Thursday, October 30, 2014

UPS Policy Change

Yesterday the Washington Post reported that UPS has changed its policy about providing light duty assignments to pregnant employees.  The link to the story is here:  http://www.washingtonpost.com/blogs/she-the-people/wp/2014/10/29/with-supreme-court-case-pending-ups-reverses-policy-on-pregnant-workers/

-- Sandra Sperino

October 30, 2014 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 29, 2014

Horton Rises

New ImageAlthough the Fifth Circuit tried to put a stake in the heart of the NLRB's Horton decision, the Board confirmed its vitality today in its opinion in Murphy Oil U.S.A. The bottom line:  the NLRB "reaffirmed the D.R. Horton rationale and applied it to find that the employer violated section 8(a)(1) of the NLRA "by requiring its employees to agree to resolve all employment-related claims through individual arbitration" and by trying "to enforce the unlawful agreements in Federal district court" when employees filed a collective action against the company under the FLSA.

Tim Glynn and  I have written about the issue before, and I've blogged about it on Workplace Prof , so I won't belabor the point. Suffice it to say that, although Horton has to date not been well-received outside of the Board and the law reviews, the jury is still out on whether the NLRA bars employers from foreclosing any kind of concerted action in a court or arbitral forum. Indeed, there's an appeal before the Second Circuit which will provide another opportunity for the viability of the theory to be tested. 

CAS

October 29, 2014 in Arbitration | Permalink | Comments (0) | TrackBack (0)

How Managers Consider Job-Applicant Criminal History

    How do managers actually consider a job applicant’s criminal history, given the law?  A recent study finds that it has a lot to do with how much discretion those managers have under company policy: Sarah E. Lageson, Michael Vuolo, and Christopher Uggen, “Legal Ambiguity in Managerial Assessments of Criminal Records,” Law & Social Inquiry (2014) (online).  Here’s the abstract:

 In an age of widespread background checks, we ask how managers in different organizational contexts navigate legal ambiguity in assessing applicants' criminal history information, based on interview data obtained in a recent field experiment. The study builds on institutional analyses of the social sources of workplace legality to describe how employers consider applicants with criminal histories. We find that some organizations set explicit standards to guide hiring decisions, providing concrete policies on how to treat applicants with records. Where such procedural mandates are lacking, however, hiring managers turn to a micro-rational decision process to evaluate potential risk and liability. These individualized approaches create inconsistencies in how the law is interpreted and applied across organizations, as evidenced by actual hiring behavior in the field experiment.

 The paper is based on forty-eight interviews of hiring managers.  The authors conducted those interviews as part of larger field experiment on how employers in the Twin Cities metropolitan area reacted to “tester” job-applicants with criminal histories.  From their interviews, the authors infer that “an applicant with a low-level criminal history may be more likely to find employment in a workplace that has formally assessed the risks and legality associated with hiring an applicant with a record, as opposed to a firm where hiring managers make largely discretionary hiring decisions, personally carrying the burden of liability.”

 

--Sachin Pandya

October 29, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 28, 2014

Books That Shaped Work in America

Dol

image from www.dol.gov

The Department of Labor recently started a new initiative called "Books That Shaped Work in America."  The agency sought the input of leaders in the field on the question of which books have helped shape the workforce in this country over the last several decades. It is interesting to take a look at which literature has been identified in this regard. There is also a link by which you can make your own suggestions on this topic. If you are looking for a good workplace related book to pick up, or want to share a great read with others, it is worth stopping by this website. It is certainly a fun idea put in place by a critically important agency.

- Joe Seiner

October 28, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, October 27, 2014

Guidance on Guidance?

New ImageFor all the concern about the use of criminal background checks in employment, there’s been relatively little attention paid to a law suit by the Attorney General of the State of Texas seeking to have the 2012 EEOC Guidance struck down. The AG sought both declaratory and injunctive relief on behalf of Texas state employers who might be subject to EEOC (or private) disparate impact suits for conduct the Guidance views as illegal. The EEOC moved to dismiss the action, and the United States District Court for the Northern District of Texas obliged.

This is not to place to rehearse the debates concerning disparate impact and criminal background checks (or even whether applying that theory to state employers goes beyond what the Eleventh Amendment would permit as far as private enforcement seeking damages is concerned).  Rather, the question is whether the EEOC’s guidance documents, which do not have the force of law at least as far as Title VII is concerned, can be subjected to judicial review outside the enforcement context. Obviously, should the federal government file suit against a Texas state employer, the legal positions taken in the Guidance are up for debate.  Similarly, should the Commission issue a right to sue letter to a charging party, any resulting action would necessarily test the legal theories the agency has articulated.

But the Texas AG doesn’t want to await such suits; rather, it seeks to nip them in the bud by its action against the Commission. The issue casts into sharp relief efforts by the agency to influence employer conduct by “soft law”  -- pronouncements which have no legal status since the EEOC has no delegated power under Title VII to promulgate regulations with the force of law.

The Northern District dismissed the suit because (1) judicial review was not available under the Administrative Procedure Act since the Guidance in question did not constitute “final agency action”; (2) the Texas Attorney General lacked standing; and (3) the case was not ripe.  Whether these are three separate grounds or merge into one another is a good question, but the bottom line is clear.  The court may well have been influenced by the fact, often forgotten, that the EEOC cannot itself sue a state agency to enforce Title VII: it can only refer the matter to the Department of Justice. This certainly reinforces the notion that its action is in some sense contingent, which bears on all three doctrinal issues.

