March 11, 2006
Les Miserables: Police, French Students Clash Over New Employment Law
From the Associated Press:
Police stormed France's famed Sorbonne University early Saturday to dislodge students occupying the building in protest of a new national employment measure, hours after the demonstrators hurled furniture and ladders from the landmark's windows.
About 80 helmeted riot officers moved into an inner courtyard under the dome of the centuries-old building and, after a brief standoff, forced them out. About 600 students had entered the building earlier to join a sit-in that began Wednesday.
The students, along with the country's powerful unions and other protesters in recent weeks, are trying to force the government to withdraw the measure that would make it easier for companies to fire workers younger than 26.
The government hopes the flexibility will spur employers to hire young people, safe in the knowledge that they will be able to get rid of them if they have to.
Gee, imagine how angry these French students would be if they lived in some hypothetical country where the default rule of employment was employment at-will.
Lobel on "The Office" and Diversity Training
Orly Lobel (San Diego) over at PrawfBlawg has a fun, but also a somewhat serious, post, on the state of sexual harassment and diversity training in the corporate world, based on a recent episode of the NBC show "The Office" this past Thursday night. As a former sexual harassment and diversity trainer during my time with Morgan Lewis in Philadelphia, some of her observations really struck home.
For instance, Orly remarks about the ironies involved "with the near fetish eagerness of management to resolve tensions through a two hour catch-all session, ending with a mandated signature of all employees on a code of ethics promising to be a HERO [an acronym for honest, ethical, respectful and open-minded]." (I personally loved the character Dwight's response to the HERO acronym, saying that such a person was not a HERO since such a person did not kill people or avenge wronged individuals.)
On the serious side, and as Orly points out, such training is essential as a defense in a supervisor sexual harassment case given the affirmative defenses for employers set out by the Supreme Court in the Faragher and Ellerth cases. Training represents reasonable preventative measures employers can take and it is also unreasonable for an employee to fail to take advantage of such preventative opportunities.
Also, Orly has some worthwhile insights on the relative merit of "command-and-control" systems of management and "ex-ante cooperative prevention." I think she rightly points out that training alone is not enought to stop discriminatory and harassing behavior in the workplace. For a start, employers also need to have a no-nonsense sexual harassment and EEO policy as part of a handbook, which employees should expressly acknowledge by signing. Finally, when complaints are filed, by taking such complaints seriously, investigating them fully, and taking appropriate disciplinary action when necessary, employers can help assure that similar situations don't happen in the future.
Pay Workers Comp and Back Wages or Beat It
His Neverland Ranch has been ordered closed until he pays for his workers back wages (about $306,000) and starts to maintain workers' compensation insurance again. Under California law, an employer is not able to operate without workers' compensation insurance.
Although Jackson will be able to reopen his Neverland ranch if he reinstitutes his workers' compensation insurance and pays a hefty fine for letting it lapse ($169,000), he might still face legal liability over the back wages that he owes to some 30 employees since December 2005.
With puns clearly intended, Jackson clearly needs to look at the Man in the Mirror and stop acting so Bad, or he is going to be in for another legal Thriller. And I'm not sure if this is going to be as easy as ABC or 123.
Hat Tip: WastedBlog.com
March 10, 2006
Worker with Multiple Sclerosis Sues Hooters for Disability Discrimination
Although the Hooters restaurant chain is mostly known for providing vicarious sexual entertainment to its customers (and sometimes also serving mediocre food), it has now found itself in the spotlight for a completely different reason: the EEOC has filed a lawsuit against it for its alleged treatment of a former employee who has multiple sclerosis.
According to the story in the Rochester Democrat and Chronicle:
The EEOC said Hooters of America Inc. refused to reduce the schedule of waitress Melissa Vicari when she was diagnosed with MS in 2003, despite several requests from her neurologist.
The complaint, filed by the EEOC in U.S. District Court in Rochester, alleges that though Vicari requested shorter shifts because of her illness, the restaurant initially denied the requests and gave similar shifts to other workers. When the restaurant did let Vicari work shorter shifts, it limited the number of shifts she worked, the suit alleges.
"In this case, Ms. Vicari was asking for nothing more than that given other Hooters Girls without disabilities," said Elizabeth Grossman, the EEOC's New York District regional attorney. "This company needs to give a hoot about fairness to its workers."
In a statement, Hooters said it would fight the suit. The company "made every reasonable accommodation possible for the employee," the statement said.
Sounds like a worthwhile and meritorious suit if the allegations are true, but did the EEOC's attorney actually make an owl reference (like "Give a Hoot, Don't Pollute") in her statement about Hooters?
Blow-Up Sex Dolls and the Prevention of Sexual Harassment
I'm just not sure that this is the best way to go about preventing sexual harassment in the workplace, but a women's group in Mexico clearly believes otherwise:
Mexico's National Women's Institute launched a series of ads on Wednesday that feature blowup sex dolls dressed as office workers, in a bid to counter sexual harassment in the workplace.
