January 13, 2007
What's In A Name? Everything
The House Committee on Education and Workforce has had its name changed in the new Congress to the House Committee on Education and Labor.
Significant? You betcha.
Top-5 International Employment & Labor Law SSRN Downloads
- Scott Cummings, The Internationalization of Public Interest Law (59).
- Howard F. Chang (photo above), The Economic Impact of International Labor Migration: Recent Estimates and Policy Implications (35).
Top-5 Benefits/Compensation/Pension SSRN Downloads
- Lucian Arye Bebchuk, Yaniv Grinstein, & Urs Peyer, Lucky CEOs (985).
- Stephen F. Befort (photo above), The Perfect Storm of Retirement Security: Fixing the Three-Legged Stool of Social Security, Pensions, and Personal Savings (140).
- Takeshi Yamaguchi, Olivia S. Mitchell, Gary R. Mottola, & Stephen P. Utkus, Winners and Losers: 401(k) Trading and Portfolio Performance (105).
- Debra A. Davis, Do-It-Yourself Retirement: Allowing Employees to Direct the Investment of Their Retirement Savings (66).
- Lawton W. Hawkins, Compensation Representatives: A Prudent Solution to Excessive CEO Pay (52).
January 12, 2007
401k Investment Decisions Vary by Race, Exacerbating Pre-Existing Wealth Disparities
Dorothy Brown (Washington & Lee) has just posted on SSRN her article Pensions and Risk Aversion: The Influence of Race, Ethnicity, and Class on Investor Behavior. Here's the abstract:
Defined Contribution plans have greatly expanded over the last two decades. Defined Contribution plans place the investment risk on employees. Employee investment decision making should be examined to determine whether those decisions are influenced by race, ethnicity and/or class.
Empirical data show that investor behavior is greatly influenced by race, ethnicity and/or class. Blacks and Hispanics are far less likely to invest in the stock market than whites. Low-income whites are far more likely to invest in the stock market than blacks or Hispanics regardless of income. As a result, retirement account balances are the greatest for many white households and the least for black, Hispanic, and certain white households. This article explores those issues and suggests solutions that will allow employees to overcome their built-in biases and make wiser investment choices.
Empirical Support for Minimum Wage Increases
Here's another piece from the New York Times (sent along by Michael Fischl (Connecticut)) on the minimum wage issue. Unlike other pieces which focus theoretically on the advantages and disadvantages of the minimum wage increase, this one provides hard evidence that such increases benefit workers by looking at working conditions at towns located close together, but in different states and under very different state minimum wage laws.
Here's an excerpt:
Just eight miles separate this town on the Washington side of the state border from Post Falls on the Idaho side. But the towns are nearly $3 an hour apart in the required minimum wage. Washington pays the highest in the nation, just under $8 an hour, and Idaho has among the lowest, matching 21 states that have not raised the hourly wage beyond the federal minimum of $5.15.
Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.
But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.
Idaho teenagers cross the state line to work in fast-food restaurants in Washington, where the minimum wage is 54 percent higher. That has forced businesses in Idaho to raise their wages to compete.
The minimum wage debate will no doubt continue on into eternity, but empirical evidence like the above should no doubt have more impact on the debate than economic models drawn up in a vacuum.
Union Organizing By Email?
Michael Fox (left), over at Jottings By an Employer's Lawyer, shares his thoughts on the NLRB's upcoming oral argument in the email case.
The Interesting, Increasing Absence of the Executive Employment Agreement
Eric Dash reports in today's New York Times Business Section that more and more companies are foregoing signing their chief executives to employment agreements as a way to avoid having to pay massive severance agreement if the executive is prematurely fired for poor performance:
The new heads of Exxon Mobil, PepsiCo and Pfizer don’t have one. Nor do the chief executives at Citigroup, General Electric and Procter & Gamble. And some corporate governance experts say shareholders are better off as a result.
It is an employment contract, and it has been in the spotlight ever since a number of prominent chief executives were ousted with golden goodbyes — Robert L. Nardelli’s $210 million exit package from Home Depot being the most recent. Employment contracts, agreed upon when a new leader arrives, have been blamed for virtually guaranteeing such huge payouts even when that executive fails.
But it doesn't look like executive employment agreements will be disappearing anytime soon:
While they may be tarred by controversy, employment agreements are still common at many large corporations. And compensation experts do not see them going away soon.
“Rumors of the employment contract’s demise are greatly exaggerated,” said Jannice L. Koors, a managing director at Pearl Meyer & Partners. “As long as you need to do things to lure top executives from positions they are already in, you are going to have to offer them some kind of protection to get them to say yes.”
