January 7, 2006
5 Top Employment Law Stories from 2005
According to All Deliberate Speed, the Top 5 employment law stories from 2005 include:
1. Walmart's Woes
2. Hurricane Katrina
3. The Continuing (Declining) Significance of Labor Unions
4. The Airlines' (Continued) Financial Troubles
5. The Reorganization of the EEOC
You can read about the reasoning behind each selection here.
I only slightly disagree with this list. I would have replaced #5 probably with the NYC Transit Strike, but besides that the list looks pretty accurate to me.
Shout Out to the New Law Blog at WSJ.com
I want to take this opportunity to welcome my old classmate and friend, Peter Lattman, to the Blawg-o-sphere.
Peter will be heading up a team of crack bloggers at the new Law Blog at WSJ.com. The Wall Street Journal-sponsored blog will cover "law and business and the business of law." Certainly, there should be much of interest to us labor and employment types.
Welcome, Peter, and I look forward to reading you and your teams' blog for years to come.
The Administration and Mine Safety Enforcement
We were all struck by the tragic circumstances surrounding the Sago mine tragedy this past week. But what makes the whole thing even more disturbing is the number of safety violations for which the Sago mine was cited. According to statistics cited in an article in the Christian Science Monitor:
Nearly half of the 208 safety citations levied in 2005 against the Sago coal mine where 12 men died this week were “serious and substantial.” Federal inspectors found 20 dangerous roof-falls, 14 power wire insulation problems, and three cases of inadequate ventilation plans, among the 96 major violations.
Nevertheless, according to Elaine Chao, Secretary of Labor, federal inspectors had “increased their inspections [at the Sago mine] by about 84 percent.” So, what happened?
One theory, espoused by the New York Times, is that although inspections might have increased, enforcement did not. That is, there were more inspections and citations, but not enough actual enforcement of punitive fines for these reckless conditions. According to the Times:
As inspectors delve into the deadly mine disaster in Sago, W.Va., their starting premise must be that the explosion that choked off 12 workers' lives would never have happened if all the safety rules now on the books had been properly enforced.
And what's more:
But in accounting for the deaths, inspectors should look as well into the budget cutbacks and staff attrition that have marked the Bush administration's management of its own ranks in the Mine Safety and Health Administration. The latest budget imposes a $4.9 million cut for the safety agency, according to Congressional critics who estimate that the agency has suffered a reduction of 170 positions in the past five years.
Unfortunately, this might be another example of a man-made disaster of the New Orleans levee variety.
Hat Tip: Think Progress
75% of Attorneys Would Rather Be Doing Something Else
I guess being a lawyer isn't all its cracked up to be (or maybe it is and that's the problem).
If starting over, 75 percent of lawyers would choose to do something else. A similar percentage would advise their children not to become lawyers. The work is often contentious, and there's pressure to be unethical. And despite the drama portrayed on TV, real lawyers spend much of their time on painstakingly detailed research. In addition, those fat-salaried law jobs go to only the top few percent of an already high-powered lot.
Yikes? Whom did they survey? My former students? I, for one, still think that being an attorney can be one of the most rewarding, important, noble, and, yes, compassionate jobs one can have. Of course, if you're an attorney and become a politician, then you're on your own.
January 6, 2006
Title VII Jurisdiction/Merits Case Set for Oral Argument Next Week
The United States Supreme Court is scheduled to hear oral arguments in the case of Arbaugh v. Y & H Corp. on Wednesday, January 11, 2006. According to the blurb I received from the Legal Information Institute (LII) Bulletin yesterday:
In November of 2001, Jenifer Arbaugh brought suit against
her former employer, Y & H Corporation under Title VII of
the 1964 Civil Rights Act, alleging that she was
discriminated against because of her sex, and was forced to
resign her position as a bartender and waitress.
