Walmart Labs offices, a subsidiary of Walmart
The majority of civil cases settle before they get resolved by a court. Many of these lawsuits settle before trial, although some cases settle after trial and during the appeals process. But it’s rare for a case to settle after someone petitions the U.S. Supreme Court to review the case.
Why would a litigant spend tens (if not hundreds) of thousands of dollars and years in litigation, only to settle a case after the highest court takes the case? One obvious answer is fear of losing the case, although there could be more to it than that.
Let’s say you won at the trial level and won again on appeal. Odds are good that you’ll win at the U.S. Supreme Court. But there’s no guarantee of another legal victory. And sometimes, losing the case could mean much more than just losing the case. It could result in a legal change that means you could lose many more cases like this one in the future.
This situation may have played out in a recent religious discrimination lawsuit involving Walmart and a prospective employee who alleged religious discrimination in violation of Title VII of the Civil Rights Act of 1964 (Title VII).
Religious Accommodations Under Title VII
Title VII is the law that most employees rely on if they want to sue their employer for religious discrimination. This law applies to employers with 15 or more employees and its protections don’t just apply to current employees, but job applicants, too.
A bar on religious discrimination isn’t the only right provided by Title VII. There’s also the right to a reasonable adjustment to the workplace to accommodate the employee’s religious beliefs. However, this reasonable accommodation must not create an undue hardship for the employer.
What’s an undue hardship? It’s something that creates more than a “de minimis” cost on the employer. If there’s a modest and temporary increase in expenses for an employer to accommodate the employee, it might qualify as a de minimis cost. But if this expense is significant or permanent, such as requiring the employer to hire an additional employee or pay permanent overtime or shift premiums to other workers, then that’s likely more than a de minimis cost to the employer.
The undue hardship also relates to non-monetary costs, such as diminishing the rights and benefits of other workers, reducing the efficiency of other jobs or impairing workplace safety.
This de minimis standard to define undue burden was established in the case, Trans World Airlines, Inc. v. Hardison more than 40 years ago. This standard under Title VII is more generous to the employers than the undue hardship standard from the Americans with Disabilities Act of 1990 (ADA). Under the ADA, a covered employer must provide a reasonable accommodation to an eligible employee unless it imposes “significant difficulty or expense.”
It’s possible that Walmart’s decision to settle its religious discrimination case was an attempt to prevent the U.S. Supreme Court from changing Title VII’s relatively easy-to-meet de minimis standard. The last thing Walmart would want is the definition of undue burden under Title VII to change into something more generous to employees, such as the definition of undue burden under the ADA.
EEOC v. Walmart Stores East L.P.
In April 2016, Walmart offered Edward Hedican (Hedican) a job as one of eight assistant managers for one of its stores. Hedican was a Seventh-Day Adventist and this was a full-time position. This meant that he would have to work during his Sabbath, which started at sundown on Friday and ended at sundown on Saturday.
After receiving the job offer, Hedican explained his scheduling needs given his religious beliefs. The human resources manager for the store looked into potential accommodations for Hedican. She found a few options, but concluded they would create an undue burden on Walmart. She reached this conclusion for several reasons.
First, it would require other assistant managers to take on additional Friday night and Saturday shifts, which were among the least popular shifts.
Second, it would stop this particular store’s policy of rotating all eight assistant managers through all potential scheduling patterns. This provided allowed the assistant managers to gain experience working in all store departments. The store manager implemented this policy to make it easier for assistant managers to cover for each other in cases of vacation, illness, resignation, etc.
Third, the first two problems might be avoided, but only if a ninth assistant manager were hired or if the store was understaffed at times.
Given these scenarios, the store’s human resource manager told Hedican that his religious scheduling needs could not be reasonably accommodated. She suggested that he apply for an hourly management position, which didn’t have the complicated scheduling requirements of assistant manager. Hedican declined to apply and instead filed a charge with the U.S. Equal Employment Opportunity Commission (EEOC).
The EEOC eventually filed suit on Hedican’s behalf and alleged violations of Title VII due to religious discrimination and retaliation. EEOC alleged that Walmart withdrawing its offer of employment constituted retaliation for his request for a religious accommodation and that Walmart improperly refused to provide a religious accommodation to Hedican.
Walmart filed a motion for summary judgment, which the trial court granted. On appeal to the U.S. Court of Appeals for the Seventh Circuit (Seventh Circuit), the appellate court affirmed the trial court’s decision, relying heavily on the de minimis legal standard set out in Hardison.
The EEOC asked the Seventh Circuit to reconsider its decision, but they declined. Hedican then asked the Seventh Circuit for permission to take over the litigation, but was denied.
But in March 2022, the U.S. Supreme Court granted Hedican’s petition to intervene (take over the litigation). This would likely allow him to appeal his case to the U.S. Supreme Court and have them reconsider whether to overrule the Hardison case and change the de minimis cost undue burden standard.
The Supreme Court and Overruling Precedent
Absent certain procedural nuances, when the U.S. Supreme Court issues a decision, it becomes the supreme law of the land and overrides any contradictory law, statute, regulation, rule, legal standard or executive order. Basically, the only thing it doesn’t trump is the U.S. Constitution itself.
Currently, the Hardison case is the law when it comes to determining what constitutes an under burden for religious accommodations under Title VII. But at least three members of the U.S. Supreme Court (Justices Alito, Thomas and Gorsuch) have expressed a desire to overrule Hardison. Presumably, they would change the undue burden definition to something that requires employers to do more to accommodate the religious needs of their employees.
While three votes wouldn’t be enough to overrule Hardison, it’s not farfetched to assume that at least two of the remaining three conservative justices (Chief Justice Roberts and Justices Barrett and Kavanaugh) would also agree with the idea. Then take into account the U.S. Supreme Court’s shift to enhancing the religious rights of individuals and Walmart’s concerns become apparent.
Bottom Line
Walmart settling a case to prevent Hardison from getting overruled is just a theory, but it’s still a distinct possibility. Walmart may not have cared about losing to Hedican even if it resulted in paying him a large sum of money. But they certainly cared about getting Hardison replaced with a new case redefining religious accommodations at work. Either way, the settlement signals the potential for change concerning what employers must do to accommodate the religious beliefs of their employees.