But, as the article points out, maybe increased scrutiny on these "golden goodbyes" will make excessive severance packages more rare. After all, "[i]t’s not that employment agreements are bad,” said Paul Hodgson, senior analyst at the Corporate Library, a governance watchdog group. “It’s what’s in them.”
January 11, 2007
Out of Whack Executive Compensation
Thanks to Chris Cameron (Southwestern) for sending me this hard-hitting op-ed by Bob Herbert (pictured left) in this week's New York Times. Some of what Herbert has to say:
Data recently compiled by the Center for Labor Market Studies at Northeastern University in Boston offers a startling look at just how out of whack executive compensation has become. Some of the Wall Street Christmas bonuses last month were fabulous enough to resurrect an adult’s belief in Santa Claus. Morgan Stanley’s John Mack got stock and options worth in excess of $40 million. Lloyd Blankfein at Goldman Sachs did even better — $53.4 million.
According to the center’s director, Andrew Sum, the top five Wall Street firms (Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley) were expected to award an estimated $36 billion to $44 billion worth of bonuses to their 173,000 employees, an average of between $208,000 and $254,000, “with the bulk of the gains accruing to the top 1,000 or so highest-paid managers.”
Now consider what’s been happening to the bulk of the American population, the ordinary men and women who have to work for a living somewhere below the stratosphere of the top corporate executives. Between 2000 and 2006, labor productivity in the nonfarm sector of the economy rose by an impressive 18 percent. But workers were not paid for that impressive effort. During that period, according to Mr. Sum, the inflation-adjusted weekly wages of workers increased by just 1 percent.
That’s $3.20 a week.
Herbert's take home point: "Productivity gains are no longer broadly shared. They’re barely shared at all."
Hard to argue against that.
Employment Harrassment Claims Alive and Well in 10th Circuit
Thanks to Rosario Vega Lynn of the New Mexico Labor and Employment Law Blog for pointing me to this recently-decided national origin harassment case from the 10th Circuit: Herrera v. Lufkin Industries, Inc., No. 04-8089 (10th Cir., January 4, 2007). In this case, the court found that a number of instances of national origin harassment in an oil field context over a four year period permitted the plaintiff to survive summary judgment.
The conduct included:
[O]ver a four year time period: (1) Moore [a management trainee] refused to shake Herrera's [the plaintiff] hand in 1997 when they met; (2) in 1999, Moore gave Cunningham "Mexican peanut brittle" with a note to give it to Herrera; (3) Moore told Herrera to deal with certain customers because they were either Mexican or liked Mexicans; (4) Moore told Cunningham to tell Herrera not to "Mexicanize" Herrera's new company truck; (5) Moore would refer to Herrera as "the Mexican" or the "f-cking Mexican" whenever he spoke with Cunningham (Herrera's supervisor), Carolyn Coleman (the secretary), and Bill Bryant (the warehouse manager). These types of comments were made against Herrera every two or three days and Herrera was informed of some of the comments
As Rosario points out, this is a surprising outcome because the 10th Circuit reversed its previous decision in the case, it has been less than receptive to these types of harassment claims in the past, and one would think that the court would have allow more harsh and inappropriate conduct to occur in an oil field environment.
Oh well, wonders never cease.
Union Organizing By Email?
The NLRB will hear argument on March 27 on a case raising the issue of whether employees have the right to use their employer's email system to communicate with other employees about unions or other protected, concerted matters. The case is The Guard Publishing Co., d/b/a The Register-Guard, 36-CA-8743-1.
January 10, 2007
Analysis of Oral Transcript in Davenport Supreme Court Union Fees Case
As reported in a number of earlier posts (here, here, and here), the United States Supreme Court heard oral argument today in the consolidated cases of Davenport v. Washington Education Association and Washington v. Washington Education Association. At stake, whether the State of Washington can prohibit unions from using nonmembers' dues for political purposes unless those nonmembers affirmatively opt-in to allow their dues to be used for such purposes.
Thanks to SCOTUSBlog for providing a link to the transcript of the oral argument in these cases. Some of the more interesting questions by the Justices in the case include:
- Justice Breyer seeming to signal his support for the union when he asked:
If that's what they intended, then how can a State say, well, it's the union's money, we don't want you to send this little bit of your money to contribute in a campaign, but if the local swimming team wants to, or the bar association or the corporation, if they want to spend money that people have given them for totally other purposes, the compulsory bar association, well, they can do that. It's just the labor unions that can't spend the money that these people forced to belong -- you know, they have to object affirmatively -- but all the other similar organizations, they can't.
2. Justice Alito, on the other hand, posing questions which suggests support for the State of Washington and the class of nonmember union employees:
Well, if this money is the non-union member's money and an opt-out -- I'm sorry -opt-in scheme is not much of a burden on the unions, why should the First Amendment permit anything other than an opt-in scheme.
