June 2, 2007
Labor Economics Revisited
Bruce Kaufman (Georgia St. Dep't of Economics) has just posted on SSRN his article The Non-Existence of the Labor Demand/Supply Diagram, and Other Theorems of Institutional Economics. Here's an excerpt from the abstract:
In this article I accomplish four things of significance. The first is to demonstrate that the core diagram of neoclassical labor economics � the diagram of wage determination by demand and supply (D/S) � does not have logical coherence and thus has no existence on the plane of pure theory. The second is to deduce this conclusion using a core concept of institutional economics (i.e., transaction cost), thus demonstrating that the institutional approach to labor economics has theoretical explanatory power. The third is to use the transaction cost idea to also deduce four fundamental theorems concerning labor markets and wage determination. The fourth is to identify the core theoretical foundation of the field of industrial relations. This discussion also yields important implications for the economic evaluation of labor and employment policy, as well as interesting insights on the history of thought in labor economics.
Top-5 Benefits/Compensation/Pension SSRN Downloads
- Daniel I. Halperin (left) & Ethan Yale (right), Deferred Compensation Revisited (229).
- Edward A. Zelinsky, The New Massachusetts Health Law: Preemption and Experimentation (123).
- Pamela J. Perun, Towards a Sensible System for Saving (70).
- Lisa Mensah & Pamela J. Perun, Savings for Life: A Pathway to Financial Security for All Americans (66).
- Wei-Yin Hu & Jason S. Scott, Behavioral Obstacles to the Annuity Market (57).
Top-5 International Employment & Labor Law SSRN Downloads
- Margaret M. Blair, Cynthia A. Williams, & Li-Wen Lin, Assurance Services as a Substitute for Law in Global Commerce (76).
- Judy Fudge, The New Discourse of Labour Rights: From Social to Fundamental Rights? (61).
- Orly Lobel (photo above), Big-Box Benefits: The Targeting of Giants in a National Campaign to Raise Work Conditions (35).
- Kirsten Anderson, Shelley D. Marshall, & Ian Malcolm Ramsey, Do Australian Institutional Investors Aim to Influence the Human Resource Practices of Investee Companies? (18).
- Dae Yong Jeong & Ruth V. Aguilera, The Evolution of Enterprise Unionism in Japan: A Socio-Political Perspective (15).
June 1, 2007
Global Issues in Labor Law
Sam Estreicher's Global Issues in Labor Law is now out. Paul previewed the book a couple of months ago, so I won't repeat the description. But Sam: you might want to ask West to put your name on the book cover on West's promotional site (follow the link; squint at the names). Fortunately, West got the name right on the hard copy of the book.
Congress Obviously Reads This Blog
Update (6/5): From a press release from Senator Clinton from May 30th:
Senators Edward Kennedy (D-MA), Tom Harkin (D-IA), Hillary Rodham Clinton (D-NY), and Barbara Mikulski (D-MD) today announced that they will introduce legislation next week to ensure that workers are able to enforce their legal right to equal pay. The bill will remove a technical hurdle created by yesterday’s Supreme Court ruling in Ledbetter v. Goodyear Tire & Rubber Company that will make it far more difficult for women and others to receive equal pay for equal work. Representatives Rosa DeLauro (D-CT), George Miller (D-CA) and Eleanor Holmes Norton (D-DC) announced that they will introduce companion legislation in the House of Representatives.
OK, tongue firmly in cheek, but after I wrote a couple of days ago that the decision in the Ledbetter pay discrimination case should be legislatively nullified, members of Congress made the following comments:
From Rep. George Miller (D-CA), chairman of the House Education and Labor Committee:
“The Supreme Court’s ruling makes it more difficult for workers to stand up for their basic civil rights in the workplace. A worker undergoing sex, race, or other discrimination in pay is discriminated against with each and every discriminatory paycheck, not just when the company set the worker’s pay. Yet, according to the Supreme Court, if a worker does not file within 180 days of the employer’s decision to set her pay unlawfully, she has to live with that discrimination paycheck after paycheck. This ruling will force Congress to clarify the law’s intention that the ongoing effects of discriminatory decisions are just as unacceptable as the decisions themselves.”
And from Hillary Clinton:
"All Americans deserve equal pay for equal work, and it is my hope that Congress can remove the technical hurdles that will prevent individuals from receiving what is rightfully theirs."
But it still unlikely that there will be any movement until either a Senate filibuster can be overcome and/or there is a different President.
