Saturday, April 22, 2006

First Circuit Issues Major Arbitration Decision

Logomasthead_1The First Circuit released Friday a consumer arbitration case that will significantly affect employment arbitration on the issues of discovery, shortened limitations periods, restricted damage awards, prohibitions on shifting costs and attorneys’ fees, and prohibitions on class actions.  The case is Kristian v. Comcast Corp., Nos. 04-2619 & 04-2655 (Apr. 20, 2006) (Westlaw password required).

Consumers sued Comcast, a cable television provider, for federal and state antitrust violations.  When Comcast moved to compel arbitration, plaintiffs made five arguments that the arbitration agreement would nullify their ability to vindicate their statutory rights.  First, they argued that a clause in the arbitration agreement warning that “participating in arbitration may result in limited discovery” made the arbitration agreement unenforceable.  However, the court held that, pursuant to Gilmer, discovery restrictions would not preclude arbitration, and that discovery issues should be left to the arbitrator.

Second, plaintiffs argued that the arbitration agreement’s one-year limitations period was inconsistent with the four-year limitations period provided by the state antitrust statute.  The court, however, ruled that this issue was for the arbitrator because the plaintiffs’ claims of ongoing injuries would require an examination of the merits of the case.

Third, plaintiffs argued that an arbitration clause forbidding treble damage awards rendered the arbitration agreement unenforceable.  The court, citing an article by David Schwartz (photo bottom left), held that this clause was unenforceable as to claims brought under federal law, which required treble damage awards.  The court ruled that these federal claims should be submitted to arbitration without the damage restriction.  However, the court held that the clause was enforceable as to claims brought under state law, which permitted but did not require treble damage awards.

Fourth, plaintiffs challenged an arbitral provision forbidding an award to plaintiffs of costs and attorneys’ fees.  The court held that this provision would burden plaintiffs “with prohibitive arbitration costs, preventing [p]laintiffs from vindicating their statutory rights in arbitration.”  However, rather than refusing to enforce the arbitration agreement on this basis, the court severed the offending clause.

Fifth, plaintiffs challenged an arbitral provision prohibiting class actions.  The court recognized that this provision did not conflict with any explicit provision of the antitrust statutes.  However, the court held, the provision did conflict with FRCP 23;  “because the [arbitration agreement] creates a mandatory arbitration regime, a bar on class arbitration effectively forecloses the use of any class-based mechanism.”  Citing Jean Sternlight (photo bottom right), the court held that plaintiffs’ attorneys would be unlikely to undertake a costly and complex antitrust case such as this one absent the class action device.  This would effectively weaken if not eliminate the private enforcement scheme provided in the antitrust statutes, and therefore was inconsistent with those statutes.  However, once again, rather than refusing to enforce the arbitration agreement, the court severed the offending provision.

Thus, after refusing to enforce the treble damage limitation as to federal claims, and severing the clauses on costs, attorneys’ fees, and class actions, the court held that the plaintiffs’ antitrust claims were arbitrable.

Fac_1 Faculty_jeansternlight


April 22, 2006 in Arbitration | Permalink | Comments (0) | TrackBack (1)

Top-5 Employment SSRN Downloads

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Top-5 Benefits/Compensation//Pension SSRN Downloads

Lin on Sample Labor Contracts in China

Printer_paper Lin Li (Cornell, LL.M candidate) has posted on NELLCO: Reform Suggestions on Sample Labor Contracts in China.  Although the text of this paper is in Chinese, the abstract is in English.

From the abstract:

To regulate the labor relationship, that is, to establish labor rights and duties, depends on labor laws and labor contracts. But in the long history of China, there has been no labor law and labor contract. Since the open door policy was implemented, labor law and the system of labor contract began slowly. However the situation is still far from satisfactory.

Now, in China, there is a desperate need for appropriate regulation of labor rights and duties.