Nevertheless, the EEOC clearly issued its Guidance in order to influence employer conduct, and Texas is not wrong to believe that it is at greater risk of liability in the wake of the Guidance than it was before. It will be interesting to see what happens to the decision on appeal.

CAS

October 27, 2014 | Permalink | Comments (0) | TrackBack (0)

Saturday, October 25, 2014

Flight Attendants and Title VII

The EEOC, IIT Chicago-Kent College of Law's Institute for Law and the Workplace, and the Equal Employment Opportunity Committee of the American Bar Association's Section of Labor and Employment Law recently sponsored a wonderful event which brought together some of the key players from the well-known flight attendant sex discrimination cases that were brought in the early years of Title VII.  The event was part of the on-going celebration of the 50th anniversary of the statute.  The video of the event is available here.  From the press release:

"Flight attendants' fight for equal treatment began in the 1960s, with lawsuits such as Mary Celeste (Lansdale) Brodigan's challenge to United's policy of discharging female, but not male, employees upon marriage, which was subsequently overturned in court. Similarly, Mary Pat Laffey-Inman brought a case under Title VII and the Equal Pay Act, resulting in findings that Northwest treated male and female flight attendants differently in areas of hiring, pay, promotions, benefits, and weight monitoring.

'To give life to Title VII, it takes the commitment and tenaciousness of individuals willing to challenge injustice and go forward, often for many years, to vindicate their rights," Commissioner Lipnic reflected. "These women, through their legal actions, made workplaces better for all Americans, women and men.  They are a testament to the enduring power of the Civil Rights Act.'"

I definitely recommend this video if you have a chance to take a look.  It really brings to life some of these important early cases.

- Joe Seiner

October 25, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, October 23, 2014

Hot Goods and Economic Duress: Part II

    Is there a valid economic-duress objection to the US Department of Labor’s exercise of “hot goods” authority under the Fair Labor Standards Act (FLSA)?  Earlier this year, in Perez v. Pan-American Berry Growers, LLC, a federal district court in Oregon granted a Rule 60(b) motion to vacate a consent judgment--- entered after a DOL “hot goods” objection—on economic-duress grounds. In a previous post, I described that consent judgment, the political reaction to it, and that, in August 2013, some of the farm-defendants in Pan-American filed a motion to vacate the consent judgment. 

   Now, our story continues.    

     In January 2014, Magistrate Judge Coffin agreed that the consent judgment against the farm-defendants should be vacated under Federal Rule of Civil Procedure 60(b)(3).  That rule authorizes relief to a party from a judgment due to “fraud, . . . misrepresentation, or misconduct by an opposing party.”  Judge Coffin read the word “fraud” as also covering duress.  Then, he observed that Oregon law recognizes “economic duress or business compulsion as a form of duress,” and that, under that law, to find economic duress, one must show (1) wrongful acts or threats, (2) financial distress caused by such acts or threats, and (3) no reasonable alternative to the wrongdoer’s terms (relying on Oregon Bank v. Nautilus Crane & Equipment Corp., 68 Or. App. 131, 142-43 (1984)).

  Applying this test, Judge Coffin found economic duress.  First, he concluded, DOL committed a “wrongful” act.  Blueberries are perishable.  There’s a small window of time in which they can be harvested for sale.  Wait too long, and they spoil, and become worthless.  Therefore, “delay in the harvest and marketing could devastate a company that produces blueberries.”  DOL’s wrongful act, the judge reasoned, was to insist on a consent judgment under these circumstances as a condition of lifting its hot-goods objection: “[W]hen one party must agree to a comparatively minor penalty or lose millions simply to engage in the judicial process, such heavy handed leverage is fraught with economic duress brought about by an unfair advantage.” (In a footnote, Judge Coffin also wrote: “[T]he Constitution’s due process requirements also prohibit the alleged duress at play in these cases.”  He didn’t explain further.)

 Second, the judge found the requisite financial distress: The defendant-farms had agreed to the consent judgment “to avoid the egregious economic harm that would result from the hot goods objection remaining in the place.”

 Third, the judge found that the farm-defendants had no reasonable alternative to agreeing to the consent judgment.  Why couldn’t have Pan-American sought a temporary restraining order against DOL immediately after receiving DOL’s hot-goods objection? Judge Coffin wrote: Because of the nature of the farms’ businesses, it makes sense that they’d “conclude that resort to such options without further information would be extremely risky given the potential staggering economic losses.” Moreover, Judge Coffin couldn’t think of any good reason of why DOL wouldn’t lift its hot-goods objection unless the farm-defendants signed a consent judgment, instead of its past practice of letting an alleged FLSA violators put the allegedly owed back pay and penalties in escrow, after which it could argue against the alleged FLSA violations in court.

 In April 2014, District Judge Michael McShane adopted Judge Coffin’s recommendation and vacated the consent judgments.  He wrote: “The unique situation here involved a “hot goods objections” to a highly perishable product at peak harvest. As noted by Judge Coffin, additional delays, even of mere days, threatened to cripple the growers. Additionally, the Department of Labor had recently changed the implementation (and remedy) of its policy. Under these circumstances, defendants had no choice but to agree to the consent judgments.”

 Weil vs. the Subcommittee

    Meanwhile, the political fight against DOL continued. On July 30, 2014, the House Agriculture Committee held hearings on the issue.  The key witness: David Weil, the head of DOL’s Wage and Hour Division.  Before his Senate confirmation in April 2014 (about a week after the district court’s Rule 60(b) order in Pan-American),  Weil had a prominent academic career researching labor and employment issues, including wage and hour enforcement (e.g., Weil, 2005). 

