June 10, 2006
Report: Five of Top Ten Grossing Class Action Settlements Involved ERISA Claims
Here's a news item for that small segment of my students who believe that attending law school will help them one day become millionaires.
The Alexander Hamilton Institute Benefits Alert Newsletter brings word that the 2006 edition of Seyfarth Shaw Class Action Report observes that the top 10 grossing class action settlements awards brought in $1.06 billion dollars. But even more interesting is that 5 of the top 10 cases are ERISA cases!
The Newsletter goes on to inform employers some ways they can go about contesting and defending themselves from such ERISA class action lawsuit, but truth be told, once such a suit makes it past class certification and any motions to dismiss, it is almost always in the best interest of the company not to try to contest the class action through trial. I made this similar point when discussing ERISA stock drop litigation a few months ago.
And for my money-hungry law students? There is still plenty of room in my employee benefits class for the coming Fall semester.
Green on A Structural Approach as Antidiscrimination Mandate
Tristin Green (Seton Hal) has posted on SSRN her upcoming piece in the Vanderbilt Law Review entitled, A Structural Approach as Antidiscrimination Mandate: Locating Employer Wrong.
From the abstract:
A structural approach to employment discrimination law seeks to impose an obligation on employers not to facilitate discriminatory decisionmaking in the workplace. Scholars across disciplines agree that a structural approach is a crucial element of an effective antidiscrimination law. Over the past several years, however, a handful of scholars, most notably Professor Samuel Bagenstos in his recent article The Structural Turn and the Limits of Antidiscrimination Law, have cautioned against using antidiscrimination law to target more subtle forms of employment discrimination.
These critics do not dispute that the problem of structural discrimination is a real one; nor do they question the empirical foundation for or description of the problem. Instead, the recent calls for caution, even retreat, stem from a single underlying concern: that structural discrimination does not fit the paradigmatic picture of discrimination as the product of a discrete decision to exclude based on animus or irrational stereotype. By diverging from the prevailing story, the argument goes, a structural approach to employment discrimination law loses the normative force that underlies an animus-based, individualized approach, and it is therefore likely to face substantial political resistance.
My aims in this paper are twofold. First, and foremost, I seek to set the normative foundation for a structural approach to employment discrimination law. Current pessimism concerning the political viability of a structural approach, I argue, stems from the mistaken assumption that a structural approach aims to impose costs on employers for societal barriers to employment.
My second aim in this paper . . . is to reclaim the normative core of employment discrimination law. I argue that even though all antidiscrimination law shares a common goal of social equality, there remains a meaningful normative distinction between antidiscrimination and accommodation mandates, a distinction that rests on the idea of correction for and prevention of wrongful acts in the employment relationship.
You can download a copy of this important, thought-provoking contribution to employment discrimination law at this link.
Top-5 International Employment & Labor Law SSRN Downloads
- Laurence R. Helfer (photo above), Understanding Change in International Organizations: Globalization and Innovation in the ILO (42).
- Peer Zumbansen, The Parallel Worlds of Corporate Governance and Labor Law (38).
- Alan Hyde, A Stag Hut Account and Defense of Transnational Labor Standards - A Preliminary Look at the Problem (18).
Top-5 Benefits/Compensation//Pension SSRN Downloads
- Bengt R. Holmstrom (photo above), Pay Without Performance and the Managerial Power Hypothesis: A Comment (105).
- Brian K. Powell & Richard A. Bales, HIPAA as a Political Football and Its Impact on Informal Discovery in Employment Litigation (100).
- Katherine V.W. Stone, Legal Protections for Workers in Atypical Employment Relationships (81).
- Ruth Helman, Craig Copeland, & Jack VanDerhei, Will More of Us Be Working Forever? The 2006 Retirement Confidence Survey (52).
- Jeremy Telman, The Business Judgment Rule, Disclosure, and Executive Compensation (51).
June 9, 2006
Yes, No, and Maybe: Mixed Feelings About Tenure and Political Bias in the Academy
How's this for a mixed bag of survey results regarding the American public's perception about university professor tenure and political bias in the academy (courtesy of Inside Higher Ed):
Americans back the concept of tenure — but they don’t necessarily know what it entails. Americans think highly of professors — except that a substantial minority of Americans doesn’t. Americans don’t rate political bias in the classroom as the top problem in academe today — but many think it’s a serious one.