This sample labor contract has wide adaptability, and is not a short-term solution. It should be noted that a good labor contract on paper alone is not the solution. The on-site investigation and statistics implemented in this article show that there are serious problems in the process of implementing labor contracts in China. Therefore some reform suggestions concerning how to properly implement labor contracts are also proposed in this article.

This article has particular interest for me, as I am scheduled to go to China on a labor and employment law delegation headed by former NLRB Chairman Peter Hurtgen in September.  Our delegation will meet various Chinese labor counterparts and explore four different Chinese cities. 

You can download the paper here, but make sure you have a translator!


April 22, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Flush, Goes Retirement!

Bills As featured on the Carnival of the Insanities!

One of the more interesting stories making its way around the web this morning concerns a German pensioner who thought his retirement money in the form of German marks was worthless.

So what do you do with supposedly worthless money?  Well, of course, you flush it down the toilet.

And that would have been the end of the worthless marks, except for two things.

First, when you flush the equivalent of almost $19,000 US dollars down the toilet in smaller bills, you're gonna have a roto rooter problem. 

Second, when authorities are alerted of said water-logged money clogging their sewer system, they are likely to come and tell you that the money is not worthless and can be easily converted at any German bank into euros.

The moral of the story? There are many tantalizing possibilities, but why don't we go with the obvious: Don't go flushing your retirement down the toilet.

Hat Tip:  Wasted Blog


April 22, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

Friday, April 21, 2006

Federal Court Refuses to Enforce Contractually-Shortened Statute of Limitations

Logo405 I could not possibly improve upon Judge Richard Alan Enslen's description of this case:

Defendant Stryker Medical Division set a trap for the unwary when it hired Plaintiff Timothy R. Conway.  The name of the trap was a six-month limitation on any claim brought under the Family and Medical Leave Act of 1993 ("FMLA").  Plaintiff nominally agreed to the trap when he signed a form application for employment complete with legal language promising that he had read it (though of course, no production worker would ever attempt to negotiate form language, which is offered on a take it or leave it basis and which is why workers pay little attention to such forms).  When Plaintiff was discharged by Defendant, he consulted with Plaintiff' s attorney who filed suit on his behalf after the expiration of the six-month period, but well before the expiration of the statutory limitation period.  The trap has now been sprung by Defendant's filing of a Motion for Summary Judgment premised on the artificial limitation period.  The Court is no party to the unconscionable limitation on FMLA claims and now holds it to be unenforceable under the terms of FMLA and as a matter of public policy.

Conway v. Stryker Medical Div., No. 4:05-CIV-40, 2006 WL 1008670 (W.D. Mich. Apr. 18, 2006) (Westlaw password required).


April 21, 2006 in Employment Discrimination | Permalink | Comments (0) | TrackBack (0)

Are Student Externs FLSA "Employees"?

Sealrev_13 No, says the Department of Labor, in Opinion Letter FLSA2006-12.

The issue was whether students in a university’s externship program were considered employees under the Fair Labor Standards Act.  The DOL Wage & Hour Division found that "the program participants [we]re not employees of the companies that sponsor them."  The Division provided a six-part test for determining whether a trainee, intern, extern, apprentice, graduate assistant, or similar individual is to be considered an employee. If all of the following six factors are met, then an employment relationship does not exist:

  1. The training is similar to what would be given in a vocational school or academic educational instruction;
  2. The training is for the benefit of the trainees or students;
  3. The trainees or students do not displace regular employees, but work under their close observation;
  4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion the employer’s operations may actually be impeded;
  5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.


April 21, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

Clean An Airplane, Get a Free T-Shirt

Plane_commercial_1Clearly, Delta Airlines is facing desparate times, being in bankruptcy and nearly facing a crippling strike by its pilots.

So to cheer everyone up, the St. Petersburg Times is reporting that Delta thought it would be a good idea to get its employees to give additional free labor and volunteer to clean airplanes at night on their own time.  The reward for such loyalty?: "[A] free T-shirt, reward points good for merchandise and a chance to show their pride in the airline."