    In prepared testimony, Weil argued, among other things, that agricultural goods were not uniquely perishable.  “[I]n today’s economy, most goods can be considered perishable if you consider the tremendous pressure upper-tier businesses place on lower-tier suppliers to deliver goods on a precise schedule. Be they blueberries, automobile parts, high fashion clothing items, or consumer digital products, delay in delivery date can be extremely costly to all parties in the supply chain.”  In his oral testimony, Weil emphasized that during 2001-2013, DOL had invoked the FLSA hot-goods provision a total of 28 times, out of roughly 7,500 inspections, in the agricultural sector.  Several committee members, however, stressed that not all agricultural goods were perishable (e.g., peanuts). The other witness at this hearing—Oregon Commissioner of Labor and Industries Brad Avakian—continued his earlier criticism of DOL.

    It’s always a bit tricky to separate substance from theater at a congressional hearing.  Still, one thing was clear: Weil faced some fairly aggressive questioning.  Among other things, for example, Rep. Kurt Schrader (D-Oregon) asked Weil why DOL insisted that the defendant-farms in Pan-American sign a consent judgment, rather than just put the allegedly-owed back wages and penalty in escrow, before DOL would lift its hot-goods objection?  This exchange followed:

 Weil: The use of escrow is undertaken in cases where it is the judgment of the investigator, again in consultation with other offices, our regional offices, as well as our Solicitor’s office, that there is progress in negotiations in good faith on the part of the employer where back wages can be put in escrow and goods---

 Schrader: Well, they did that.  They did that.  So why was the quarantine [sic] not lifted?

 Weil: Well, in the—I can’t comment on the particulars of this case.  I can comment that our procedures are very clear in what instances we use escrow.  And it’s where we’re having progress towards resolution—

 Schrader: You had progress.  You had progress here.  I mean, you’re violating your own standards.  You’re violating---the Department violated what you just said.  It’s—It’s sad.  It’s almost indefensible.  You keep digging a bigger hole for the Department of Labor with your testimony, sir.

 Weil: Well, I don’t think so.  What I’m trying to clarify is that we have very clear procedures and practices that we do institute, and certainly under my watch.

 Hearing Recording (42:27 to 43:46).

 

No Appeal For You

 About a month later, on August 25, 2014, District Judge McShane denied DOL’s request for permission to appeal the court’s Rule 60(b) order to the Ninth Circuit pursuant to 28 U.S.C. 1292(b).  Section 1292(b) permits a federal appellate court to hear the appeal of an otherwise non-appealable order if the district court declares that the order “involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.”  28 U.S.C. 1292(b).  

    So, DOL posed the “controlling question of law” as whether its use of its “hot goods statutory authority with respect to perishable agricultural goods constituted fraud or misconduct under [FRCP] 60(b)(3) warranting the extraordinary relief of vacating a consent judgment.”  It added: “This is a novel question that has never been addressed by any other court at any level of the judiciary, let alone by the Ninth Circuit.”

 In denying DOL’s request, Judge McShane reasoned the "critical issue" wasn't DOL's general use of hot-goods objections, but

the 'unique situation' present here where defendants 'had no choice but to agree to the consent judgments.' . . .  It was the specific manner in which the plaintiff used the “hot goods objection” in this instance, as opposed to the general use of the “hot goods objection” as to perishable goods, that constituted fraud under rule 60(b)(3). . . . This case revolves not around a question of law on which reasonable jurists could differ, but rather on factual findings unique to this case.

 Today, the case continues.  Now pending—Pan-American’s motion for partial summary judgment on its counterclaim against DOL for conversion, as well as DOL’s motion to dismiss all of Pan-American’s counterclaims and to amend its complaint.

 

Coming Soon: A few thoughts about the district court’s Rule 60(b)(3) order and DOL's FLSA hot-goods authority.

 

--Sachin Pandya

October 23, 2014 | Permalink | Comments (0) | TrackBack (0)

University of Cincinnati College of Law Dean Search

I am so lucky to serve on the faculty at the University of Cincinnati College of Law.  If you know any terrific dean candidates who would like to lead a law school with a collegial, engaged faculty, please pass along the following information. 

Sandra Sperino  

The  University  of  Cincinnati  invites  applications  and  nominations  for  the  position  of  Dean  of  the   College   of   Law.      Reporting   to   the   Provost   and   Senior   Vice  President  for  Academic  Affairs,  the   Dean  is  the  chief  academic  and  administrative  officer  of  the  College  of  Law.      We   seek   a   dean   whose   vision   will   build   upon   the   College   of   Law’s   history   and   tradition   of   educating  and  inspiring  leaders  who  pursue  justice  and  advance  the  role  of  law  in  society.  The   fourth   oldest   continually   operating   law   school   in   the  nation,  the  College  of  Law  is  small,  with   fewer  than  four  hundred  students,  and  extremely  rigorous.    The  faculty  is  highly  productive  and   creative;   in   addition   to   being   expert   in   their   respective   fields,   they   also   are   committed   to   maintaining   a   robust   and   collegial   learning   environment   that   fosters   diverse   and   innovative   ideas   about   law   in   society,   builds   collaborative   relationships,   and   imparts   the   knowledge,   values,   and   competencies   needed   to   excel   in  a  changing  world.  This  mission  is  evident  in  our   curriculum,   which   blends   theory   and   practice   in   programs   that   include   the   Urban   Morgan   Institute   for   Human   Rights;   the   Lois   and   Richard   Rosenthal   Institute   for   Justice,   home   to   the   only  Innocence  Project  in  Ohio;  the  Center  for  Race,  Gender,  and  Social  Justice;  the  Institute  for   the   Global   Practice   of   Law;   the   Weaver   Institute   for   Law   and   Psychiatry;   and   the   Entrepreneurship   and   Community   Development   Clinic.      Our   graduates   have   distinguished   careers   on   state   and   federal   courts,   law   firms,   Fortune   500   companies,   and   varied   levels   of   government,   among  other  arenas.  For  more   information,   see:  http://www.law.uc.edu.      