More food for thought:
[M]ore Americans express “a lot of confidence” in higher education [41.6 percent] than in organized religion (29.9 percent), the White House (20.7 percent), and the press (10.8 percent). Confidence in the military did exceed that for academe, at 53.9 percent.
The rest of this survey on tenure, political bias, and academic freedom, by the American Association of University Professors (AAUP) can be accessed here.
Hyde on New Institutions for Worker Representation
Alan Hyde (Rutgers-Newark) has posted on SSRN his forthcoming piece in the New York Law School Law Review entitled, New Institutions for Worker Representation in the United States: Some Theoretical Issues.
Here's the abstract:
Alternative worker organizations (AWOs) that are growing, despite the membership declines in conventional unions, include membership organizations affiliated with labor unions, in some cases loosely; employee caucuses sponsored by employers; benefits providers; immigrants' advocacy organizations; immigrant centers; legal advocacy groups; and internet and intranet groups. In addition, governmental agencies are playing a larger role in worker advocacy.
Experience to date does not suggest, contrary to some of the theoretical literature, that such groups experience distinctive difficulty in mobilizing for action, overcoming collective action problems, projecting power, or attaining results. They are probably superior to traditional unions on all these grounds. The chief observable impediment to their growth is the necessity of alliances with groups with different agendas. The legal framework concerning AWOs is sufficiently accommodating to permit future experimentation.
You can download this article, which may point to where the future of labor law lies, at this link.
June 8, 2006
An ALJ Who Really Needs a Good Clerk
The NLRB recently set aside seven recommended decisions and orders by ALJ Howard Edelman and directed the Chief ALJ to reassign the cases to different ALJs (see here and here for representative examples). The problem with Edelman's decisions? According to the Board, "the vast majority of the statement
of facts in the judge's decision and virtually all of its legal
analysis were copied almost verbatim from the General Counsel's brief." To avoid the appearance of bias, the Board remanded the cases to different ALJs.
What is perhaps more disturbing about the Board feeling the need to remand seven decisions at once, is that the Board had remanded Edelman decisions twice before. In a 2004 case, the Board found Edelman's practice of copying the General Counsel's brief, although not per se improper, to be troubling and not to be condoned in the future. After he apparently didn't get the hint, the Board remanded a 2005 Edelman decision, noting the 2004 case and stating that the ALJ's "wholesale borrowing of large portions of the parties’ briefs into his decision" creates the appearance of impartiality. I'll say.
As a former counsel for the NLRB's General Counsel, I'd like to say that this copying reflected the quality of the work of GC attorneys, but it's impossible to chalk this up to anything more than the lethal combination of hubris and laziness. It also seems to be past the time for mere remands--this guy needs to go.
One interesting thing about these decisions is that the remands were triggered by Edelman's copying of briefs and the appearance of bias that copying creates, rather than an actual finding of bias itself. It is nearly impossible to get a finding of bias for any adjudicator, whether ALJ or judge, based solely on their decisions. There are good reasons for this, but Edelman's conduct raises the issue of whether this hurdle should be lowered a bit. In one of my Fifth Circuit NLRB cases, an opponent accused the ALJ, whose credibility determinations the Board adopted, of being biased. The ALJ's record was astounding (scores of decisions, all favoring unions) and gave me pause, but the law on this issue was so clearly against a finding of bias based solely on the judge's past decisions that the panel literally chewed out my opponent in oral argument for even raising the issue. I'm sure it had nothing to do with the fact that had we looked to the judge's record it might have looked similarly bad against unions.
Bipolar Disorder in the Academy
Here's a sad story posted today on Inside Higher Ed about how one tenured professor with bipolar disorder found it difficult to keep his job and battle his sickness at the same time. The looming question is whether there is a double standard when it comes to how mental versus physical employee illnesses are treated in the academy.