Y & H admitted to the questions of jurisdiction and its status
as an employer under Title VII. In a district court trial,
a jury found for Arbaugh. Y & H then advanced the claim that
the court lacked subject-matter jurisdiction to hear
Arbaugh's claim because Y & H did not have fifteen full-
time employees at the time of the incident, and thus did
not actually qualify as an "employer" under § 2000e(b) of
The Supreme Court's decision is expected to definitively
determine whether the employment status of a Title VII defendant
is a jurisdictional matter or one going to the merits of the case
to be decided by the trier of fact. The Supreme Court will also
resolve existing conflicts between and within the various circuits
as to this question, and will hopefully establish a uniform
standard for all plaintiffs and defendants in Title VII
The more detailed summary from LII can be read here.
The NSA Domestic Spying Whistleblowers
Interesting post on Slate.com concerning whether those responsible for disclosing the NSA's domestic spying operations would be protected by federal whistleblowing law. The short answer appears to be no.
According to federal whistle-blower protection law, members of the intelligence community are not protected if they divulge classified information to anyone without the proper security clearance, even if they think they have evidence of a crime. They can, however, pass along what they know to higher-ups and internal auditors within the bureaucracy without fear of retaliation. Provided they go through the proper channels, they can also spill the beans to a member of Congress who has the appropriate clearance. (The Intelligence Community Whistle-Blower Protection Act of 1998 covers this scenario.)
National security whistle-blowers are rarely brought up on criminal charges, since it's very hard for the government to prove that a leaker intended to break the law. (Only two officials have ever been convicted of leaking classified information to the press.) The whistle-blowers are more likely to face administrative sanctions—they might lose their security clearance, for example, or get fired.
IBM Freezes DB Pension Program
From USA Today.com:
IBM announced [yesterday] that it will freeze its pension plan, the latest in a series of major companies to move away from offering benefits that provide retired workers with monthly checks.
The freeze will take effect in 2008. No accrued benefits will be lost, but employees will no longer accrue benefits after 2007. Instead, IBM says, it will beef up 401(k) contributions for its 125,000 U.S. employees.
The rest of the story can be found here.
This is yet another example of the increasing trend of employers of moving away from defined benefit plans (where pension benefits are guaranteed at retirement) to defined contribution plans (where only contributions to pension plans are guaranteed). My previous post of this trend can be accessed here.
Expect to see more of the same as 2006 moves on.
January 5, 2006
Asking for Pension Concessions a Mistake Says MTA Head
From the New York Times this morning another follow-up to the NYC transit strike. Here are some excerpts:
The chairman of the Metropolitan Transportation Authority said yesterday that he had erred in making pension changes a central demand in contract negotiations with the city's transit workers, a miscalculation that helped lead to a 60-hour subway and bus strike the week before Christmas.
[Peter S.] Kalikow, who was appointed by Gov. George E. Pataki in 2001, defended the settlement reached last week as fair. He said the union's main concession - having workers for the first time pay part of their health-insurance premiums - was more valuable than the pension demands that were ultimately abandoned.
The whole story can be read here.
Interesting Post on the Increasing Use of RICO in Illegal Hire Cases
Tom Veal, over at Stromata, is concerned that RICO is being used in employment cases in ways that it was never intended to be used. He asserts:
There’s nothing wrong, needless to say, with representing clients and being paid for it. What is wrong is working systematically to unbalance the scales of justice, as the organized plaintiffs’ bar (not every single plaintiff’s lawyer, of course) has been doing for the past several decades.
RICO, which Mark Krikorian is so delighted to see invoked against American businessmen, originated as a device for bankrupting organized crime through huge damage awards to its victims. In that objective, it has been an utter failure. It has now metastasized into a incentive for lawsuits that give risible compensation to those who have allegedly been wronged and outsize fees to their attorneys.
The Yakima case noted above – $65 each to the plaintiff class [of fruit pickers in Yakima County, Washington), probably a quarter million or so to their self-appointed “advocates” – is merely an all-too-typical instance.
I would be interested to hear readers' comments on the increasing use of RICO in the employment law area.
ERISA Section 510 Class Action Certified
Update: More info on the case from the Washington Post here.