The television part of the campaign - which also includes billboards and radio ads - shows the wide-mouthed sex dolls dressed as secretaries, sitting at desks or photocopiers as men leer at them or try to grope them.
"No woman should be treated like an object," a somber-voiced narrator says in the background. "Sexual harassment is not just demeaning, it's a crime."
Seems like a worthwhile PSA, but what do they mean "try to grope them"?
What defenses do blowup dolls exactly have?
March 9, 2006
Hybrid Pensions in Hawai'i
Hawaii has come up with an original way to keep public pension costs from exploding: offering better pension benefits in the future if workers agree to contribute part of their salary to their pensions in the here and now.
According to the Honolulu Advertiser today:
About 45,000 state and county workers must decide by March 31 if they want to join a new pension plan that pays higher benefits but requires workers to contribute 6 percent of future paychecks.
The Employees' Retirement System began informing government workers in November about the new "hybrid" pension plan. So far less than 13,000 of the 58,000 eligible civil servants in Hawai'i have made a decision. About 80 percent of those have switched to the hybrid program, which can tack hundreds of dollars on to monthly pensions.
As it stands now, most state and county workers don't contribute to their pensions under a plan introduced almost 22 years ago. Many of them are hesitant to cut their take home to get a higher pension later in life.
It will be interesting to see how many county and state workers make the swtich to the hybrid plan prior to the March 31st deadline.
I guess the Hawai'ian experience in this regard reflects the overall savings pattern of most Americans.
It will be interesting to see how many county and state workers make the swtich to the hybrid plan prior to the March 31st deadline.Although it would most likely be in most workers' best interest to join the hybrid plan so as to have more money in retirement, it appears that a large number of workers are unwilling, or perhaps unable, to give up short term benefits for long term gains.
NFL and Players Approve Labor Deal
From the Associated Press:
At the end, even the NFL's maverick owners decided that labor peace was better than the uncertainty of working without a salary cap. They didn't especially like doing it, though, after two days of meetings that sometimes got quite contentious.
"No one hit anyone," Oakland's Al Davis said after the owners finally agreed Wednesday to accept a deal that will add close to a billion dollars to the players' pool in return for six years of labor peace. "Yeah, people were yelling a little bit, you know, but it's part of life. The idea is to go and get something done."
Davis, the NFL's most conspicuous antiestablishment owner, turned into a league supporter for this one. The agreement will add $850 million to $900 million to the player revenue pool, contributed each year on a sliding scale by the 15 teams that earn the most from non-television and ticket income.
All is right with the world again. Now, GO EAGLES!!!
Employee (Unsuccessfully) Tries to Compel Arbitration
A Louisiana appellate court released an opinion yesterday in an unusual case involving a former employee filing a motion to compel arbitration against his former employer. The employee had signed a nondisclosure/ nonsolicitation agreement containing an arbitration clause with his original employer Horseshoe Casino (pictured at left). Horseshoe was subsequently acquired by Harrah’s. The employee then signed a nondisclosure/ nonsolicitation/ noncompete/ stock option agreement with Harrah’s, but the Harrah’s agreement did not contain an arbitration clause. The employee then quit Harrah’s and began working for a competitor. Harrah’s and Horseshoe sued for damages and injunctive relief. The employee moved to compel arbitration, arguing that the arbitration clause in the Horseshoe contract should “carry over” to the Harrah’s contract. Harrah’s and Horshoe conceded that claims arising under the Horseshoe contract were subject to arbitration, but argued that claims arising under the Harrah’s contract were not. The court agreed with Harrah’s and Horshoe, finding that they were two distinct corporate entities and that there was no evidence that Harrah’s had assumed the contractual obligations of Horseshoe through its acquisition of Horseshoe.
The case is Horseshoe Entertainment v. Kepinski, No. 40,753-CA, Louisiana Court of Appeal (Second Circuit) (March 8, 2006).
StarBucks, Meet the Wobblies
Eric Fink over at Reports from Poisonville has the scoop on a significant, and surprising, labor victory by the Industrial Workers of the World (IWW) on behalf of Starbuck workers in New York City.
Corporate coffee giant Starbucks has agreed to settle charges of unfair labor practices brought by the IWW, which represents Starbucks workers seeking union recognition. Under the terms of the settlement agreement, Starbucks must rehire and pay a total of $2000 in back wages to workers who were fired during the union organizing campaign, rescind disciplinary action taken against other workers involved in the organizing drive, and cease and desist from its anti-union practices.
Can't say that I predicted that one.
Worldwide Glass Ceilings at Work
Accenture just completed a study which suggests that there still exists a substantial "glass ceiling" for women seeking advancement in their organizations. And not only in the United States, but in a number of other countries as well, including Austria, Canada, and the Phillipines.