3d Cir.: Pro-Choice Catholic Teacher's Termination Lawful
The Third Circuit Court of Appeals has denied a Catholic school teacher's Title VII retaliation claim that she was unlawfully terminated when she signed on to a pro-choice advertisement in the local newspaper. She also brought an unsuccessful sex discrimination claim under Title VII. The case is Curay-Cramer v. The Ursuline Academy of Wilmington, 04-4628 (3d Cir., June 7, 2006).
Writing for the Third Circuit panel quorum (Judge Becker passed before being able to participate in the decision), Judge Jane Roth found that the court knew of no case in which an opposition retaliation claim was based on activity unrelated to possible illegal workplace practices. Moreover, the court agreed with the district court that by construing Title VII to require the Catholic school to continue the employment of the pro-choice teacher that that would potentially cause Title VII to run afoul of the Free Exercise clause of the United States Constitution.
Two thoughts on this decision (though I believe it is probably correctly decided): (1) What if there was an off-duty conduct statute which protected employees from termination by private employer for engaging in lawful off-duty activities? Would such a law have protected the employee here or would that law have had to cede to religious constitutional considerations? Previous cases highlighted on this blog concerning a religious employer's obligation to comply with generally applicable contraception laws would seem to suggest that the state statute might override the employer's religious objections.
Second, if this were a public school situation, it appears quite clear that since this would be considered non-official duty speech (and thus not subject to the Supreme Court's recent decision in Ceballos), this employee would likely have received protection under the Connick/Pickering line of cases as speech on a matter of public concern, assuming that her conduct did not cause a substantial disruption in the workplace.
I guess my overall point is that cases like the one decided above by the Third Circuit are not in any regard easy cases and can turn on such things as whether there is a state off-duty conduct statute in place or whether the employer in question is in the public sector.
Hat Tip: How Appealing
Duru on Title VII Implications on Race-Considered Roster Construction in Professional Sport
Jeremi Duru (Temple) has posted on SSRN his forthcoming piece in the Washington University Law Review entitled, Fielding a Team for the Fans: The Societal Consequences and Title VII Implications of Race-Considered Roster Construction in Professional Sport.
Here's the abstract:
Professional sports organizations' relationships with their players are, like other employer-employee relationships, subject to scrutiny under the antidiscrimination mandates embedded in Title VII of the Civil Rights Act of 1964. Professional sports organizations are, however, unique among employers in many respects. Most notably, unlike other employers, professional sports organizations attract avid supporters who identify deeply with the teams and their players. To the extent an organization racially discriminates, therefore, such discrimination creates the risk that fans will identify with the homogenous or racially disproportionate roster that results. The consequences of such race-based team identification are wide-reaching and potentially tragic.
Through engaging the race-considered roster construction phenomenon, with particular attention to the discriminatory histories of Major League Baseball's Boston Red Sox and the National Basketball Association's Boston Celtics, this article explores the societal discord race-considered roster construction breeds and Title VII's role in thwarting it. As the construction of Major League Baseball's 2005 New York Mets suggests, however, race-considered roster construction may favor non-white players, just as it has traditionally favored white players. As such, this article also explores Title VII's application to such race-considered roster construction, the extent to which developing affirmative action jurisprudence might shield this form of race-considered roster construction from Title VII liability, and whether Title VII's inapplicability in this context would result in the aforementioned negative societal consequences.
You can check out this highly interesting and thought-provoking article here.
Court Refuses to Enforce Arbitration Agreement Containing Discovery Restrictions
Daughter sued on behalf of mother injured while residing in a nursing home. An arbitration agreement in the Residency Agreement permitted deposition only of expert witnesses. The court found this provision substantively unconscionable because the daughter needed to depose residents and staff to find out what happened; unlike Gilmer, the discovery restrictions in this case would impede plaintiff’s ability to present her claim. The court therefore refused to enforce the arbitration clause. The case is Ostroff v. Alterra Healthcare Corp., ___ F.Supp.2d ___, 2006 WL 1544390, No. 05-6187 (E.D. Pa. June 7, 2006) (Westlaw password required).
Reported employment cases involving arbitral discovery restrictions are few and far between. Like the plaintiff in this case, plaintiffs in employment cases often need to depose fact witnesses, both to find out what happened (usually by deposing the supervisor and/or decisionmaker) and to gather information on comparators.