Hat Tip: Carolyn Shapiro and Hank Leland
May 31, 2007
Bad Arbitration Award Makes Bad Law
Stuart Fromm was employed by ING as a wholesaler of mutual funds. ING fired Fromm; Fromm believes the discharge resulted from his blowing the whistle on ING's business practices that violated securities laws and NASD rules. Fromm brought seven claims to an NASD arbitration panel, alleging, among other things, a violation of the Sarbanes-Oxley whistleblowing provision, defamation, failure to pay wages as a violation of state law, and breach of contract. Here's the arbitration award:
After considering the pleadings, the testimony and the evidence presented at the hearing, the Panel has decided in full and final resolution of the issues submitted for determination [that ING is liable to Fromm for] compensatory damages in the amount of $42,000.00 [and that a]ny and all relief not specifically addressed herein, including punitive damages, is denied.
Pitiful. I provide more of an explanation to my children when I "arbitrate" their squabbles. A labor arbitrator issuing such an award would quickly find him- or herself clientless.
Fromm filed a petition to modify in federal court, arguing that the $42,000 award was inconsistent with his entitlement, under Sarbanes-Oxley, to make-whole relief. The court denied the petition, finding that because the arbitrators had not specified which of Fromm's claims he had prevailed on, he might have prevailed on a claim other than Sarbanes-Oxley, in which case he wouldn't be entitled to make-whole relief. For that reason, the court ruled, Fromm could not show that the arbitration panel had acted in manifest disregard of the law.
The problem goes back to a mistake the Supreme Court made in Gilmer. The plaintiff in that case had challenged NYSE's arbitral procedures because, among other things, the absence of written arbitral oponions would make judicial review meaningless. The Supreme Court rejected the argument, asserting that NYSE procedures required arbitrators to issue written, detailed opinions. The Court was wrong -- NYSE rules required only the issuance of a written award. An award merely states, as the award did in Fromm's case, who wins and how much. It doesn't explain what the arbitration panel found, or why the panel ruled as did. It certainly doesn't provide sufficient information for a meaningful appeal.
Robert Gilmer was right all along.
The case is Fromm v. ING Funds Distributor, LLC, ___ F.Supp.2d ___, 2007 WL 1540968 (S.D. N.Y. May 24, 2007) (Westlaw subscription required).
Bruce Barry, Professor of Management and Sociology at Vanderbilt, has just published Speechless: The Erosion of Free Expression in the American Workplace. Here's a summary:
In Speechless, Bruce Barry brings his expertise as a management scholar and civil libertarian to an in-depth examination of the state of free speech for American workers, both on and off the job.
He critiques a legal system that gives employers wide latitude to suppress worker expression, and argues that freedom of speech in the workplace is excessively and needlessly limited. Barry advocates changes to the law and to management practice that would expand employees' expressive rights without jeopardizing the legitimate interests of employers.
Requiring employees to check fundamental rights at the workplace door, Barry concludes, has a chilling effect on the exercise of those rights both on and off the job, impairing the health of democracy and civil society.
This book is worth checking out.
8th Cir: ADA Is Not An Affirmative Action Statute
The Eight Circuit in Huber v. Wal-Mart Stores, No. 06-2238 (8th Cir. May 30, 2007), has added to a circuit split over whether a qualified individual with a disability must be mandatorily reassigned to a different job as a reasonable accommodation or must compete for that job with other non-disabled individual.
The 8th Circuit has joined the 7th Circuit in finding that the disabled individual is not entitled to the job without competing for it with other employees:
We agree and conclude the ADA is not an affirmative action statute and does not require an employer to reassign a qualified disabled employee to a vacant position when such a reassignment would violate a legitimate nondiscriminatory policy of the employer to hire the most qualified candidate.
The 10th Circuit in Smith v. Midland Brake, Inc., 180 F.3d 1154 (10th Cir. 1999) (en banc),disagrees with this conclusion. I think the 10th Circuit has the better argument when it stated:
[I]f the reassignment language merely requires employers to consider on an equal basis with all other applicants an otherwise qualified existing employee with a disability for reassignment to a vacant position, that language would add nothing to the obligation not to discriminate, and would thereby be redundant. . . .
Sam Bagenstos at the Disability Law Blog also agrees:
In my view, the Eighth Circuit got it wrong. The ADA explicitly lists reassignment to a vacant position as a possible accommodation. If the Eighth Circuit is right, however, Congress accomplished absolutely nothing by adding the language about reassignment. Under the Eighth Circuit's interpretation, the employer is required to reassign an employee only if it would have reassigned her anyway, in the absence of the ADA. But Congress clearly meant to accomplish more than that, and the Supreme Court in US Airways v. Barnett seemed to recognize the point.
Hat Tip: Hank Leland
Conference on Comparative Racial Justice
David Oppenheimer (Golden Gate) writes to tell us about an exciting conference on Comparative Racial Justice being hosted by his summer
Here are some of the details:
Should Europe adopt US-style affirmative action? Should the US embrace the French model of color blindness? Shoud a national census report describe population by race? Do Europeans and North Americans have anything to teach each other about solving the problem of racial inequality?
