Saturday, August 26, 2006
- Matt Zwolinski (photo above), Sweatshops, Choice, and Exploitation (83).
- Ian Malcolm Ramsay, Andrew Barnes, Tanya Josev, Jarrod Lenne, Shelley D. Marshall, Richard Mitchell, & Cameron Rider, Employee Share Ownership Plans: Evaluating the Role of Tax and Other Factors Using Two Case Studies (47).
- Kirsten Anderson & Ian Malcolm Ramsay, From the Picket Line to the Board Room: Union Shareholder Activism (26).
- Sanford M. Jacoby, Convergence by Design: The Case of CalPERS in Japan (16).
- Ethan Yale & Gregg D. Polsky, Reforming the Taxation of Deferred Compensation (129).
- John H. Langbein (photo above), Trust Law as Regulatory Law: The Unum/Provident Scandal and Judicial Review of Benefit Denials Under ERISA (129).
- Cary Coglianese & Michael L. Michael, After the Scandals: Changing Relationships in Corporate Governance (110).
- Michael Conyon, John E. Core, & Wayne R. Guay, How High Is US CEO Pay? A Comparison with UK CEO Pay (77).
- Vidhi Chhaochharia & Yaniv Grinstein, CEO Compensation and Board Oversight (61).
Michael McCann (Miss. Coll.) and Joseph Rosen (Orpheus Sports and Entertainment) have posted on SSRN their recent piece in the Case Western Law Review entitled: Legality of Age Restrictions in the NBA and the NFL.
Here's the abstract:
This essay examines age eligibility rules in the National Football League ("NFL") and the National Basketball Association ("NBA"), offers analysis of related antitrust and labor law issues, and shares perspective on underlying policies.
As a matter of background, the NFL and the NBA are the only major sports organizations that prohibit players from entrance until a prescribed period after high school graduation. Major League Baseball, the National Hockey League, NASCAR, professional tennis, professional golf, and professional boxing have no such rules. Individuals can also partake in professional acting, theater, music, and other entertainment professions without satisfying a period after high school graduation. The same is true of those who enlist in the U.S. armed forces and in various occupations that require maturity and discipline.
Such an employment landscape raises inquiry as to why NFL and NBA teams, unlike so many other employers, would agree to boycott any candidate, regardless of talent or skill, until a prescribed period after high school graduation. This inquiry enjoys heightened interest when considering that NFL and NBA teams are incomparable employers, as players may not play in other leagues for similar compensation.
You can download this interesting sports law article at this link.
Friday, August 25, 2006
As reported by The New York Times, S.D.N.Y. Judge Victor Marrero just issued a temporary injunction barring Northwest flight attendants from striking--hours before the planned strike was to commence. As posted here earlier by Paul and explained in detail by Rick, a bankruptcy judge had earlier refused to enjoin the strike. That decision is being challenged before Judge Marrero. He stated that injunction was only intended to provide him time to review the matter, so stay tuned.
The August 21st edition of the Deloitte Washington Bulletin has the following blurb (click the link to see the complete write-up) concerning the promulgation of new anti-cutback regulations for defined benefit plans:
IRS Issues Final Anti-cutback Regulations for Defined Benefit Plans. The IRS has issued final regulations creating a utilization exception to the IRC § 411(d)(6) anti-cutback rule for eliminating optional forms of benefit from defined benefit plans. 71 FR 45379 (August 9, 2006). The final regulations also codify the Supreme Court’s decision in Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (2004), but apply the reasoning of that decision more broadly.
Thanks to Debra Davis for the pointer!
This blurb explains a little about the situation at Indiana University:
The Division of Labor Studies is a statewide academic unit with branches on six campuses. Several UALE members are employed in the DLS. Despite having 3,600 enrolled students across the state in this last year and bringing in $2,000,000 in income, the Indiana University administration is moving toward downsizing and phasing out the program.
An on-line petition to save IU Labor Studies has been created at: <http://www.petitionspot.com/petitions/IULaborStudies>
A lawsuit filed by the United Mine Workers of America [union website], seeking to compel the federal Mine Safety and Health Administration (MSHA) [official website] to perform periodic checks of "self-contained self-rescuers" oxygen units and lead mandatory emergency training for all mine workers, was dismissed Wednesday.