According to the study, which was undertaken in eight countries including the United States, only 30% of women executives and 43% of male executives believe that women have the same opportunities as men do in the workplace today. The study's authors believe that these statistics support the existence of a glass ceiling.
Nevertheless, and somewhat paradoxically, the study also found that women executives were about as personally satisfied with their own career opportunities and positions as men were with theirs. In this regards, the same level of men and women responding to the survey (58%) said that they are fairly compensated or that their salary reflects their personal achievements.
Survey: IT Job Growth Slowing Down
Twelve percent of some 1,400 chief information officers (CIOs) interviewed for the Robert Half Technology IT Hiring Index and Skills Report intend to expand their information technology (IT) departments in Q2, while 4% are planning reductions - but the vast majority (84%) anticipate no changes in personnel levels next quarter.
CIOs at the largest firms (1,000 or more employees) forecast the strongest employment growth, and business growth is the primary motivation for adding IT staff. Help desk/end-user support is the hottest job category within IT departments.
New DOL Guidance Affecting Employer LM-10 Reporting Requirements
The Department of Labor has recently issued guidance on the Employer's Report, known as "Form LM-10," required by the Labor-Management Reporting and Disclosure Act of 1959 ("LMRDA").
This report must be filed annually by all employers who have engaged in financial transactions or arrangements described in Section 203(a) of the LMRDA. It is due within 90 days after the end of the employer's fiscal year, so employers whose fiscal year ended December 31, 2005 must file Form LM-10 by March 31, 2006. Civil and criminal penalties can be levied against the employer's president and treasurer (or corresponding principal officers) who willfully fail to file the report and/or falsely report.
Although the Department of Labor ("DOL") did not aggressively pursue such penalties in the past, it has recently signaled that it will be actively enforcing the filing and reporting requirements, beginning in 2006.
Hat Tip: Paul Caron
Automakers and the Portal to Portal Act
Toyota has just announced that it plans to pay a group of approximately 4,500 workers at its Georgetown, KY plant about $4.5 million in back wages in light of a recent decision by the United States Supreme Court concerning the Portal to Portal Act of 1947.
In the Supreme Court case, IBP, Inc. v. Alvarez, 126 S. Ct. 514 (2005), the Court decided that the time it takes workers to put on protective clothing and get to their workstations is compensable time under the Fair Labor Standards Act, not exempted by the Portal to Portal Act. This was an important finding because if such time must be counted as part of how many hours a worker works during a given workweek, it might lead to overtime liability for the company.
And as the Toyota situation proves, we are talking chump change here. The amount of money that Toyota is paying works out to be about $1000 a worker over about a 5 year period of time.
Look for other auto manufacturers to have to deal with this same issue in the near future, including BMW, which through a spokesman said BMW also will have to pay back wages for many of its 4,500 workers, although the amount "will be substantially less than what Toyota had to pay."
The whole article from Automotive News can be accessed here.
March 8, 2006
Germany Pushes Private Pension Insurance
According to the Norwalk Advocate (through the AP), the German government is asking its citizens to take out private pension insurance to make up for declining payouts from the State.
From the news report:
While state pension payments will cover 52.2 percent of the average pretax income in 2009, the figure will fall to 46 percent in 2019, Labor and Social Affairs Minister Franz Muentefering said.
"Additional private pension insurance must be strengthened," said Muentefering, who also serves as vice chancellor.
Germany, like many European countries, suffers from low birth rates, leaving an increasing number of retirees dependent on contributions from a shrinking working population.
In an attempt to address the problem, the government of former Chancellor Gerhard Schroeder introduced tax breaks for citizens taking out a supplementary private pension.
Current Chancellor Angela Merkel has followed that up with a plan to raise the retirement age from 65 to 67. The change is to take place gradually between 2012 and 2029.
Our own social security and pension system could no doubt benefit from having individuals invest in private pension insurance as a supplement to the current types of retirement income received by most Americans.
Moreover, setting up tax breaks for individuals who take out a supplementary private pension may be another worthwhile idea for how to give Americans incentive to save more money for retirement.
Denver Latino Police Claim Discrimination and Hostile Work Environment
The Denver Police Latino Organization has filed a class action employment discrimination claim with the EEOC and Department of Justice, asserting discriminatory treatment in employment and a hostile work enivronment for Latino employees. According to the Rocky Mountain News, the Latino officers are concerned about a number of employment practices, including the "department's handling of recruitment, hiring, assignments, promotions and discipline."
According to the Denver Post, "State chapter president Rufino Trujillo said the Denver Police Latino Organization has been negotiating with the administration for four years about what the group says are discriminatory employment practices."