On Monday June 25, academics, activists and representatives from governments and NGOswill gather at the University of Paris’ Nanterre campus to address these questions in a public discussion of comparative racial justice. The discussion will include experts in anti-discrimination law from France, Germany, Britain, Canada and the United States.
Each will address the following question: “What can we learn from each other about the problem of racial inequality?” The discussion will be in English.
The panel is scheduled for 16:00-17:30, followed by a reception honoring the panelists. The public is welcome. Admission is free.
For further information, contact Professor David Oppenheimer at email@example.com.
May 30, 2007
Ceballos Strikes Again
As readers of this blog know, I am no fan of the Supreme Court's 2006 decision in Garcetti v. Ceballos, which drastically reduced the First Amendment rights of public employees. I have posted my views about how this current state of affairs impacts the ability of public employees to act as the vanguard of the citizenry in my recent Legal Times column, More Than Employees: Citizens working in government need better constitutional protection from retaliation.
Now comes fresh evidence from the Seventh Circuit that Ceballos is as bad as advertised. Ross Runkel summarizes in his Employment Law Memo the case of Sigsworth v. City of Aurora, 05-4143 (7th Cir. May 25, 2007):
Sigsworth sued the employer for wrongful discharge under 42 USC Section 1983 alleging retaliation for the exercise of his First Amendment free speech rights. The trial court dismissed the complaint. The 7th Circuit affirmed.
Sigsworth was an investigator on a multi-jurisdictional task force and, after a botched, reported to his supervisors what he believed to be misconduct. The court noted that Garcetti v. Ceballos, 126 SCt 1951 (2006) required that before analyzing whether an employee's speech was of public concern, a court must determine whether the employee was speaking "as a citizen" or pursuant to his duties as a public employee. The court concluded that because Sigsworth's speech was part of the tasks he was employed to perform, he spoke not as a citizen but as a public employee, and that speech was not entitled to protection by the First Amendment. The court stated that Sigsworth may be entitled to protection under the Illinois Whistleblower Act.
Not to beat a dead horse, but this is what I'm speaking about at the NYU Conference on Labor this week, so it is much on my mind. First, public employees can both be citizens and employees at the same time. It is not an either-or proposition. An employee like Sigsworth can both make his workplace better and society better by whistle blowing in these type of circumstances.
Second point is that just because Sigsworth may have protection under the Illinois Whistleblower Act, does not make his lack of constitutional protection in these circumstances any more palatable. Public employees should have First Amendment rights to speak in a non-disruptive way on matters of public concern without any consideration of whether there may be statutory protection for the employee.
OK, another Ceballos rant over.
Cert Granted Re: Judicial Review of Arbitral Awards
As Mitchell Rubinstein notes at his Adjunct Law Prof Blog, the Supreme Court has granted certiorari in a case raising the issue of whether parties can contractually alter the terms of judicial review in an arbitration decision governed by the Federal Arbitration Act. I wrote on this issue awhile back; see Maggio & Bales, Contracting Around the FAA: The Enforceability of Private Agreements to Expand Judicial Review of Arbitration Awards, 18 Ohio St. J. Disp. Resol. 151 (2002) (Westlaw subscription required). The case under review is Hall Street Assoc. v. Mattel, Inc., Nos. 05-35721 & 05-35906, 2006 WL 2193411 (Westlaw subscription required).
Chang on The Economics of International Labor Migration
Howard Chang (Penn) has posted on NELLCO his forthcoming piece in the Cornell International Law Journal entitled: The Economics of International Labor Migration and the Case for Global Distributive Justice in Liberal Political Theory.
Here's the abstract:
Estimates of the magnitude of the gains that the world could enjoy by liberalizing international migration indicate that even partial liberalization would not only produce substantial increases in the world’s real income but also improve its distribution. Although the economic effects of immigration on native workers and distributive justice among natives are often advanced as reasons to reduce immigration, these concerns do not provide a sound justification for our restrictive immigration laws. Instead, the appropriate response to concerns about the distribution of income among natives is to increase the progressivity of our tax system. Protectionist immigration policies are not only likely to be relatively costly as an instrument for redistribution but also perverse from the standpoint of global justice. I argue that liberal ideals require a global view of distributive justice and that recent attempts by some liberal theorists and philosophers to defend more limited conceptions of distributive justice that apply only within nations are all ultimately question-begging. Thus, I conclude that considerations of both economic efficiency and distributive justice militate in favor of liberalized immigration policies.
An interesting and timely piece on how labor economics can bring much needed light to current debates on immigration reform.
Lie Detector Tests and the NFL
I have to say that I was dismayed to read this story about how Denver Broncos wide receiver, David Kircus, was reinstated to the team after he successfully passed a lie detector test involving his role in a fight.