The   College   of   Law   is   located   on   the   campus   of   the  University  of  Cincinnati,  a  premier  urban   research   university,   which   traces   its  origins  to  1819.  UC  is  classified  as  a  Research  University   (Very  High  Research  Activity)  by  the  Carnegie  Commission  and  is  ranked  as  one  of  America’s  top   25   public  research  universities  by  the  National  Science  Foundation.  UC  jumped  17  spots  in  the   U.S.   News   &   World   Report  rankings  in  the  past  two  years  alone.  In  addition  to  being  named  a   “green  university”  by  Princeton  Review,  UC  has  been  named  one  of  the  world’s  most  beautiful   campuses  by  Forbes  Magazine.      The   College   of   Law   also   benefits   from   being   located   in   Cincinnati,   known   widely  for  its  deep   cultural   roots,   an   engaged   business   community,   including   many   Fortune   500   companies,   and   pre-­‐eminence   in   many   other   fields,   such   as   medicine.      Cincinnati   is   home   to   the   U.S.   Circuit   Court   of   Appeals   for   the   Sixth   Circuit   and   the   United   States   District   Court   for   the   Southern   District  of  Ohio,  as  well  as  a  very  vigorous  organized  bar.    More  than  800  law  firms  are  located   in  our  region,  which  Forbes  has  called  one  of  the  “Best  Places  for  Businesses  and  Careers.”               

The  Search  

As  the  intellectual  and  administrative  leader  of  the  law  school,  the   next  Dean  will  play  a  key  role   in  developing  new  ideas  and  forging  consensus  among  stakeholders  to  build  upon  our  successes   and   strengthen   the   College   in   a   changing   legal   market.  Among  her  or  his  responsibilities,  the   next  dean  will:      

 Understand   the   relationship   of   the   College   to   the   University   at   large,   and   work   effectively  and  cooperatively  to  fos ter  that  relationship;  

 Articulate,  advocate  for,  and  otherwise  support   academic  priorities  in  line  with   the   University's  status  as  a  world-­‐class  research  and  teaching  institution;  

Champion   academic   excellence   through   collaboration   with   faculty,   students,   other   deans,  volunteers,  and  alumni/ae  in  fulfillment  of  the  College’s  mission  and  vision;  

Provide   active   and   effective   leadership   across   the   complete   range   of   programs   and  professional  experience  at  the  College;  

Oversee   processes   to   recruit,   retain,   and   develop   a   superb   faculty,  as  well  as  those  necessary  to  recruit  and  support   an  outstanding  student   body;    

Manage   the   budget   and   finances   of   the   College   of   Law,   including   a   commitment   to  enhance  development   efforts  within  all  groups  of  stakeholders;  

Engage   the  legal  and  business  communities  of  Southwestern  Ohio  and  Northern  Kentucky  in  various   forms   of  collaboration  with  the  College,  and  extend  that  collaboration  to  national  and  international  levels;    

Build  active  and  enduring  relationships  with  College  alumni/ae.  

Successful candidates will have the following attributes: 

A   clear   vision   of   legal   education   and   its   future,   on   a   global   scale,   based   upon   a   comprehensive   understanding   of   the   impact   of   recent   changes  within  the  legal  profession and  in  the  marketplace  of  legal  services;   

 Excellent  interpersonal  skills,  especially  the  enthusiasm,  personality  and  social  presence  to   create   and   enhance   meaningful   relationships   between   the   College   and   broader   communities,   especially  the  business  and  legal  communities,  as  well  as  between  the  College   and  its   immediate  s takeholders ;  

 Superior   communication   skills   that   are   founded   upon   consistency   and   credibility,   with   messages  that  strongly  reflect  those  characteristics;  

 Demonstrated   expertise  in/and  or  clear  willingness  to  engage  in  fundraising;  

Proficiency  in  academic  administration,  including  strategic  planning.  

   Applicants   must   have   a   strong   academic   background,   including   a   J.D.   or   equivalent   and   the   necessary   qualifications   for   appointment   to   the   faculty   of   the   College   of   Law.   A   complete   application  will  include  a  letter  of  interest,  current  curriculum  vitae,  and  contact  information  for   five   professional   references.    Credential  review  begins  immediately  and  will  continue  until  the   position   is   filled.     It   is   anticipated   that   the   individual   will   start   on  July  1,  2015.    Nominations,   applications,  expressions  of  interest,  and  requests  for  the  complete  leadership  profile  should  be   sent  electronically.       

The   University   of   Cincinnati   is   committed   to   a   diverse   faculty,   staff,   and   student   body.      We   encourage   applications   from   women,   people   of   color,   persons   with   disabilities,   and   others   whose  background,   experience,  and  viewpoints  would  contribute   to  our  diversity.     