What's the difference between saying would you like to make a contribution, and would you like to allow us to use money that we possess for our purposes rather than returning it to us? What's the difference between those two?
3. Justice Scalia also not appearing to be a big fan of the union's argument:
I don't think it's content discrimination of the sort that triggers strict scrutiny when the government gives money for a particular purpose only and not for other purposes, and I also don't think it's content discrimination of the sort that triggers strict scrutiny when the government allows a private organization to use governmental power to exact money from people for a particular purpose only. That's a different ball game.
4. Justice Kennedy, a potential swing-vote, also seeming skeptical of the union argument:
I mean, you -- you begin by talking about the First Amendment but you, you proceed as if there are no First Amendment rights of, of workers involved at all.
You want us to consider this case as if the First Amendment rights of non-union members were not involved?
In addition to these questions, there were questions by other Justices, including Justices Souter and Stevens, which seemed skeptical that the Washington scheme interfered with the union's rights to political advocacy. Indeed, only Justices Ginsburg and Breyer seemed to be at all sympathetic to the union's argument.
Reading the tea leaves of the transcript, I see a 7-2 decision in favor of Davenport and the State of Washington and against the Union. At the end of the day, the Court is likely to hold that the State is free to go beyond the constitutional minimum of providing for an opt-out mechanism for union dissenters as far as the expenditure of their dues for political purposes, and doing so does not significantly burden whatever right to political advocacy the union might have.
Legislating for TSA Worker Bargaining Rights
Thanks to blogger-for-all-seasons Joe Slater (Toledo), for bringing to my attention this post on the AFL-CIO Blog about legislation in the House that would give Transportation Security Administration (TSA) employees organizing and collective bargaining rights.
According to the AFL-CIO Blog post by James Parks yesterday:
When Democrats returned to leadership in Congress last week, they promised big changes in the First 100 Hours. Today, in one of its first major votes, the House is expected to give 56,000 airport screeners the freedom to form a union and bargain for a better life. A bill to enact recommendations of the 9-11 Commission, on the floor for a vote today, repeals a portion of the Aviation and Transportation Security Act (ATSA), which gave the Bush administration authority to terminate collective bargaining for employees of the Transportation Security Administration (TSA).
Another AFL-CIO Blog post today now confirms that the legislation overwhelmingly (299-128) passed the House and is on its way to the Senate. Depending on the Senate outcome, this bill could be veto-proof.
Minimum Wage Craze Sweeping The Nation
Update: The House yesterday overwhelmingly passed a minimum wage increase to $7.25/hr.
If my home state of Mississippi is even considering passing a minimum wage increase, you know that you have a bona fide minimum wage wave sweeping the country.
With one lawmaker saying Mississippians shouldn’t be “cheap labor,” the state House today approved a bill that would set a state minimum wage that’s 40 percent higher than the national base of $5.15 an hour.
There is an exception: Students, regardless of age, could still be paid the federal minimum, if that figure remains lower.
Of course, this being Mississippi, home of one of the only states without a Department of Labor or state anti-discrimination law, there is still going to be a fight over whether there should be such worker-friendly legislation:
Republican Gov. Haley Barbour opposes the bill, as do several business groups.
Prospects for the state election-year proposal appear dim. The bill moves to the Senate, which is generally considered friendlier to business groups.
But shoot, Mississippi workers are some of the best paid in the country, so who needs a wage increase anyway? (Should be detecting a note of sarcasm here).
In any event, there will likely be a federal minimum wage increase this year, so all of this is somewhat moot.
Hat Tip: Megan McGrew
Supreme Court to Consider Cash Balance Plans?
"HIGH" TIME? This week, the U.S. Supreme Court is scheduled to discuss whether or not it will review a federal appeals court ruling that IBM Corp.'s cash balance pension plan does not discriminate against older workers. Last August, the 7th U.S. Circuit Court of Appeals overturned a lower court ruling that said the plan discriminated against older employees. However, it is not clear when the - or if - the nation's high court might decide on whether to hear the case after talking about it at their regular weekly conference.
You can read about the rest of this developing story here at PlanSponsor.com (free registeration required). You can also read about the 7th Circuit's previous decision in the IBM case at this previous post, as well as posts dealing with commentators who have critiqued and supported that decision.
EEOC Settles Pregnancy Discrimination Case
The EEOC reports that a Philadelphia-based maternity clothes retailer named, ironically, "Mothers Work," will pay $375,000 to settle a pregnancy discrimination and retaliation lawsuit alleging the company refused to hire qualified female applicants because they were pregnant.
According to the EEOC's lawsuit, a former assistant manager complained about Motherhood's policy and practice of discrimination against pregnant applicants. The EEOC said Motherhood illegally disciplined and ultimately fired Burns because it believed she was pregnant and in retaliation for her complaints.