And though at least one person in the same article opined that such requests would rub already strained employees the wrong way, suprisingly some 300 employees volunteered for the first shift on "Clean Day" in Atlanta.

And what about the employment law legality of this arrangement from a Fair Labor Standards Act (FLSA) standpoint?  Well, I think the attorney quoted in the story has it right:

It's legal for employers to ask workers to volunteer their time as long as it's not "tongue in cheek (where) if you don't volunteer, you don't have a job," said Dean Papas, an employment lawyer in Tampa.

Would I volunteer in such a situation? Only if the CEO was cleaning the airplane window next to mine.


April 21, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

Final Rules for Abandoned 401k Plans


The Department of Labor today announced the publication of final rules that allow financial institutions to take responsibility for abandoned 401(k) plans and distribute the plans' assets to covered workers and their families (we previously blogged about this issue before here).  The department estimates that 1,650 401(k) plans, covering 33,000 workers, are abandoned by their sponsors each year.

This has been a huge problem for many workers  The financial institutions holding the money have no legal authority to distribute the money to workers.  That legal authority resides with the plan trustees.  When a plan is abandoned (often because the company goes out of business), many workers assume their 401k assets are safe, and don't roll them over.  Other workers may have changed jobs before the company goes out of business, and may not be aware of the company's status.  Years later, when these workers try to roll over or withdraw funds from their accounts, the trustees are dead or unlocatable, leaving these workers with no access to their funds.

The new rules provide standards for determining when a plan is abandoned and establishes a process for winding up the affairs of the plan and distributing benefits to workers.  The final rules should eliminate the need for costlier court approvals and allow workers to gain access to their benefits sooner.

The new rules will be published in today's Federal Register, or you can obtain a Fact Sheet online.


April 21, 2006 in Pension and Benefits | Permalink | Comments (1) | TrackBack (0)

DOL Issues New Edition of SCA Directory of Occupations

Sealrev_11The Department of Labor's Wage and Hour Division today announced the publication of the fifth edition of the Service Contract Act Directory of Occupations.  The directory, a list of occupations most often included in SCA wage determinations, standardizes agency requests for wage determinations and provides definitive guidance for contractors to determine how employees working on a contract should be classified and paid.


April 21, 2006 in Government Reports | Permalink | Comments (1) | TrackBack (0)

How Far Do You Drive to Work?

Car_redvw_3Well, if you are like a lot of Americans, the answer may be pretty far.

According to this story from Yahoo! News (through Reuters):

Studies show Americans spend more time than ever commuting and for a growing number, getting to work takes more than an hour. In the most recent U.S Census Bureau study, 2.8 million people have so-called extreme commutes, topping 90 minutes.

Studies show 7.6 percent of U.S. commuters traveled more than an hour to work in 2004, the most recent data available, up from 6 percent in 1990. The average one-way commute grew by 13 percent to 25.5 minutes between 1990 and 2000.

In 1990, only in New York state did more than 10 percent of workers spend more than an hour to get to work . . . . Now that situation can be found in New Jersey, Maryland, Illinois and California as well.

Personally, I always disliked spending a lot of time commuting, whether it was by car, bus, or train. And this from a guy who used to commute 35 minutes each way during high school by car and bus, and an hour each way by car and train when commuting to my last law firm job in Philadelphia.

I always say that being a law professor is one of the greatest jobs in the world, and for me, one of the factors behind that assessment is the fact that I now only have a 5 minute commute!


April 21, 2006 in Commentary | Permalink | Comments (0) | TrackBack (0)

Thursday, April 20, 2006

The Non-Existent Mommy Wars

524The New Republic has an interesting editorial (subscription required) in its May 1st issue questioning the hype surrounding the so-called "Mommy Wars."

According to conventional wisdom, there is an on-going ideological divide between stay-at-home moms and women who choose to put their careers above their families.  A continuing cultural war of epic proportions seethes just under the fabric of American society.