All   inquiries,   applications,  and  nominations  will  be  kept  strictly  confidential  absent  permission   to  proceed   otherwise.    Inquiries  and  materials  may  be  submitted  to:     

Jonathan   Fortescue,   Managing  Partner  or   Jessica  G.  Ray,  Senior  Associate   101  Main  Street,   14th   Floor   Cambridge  MA   02142   (617)  401-­‐2988   92114@parks quare.com 

October 23, 2014 | Permalink | Comments (0) | TrackBack (0)

Labor & Employment Law Roundup

McDonald'sThere's been a lot of action in labor and employment law recently, so time for another roundup:

Hat Tip: Michael Duff, Jonathan Harkavy, & Patrick Kavanagh

-JH

October 23, 2014 in Labor and Employment News | Permalink | Comments (4) | TrackBack (0)

Jim Hawkins on The Law's Remarkable Failure to Protect Mistakenly Overpaid Employees

Hawkins

Friend-of-blog Jim Hawkins (Houston) just posted on SSRN his fascinating article, The Law's Remarkable Failure to Protect Mistakenly Overpaid Employees, which is forthcoming later this year in the Minnesota Law Review.  This piece takes a unique look at an unexplored but very important issue -- what the rules currently are for employers attempting to recover from erroneously overpaid workers. He further suggests legislative and judicial intervention to help protect this group of employees. From the abstract:

"Employers frequently make mistakes and overpay their employees. For instance, the federal government alone, which makes up only around 2% of the U.S. workforce, will likely overpay its employees by $2 billion this year. After discovering the error, employers often recoup the mistaken overpayments without the supervision of the courts by simply exercising a self-help remedy — setting-off the debt against the employees’ paychecks. The law of restitution enables this recovery because overpaying on a contract is a prototypical example of unjust enrichment. For some employees, the entire transaction is trivial, but for many others, losing significant portions of their wages and suffering from aggressive collection techniques drive the employees and their families into financial distress.

Remarkably, current law does virtually nothing to protect employees who are indebted to their employers, and scholarship on restitution, creditor-debtor law, and employment law has not recognized this near absolute absence of protection. This Article uncovers law’s failure to protect mistakenly overpaid employees and suggests judicial and legislative action to protect this vulnerable group."

This paper takes an extremely interesting look  at this novel issue,  and I definitely recommend it to those of you interested in this topic.

-Joe Seiner

October 23, 2014 | Permalink | Comments (0) | TrackBack (0)

The "Best" Way to Fire Workers?

In an interesting article over at Forbes.com, the magazine discusses several different strategies on how to best effectuate the termination of an employee.  The article focuses on several methods that can be used in this regard, with an eye toward avoiding subsequent litigation.  From the piece:

“In a well-executed firing the employee understands the reasons why they and the company are better off separated.  They accept the offer of severance in exchange for a legal release, and move on with their lives and careers, without any legal involvement.”

When covering employment discrimination and employment law topics, this is often an issue that arises in class.  Students may find it interesting to see some of the approaches offered by a major publication on this issue.  Reasonable minds can certainly differ on the best ways for employers to separate from employees, but this article provides at least one worthwhile quick read on some of the basic approaches.

-- Joe Seiner 

October 23, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 21, 2014

Hot Goods and Economic Duress: Part I

    Is there a valid economic-duress objection to the US Department of Labor’s exercise of “hot goods” authority under the Fair Labor Standards Act (FLSA)? Under FLSA, 29 U.S.C. §§ 212(a), 215(a)(1), the US Department of Labor (DOL) can go to federal court to get an injunction to stop any person from shipping or selling goods produced in violation of FLSA’s wage, hour, and child labor provisions (“hot goods”).  FLSA has no express economic-duress defense to a “hot goods” injunction.  But earlier this year, in Perez v. Pan-American Berry Growers, LLC, a federal district court in Oregon granted a Rule 60(b) motion to vacate a consent judgment--- entered after DOL asserted a “hot goods” objection—on economic-duress grounds.  

 Here’s that story.  In this post, I’ll set the stage by describing the consent judgment and the political reaction to it.  In subsequent posts, I’ll discuss the court’s Rule 60(b) ruling, its reasoning, and more.  (For prior accounts in the press, see, e.g., here, here, and here, and see also this law student note.)

The Consent Judgment

Perez v. Pan-American Berry Growers, LLC, involves DOL actions against three Oregon farms that grow berries.  I’ll focus here on Pan-American Berry Growers, which operated a Salem, Oregon farm that grows blueberries.  On August 2, 2012, DOL contacted Pan-American.  Based on a DOL investigation initiated a few days earlier, DOL said that it had concluded that Pan-American had committed FLSA wage and hour violations with respect to blueberry pickers working on its farm.  On that basis, DOL faxed over a “hot goods” objection—a notice to Pan-American that its blueberries were “hot goods” and a request that it not ship those blueberries for sale.  This was DOL’s signal to Pan-American that it believed that it had enough proof of FLSA violations that it could, if necessary, go to court and persuade a judge to order a hot-goods injunction against Pan-American.  The next day, DOL contacted one of Pan-American’s downstream buyers, who agreed not to take shipment of the “hot” blueberries.  Throughout, DOL told Pan-American that it would not lift its “hot goods” objection unless Pan-American entered into a consent judgment.

On August 9, Pan-American (represented by an attorney) and DOL signed a consent judgment , under which Pan-American paid DOL about $41,778 in back wages and a $7040 penalty, as well as agreed to training plus regular audits by a third-party monitor.  After Pan-American signed, DOL told the downstream buyer that it no longer had a “hot-goods” objection to the shipment or sale of Pan-American’s berries.  On August 15, DOL filed its complaint in Perez v. Pan-American Berry Growers, LLC.  The consent judgment—now signed by both parties—was then signed by Oregon federal district court judge Michael R. Hogan on August 18 and entered on August 21, 2012.