June 7, 2006
Verizon Pregnancy Discrimination Settlement
Previous posts have highlighted stories which have pointed to the increased incidence of pregnancy discrimination in the United States.
Now comes word of a whopping $49 million pregnancy discrimination settlement between Verizon and a large group of current and former female workers in thirteen different states.
From the EEOC Press Release (reprinted on OregonLive.com At Work blog):
The U.S. Equal Employment Opportunity Commission today announced that, pursuant to a court-filed consent decree, telecommunications giant Verizon Communications, Inc. will pay approximately $48.9 million to 12,326 current and former female employees in 13 states and the District of Columbia as part of a 2002 settlement of a landmark class action lawsuit alleging pregnancy discrimination against Verizon predecessor telephone companies NYNEX and Bell Atlantic.
The suits alleged that the companies violated Title VII of the 1964 Civil Rights Act, the Pregnancy Discrimination Act of 1978, the Equal Pay Act of 1963, and the Civil Rights Act of 1991, by denying female employees service credit related to pregnancy and maternity leaves of absence taken between July 2, 1965 and April 28, 1979, and care for newborn children leaves of absence taken between July 2, 1965 and December 31, 1983.
And in case you think this is just an isolated incident of one bad-apple company engaging in impermissible behavior, consider that:
Pregnancy discrimination charge filings with the EEOC and state or local agencies nationwide have increased by 31% between fiscal years 1992 and 2005, from 3,385 to 4,449 filings. Charge Data (pre-litigation) are available [here].
Burris on ADA Enforcement and Psychiatric Disabilities
Scott Burris (Temple) has posted on SSRN his forthcoming piece in the Maryland Law Review entitled, Justice Disparities: Does the ADA Enforcement System Treat People with Psychiatric Disabilities Fairly?
From the abstract:
1990 Americans with Disabilities Act (ADA) was expected to decrease discrimination against people with disabilities. However, discrimination against people with psychiatric disabilities may exist in the legal system that is charged with implementing the ADA. This study describes and compares the characteristics of people with psychiatric and nonpsychiatric disabilities who filed employment discrimination lawsuits under Title I of the Americans with Disabilities Act (ADA) from 1993 to 2001. The paper examines actual and perceived outcomes of these lawsuits, features of the surrounding legal process, effects of psychiatric disability status on receiving a benefit from litigation, and the predictors of overall satisfaction with the experience of bringing an ADA Title 1 claim.
The study finds that people with psychiatric disability fared significantly worse in employment discrimination lawsuits than their counterparts with nonpsychiatric disabilities, controlling for other significant predictors of litigation outcome including health status, plaintiff's education, reasons for the lawsuit, and assistance by a lawyer. Plaintiffs with psychiatric disabilities were also significantly less satisfied with the overall process of filing a claim of employment discrimination and bringing a lawsuit under the ADA. The effects of poor outcome on dissatisfaction were mediated by perceived unfairness, lack of voice, and lack of procedural justice in the charge process and litigation.
This type of scholarship is part of a growing trend of pieces which highlight the increasingly important role legal empirical studies are playing in understanding the efficacy of various federal statutory schemes.
You can download this timely article here.
The Impact of Company Bankruptcy on Retiree Health Benefits
Fred Tung over at the Conglomerate Blog has news of a survey which suggests disturbing findings as to what happens to employees who lose previously-promised retiree health benefits when their companies goes under.
the effect of two major steel company bankruptcies--LTV and Bethlehem Steel—on health coverage for retirees and their dependents. The two bankruptcies left approximately 200,000 retirees and dependents without health coverage between 2002 and 2003.
While most respondents (about 74%) were able to find health coverage after the loss of their retiree benefits, the loss of benefits caused significant disruption to their lives and retirement plans. For example, about one-half of pre-65 retiree respondents reported that they or a spouse returned to work or delayed retirement as a result. Twenty-five percent of pre-65 respondents reported that they cashed in “a lot” of their savings or assets to cover health care or insurance premium costs. Also 49% of pre-65 respondents reported postponing or going without needed physician care, and 29% reported postponing or going without need hospital care, because of cost concerns.