But as with most things in life, nothing is ever quite that black and white. Indeed, in this context, as in many others, there are many shades of grey blending together when one actually takes the time to look at these work/family balance issues.

Indeed, the TNR piece points to: 

"The Motherhood Study," a report issued last year by the Institute for American Values, [which] found no evidence of any ideological divide between mothers who work and those who stay at home. For all but the most privileged, the mommy wars are not only a myth, but a dangerous diversion from the true scandal of parenthood in contemporary America.

Even more provocatively, the editorial observes (I believe quite rightly):

The majority of children now grow up with both parents working outside the home--often out of financial necessity. But, taking its cues from reactionaries and solipsistic liberal elites, our public policy still treats working mothers as a casualty of the culture wars rather than an on-the-ground reality.

From this jumping off point, the editorial takes national and state policymakers to task for not providing more effective legal protection for working mothers and talks of at least one new approach being championed by a group of lawmakers.  Under this newly-introduced "Federal Employees Paid Parental Leave Act," federal workers would be guaranteed six weeks of paid leave to care for newborns or adopted babies.

And although enactment of this bill would be largely symbolic because it would not have the scope that most workplace flexibility advocates would prefer to see, it would nevertheless be an important first step in overcoming the anachronistic world view of two sides bickering over whether mothers should stay at home or not.

As the TNR authors assert, it is time to start making workplace flexibility law based on the reality that many women have no choice but to work and that legislating protective workplace rules in this context is not taking sides in some non-existent mommy war. 

I'll leave you with these concluding, powerful words from the TNR editorial:

The cultural revolution has already occurred. The real threat to the American family is the policies that lag behind it.

Hat Tip: Dana Nguyen


April 20, 2006 in Commentary | Permalink | Comments (0) | TrackBack (1)

A University President Gotta Live, Doesn't She?

TsouIt appears that the now-former President of Texas Southern University, Patricia Slade, had a little trouble differentiating what was hers and what was the university's. 

As a result, the University's governing Board has fired her for cause because of her lavish spending on seemingly personal items with university funds. She also might be facing criminal charges.

According to a story yesterday in the Chronicle of Higher Education (subscription required), Slade is alleged to have spent almost $650,000 in university funds on personal expenses in the last seven years.  Included in that total: $286,000 on furniture, landscaping, and security for Ms. Slade's newly built home and an undisclosed amount on golf lessons, expensive china, travel, and spa visits.

No shrinking violet, Slade has defended herself in a letter to the Houston Chronicle, arguing that, "all of the questioned expenses had been covered by her expense account (about $50,000 per year) and by her annual office budget of $450,000."  She is also claims that much of the money spent were for activities she conducted as the University's president.  Slade plans to fight her dismissal through the various appeal processes.

Most ironic about this whole story is that she had labeled fiscal responsibility as first among her five top goals for the university.


April 20, 2006 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

Totenberg on Supreme Cout Oral Arguments in Workplace Retaliation Case

Atc For those of you interested in a fun, unique perspective on the oral arguments that took place this past Monday at the United State Supreme Court in the workplace retaliation case of Burlington Northern v. White, check out this All Things Considered audio segment from NPR's Nina Totenberg.

What makes this synopsis of the various arguments made by the parties' attorneys and the Justices' response so entertaining is the way that Totenberg characterizes the tone of the various Justices' responses to the arguments that the lawyers make.  So, for instance, Justice Ginsburg makes a tart remark, while at another point Justice Kennedy is full of exasperation. It all sounds like big adjudicative soap opera!

As far as what the oral arguments suggest about how the case will actually come out, the nature of the questions asked indicate that Ms. White will win her retaliation case under something like a "materially adverse" standard by a significant margin of perhaps 7-2. 

Let me know if you agree after listening to this 4 to 5 minute audio segment.