The claim was filed in June in response to Congressional changes to mine safety rules following the Sago Mine disaster. US District Judge John D. Bates [official profile] dismissed the case [opinion, PDF] because federal law allows the MSHA discretion in setting safety standards. Bates wrote that "the loss of lives, and the risks miners presently face, weigh heavily in public discourse and are taken seriously by this court. But the tragedy of those events, and the need for greater protection described by plaintiff, cannot substitute for the requirements of the law."
Clearly, the judge is right that MSHA has the discretion to set such safety standards. Why MSHA would not undertake these safety enhancements is beyond me. It might be because of the slow bureaucratic pace at which the agency moves or because politics (in particular, the coal mine owner lobby) is having an undue influence. Of course, you could also argue that the UMW's lawsuit was a political ploy to bring attention to needed improvements in the coal industry.
Whatever the reasons, here's hoping that such safety enhancing standards are put in place by MSHA and before another Sago Mine disaster happens.
California Governor Arnold Schwarzenegger says he and lawmakers have reached a deal to increase the minimum wage to $8 per hour in two steps.
If approved, the legislation would increase the state's minimum wage from $6.75 to $7.50 on January 1, 2007 and then to $8.00 in January 1, 2008.Schwarzenegger says he opposed previous minimum-wage proposals because they were indexed to inflation.
I guess I'm still not sure if someone can leave very well on such an hourly salary in such an expensive state like California, but it's a start. I'm also a little disappointed that the Governor didn't agree to tie minimum wage increases to inflation. That seems to be a no-brainer to me and would have avoided future battles over the minimum wage.
Thursday, August 24, 2006
Michael Stein (William & Mary) and Michael Waterstone (Loyola-LA) have posted on SSRN their forthcoming piece in the Duke Law Journal: Disability, Disparate Impact, and Class Actions.
Here's the abstract:
Following Title VII's enactment, group-based employment discrimination actions flourished due to disparate impact theory and the class action device. Courts recognized that subordination which defined a group's social identity was also sufficient to legally bind members together, even when relief had to be issued individually. Interwoven through these cases was a notion of panethnicity that united inherently unrelated groups into a common identity, for example, Asian Americans.
Stringent judicial interpretation subsequently eroded both legal frameworks and it has become increasingly difficult to assert collective employment actions, even against discriminatory practices affecting an entire group. This deconstruction has immensely disadvantaged persons with disabilities. Under the Americans with Disabilities Act ("ADA"), individual employee claims to accommodate specific impairments, such as whether to install ramps or replace computer screens, have all but eclipsed a coherent theory of disability-based disparate impact law, and the class action device has been virtually non-existent in disability discrimination employment cases. The absence of collective action has been especially harmful because the realm of the workplace is precisely where group-based remedies are needed most. Specifically, a crucial but overlooked issue in disability integration is the harder-to-reach embedded norms that require job and policy modifications.
The Article argues that pandisability theory serves as an analogue to earlier notions of panethnicity and provides an equally compelling heuristic for determining class identity. It shows that pandisability undergirds ADA public service and public accommodation class actions where individualized remedy assessments have been accepted as part of group-based challenges to social exclusion. The Article also demonstrates that this broader vision of collective action is consistent with the history underlying the class action device. Taking advantage of the relatively blank slate of writing on group-based disability discrimination, it offers an intrepid vision of the ADA's potential for transforming workplace environments. In advocating for a return to an earlier paradigm of collective action in the disability context, the Article also provides some thoughts for challenging race and sex-based discrimination.
You can download this important contribution to disability and employment discrimination law at this link.
The Second Circuit Court of Appeals in a 2-1 decision in Reuland v. Hynes, 04-5521 (2nd Cir. Aug. 21, 2006), has found that a Brooklyn assistant district attorney was demoted and forced to resign in violation of the First Amendment because the adverse employment actions taken against him stemmed from his criticisms of his employer during a publicity tour for his new book.
The majority found that the ADA had engaged in speech on a matter of public concern when publicizing his work when he commented to a reporter about the Brooklyn DA's office: "We’ve got more dead bodies per square inch than anywhere else."