The Farms Fight Back

    Even before the consent judgment had been entered, Pan-American, the other farm-defendants, and their allies took the fight to DOL.  In a letter, dated August 17, 2012, to then-DOL head Hilda Solis, both Oregon’s US Senators and four of its five US House Representatives expressed concern that “Oregon farmers” had told them a “narrative and supporting documentation” indicating that DOL “may have abandoned the normal due process mechanisms and remedies in favor of a significant sanction.”  They asked for “additional clarification” of DOL’s policies for issuing hot-good orders on agricultural enterprises. 

Similarly, in a letter dated August 15, 2012, the Commissioner of Oregon’s Bureau of Labor and Industries, Brad Avakian, asked DOL to stop using its hot-goods authority “to seize perishable goods on Oregon farms.”  For Avakian, the problem was this: “Seizing goods that will spoil quickly creates leverage by potentially destroying the value of the goods.  If the goods spoil, however, the incentive for the employer to correct its action is largely lost as is the ability to gain income from the goods to pay proper wages.”  He added that “the seizure of the perishable items on Oregon farms under the ‘hot goods’ provision likely violates the [Fourth and Fourteenth Amendment] rights of farmers who have yet to be found guilty of anything.”

    On February 16, 2013, Oregon State Senator Fred Girod introduced SJM 7 into the Oregon legislature.  If adopted, the Oregon legislature would thereby officially ask Congress to require DOL to “adopt standard rules and procedures” for applying the FLSA hot-goods provision “that specifically speak to full disclosure of employers’ and workers’ rights and when the application of the provision is appropriate or not.”  Among its various “whereas” clauses was one that declared that, in July and August 2012, DOL had invoked its FLSA hot-goods authority in the agricultural industry “in a way that was, on its face, coercive and extortive.”   (This bill was still in committee when the Oregon legislature adjourned in July 2013.)

    In March 2013, U.S. House Representative Kurt Schrader (D-Oregon) introduced H.R. 1387, a bill to amend FLSA to exclude “perishable agricultural commodities” from the ambit of the FLSA hot-goods provision.  That exclusion would cover “fresh fruits and fresh vegetables of every kind and character,” even if frozen or packed in ice.  Schrader, whose congressional district includes Salem, later described the bill as the result of working “closely” with the Oregon Farm Bureau—an organization that lobbies on behalf of Oregon farmers and ranchers— to “combat” DOL’s actions.

    In May 2013, the Oregon Farm Bureau—which had already spoken out against DOL’s actions in the press—sued DOL under the Freedom of Information Act.  According to the lawsuit, the Oregon Farm Bureau had filed a FOIA request on February 27, 2013, asking for specific investigative files as well as general documents containing DOL policies and procedures.  In response, it alleged, DOL asserted a FOIA exemption for active cases and otherwise did not provide any of the requested documents.  (In February 2014, the parties settled this lawsuit.)

 The Rule 60(b) Motion

    On August 15, 2013, Pan-American and another of the farm-defendants, B&G Ditchen LLC, moved to vacate the consent judgment pursuant to Federal Rule of Civil Procedure 60(b), on the ground that they had agreed to that consent judgment under duress.  Judge Hogan, the original district court judge assigned to the case, had retired in November 2012.  So, about a week later after the Rule 60(b) motion was filed, the case was reassigned to federal magistrate judge Thomas M. Coffin.

 Coming up Next: Judge Coffin agrees that the consent judgment should be vacated because of economic duress.  Plus, the political fight continues, as DOL goes before the House Agriculture Committee.

 

--Sachin Pandya

 

October 21, 2014 | Permalink | Comments (0) | TrackBack (0)

EEOC to Host Live ADA Chat

EEOC

image from www.eeoc.gov

The EEOC has scheduled a live chat which will take place via Twitter on October 28th from 2:00 to 3:00 pm (EDT).  As this is National Disability Employment Awareness Month, the Commission will be addressing questions on the federal government's role as a model employer for individuals with disabilities. The EEOC Chair (Jenny Yang) and friend-of-blog Commissioner Chai Feldblum will be fielding questions during this chat. From the EEOC's website:

“Members of the public are encouraged to participate by submitting questions using the hashtag #EEOC4NDEAM. The EEOC invites queries regarding the hiring, promotion and retention of people with disabilities in the federal government and suggestions on how agencies can increase the number of people with disabilities in the federal workforce.

‘We hope this Twitter Chat provides useful information about what the EEOC is doing to increase the employment of people with disabilities at all levels of federal service," said EEOC Chair Yang. "The EEOC is committed to ensuring our nation's workplaces are inclusive of all people without regard to disability, race, color, sex, national origin, religion, age, or genetic information and family medical history, beginning with the federal workplace.’”

It is definitely worth taking part in this chat if you can work it into your schedule.

-- Joe Seiner

 

October 21, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, October 20, 2014

AALS Newsletter - Request for Information

Monique Lillard (Univ. of Idaho) and Natasha Martin (Seattle Univ.) pass along the following request for information for the annual AALS newsletter. 

Call for information for Joint Newsletter published by the AALS Sections on Labor and Employment and Employment Discrimination:

The semester is quickly passing by, but we don’t want to miss an opportunity to share and to celebrate the many accomplishments and developments in of the section members.  As secretaries of the Labor and Employment Law and Employment Discrimination Law Sections of the AALS, we invite your participation and collaboration.  We are interested in your news, so please do share it with us!  (See below for ideas on content)

If you would like any information included in the newsletter, please send it to Monique C. Lillard, Professor of Law, University of Idaho – lillard@uidaho.edu.  Be sure to include your full name, title and law school affiliation.  I will acknowledge each email I receive.  If you do not receive an acknowledgement, please telephone me at 208 885 7022.  (The filters on my email have become erratic and your email may be lost.)  