Court Rules That Filing a 12(b)(6) Motion Does Not Waive Arbitration
Jonathan Jung sued his employer Skadden Arps for race and national origin discrimination. Skadden filed a 12(b)(6) motion. The court found the motion meritorious, but granted Jung leave to amend his complaint. Jung successfully did so. Skadden then moved to compel arbitration pursuant to a predispute arbitration agreement. Jung argued that Skadden had waived the right to compel arbitration by filing the 12(b)(6) motion, and cited a case in which the Second Circuit had found waiver where a defendant had engaged in discovery before filing a motion to compel.
The U.S. District Court for the Southern District of New York disagreed with Jung’s argument and granted the motion to compel arbitration. Discovery, explained the court, creates sufficient prejudice to support waiver because “it is unfair to allow a party to gather information that will be advantageous in a later arbitration proceeding, if that information cannot be obtained in the arbitration proceeding.” A 12(b)(6) motion, the court ruled, did not create such prejudice.
The line the court drew here seems a bit fuzzy to me. Anecdotal evidence suggests that arbitrators are much less likely to grant motions to dismiss than courts are, in the same way that arbitrators generally permit less discovery than is allowed under the rules of civil procedure. If it's unfair to allow employers to use litigation to obtain discovery before seeking to compel arbitration, then it's arguably unfair to allow them to use litigation to seek a dismissal before seeking to compel arbitration.
The case is Jung v. Skadden, Arps, Slate, Meagher & Flom LLP, No. 05-CIV-4286 (MBM) (S.D.N.Y. May 31, 2006) (Westlaw password required).
June 6, 2006
Hawai'i Supreme Court Refuses to Enforce Arbitration Agreement
An employee at an Acura car dealership was injured when his supervisor allegedly discharged an air hose into the employee's anus. The employee sued the dealership for sexual harassment, sex discrimination, and negligence. The dealership moved to compel arbitration pursuant to an arbitration provision in the employment handbook. The trial court granted the motion, but the Hawai'i Supreme Court reversed, for three reasons. First, the court held the employee had insufficient notice because the arbitration provision was "buried" on page 20 of a 60-page handbook, and was not set off in any way. Second, the court held that no arbitral contract had been formed because the handbook itself stated that it "did not create a contract," that its policies were meant to be treated as "guidelines," and that its policies were presented "for information only." Third, the court held that the dealership's reservation of a right to modify or revoke the arbitration provision at any tme without notice demonstrated a lack of consideration.
The case is Douglass v. Pflueger Hawaii, Inc., No. 26363, ___ P.3d ___ (May 25, 2006).
Professional Sports Unions Flip-Flop?
The players' association and Sen. George Mitchell, who is conducting Major League Baseball's steroid investigation, are butting heads again -- this time over whether Mitchell should be required to notify the union in advance before he attempts to interview or request documents from former players.
In a memorandum Monday to agents and players -- a copy of which was obtained by ESPN.com -- union head Donald Fehr said Mitchell had agreed to notify the MLBPA before requesting interviews with or documents from current players. However, he has "refused to give the MLBPA notice as to most former player interviews," Fehr said in the memo. If a former player requests to have the union participate, though, Mitchell has agreed to honor that request, Fehr said.
So the union is asking all players and former players to decline to speak with the invetigators without consulting "both with a personal lawyer and with an MLBPA lawyer."
The reason that I am skeptical about how many much players' associations, like the MLBPA, care somuch about former players unless it serves their purposes is because of statements made by Gene Upshaw, head of the NFLPA in the past, like this one:
The bottom line is, I don't work for [retired NFL football players]. They don't hire me and they can't fire me. They can complain about me all day long. They can have their opinion. But the active players have the vote. That's who pays my salary.
Now, if Fehr feels the same way about former major league baseball players, it would take some nerve to suggest that former players should cooperate with the MLBPA when it comes to Sen. Mitchell's steroid investigation.
You just can't have it both ways.
June 5, 2006
Delta Close to Terminating Pilot Defined Benefit Pension Plan
In what is sure to be yet another blow to pilots at Delta Airlines, the Washington Post is reporting that the airline is close to requesting termination of its defined benefit pension plan for its pilots.