‘PEAK’ PIQUE? A group of former Abbott Laboratories employees has won
the right to collectively challenge their termination as part of the
spinoff of an Abbott business.
US District Judge Robert Gettleman of the US District Court for the
Northern District of Illinois certified the thousands of plaintiffs into
a legal class from which they can pursue their claims that the spinoff
of Abbott's hospital products business to Hospira, Inc., violated their
rights under federal benefits laws, Reuters reported.
"The plaintiffs allege that Abbott designed the spinoff to cut off the
employees' pension benefits and insulate itself from ever paying any of
the increased pension obligations accrued by its older employees as they
approached their peak salary years," the Washington law office of Sprenger
& Lang said in a news release on Wednesday.
The rest of the details can be found here, while the court's certification
opinion is here.
Sounds like another Varity Corp. scenario, but that case was more about breaches
of fiduciary duties. This case is more like the Section 510 Nemeth case, but
interestingly both types of cases lead to Section 502(a)(3) type relief.
White House Announces Three Important Recess Appointments
Update from Ross' Employment Law Blog.
The White House has issued a press release yesterday which contains 17 recess appointment, three of which are extremely important to labor law.
Peter Kirsanow (pictured left) has been given a recess appointment as a member of the NLRB, while Ronald Meisburg has been given a recess appointment to be general counsel of the NLRB (previous post about Kirsanow's and Meisburg's nomination here). The same press release states state that Arthur Rosenfeld was given a recess appointment to be Federal Mediation and Conciliation Director at the FMCS.
At this point, it is unclear why the President chose to use the recent appointment route. Two obvious possibilities are that the White House did not want to waste valuable confirmation time with the Alito nomination hearings starting next week, but it also could be that the White House was concerned about getting these nominations through the Senate.
The NLRB now has 4 members and a general counsel. It does not appear that a recess appointment was made for the other recently-nominated NLRB nominee, Dennis Walsh.
Hat Tip: TPM
January 4, 2006
Yet Another Wal-Mart Employment Class Action Certified
A Philadelphia judge has certified as a class all Pennsylvania Wal-Mart employees who believe they were not compensated for rest and meal breaks they allegedly missed over the course of the past seven years.
Judge Mark I. Bernstein’s decision in Hummel v. Wal-Mart Stores Inc. came just days after a California jury awarded a class with similar complaints $172 million following four months of testimony. Of that award $115 million was for punitive damages.
That California class consisted of roughly 115,000 current and former Wal-Mart employees.
Local class counsel Michael Donovan of Donovan Searles in Philadelphia said he believes the Hummel class could eventually include nearly 150,000 current and former employees of the retail giant's Pennsylvania stores since March 1998.
Rest of the story here. PS
Rest of the story here.
Private University Interferes with Private Life of Its Employee
Inside Higher Ed is reporting this morning about how a Catholic university in Florida would not allow one of its temporary music instructors to travel on a school field trip while lodging with her lesbian partner after students filed complaints. The teacher later resigned from the school.
From the article:
Last May, Ann Schrooten, a former temporary music instructor and interim director of the liturgical choir at the University of St. Thomas wanted to take her lesbian partner and their son on a class trip to France. Ultimately, after students at the Roman Catholic institution complained to the campus ministry, university officials told her that the proposed arrangement created a “moral dilemma” and that she would have to change the travel plans. She chose not to take the trip and no longer works for the university, although officials said that she was not asked to leave because of this situation.
[But discussing how they would have applied the same policy to umarried heterosexuals,] Doug Hennes, vice president of university relations, said Monday that he wasn’t sure that St. Thomas would have raised the issue with [the unmarried heterosexuals] had the Schrooten case not happened. “We don’t discriminate on the basis of race, ethnicity, gender or sexual orientation,” he said.
Two thoughts. On the private employment side, this is exactly why we need stronger federal and state sexual orientation discrimination laws. Being dictated to about how you can travel on a school-sponsored trip would seem to interfere with the the terms, conditions, and privileges of employment and private employers should simply not be able to do it (note that because the institution is a religious one should not make a difference here because we're talking about exempt religious discrimination, but discrimination based on sexual preference).