Deadline is November 7 – that is approximately three weeks from now.

Please send the following information:

Comings and Goings:  information about new hires in Workplace subjects, tenure, promotions, movement into administration, visits, honors, awards, deaths, etc.

Announcements:  conferences, workshops, writing competitions, etc.

Articles of Note:  include a two line description of the article, the title, any co-authors, and the citation

Noteworthy Cases:  we will of course note any US Supreme Court cases, but if you consider any of your local (federal or state) cases to be noteworthy, please include a three-four line summary and the full citation.  If you have written or presented recently on any of the recent U.S. Supreme Court decisions, we would appreciate you including your short synopsis in the newsletter. 

Thanks in advance for your cooperation.

Sincerely,

Monique C. Lillard, University of Idaho, Secretary, Labor and Employment Law Section, and

Natasha Martin, Seattle University, Secretary, Employment Discrimination Section 

October 20, 2014 | Permalink | Comments (0) | TrackBack (0)

Saturday, October 18, 2014

DOL on Paid Family Leave

Dol

image from www.DOL.gov

In an interesting post from the official Department of Labor blog, the agency discusses the importance of paid family leave in the workplace.  As the only industrialized nation without such paid leave, this country lags far behind many of our counterparts on this important issue.  The DOL's comments are worth taking a look at, as the agency discusses new funding that has been approved to study the feasibility of paid leave:

"Today, we were delighted to announce that the Department of Labor has awarded $500,000 to assist Massachusetts, Montana, Rhode Island and the District of Columbia in funding feasibility studies on paid leave. The studies will inform the development or implementation of paid family and medical leave programs at the state level – seeking solutions that work for their unique communities.

As Secretary Perez has said, it’s time for America to lead on paid leave. It’s time to make strides in our workplace policies to meet the long-standing realities of today’s working women and families. It is critical to the nation’s economic success, and these grants are an important step in the right direction."

This is certainly a controversial issue, and one that will be worth following in the coming months and years (and political campaigns)...

-Joe Seiner

October 18, 2014 | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 15, 2014

Judge Rejects EEOC Severance Suit Against CVS

Many of you have been following the EEOC's high-profile litigation against CVS, where the agency challenged the validity of the severance agreements offered to terminated employees. While workers waived their rights to litigation as part of the agreement, they were still entitled to bring charges against the company with the Commission. The case seemed primed to provide substantial guidance on the uncertainty which currently exists in this area of the law. This was not to be, however, as the District Court threw out the case on other grounds. From the Chicago Tribune's report on the case:

"U.S. District Court Judge John Darrah barely addressed the merits of the EEOC claim. He threw out the suit because he said the EEOC did not follow the law by failing to have formal settlement discussions with CVS before filing the complaint."

It will be interesting to see if the agency appeals this decision, and if so what the Seventh Circuit ultimately does with this case.  More to follow soon…

-Joe Seiner

October 15, 2014 | Permalink | Comments (2) | TrackBack (0)

Tuesday, October 14, 2014

A Fast-Food Non-Compete Clause

    What’s the confidential information about a fast-food restaurant franchise that justifies having all its employees sign a non-competition agreement?  Jimmy John’s Sandwich Shops is the restaurant chain—stores nationwide—and the lawsuit is  Brunner v. Jimmy John’s Enterprises, Inc., No. 1:14-cv-05509 (N.D. Ill., filed July 18, 2014).  Although the lawsuit leads with a collective action under the Fair Labor Standards Act, a recent Huffington Post report (followed by the New York Times) points to the plaintiffs’ additional effort to declare void and enjoin enforcement of a Jimmy John’s Employee Confidentiality and Non-Competition Agreement.  See First Am. Compl. ¶ 293. 

    According to that Agreement (¶ 1), under the standard franchise agreement between a franchisee and Jimmy John’s Franchise Inc. (JJF), “all employees” of the franchisee “having access to Confidential Information are required to execute” the Employee Confidentiality and Non-Competition Agreement.  The term “Confidential Information” is quite broadly defined (Agreement ¶ 2(a)).  The Agreement then provides in relevant part:

 Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after . . . he or she will not have any direct or indirect interest in or perform services for (whether as an owner, partner, investor, director, officer, representative, manager, employee, principal, agent, advisor, or consultant) any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located within three (3) miles of either (1) ___________________ [insert address of employment], or (2) any such other JIMMY JOHN’S Sandwich Shop operated by JJF, one of its authorized franchisees,  or any of JJF’s affiliates.

Agreement ¶ 3 (emphasis added).  The Agreement (¶ 6) also gives the employer-franchisee and JJF the right to seek reimbursement for costs and attorney fees incurred to enforce the Agreement against the employee.

 In Brunner, the plaintiffs assert that the above-quoted non-compete clause effectively restricts an employee “from working in an area that is over 6,000 miles large, at innumerable types of business . . . in any capacity, for a period of two years in 44 different states and the District of Columbia.  (First Am. Compl. ¶ 185).  They also argue that the clause is overly broad, because it bans “any and all employment, association, ownership or consultation with any business that derives more than 10% of its revenue from selling a range of sandwiches, pita, wraps or rolls.” (First Am. Compl. ¶ 187).

