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Supreme Court and Business: 5 Cases to Watch This Term

October 2, 2017, 12:42 PM UTC

The Supreme Court begins its new term on Monday and people are using words like “blockbuster” and “epic” to describe the upcoming series of cases. This is largely because the court will begin the term at full strength—prior to the confirmation of conservative Justice Neil Gorsuch last spring, the court had been reluctant to take hot button cases for fear of a four-four tie.

The most high profile cases in the new term include ones about cell phone privacy and the legality of partisan gerrymandering. But the Supreme Court will also make a number of divisions that will have huge implications for companies business. Below are five of the most important business cases the top court will hear in coming months. Keep in mind too the court has only filled about half its schedule—meaning more big business cases are on the way.

Do Mandatory Union Dues Violate the Constitution?

An state government worker in Illinois, Mark Janus, claims labor rules that force him to contribute to a union violate his First Amendment rights. He argues the contributions force him to support a political position with which he disagrees. The union claims there’s no First Amendment right at stake, and that ending mandatory dues collection would permit some workers to free ride on benefits obtained by collective bargaining.

The case concerns workers in public sector unions, not private companies (where mandatory collection rules are determined by state laws). But a defeat for the union in the Janus case would have enormous ripple effects by weakening the overall financial clout of organized labor. Supreme Court watchers predict the outcome doesn’t look good for labor since the top court deadlocked 4-4 on a similar case in 2016, and the conservative Gorsuch is expected to tip the balance in favor of Janus this time around.

Are Forced Arbitration Clauses Illegal in Employment Contracts?

The Supreme Court has repeatedly decreed in recent years that companies can rely on the Federal Arbitration Act to uphold contracts that require people to waive their right to sue, and instead seek redress through arbitration. While this clearly applies in the case of consumers, the National Labor Relations board has ruled that employment contracts are a different matter, and that forced arbitration clauses are an illegal labor practice because they restrict workers rights to engage in “concerted activities” for their mutual protection.

This case, which is actually three consolidated cases that also involve Ernst & Young and an energy company, will kick off the new Supreme Court this Monday.

Can a Baker Refuse His Services to a Gay Couple?

Masterpiece Cakeshop v. Colorado Civil Rights Commission is one of the very biggest cases of this blockbuster term. It turns on a Christian baker who said he would sell a cake to a gay couple planning to get married, but would not bake a special one just for them.

The case is a test of the boundaries of the First Amendment’s protections for free speech and freedom of religion. It has implications for businesses of all sorts whose owners could conceivably invoke their religious beliefs to deny gay people a wide variety of services. As The Economist notes, “If the court finds for [the baker] Mr Phillips, calligraphers, florists, photographers and tailors who reject gay marriage may earn a licence to discriminate as well.”

Can Foreigners Use U.S. Courts for Overseas Disputes? (When Does the Alien Tort Statute Apply?)

This case involves victims of terror attacks in Israel and Gaza who want to use U.S. courts to sue Jordan’s Arab Bank over its role in distributing so-called martyrdom payments. The plaintiffs are relying on a law called the Alien Tort Statute, which grants U.S. courts the right to hear civil actions brought by aliens for any violation of the “law of nations or a treaty of the United States.”

As SCOTUSBlog notes, the U.S. Chamber of Commerce and other business groups have grown alarmed at the sudden popularity of the Alien Tort Statute in recent years, and want the Supreme Court to limit its application to individual defendants, not corporations.

Is a Popular Method to Challenge Bad Patents Legal?

In response to complaints about a proliferation of low quality patents, Congress in 2011 introduced a more efficient way for defendants to challenge patents they believe are invalid. Instead of disputing the patents in federal court (a very slow and expensive process), companies now have the option to ask a panel of judges at the Patent Office to conduct a review over whether the patent should have been issued in the first place.

The review system has widespread report from a variety of industries, including tech and retail, but now some patent owners are arguing the system is not constitutional because it can deprive them of an alleged property right without a jury trial. If the plaintiffs in the case prevail, U.S. companies could suddenly become exposed to a new wave of costly patent litigation.