From the article:
Delta Air Lines Inc. will file a request to terminate its pilots' defined benefit pension plan "fairly soon," Chief Executive Gerald Grinstein said in an interview Friday in which he also talked about employee pay cuts, his future and whether a merger is a good idea.
It was the first time a Delta executive has said for sure that the airline plans to terminate the pilots' pension. In the past, the company has said only that it would likely seek termination.
When, and if, the pension plan is terminated, the pilots will have to look to the Pension Benefit Guaranty Corporation (PBGC) for whatever pension benefits are owed them. In this regard, the only thing that can be said for sure is that the pilots will not be receiving the full pensions that they have earned, but some lesser percentage.
Supreme Court Remands Whitman and Mohawk Employment Cases
Thanks to Ross Runkel and his Employment Law Memo for bringing to our attention that the Supreme Court today decided to remand (in per curiam opinions) two employment law cases that we have written about previously (here and here) to the appropriate circuit courts.
The first case is Whitman v. Department of
Transportation, No. 04-1131 (U.S. June 5, 2006) (per curiam), in which the employee sued the
Federal Aviation Administration claiming that the agency disproportionately tested him for substance
abuse in violation of the First Amendment and the federal statute on mandatory
drug testing. The claim was dismissed on the ground that the Civil Service Reform Act did not provide subject matter jurisdiction. The Supreme Court remanded the case to the 9th Circuit, finding that the question was not whether the CSRA provided subject matter jurisdiction, but whether it removed jurisdiction provided by the general federal question jurisdiction statute. The Supreme Court remanded the case to the 9th Circuit to make further findings on this issue.
In the second case, Mohawk Industries v. Williams, 05-465 (U.S. June 5, 2006) (per curiam), an employee RICO case dealing with illegal hiring of immigrants by the employer, the Supreme Court remanded the case back to the 11th Circuit in light of Anza v. Ideal Steel Supply Corp., No. 04-433 (U.S. June 5, 2006), which held (also today) that a RICO plaintiff alleging mail fraud must prove that the alleged violation was the proximate cause of the plaintiff's injury, which requires "some direct relation between the injury asserted and the injurious conduct alleged." The previous Mohawk case oral arguments had focuses on whether an employer could be a RICO enterprise.
Wal-Mart Victorious in Pharmacist Religious Accommodation Case
Over the year, we have reported on a number of religious discrimination cases in which pharamacists have sued their employers for requiring them to dispense, under some circumstances, contraception drugs with which they morally disagree.
Now comes words (thanks to Ann Bartow at Feminist Law Professors for the pointer) that Wal-Mart has won its cases against one of these religious pharmacists who even though he was not forced to dispense the drugs, refused to interact with customers who were taking the drugs.
According to Wired.com:
U.S. District Judge John Shabaz said Neil Noesen was actually fired from the Onalaska store last summer because he was disruptive and wasn't meeting expectations.
The Thursday ruling said Wal-Mart accommodated Noesen's religious opposition to birth control by having other pharmacists fill prescriptions. It also said Noesen went too far by trying to avoid any interaction with those customers, leading to poor customer service.
Additionally, the Minneapolis-St. Paul Star Tribune reports:
Stephanie Adler, an Orlando lawyer who represented Medical Staffing Network, said Shabaz's ruling was among the first in the country dealing with religious accommodations for pharmacists.
"It demonstrates there has to be a balance between accommodating someone's religious beliefs while at the same time providing a service and allowing people access to medical care,'' Adler said. "Noesen believes that his personal beliefs are more important than a patient's right to have access to legally prescribed medication.''
The state Pharmacy Examining Board sanctioned Noesen last year after he refused to fill a contraceptive prescription or transfer it to another pharmacy while he was a temporary pharmacist at a Menomonie Kmart in 2002. The board reprimanded him and forced him to attend ethics classes, saying he could not stand in the way of the woman's care.
A more difficult question still to be decided is how to accommodate religious pharmacists in these situations when they are the only ones availabe to fill the prescription? Is reassignment to another shift or another store appropriate where they can work with a non-objecting pharmacist? And, of course, the issue is complicated because some states, like Illinois, have made it illegal for pharmacists to refuse to fill such contraception prescriptions.