Supreme Court's caseload continues to decline noting that the court decided less than 70 cases.  As a result, he said, the decisions are becoming wordier and longer.  He did note, however, that the Court is likely to increase its caseload this year based on the numbers of cases it has already agreed to hear.
• He said that although court eras are typically named after the Chief Justice, he said he viewed the current court as the "Kennedy" Court.  He noted that in virtually all of the 5-4 decisions decided by the Court, Justice Kennedy was in the majority.
• Despite the number of employment law cases decided last term, Professor Chemerinsky didn't highlight those cases has having particular significance, pointing rather to the Court's decisions in the gun-rights case or the Guantanamo Bay detainees, for example, as noteworthy.  

As for the upcoming term, he indicated that there were a few cases that would be interesting, but nothing as ground-breaking as last term.  He noted that a case involving FDA-approved warning labels and an FCC cases involved "fleeting expletives" were likely to receive the most press. 

Lastly, he highlighted the fact that the upcoming Presidential election may decide whether the Court becomes conservative or remains split among ideological lines.  He noted the obvious: that two of the oldest justices (Stevens and Ginsburg) are likely to retire soon.  If McCain is elected President, he may have the opportunity to appoint two conservative justices to serve on the court for years -- if not, decades -- to come. 

The Workplace Prof blog has a noteworthy post this afternoon as well about the upcoming Supreme Court term.  They predict that it may very well be a "blockbuster" year.  But as with box-office predictions, the best bet is to wait and see how the Supreme Court decides.

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A recent California Appellate decision spells out a possible defense for some banks in discrimination cases.  Specifically, the court held that state discrimination laws are preempted by the National Banking Act for certain national bank employees.  For national banks in Connecticut (and indeed in other states), the decision is worth a review to determine if it applies.

In Ramanathan v. Bank of America, No. A113611 (Cal. Ct. App. Sept. 25, 2007), the Appellate Court was asked to review whether a "Vice President" was an "officer" under the National Banking Act, such that his state law claims, including race discrimination claims, would be preempted.  The Court held that because the employee was not actually performing the duties of his "Vice President", he should not be considered an "officer". Therefore, it reversed summary judgment to the bank and remanded for further proceedings.

The Court provided the following background:

Section 24 (Fifth) of the National Bank Act (“NBA”) provides the following powers to a duly organized national banking association: “To elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places.” (12 U.S.C.A. § 24 (Fifth).) Courts have long recognized that the power conferred by Section 24 (Fifth) on national banks to dismiss its officers “at pleasure” is protected by the doctrine of preemption from all state law claims filed by their former officers for breach of an employment agreement. ...

Courts have also acknowledged the doctrine of preemption protects national banks that dismiss their officers under Section 24 (Fifth) from state law discrimination claims filed by their former officers, although in this regard, courts have differed on whether such preemption is total or partial. ...

In our view, the key issue on appeal is whether [the plaintiff] was an “officer” of the Bank under Section 24 (Fifth). ... 

[W]e hold that where an employee asserts his or her position as “Vice-President” is not vested with any of the duties or responsibilities normally associated with such a positio ... then to obtain summary judgment on preemption grounds under Section 24 (Fifth) the Bank must show the employee is “an officer” of the bank....

The court then followed four broad factors to review whether an employee is an officer.

1. First, he or she holds an office created by the board of directors and listed in the bank’s bylaws.
2. Second, he or she is appointed by the board of directors, either directly or pursuant to a delegation of board authority set forth in the bylaws.
3. Third, he or she has the express legal authority to bind the bank in its transactions with borrowers, depositors, customers, or other third parties by executing contracts or other legal instruments on the bank’s behalf.
4. Fourth, his or her decision-making authority, however it might be limited by bank rule or policy, relates to fundamental banking operations in such a manner as to affect potentially the public’s trust in the banking institution.

For national banks out there, this case discusses at length a valuable defense for employment claims. But one cautionary note, the preemption of state laws may not apply to federal discrimination claims.  And recall that this applies to national banks, not state banks.

For attorneys who represent indivdiuals, filing a federal discrimination charge (bypassing state law) may be one way to avoid this whole area entirely.  Nevertheless, given the power of preemption, this defense is worth exploring further when representing a national bank.

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