If this were a public university situation, I believe the case of Lawrence v. Texas provides such public employees a heightened interest in decisional non-interference in private affairs. Although this right is not absolute, it needs to be weighed against the efficiency concerns of public employers. To read more about my thoughts on the interference of the privacy rights by public employers, you can peruse this previous post.
Havens ESOP Case Given Go Ahead
From PLANSPONSOR.com this morning:
HAVENS STANCE. A federal judge has determined that former
employees of Havens Steel Co. have a case against and can
sue former officers of the company for allegedly causing
their accounts in the company’s employee stock ownership
plan (ESOP) to lose their value.
The Kansas City Business Journal reports that former
CEO Kenneth McCullough and former officers Donald Price,
Jesse Bechtold, Tom Collins, and Steven Cowan are accused of
breaching their fiduciary duties to plan participants by
allegedly paying themselves huge bonuses and by investing
only in Havens stock. In addition, the suit also alleges
that the officers caused Havens to borrow $2.3 million for
the bonuses and that they turned down purchase and takeover
offers for the company from investors, as well as allowing
"executive expense account spending, including thousands of
dollars in ATM cash withdrawals and payments for expensive
meals and strip clubs," the complaint said.
You can access the whole story here.
January 3, 2006
Deadline for Employment and Labor Law Writing Competition
From Marty Malin (Chicago-Kent):
Happy New Year. This is a reminder that entries for the Louis Jackson Memorial Student Writing Competition in Employment and Labor Law are due January 18, 2006. The competition is blind judged by a national panel of five law professors. First place is a $3,000 scholarship and there are two $1,000 second place awards. So, as you are grading the last of those seminar papers and find some good ones, encourage your students to participate in this year’s competition.
Full details are available here.
Military To Keep Louisiana Iraqi War Veterans on Active Status For Employment Purposes
This blurb from PLANSPONSOR.com:
RESERVE CAUSE. More than 200 National Guard soldiers returning to
Louisiana from Iraq are staying on active duty for up to a year so
they can have full-time work in their hurricane-ravaged hometowns,
thanks to a program designed by the Army to give returning reservists
jobs if their old ones were wiped out by hurricanes Katrina and Rita.
The program has also drawn the interest of 60 National Guard soldiers
from a Mississippi brigade, according to the Associated Press. Many
soldiers returned home to find their homes and employers gone, and
extending their active duty has not only given them jobs - it is
filling construction and engineering jobs needed to repair military
bases, including a National Guard headquarters in New Orleans.
The rest of the story can be found here.
New Empirical Findings on High Deductible Health Plans and Health Savings Accounts
Paul Fronstin (EBRI) and Sara R. Collins (The Commonwealth Fund) have posted on SSRN the following worthwhile interesting piece of scholarship on HDHP plans and HSAs:
Early Experience with High-Deductible and Consumer-Driven Health Plans: Findings from the EBRI/Commonwealth Fund Consumerism in Health Care Survey (EBRI Issue Brief, No. 288, December 2005)
From the abstract:
This paper presents findings from the first EBRI/Commonwealth Fund Consumerism in Health Care Survey. The online survey of privately insured adults ages 21-64 was conducted to provide national data regarding the growth of high-deductible health plans with and without savings accounts and their impact on the behavior and attitudes of health care consumers.
The sample was randomly drawn from Harris Poll Online, Harris Interactive's online sample of Internet users who have agreed to participate in research surveys. The survey findings suggest that so far individuals in CDHPs and HDHPs are less satisfied than individuals with comprehensive health insurance with various aspects of their health plan, are less satisfied overall with their health plan, and are less likely to recommend the plan to a friend or work colleague.
Download this worthwhile and informative piece on an increasingly important part of employee benefits law.
Who Are America's Most Hated Companies?
