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.