Economic Liberty Challenges In the 21st Century

By Drew Erteschik and J.M. Durnovich

erteschik_drew_LHIntroduction

Most of us left law school with the understanding that so-called “economic liberty” challenges to state regulations will generally fail under rational basis review.  That area of the law, however, has changed dramatically.

This article looks at the change in three parts:

The first part offers a brief refresher on the history of economic liberty challenges in the 20th century.

The second part describes a flurry of recent cases involving successful economic liberty challenges on substantive due process grounds.

The third part examines some possible legal and policy explanations for the modern trend.

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NCBA Out & About: A Hike Along England’s South Downs Way

jon-sdw-1By Jonathan Maxwell

There are few better opportunities for relaxation and rejuvenation than a long walk.  English national trails take it to a new level.

In the bracing air along the Seven Sisters, the prominent chalk cliffs overseeing the English Channel, I encounter a fellow hiker who recommends a 13th-century inn in Alfriston as a perfect first night‘s stay. Laterin the gloaming along the Cuckmere River, a gentleman farmer pauses while working in his field to point out a distant steeple, advising that if I stick to the river path I will be in Alfriston ere long.

Of the English walks officially designated as “national trails,” one of the most historic and varied is but a 50-mile train ride south of London. Beginning in Eastbourne on the English Channel, the South Downs Way wends westward one hundred miles through a national park – along coastal cliffs, inland atop an escarpment, and through the woods, to Winchester. (See www.nationaltrail.co.uk/southdowns.) I cannot resist taking six days to walk it solo.

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Tully v. City of Wilmington: The Constitution Requires Public Employers To Play By Their Own Rules

parkerkaty-2By Katy Parker

The North Carolina Court of Appeals recently ruled that a police officer has a valid property and liberty interest in requiring his employer, the City of Wilmington, to comply with its own established promotional process.

When Corporal Kevin Tully of the Wilmington Police Department sat for the sergeant’s test in fall of 2011, he felt pretty good about his chances for promotion.  Aside from being named “Wilmington Police Officer of the Year” for 2011 and receiving several other commendations and awards, Corporal Tully is also an avid student of police policy and procedure, and the United States Constitution.  He is often the guy that other officers go to with questions about the finer points of Fourth Amendment search and seizure law.  After taking the test, Corporal Tully felt even better, feeling certain that he had answered most of the questions correctly.  And so it was quite a shock when Corporal Tully was informed that he had failed the test.  He asked for copies of the answers, as he is entitled to do under WPD policy.  Upon receipt of the answer key, Corporal Tully immediately realized that the answer key was wrong – and that the so-called “correct answers” on questions related to Fourth Amendment search and seizure issues were actually based on outdated law.

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Arbitrability Of Arbitration: Judge Takes Backseat to Arbitrator in 9th Circuit Uber Case

kornbluthmichaelBy Michael A. Kornbluth

Last week the U.S. Court of Appeals for the 9th Circuit held that whether or not a contract should be arbitrated was a question to be decided by an arbitrator, not a judge. In Mohamed v. Uber Technologies, 15-16178 (9th Cir. Sept. 7, 2016), the circuit court used scathing language in reversing the district court, which had held that the issue of arbitrability was properly before  the district court and went on to determine that the arbitration clause at issue was unconscionable.

This case originated in 2015 in the U.S. District Court for the Northern District of California, where a number of Uber drivers filed a class action against Uber and a few other companies, alleging violations of the Fair Credit Reporting Act, the Massachusetts Consumer Credit Reporting Act, and the California Consumer Credit Reporting Agencies Act, for improperly using consumer credit information to effectively terminate the plaintiffs’ ability to work for Uber.

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Date Change For Section Annual Meeting/CLE

Due to a conflict with two CLE programs, the Constitutional Rights and Responsibilities Section is moving the date of its Annual Meeting and CLE from Jan. 13, 2017 to Feb. 9, 2017.  The CLE will focus on HB2 and the legal challenge to that bill, including its impact on employment law related issues as well as an analysis and discussion of the litigation resulting from the bill.  We apologize for any inconvenience with regard to the change of date and hope to see you on Feb. 9, 2017.

EEOC Issues Updated Retaliation Guidance

herrmannseanBy Sean F. Herrmann

Retaliation, which finds its way into nearly 45 percent of all charges filed nationwide, remains the most prevalent bias allegation to come across the desk at the EEOC. This has the EEOC’s attention. On Aug. 29, 2016, it issued its Enforcement Guidance on Retaliation and Related Issues, laying out its most recent interpretation of the law on this topic. The guidance addresses retaliation under Title VII and all other federal anti-discrimination laws.