Interestingly, writing in dissent, Judge Winters found that the employee deserved no First Amendment protection because he was engaging in mere hyperbole and not truly speaking out on the deficiencies of his employer.
In any event, I think we can all agree that this is not a case of official-capacity speech under Ceballos.
Thanks to Robert Loblaw of Decision of the Day for bringing this case to my attention.
Yup, you read it right. An important case, Murphy v. IRS, 05-5139 (D.C. Cir. Aug. 22, 2006), has come down from the D.C. Circuit Court of Appeals finding that the taxing of emotional distress damages awarded in an employment retaliation case under the Internal Revenue Code is unconstitutional under the 16th Amendment because such legal relief is not "income" under the Amendment.
There has been a truckload of commentary that has come out about this case, including whether because something is not income under the 16th Amendment the Congress nevertheless has power to tax the award under its other enumerated powers. Paul Caron at TaxProf has this very helpful post summarizing all the blogospheric reaction to this important case. Additionally, here is a nice summary of the case itself from Ross' Employment Law Blog.
Over 2000 employees have brought claims against Cintas in 71 actions in 71 different federal district courts. The Judicial Panel on Multidistrict Litigation has transferred those actions to the Northern District of California, where the first action was filed. The Panel found that the actions involved common questions of fact and that they required the interpretation of identical arbitration clauses. The case is In re Cintas Corp. Overtime Pay Arbitration Litigation, No. MDL-1781 (Aug. 18, 2006), 2006 WL 2422689.
Wednesday, August 23, 2006
Eric Chason (William & Mary) just sent me a reprint on his thoughtful new piece in the Ohio State Law Journal: Deferred Compensation Reform: Taxing the Fruit of the Tree in its Proper Season, 67 Ohio St. L. J. 347 (2006) (here is the SSRN link).
From the abstract:
Executive pensions (or deferred compensation) grabbed headlines after Enron's collapse and fresh concerns over ever-increasing executive pay. They also grabbed the attention of Congress, which reformed executive pensions legislatively in 2004 with § 409A of the Internal Revenue Code. Section 409A merely tightens and clarifies the doctrines that had already governed executive pensions, leaving the basic economics of executive pensions unchanged. Executives can still defer taxation on current compensation until actual payment is made in the future. Deferral still comes at the same price to the employer, namely the deferral of its deduction for the compensation expense. Thus, the timing of deduction and inclusion are matched.
[T]he primary problem of executive pensions is the temporal shifting of executive compensation from high-tax years to low-tax years. This temporal shifting is clearly allowed by current law, in contrast to personal shifting of compensation income from high-rate taxpayers to low-rate taxpayers. The policy concerns are largely the same, however, and the tax laws should limit the temporal shifting as well. The ideal response would be a system of accrual taxation on executive pensions. The second best would be taxing the delayed payment at the highest marginal tax rates that apply to individuals.
Check out this insightful contribution to the area of executive pensions, as this original approach to the law will surely come to the attention of decisionmakers in this ever-changing area of the law.
From a press relase (should be posted soon on this site) from New Jersey Governor John Corzine:
Governor Jon S. Corzine has signed legislation . . . to force the disclosure of the names of large employers that have inordinate numbers of workers enrolled in the NJ FamilyCare subsidized health-care program.
Mounting evidence suggests that some large employers like Wal-Mart and other big-box retailers are trying to maximize profits at the expense of New Jersey taxpayers who foot the bill for NJ FamilyCare," said [Reed] Gusciora (D-Mercer). "It's inconceivable that the failure of these well-heeled employers to provide health insurance to their workers is costing taxpayers more than $100 million a year."
The new law (A932) directs the state Department of Human Services to create an annual report on employers that have 50 or more employees enrolled in NJ FamilyCare. The reports will include employer information, the type of insurance offered, the number of employees and dependents enrolled in FamilyCare, and the annual cost to the state for covering employees, employee spouses and employee dependents.
The measure requires DHS to provide the annual report by February 1 to the Governor and Legislative Committees. The comprehensive study will not include the names of FamilyCare enrollees and will be used to evaluate the decline in employer-provided health insurance statewide.