The three-year consent decree settling the suit requires Motherhood to pay Ms. Burns $135,000 in compensatory and punitive damages; $50,000 in back pay; $130,000 for Burns's private attorney's fees and costs; and $20,000 in compensatory and punitive damages to each of three women who were denied employment opportunities because they were pregnant.
Mothers Work owns several brands, including "a pea in the pod," Mimi Maternity, Motherhood Maternity, and Motherhood Nursingwear. The company also leases departments in department stores such as Macy's, Sears, Babies R Us, Bloomingdale's, and Marshall Fields.
New Book on Employment Discrimination Law
Congratulations to Janis McDonald (left), Frank Ravitch (right), and Pamela Sumners on the publication of their new book Employment Discrimination Law: Problems, Cases, and Critical Perspectives. The publisher, Prentice Hall, describes the book as appropriate for undergraduate/graduate courses in Employment Discrimination Law and introductory paralegal courses.
January 9, 2007
"Discriminatory" Job Notices Revisited
Update: Doug Lederman at Inside Higher Ed also helpfully points out Scott Jaschik's piece on the AEA's recent actions.
About a month ago, I wrote a post about an Inside Higher Ed article which explained that the American Economic Association (AEA) had adopted a policy to refuse job notices that sought applications from underrepresented minorities. At the time, I was confused about how such job notices could in any way run afoul of employment discrimination law.
Apparently, the AEA has now backed off from its extreme stance. The Chronicle of Higher Education (subscription required) reports:
After a period of widespread discontent, the executive committee of the American Economic Association voted on Thursday to loosen restrictions on references to minority groups in the association's job notices. The decision was formally announced on Saturday during the association's annual meeting here.
Since 1986, the association has banned advertisements in its newsletter, Job Openings for Economists, that discriminate "on the basis of race, color, religion, gender, national origin, sexual preference, or physical handicap." And for at least a decade, it has interpreted that policy with an unusual strictness, so as to forbid phrases such as "We encourage applications from women and members of underrepresented minorities." Broad language such as "We are an equal-opportunity, affirmative-action employer" has been accepted, but explicit encouragement to particular groups has not.
The new policy's exact terms have not yet been set in stone, but the association will now allow recruitment language that encourages applications from people who belong to underrepresented groups covered by federal civil-rights law.
Good to see this organization is willing to admit its poor policy decision and move on.
"You're Sued!": Trump Sued for Age Discrimination
For a man so used to saying "you're fired!" on his well-known The Apprentice TV show, it might taking some getting used to for Donald Trump to hear from one of the rejected applicants from his show the phrase: "You're sued!" (from CBS4boston.com):
Richard J. Hewett never heard "You're fired!" -- but he's suing Donald Trump anyway.
The rejected applicant for NBC's "The Apprentice" is suing the real estate mogul claiming he was turned away because of age discrimination.
Hewett was 49 when he was rejected in July 2005, and claims in his lawsuit filed last week in U.S. District Court in Boston that only two of the finalists covering six seasons has been over 40. He alleges Trump and the show's producers are in violation of the federal Age Discrimination in Employment Act.
This has not been a good couple of weeks for Trump, between resume fraud being exposed in his mortgage company and his nasty tit-for-tat with Rosie O'Donnell.
As for this case, The Apprentice producers have responded that only a minuscule number of applicants over 40 apply for the show, but unlike the help wanted ads that focus on people just out of law schools, the producers claims they would like to have more experienced contestants, just apparently not Mr. Hewett.
Need a Speaker from the NLRB?
As part of that initiative, a user-friendly feature has been included in the new National Labor Relations Board Website to enable members of the public to request that NLRB representatives speak at and participate in meetings, conferences and seminars at no cost. The site specifically lists schools as part of its target audience, so Labor Law professors should be able to use the site to request a guest speaker from the NLRB.
Request an NLRB speaker by answering a few questions on the Speakers feature of the NLRB’s Website and electronically submitting the request. Once the request is received, one of the Agency’s National Outreach Coordinators will contact the requesting individual to coordinate efforts to provide an NLRB expert at the event.
Family Friendly Policy And The Law
Comparative Labor Law & Policy Journal
Volume 27, Number 4, Summer 2006
- Finland: Antti Suviranta, Employment, Family, and the Law in Finland, p. 437.
- Germany: Marlene Schmidt, Employment, the Family, and the Law: Current Problems in Germany, p. 451.
- Israel: Mordehai (Moti) Mironi (photo above), Work, Family, and the Law in Israel, p. 487.
- Japan: Michiyo Morozumi, Special Protection, Equality, and Beyond: Working Life and Parenthood Under Japanese Labor Law, p. 513.