A link to this guide can be found here

The EEOC issued a more-user friendly Questions and Answers document to accompany the guidance. 

Finally, the agency also issued a small business fact sheet.

Fourth Circuit Takes On ‘Me Too’ Evidence and ‘Mini-Trials’ In Recent Decision

herrmannseanBy Sean F. Herrmann

Recently, in Calobrisi v. Booz Allen Hamilton, Inc, No. 15-1331 (4th Cir. Aug. 23, 2016), the U.S. 4th Circuit Court of Appeals specified certain types of evidence that district courts must, at a minimum, consider when ruling on summary judgment motions. It held that the trial court erred when it granted summary judgment, in part, to the employer in an age and gender discrimination and retaliation case. This decision will impact practitioners and district court judges alike.

In partially reversing the district court’s decision, the 4th Circuit first noted that the lower court did not “individually analyze each piece of other employee evidence.” Specifically, the appellant-plaintiff, a then age 55-year-old female, submitted testimony from seven other “middle-aged women,” who stated that they experienced adverse actions at the workplace similar to those alleged by the plaintiff. The district court, in one sentence, determined that the plaintiff’s “me-too” evidence would not be admissible at trial and, accordingly, did not consider it when ruling on the summary judgment motion.

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And Now For Something Completely Different … About CLE Titles

By Catherine Peglow

Have you ever wondered how our CLE programs get their names?

“The Alimony Tour – Not Starring John Cleese” was the name of the 2015 Family Law Section Annual Meeting CLE in Asheville. Now, I’m a Monty Python fan, but a clever name like that can present some problems when you consider the life cycle of a typical North Carolina Bar Association Foundation CLE program. After the live program, we generally do video replays across the state, and those video replays count as live CLE credit. After the replays finish, the program is edited into sessions and uploaded to our On Demand catalog. When you view those sessions online from the convenience of your home or office, they count as online CLE credit.

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Economic Liberty Challenges In the 21st Century

By Drew Erteschik and J.M. Durnovich

erteschik_drew_LH

Introduction

Most of us left law school with the understanding that so-called “economic liberty” challenges to state regulations will generally fail under rational basis review.  That area of the law, however, has changed dramatically.

This article looks at the change in three parts:

 

The first part offers a brief refresher on the history of economic liberty challenges in the 20th century.

The second part describes a flurry of recent cases involving successful economic liberty challenges on substantive due process grounds.

The third part examines some possible legal and policy explanations for the modern trend.

20th Century Views

In 1905, the U.S. Supreme Court decided Lochner v. New York, a case that considered a state law capping the maximum hours for bakery employees.[1]  The Court struck down the law on the grounds that it violated the “right of an individual to be free in his person and in his power to contract in relation to his own labor.”[2]  Over the next thirty years—the “Lochner era”—the Supreme Court struck down a number of state laws that infringed upon economic liberty rights.[3]

The Lochner era, however, was short-lived.  Headlined by the Court’s decision in U.S. v. Carolene Products, the Great Depression ushered in the post-Lochner era—a time when the Court established a presumption of constitutionality for state regulations.[4]  Most scholars attribute the shift to non-jurisprudential reasons:  If President Roosevelt’s New Deal was to survive constitutional challenges, the Court needed to dilute Lochner’s potency.[5]

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Fourth Circuit’s RLM Communications, LLC v. Tuschen Tackles Noncompetition and Trade Secret Misappropriation Issues

Wall,JonBy Jonathan Wall

Noncompetition agreements (“non-competes”) present thorny issues.  In most cases, you have a former employee who has signed a black-and-white contract prohibiting him or her from engaging in certain employment, and the employee goes and does the one thing that the contract specifically prohibits.  Not that long ago, most judges would view the matter purely as a contract issue, and once an employee’s attorney admitted that yes, that was the client’s signature on the agreement, they did not want to hear much else, with visible disinterest giving way to agitation the longer the argument proceeded.

On rare occasions, if the employee could present special circumstances, the trial courts would do more than pay lip service to the maxims like “noncompetes are strongly disfavored in North Carolina.”  Was the territory much more expansive than where the employee actually operated?  Was this really a lower-level employee, with the noncompete designed to keep the employee hostage rather than protecting legitimate employer interests?

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