As far as ERISA preemption, I am going to say this type of bill which merely requires disclosure, but does not compel these companies to do anything, is not interfering with the orderly administration and management of employee benefit plans and therefore, preemption should not be a problem.
Of course, if New Jersey utilized the findings from these disclosures to try to put
additional obligations on these companies to pay for health care, I think then
your in the Maryland realm of things and ERISA preemption may be a real
I like the idea of the disclosure law in some ways because bringing to light the practices of these highly profitable companies and the way they handle employee health care maybe can shame some of them in doing what's right, health care-wise, for their employees.
Hat Tip: Blog Reader Steven Sholk
So who portrays the worse bosses on television these days? According to the Challenger, Gray & Christmas (via CNNMoney.com), the worst bosses include:
Homer Simpson's boss, Mr. Burns, and Jack Bauer's boss, President Logan.
Also on the list: Gordon Ramsey, head chef on Fox's "Hell's Kitchen"; Michael Scott, manager on NBC's "The Office"; Al Swearengen, the brothel owner on HBO's "Deadwood"; Dr. Bob Kelso, hospital chief of staff on NBC's "Scrubs"; Adrian Monk, the obsessive-compulsive detective on USA Network's "Monk"; and Cosmo Spacely, George Jetson's boss in the 1960s animated series "The Jetsons."
I used to love The Jetsons, but wasn't there an equally obnoxious competitor boss in that show that George sometimes worked for?
Five points for anyone who remembers his name!
Here's a story from CNN.com about a long-time female religious teacher who was asked to leave by her church because the church no longer believed that women should educate boys:
The minister of a church that dismissed a female Sunday School teacher after adopting what it called a literal interpretation of the Bible says a woman can perform any job -- outside of the church.
The First Baptist Church dismissed Mary Lambert on August 9 with a letter explaining that the church had adopted an interpretation that prohibits women from teaching men. She had taught there for 54 years.
The letter quoted the first epistle to Timothy: "I do not permit a woman to teach or to have authority over a man; she must be silent."
OK, so the church has probably the legal right to religiously discriminate against this teacher under Title VII, but perhaps she could make a claim that religious discrimination was really just a pretext for age discrimination (see Mississippi College).
In any event, you would think a church, a place of compassion, would recognize that being this unfair to a 54-year employee is just not right, illegal or not.
The other question I have, since the church wants to follow a literal version of the New Testament, is whether it will allow its female members to even speak in church.
Congratulations to Gulius Getman on the publication of his new novel Strike! Getman's novel tells the story of a strike by paper workers fighting to maintain their community and traditional lifestyle. Here's a description from the publisher's news release:
The strike is provoked by negotiators for Consolidated Paper Company, following the instructions of their new CEO, George Watts. In an effort to destroy the union, Watts demands major concessions and refuses to make reasonable compromises. When the workers predictably go on strike the company hires strikebreakers to permanently take their jobs. The union puts up a much stronger battle than the company expects. It wins the support of a once hostile press, student groups, churches and civil rights activists. It undertakes a campaign of civil disobedience that puts Watts on the defensive even at the Harvard Club. Watts, reluctantly, orders Tom Gilligan (the company's long director of labor relations) to negotiate a settlement with the union.
But as the parties get close to reaching an agreement a violent confrontation between strikers and scabs takes place. Edith Kent, a pregnant replacement worker is killed during the clash. Her death dispirits the strikers, and turns public opinion against the union. The strike is lost. Three union leaders are subsequently tried for conspiracy under the RICO Act. With the strikers' freedom at stake, Gilligan is called to testify. The effect of his testimony will determine whether the strikers remain free or not.
Congratulations to Professor Michael J. Goldberg (Widener), who won an LMRDA case before the Third Circuit which he handled pro bono on behalf of four union laborers. The case arose in Wilmington, and involved a dispute between the men - reformers in the longshoremen's union - and their national union, the International Longshoremen's Association. The case is Knight et al. v. International Longshoremen's Association, No. 05-3430 (3d Cir. 8/14/06).
Tuesday, August 22, 2006
Dennis Nolan (South Carolina) wrote this morning to send me a link to this fascinating article by Malcolm Gladwell in the New Yorker Magazine discussing the connection between increase productivity in the American workforce and the turmoil surrounding employer-provided pensions.
