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Supreme Court: Title VII Employee Threshold Does Not Determine Jurisdiction
The United States Supreme Court has resolved a significant issue regarding coverage under Title VII: whether the 15-employee threshold for determining whether an individual or entity is an 'employer' covered by Title VII of the Civil Rights Act of 1964 is a substantive element of plaintiff's claim for relief, or a jurisdictional issue. (Arbaugh v. Y & H Corp., No. 04-944 (2006)). In Arbaugh, the Supreme Court, reversing the U.S. Court of Appeals for the Fifth Circuit, held that the 15-employee threshold is an element of a plaintiff's claim that must be challenged prior to trial on the merits. The Supreme Court's decision is significant because evaluating the number of employees as a substantive issue would allow a federal court to exercise supplemental jurisdiction and to retain discretion to hear pendent state law claims even if it dismisses the federal claims for failure to state a claim.
The Case
Arbaugh sued her former employer, the Y & H Corp., which operates the Moonlight Caf' in New Orleans, under both Title VII and Louisiana law in federal district court. A pretrial order signed by the parties and the trial judge stated that the court had jurisdiction over both the Title VII claims and the state law claims. However, the pretrial order did not list as a contested factual or legal issue whether Y & H had sufficient employees to be covered by Title VII. The case was tried to a jury, which returned a verdict in Arbaugh's favor.
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