According to the Economist magazine, the (dis)honor goes to a number of companies including Microsoft ("Type 'hate Bill Gates' into Google even now, and you will probably get over 15,000 hits. Type 'love Bill Gates', and on a good day (for Mr Gates) you may get 2,000.), the (obvious choice) of Enron, and the big tobacco companies. As for the latter, "'If you are killing people, it doesn't matter whether you are creating shareholder value, you are still bad,' observes Mason Carpenter, a professor at the University of Wisconsin-Madison School of Business." Especially, if, unlike with alcohol and fast food, you have been dishonest about the effects of your product over the years.
On the other hand:
A straw poll by Fred Bateman, a professor of economics at the University of Georgia's Terry College of Business, brings us to the present. He asked three classes in economics, about 100 students in all, which company they thought was the most hated in America. They almost all said Wal-Mart.
I personally find this hardly surprising given the way Wal-Mart treats prospective and current employees. For instance, it wrote a well-publicized memo on how NOT to hire unhealthy workers and the unaffordability of its health care coverage for a large segment of its workers forces many of them onto Medicaid (which BTW make its TV commercials to the contrary gut-wrenching). When you add the alleged use of illegal immigrants as workers and the million person on-going class action sex discrimination lawsuit, one hardly need to mentions its harsh anti-union tactics to see why Wal-Mart has even evoked the wrath of so many, including the iconoclastic writers of the South Park cartoon.
In any event, Gordon Smith of the Conglomerate blog who brought this story to my attention, asks some important questions about Wal-Mart including, "[W]hether Wal-Mart hatred is a class thing. The 'elites' hate Wal-Mart, but ordinary people don't?"
The Economist itself comes to this conclusion about big business in America:
But still, a few general truths emerge. The main one is that Americans are generally accepting of big business, but only so long as they feel in control of it, as citizens or as consumers. They lose that sense when a company wins a monopoly for its products, or when it comes busting into a community and displacing local commerce, or when its
officers break the law. When that happens, they are disproportionately shocked and hostile, because they see it as a violation both of the natural order of things, and of their trust.
Who will face the wrath of Americans next most likely? Big Oil. "A Gallup poll in August found that 42% of Americans disliked the oil industry, including 35% who disliked it very much indeed."
I myself wonder how much a role the characteristics of the workplace and the treatment of employees play in causing an employer to be unpopular among consumer? It can't just be general corporate dishonesty, greed, and bullying of other businesses, can it?
Hope Remains for Miners Trapped in WV Coal Mine
Most important update: 12 of the Miners Found Alive!
Update: Hope turns to "very discouraged"
News this morning about the tragic mishap surrounding the 13 miners trapped far underground in a coal mine in West Virginia (the miners have been trapped 260 feet under ground since Monday morning). Although there is now indications that rescue workers have been able to drill a hole down to the trapped miners, there is some concern because of the poor air quality that might exist at the bottom of the mine shaft. The full updated AP story can be read here.
According to the AP story, this mine has recently been the object of many federal and state government findings of health and safety violations and penalties have been proposed for these transgressions:
Federal inspectors cited the mine for 46 alleged violations of federal mine health and safety rules during an 11-week review that ended Dec. 22, according to records.
The more serious alleged violations, resulting in proposed penalties of at least $250 each, involved steps for safeguarding against roof falls, and the mine's plan to control methane and breathable dust. The mine received 208 citations from MSHA during 2005, up from 68 citations in 2004.
The state Office of Miners' Health Safety and Training issued 144 notices of violation against the mine in 2005, up from 74 the year before.
Needless to say, the arrival of the 21st century has not changed the fact that mining remains one of the most dangerous professions in the United States and more needs to be done to make these workplaces more healthy and safe for workers.
Our thoughts and prayers remain with the trapped miners and their families this morning.
2006 AALS Conference - Panels of Note
Today, I take off for DC for the annual pilgrimage to the Association of American Law Schools Annual Conference. The following are links to previous posts highlighting the various panel discussion at the conference that should be of interest to labor and employment types:
If you are traveling to the conference and happen to be at one of these panels, please come up and introduce yourself to me. I would love to meet readers of this blog and obtain comments on how to make the blog better.