 The Agreement says it is governed by Illinois law (Agreement ¶ 7).  In Illinois, an employee non-complete clause, to be enforceable, has to be “[1] no greater than is required for the protection of a legitimate business interest of the employer-promisee; (2) does not impose undue hardship on the employee-promisor, and (3) is not injurious to the public.”  Reliable Fire Equipment Co. v. Arredondo, 965 N.E.2d 393, 396 (Ill. 2011).  A “legitimate business interest” can be at stake when, for example, the employee acquires “confidential information through his employment.”  Id. at 403.

 So, what’s that confidential information that Jimmy John’s Franchise, Inc. and its employer-franchisees are trying to protect?  Is it really worth applying the non-compete clause’s time, subject matter, and geography restrictions to all former employees of a Jimmy John’s Sandwich Shop?  Was it reasonable to believe, both when drafted and today, that this non-compete clause would have been enforceable against any former Jimmy John’s Sandwich Shop employee?  It is still early days in the Brunner litigation, so stay tuned.

 

--Sachin Pandya

October 14, 2014 in Employment Common Law | Permalink | Comments (4) | TrackBack (0)

Patchwork Preferences

Patchwork Map AlteredAn interesting battle is brewing over whether local governments can become local “right to work” zones within states that have not enacted so-called “right to work” laws.  Illinois Republican gubernatorial candidate Bruce Rauner has suggested that, while he does not intend to push for “right to work” state legislation in historically labor-friendly Illinois, he does favor letting municipalities or counties within Illinois decide whether to enact such laws at the local level.  Rauner says that we could call them “economic opportunity zones.”  Many would no doubt prefer to name them “free-rider zones.”  But, for the moment, I want to set aside the debate over whether “right to work” is a misnomer. 

This political strategy picks up on a recent Heritage Foundation paper arguing that local governments should enact local “right to work” laws.  Many believe, based on the text of the NLRA, that only states – and not localities – are authorized to enact such legislation in the face of federal preemption.  But Andrew Kloster, one of the Heritage authors responded:  “I personally don’t think that is the case. It is certainly not clear. And that is the important thing: When it is not clear, the tie goes to the jurisdiction trying to pass their own law.”

You can decide for yourself whether the statutory text results in a tie.  Section 14(b) reads:

“Nothing in this subchapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law.”

Elsewhere, in the NLRA's definition of “employer” found in Section 2(2), Congress used the phrase “any State or political subdivision thereof,” suggesting that Congress knew how to intentionally include local governments where it wanted to within the statutory scheme.  But Kloster's argument is that Section 14(b) was merely meant to dispel concerns about possible federal preemption of such laws, and that failing to include specific reference to local governments in 14(b) should not be read to mean that local "right to work" laws are preempted. 

 ALEC is reportedly creating a template for local “right to work” legislation.  This stands in stark contrast to ALEC’s push for state laws that preempt any local living wage laws or local paid sick leave laws, which I previously discussed here.  Advocates of those state preemption laws claim to be concerned about complying with a patchwork of varying local employment laws where employers have employees in multiple cities.  Perhaps some patchworks of local workplace regulation are more concerning to ALEC members than others?  Why not think of a local living wage law or paid sick leave law in Milwaukee, Wisconsin (now preempted by state law) as simply the indirect creation of a local “economic opportunity zone” in nearby Waukesha?  

-J. Bent    

October 14, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, October 13, 2014

EEOC Brings ADA Class Case Against FedEx

EEOC

image from eeoc.gov

The EEOC just announced a class case that it filed against FedEx Ground Package System, Inc. The lawsuit was brought under the Americans with Disabilities Act, and seeks relief for hearing impaired employees of the company.  From the press release:

“The EEOC says that FedEx Ground failed to provide needed accommodations such as American Sign Language (ASL) interpretation and closed-captioned training videos during the mandatory initial tour of the facilities and new-hire orientation for deaf and hard-of-hearing applicants. The shipping company also failed to provide such accommodations during staff, performance, and safety meetings. Package handlers physically load and unload packages from delivery vehicles, place and reposition packages in FedEx Ground's conveyor systems, and scan, sort and route packages.  

The EEOC charges that, in addition to failing to provide communications-based accommodations for mandatory meetings, FedEx Ground refused to provide needed equipment substitutions and modifications for deaf and hard-of-hearing package handlers, such as providing scanners that vibrate instead of beep and installing flashing safety lights on moving equipment."

It is very interesting to see this type of litigation brought in the disability context, were such claims are often more individualized.  It is also interesting to see this type of high profile class claim brought by the agency after the Supreme Court's Wal-Mart decision, which made it more difficult for private plaintiffs to pursue class-action litigation.  This will definitely be a case worth following.

--Joe Seiner

October 13, 2014 | Permalink | Comments (1) | TrackBack (0)

Thursday, October 9, 2014

BMW Seeks EEOC Hiring Data

EEOC

image from eeoc.gov

Many of you are probably following the federal litigation involving the EEOC's employment discrimination suit against BMW Manufacturing Co.  That litigation alleges that the company's policy of not hiring individuals with certain criminal backgrounds created a disparate impact against workers on the basis of race for which there was no sufficient business justification. The suit is specifically targeted at BMWs Spartanburg facility in South Carolina.

In an interesting twist to this lawsuit, BMW has now asked a court to order the Commission to disclose its own treatment of applicants with criminal backgrounds. This move certainly shows the contentious nature of the litigation. The EEOC has opposed the motion on grounds that the information sought is not relevant to the case.

This case is a fascinating one to follow on an important issue of disparate impact law. This recent development highlights yet another interesting aspect of this case.

-- Joe Seiner

October 9, 2014 | Permalink | Comments (1) | TrackBack (0)