Hat Tip: HR Lawyers' Blog


April 20, 2006 in Labor Law | Permalink | Comments (1) | TrackBack (0)

Wednesday, April 19, 2006

EEOC Issues New Guidance on Race and Color Discrimination

Logo_2The Equal Employment Opportunity Commission today has issued a new set of interpretive guidance documents concerning race and color discrimination.

According to the EEOC press release announcing the publication of these new documents:

The new materials cover issues related to evaluating allegations of discrimination; providing equal access to jobs through the recruitment, hiring and promotion processes; and addressing harassment and retaliation.

The documents issued today include a compliance manual section, a question and answer sheet, and a summary sheet.

Hat Tip: Ross' Employment Law Blog


April 19, 2006 in Labor Law | Permalink | Comments (0) | TrackBack (0)

The Impotence of GM

Viagra Numerous commentators have recently pointed out that the business models employed by GM and other United States automobile manufacturers have led to catastrophic financial losses over the last number of years (GM alone lost 10.6 billion dollars last year).

But apparently the impotence of GM does not stop there.

According to a report from Atlanta's

Viagra, Cialis and other erectile dysfunction drugs are costing General Motors Corp. a hefty sum.      

The company spends $17 million annually on such drugs, GM spokeswoman Sharon Baldwin said.

Although that's a small fraction of GM's overall health care costs, which in 2005 were more than $5 billion, company executives often use the example to illustrate what they said are out-of-control health care costs.

Brings a whole new meaning to stiff competition in the auto industry.

Hat Tip: Wasted Blog


April 19, 2006 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Wal-Mart (Finally) Moves to Expand Health Care for Employees; Much More Still to Do

Walmart_1_4 is reporting this morning that Wal-Mart is loosening eligibility requirements for part-timers for purposes of health insurance.

Whereas part-timers previously had to work for Wal-Mart for two years before becoming eligible for coverage, now they'll only need to work one year. This will allow an additional 150,000 employees to sign up for health-coverage.

In addition, Wal-Mart is reducing a number of prescription co-pays from $10 to $3.

Both simple, affordable moves for the retail behemoth. One wonders why it took so long to implement these necessary changes. 

One also wonders whether these changes were due to the large number of Wal-Mart bills sweeping state legislatures right now which would require Wal-Mart to pay a larger percentage of their payroll costs on health insurance.

Finally, all is still not well if you are a rank-and-file Wal-Mart worker seeking health insurance. According to the story in

The [current] version of the health plan that the company expected most employees to sign up for would be available for $23 a month and workers' children would be included for $15 more.

However, the coverage also calls for a deductible that requires the worker to pick up the first $1,000 in medical expenses, and the deductible rises to a maximum of $3,000 for families.

Clearly, the next thing Wal-Mart needs to change to make health care truly affordable for its workforce are these astronomically high deductibles.


April 19, 2006 in Pension and Benefits | Permalink | Comments (0) | TrackBack (1)

Recently-Published Scholarship: The Labor Lawyer

644319310 11465

Doyl_11973 Wepz

The Labor Lawyer
Volume 21, Number 2, Fall 2005

  • Samuel Estreicher (top left), Review of the Supreme Court’s Labor and Employment Docket, O.T. 2005, p. 109.
  • Neil Dishman (no photo or email address available), The Expanding Rights of Transsexuals in the Workplace, p. 121.
  • Daniel P. Westman (top right), The Significance of the Sarbanes-Oxley Whistleblower Provision, p. 141.
  • Richard G. McCracken (no photo available), San Manuel Bingo and Casino: Centrally Located in the Broad Perspective of Indian Law, p. 157.
  • William E. Doyle, Jr. (bottom left), Implications of Smith v. City of Jackson on Equal Pay Act Claims and Sex-Based Pay Discrimination Claims Under Title VII, p. 183.
  • William E. Pilchak (bottom right), Pounding Square Pegs Into Round Holes: Non-Compete Agreements For Temporary Employees Stand Existing Law On Its Head, p. 199.


April 19, 2006 in Scholarship | Permalink | Comments (0) | TrackBack (0)