A number of city officials have now responded and although they agree that better recruitmennt practices could be put into place to hire more Latino officers, they claim that there is no merit to the claims of discrimination and hostile work environment. For instance, "Detective Virginia Quiñones, a department spokeswoman, issued her own statement agreeing that the city needs to recruit more qualified minorities, but she defended the administration and said it strives to be fair."
The hiring of more Latino police officers is a particularly sensitive issue in Denver, as the city's population is 35 percent Latino. According to the Denver Post: "There are 1,493 officers in the Denver Police Department. About 20 percent are Latino - 36 women and 266 men." Additionally, two of the highest-ranking Latinos in the Denver Police Department are Deputy Chiefs.
Given the Police Department's understanding that there needs to be more minorities recruited and hired and given the conciliatory tone taken by a number of Denevr Police Department higher-ups in the articles linked to above, it appears that this case is especially suited for resolution through EEOC mediation.
Here's hoping the parties take advantage of such a process.
When Labor Strikes Come to Law School
Steve has decided to move classes off campus out of respect for the strike by the UNICCO union, which represents workers who provide janitorial and other services to campus. (Michael is not teaching classes this semester so he did not have to make a similar decision).
Both Steve and Michael have shared their thoughts (Steve's here and here and Michael's here and here) about what obligations professors have to the university community, co-faculty, and students, under such circumstances.
Of special note is the rapid fire exchange of comments to Steve's first post between Kate Litvak (Texas), Joe Slater (Toledo), and Matt Bodie (Hofstra), concerning the rights of law professors to honor picket lines under such circumstances.
As this is such a controversial topic, I would love to hear other readers' views and I will certainly share your thoughts with Steve and Michael.
An Introduction to Arbitration
If you need a short descriptive essay designed for general practitioners and
non-lawyers, see An Introduction to Arbitration. The essay (written by yours truly) describes the advantages of arbitration over litigation, the concerns about arbitration (especially employment and consumer arbitration), the controlling law, the process of choosing an arbitrator, and tips for the advocate.
Employment Effects of Academic Affirmative Action
Jesse Rothstein & Albert Yoon (photos posted on Sunday) write about the effects academic affirmative action has on the employment opportunities, graduation rates, and bar passage rates of students at elite law schools. Here's their abstract:
An important criticism of affirmative action policies in admissions is that they may hurt minority students who are thereby induced to attend selective schools. We use two comparisons to identify so-called mismatch effects in law schools, with consistent results. Black students attain better employment outcomes than do whites with similar credentials. Any mismatch effects on graduation and bar exam passage rates are confined to the bottom quintile of the entering credentials distribution, where selection bias is an important, potentially confounding factor. Elite law schools' use of affirmative action thus does not appear to generate mismatch effects.
Rothstein & Yoon, Mismatch in Law School.
March 7, 2006
GM Freezes Cash Balance Plan for Salaried Workers
General Motors Corp., following in the footsteps of other large U.S. employers trying to cut pension costs, said Tuesday that it will shift its pension program for salaried employees from a defined benefit plan to a plan that relies more heavily on employee contributions.
Effective Jan. 1, GM will freeze the accrued pension benefits for approximately 40,000 U.S. salaried employees. The change won't affect retirees.
Salaried employees hired on or after Jan. 1, 2001, will move exclusively to a defined contribution plan. Those employees currently have a cash balance plan, which works like a traditional defined benefit plan but allows participants to collect their benefits in a lump sum at retirement instead of in monthly checks.
Thus, not only are large employers increasingly disenchanted with the liabilities imposed upon them by traditional DBPs, but GM's action signals that more modern DBP incarnations, like cash balance plans, are well on their way to facing the same fate as companies are finding that such pension arrangements are not necessarily providing the savings initially expected.
Treasury Official: Congress Must Reduce Claims on PBGC
Investor's Business Daily reports that top Bush Administration officials do not believe current proposed pension legislation goes far enough in reducing claims against the government insurer of defined benefit plans, the Pension Benefit Guaranty Corporation (PBGC).
According to the story:
In a prepared speech, Assistant Treasury Secretary Mark Warshawsky said current congressional pension reform proposals are "inadequate" and urged lawmakers to reduce claims on the PBGC over the next 10 years.
He also called for improved disclosure about plans' status to workers and for adjusting pension insurance premiums to better reflect each plan's risk.
The PBGC is currently running a $23 billion deficit, he said.
Operations [of the PBGC] are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.
The fact that top Administration officials are unsatisfied with the current pension reform legislation being considered by both the House and Senate at this late time of the game is unsettling to say the least.
Although the PBGC has been known to run large deficits in economically troubling years and large surpluses in economically favorable years, the current outlook presented by Treasury suggests that there is something more than just the average cyclical swings at play here (including, most significantly, the tremendous movement by large companies to freeze their traditional pension plans).
Hopefully, Congress will take Treasury's advice seriously and raise PBGC insurance premiums on employers to properly fund the PBGC while there is still time to save the agency.