Here's a taste of this lengthy, but highly interesting, article:
America’s private pension system is now in crisis. Over the past few years, American taxpayers have been put at risk of assuming tens of billions of dollars of pension liabilities from once profitable companies. Hundreds of thousands of retired steelworkers and airline employees have seen health-care benefits that were promised to them by their employers vanish.
The logic of dependency ratios, of course, works equally powerfully in reverse. If your economy benefits by having a big bulge of working-age people, then your economy will have a harder time of it when that bulge generation retires, and there are relatively few workers to take their place.
This demographic logic also applies to companies, since any employer that offers pensions and benefits to its employees has to deal with the consequences of its nonworker-to-worker ratio, just as a country does. An employer that promised, back in the nineteen-fifties, to pay for its employees’ health care when they were retired didn’t set aside the money for that while they were working. It just paid the bills as they came in: money generated by current workers was used to pay for the costs of taking care of past workers. Pensions worked roughly the same way.
Technology led to great advances in productivity, so that when the bulge of workers hired in the middle of the century retired and began drawing pensions, there was no one replacing them in the workforce. General Motors today makes more cars and trucks than it did in the early nineteen-sixties, but it does so with about a third of the employees. In 1962, G.M. had four hundred and sixty-four thousand U.S. employees and was paying benefits to forty thousand retirees and their spouses, for a dependency ratio of one pensioner to 11.6 employees. Last year, it had a hundred and forty-one thousand workers and paid benefits to four hundred and fifty-three thousand retirees, for a dependency ratio of 3.2 to 1.
But, with respect to the staggering burden of benefit obligations, what got them in trouble isn’t what they did wrong; it is what they did right. They got in trouble in the nineteen-nineties because they were around in the nineteen-fifties—and survived to pay for the retirement of the workers they hired forty years ago. They got in trouble because they innovated, and became more efficient in their use of labor.
The take home line from this remarkably perceptive article: "Here, surely, is the absurdity of a system in which individual employers are responsible for providing their own employee benefits. It penalizes companies for doing what they ought to do." In other words, by becoming more productive and more innovative and thereby having less employees, it makes it harder for companies to fund their existing pension obligations.
[I]f you pooled the obligations of every employer in the country, no company would go bankrupt just because it happened to employ older people, or it happened to have been around for a while, or it happened to have made the transformation from open-hearth furnaces and ingot-making to basic oxygen furnaces and continuous casting. This is what Walter Reuther and the other union heads understood more than fifty years ago: that in the free-market system it makes little sense for the burdens of insurance to be borne by one company. If the risks of providing for health care and old-age pensions are shared by all of us, then companies can succeed or fail based on what they do and not on the number of their retirees.
- John E. Matejkovic (top left) & Margaret E. Matejkovic (top right), Whom to Hire: Rampant Misrepresentations of Credentials Mandate the Prudent Employer Make Informed Hiring Decisions, Creighton L. Rev. 827 (2006).
- Stephen Richey (bottom right) & Faith C. Isenhath, Survey: How Recent Kentucky Courts are Applying the Retaliation Claim in Employment Cases, 33 N. Ky. L. Rev. 283 (2006).
- Jayne Elizabeth Zanglein, Fifth Circuit Survey: Employee Benefits, 38 Tex. Tech L. Rev. 767 (2006).
- Stan Pietrusiak (bottom left), Fifth Circuit Survey: Labor and Employment Law, 38 Tex. Tech L. Rev. 911 (2006).
- Donald T. Bogan (bottom center) & Benjamin Fu, ERISA: No Further Inquiry into Conflicted Plan Administrator Claim Denials, 58 Okla. L. Rev. 637 (2005).
- Megan E. Hladilek, Can I Go to Chemo?: Protecting Employee Rights to Intermittent and Reduced Leave Under the Family Medical Leave Act, 29 Hamline L. Rev. 377 (2006).
- Scott E. Michael, "Lie or Lose Your Job!": Protecting A Public Employee's First Amendment Right to Testify Truthfully, 29 Hamline L. Rev. 411 (2006).