Broncos receiver David Kircus' job is no longer in jeopardy over allegations he threw a punch that landed a man in the hospital with multiple facial fractures.
Coach Mike Shanahan, who had pledged to release Kircus if it was determined he was at fault in the fight, said Tuesday that Kircus passed a lie-detector test administered by an expert and will remain with the team regardless of the legal outcome of his case.
"David came to me and said, 'Hey coach, I guarantee I did not take the first swing. I defended myself. I probably used poor judgment, being at the wrong place at the wrong time.'
"I said, 'Well David, I'll give you a chance to take a lie-detector test,' and he wanted to do that. And he passed it with flying colors, so he will be on our football team," Shanahan said . . .
"If he flunked the test, he would not be with us," Shanahan said. "He wanted to take the test. He said, 'Coach, if I flunk it, I won't be on this football team. If I do pass it, I'll be on this team.' I said, 'Hey, that's fair enough for me.'
So, now what matters is the outcome of a scientifically unreliable lie detector test rather than the legal outcome?
Perhaps, Coach Shanahan should read the federal Employee Polygraph Protection Act of 1988, which, except in limited circumstances not applicable here, does not permit employers to require or request an employee to take a polygraph or use the results of those tests for employment purposes. This is because there is a general scientific consensus that such tests are not reliable.
My question is where was the NFLPA when all of this was going on? Shouldn't they be protecting their players' employment rights in these circumstances and not allow them to be subject to the whim of a polygraph test?
NYU Conference on Retaliation & Whistleblowers
NYU's Center for Labor and Employment Law and the ABA Section on Labor and Employment Law are holding a Conference on Retaliation and Whistleblowers on May 30 & June 1, 2007. Paul Secunda will be attending, and speaking on the impact of Garcetti on retaliation and whistleblowing. He'll also be editing the proceedings.
For more information on the conference, contact Ben Eisenman.
May 29, 2007
Some Reflections on the Ledbetter Decision
Rick has already posted the outcome of today's Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co., No. 05-1074 (U.S. May 29, 2007). With all due respect to my friend, Ross Runkel, whose post on the case Rick links to, I must disagree with his conclusion that the case was rightly decided. Even though I also rightly predicted the outcome of this case, I don't believe this outcome is the right one.
Here are some thoughts that I have after now reading the entire majority and dissenting opinion through:
1. The crucial distinction between the majority opinion by Justice Alito and the dissent by Justice Ginsburg comes down to really just one question: under Morgan, is pay discrimination a discrete act like a termination or failure to promote or is it more like a cumulative series of individual events like hostile work environment sexual harassment? If the former, cases like Ricks and Evans apply, and you can't depend on stale claims to give life to connected, but not independently discriminatory, claims. If the latter, you only need one event to occur in the relevant time period, and if each discriminatorily-infected pay check is seen as constituting such an event, the claim may be still timely even though many of the pay decisions and paychecks fall outside the statutory period.
2. On this critical point, I think Justice Ginsburg gets the better of the argument. As with hostile work environment sexual harassment claims, individual pay decisions by themselves do not have the obvious discriminatory intent that discrete acts such as terminations or failures to promote do. It is not until many discriminatory wage decisions have occurred that the discriminatory conduct becomes clear to the employee. Often, it takes many years for this pattern to develop before the employee realizes that she might have a cognizable claim. This state of affairs is very similar to hostile work environment cases where one incident of harassment alone does not necessarily indicate to the employee that a sexually abusive and intimidating environment has been, or will be, created.
3. Once you make the decision that pay discrimination is more like sexual harassment than a discriminatory termination, the rest of the analysis follows. For instance, issues about notice to employers about stale claims are addressed the same way that they were addressed in Morgan by Justice Thomas - by relying on equitable theories such as laches. Also, and as Justice Ginsburg points out, cases like Evans and Ricks become inapposite because those cases dealt with past discrete acts of discrimination - firing for having a baby and denial of tenure.
4. A lot of emphasis is placed on Bazemore by both the majority and dissent. I'm not sure given how Morgan divides the employment discrimination world for statute of limitations purposes it matters whether Bazemore was about just current discriminatory pay structures as Justice Alito believes, or about all discriminatory pay decisions as Justice Ginsburg believes. Once discriminatory pay decisions are seen as most comparable to sexual harassment claims, it really doesn't make a difference.
5. There is also a lot of talk about the resurrection of the Lorrance case and its now legislatively superseded decision about discriminatory-enacted seniority systems. It seems to me that given the outcome of this case and the express invitation by Justice Ginsburg, Ledbetter may indeed suffer the same fate as Lorrance, especially if there is both a Democratic-controlled Congress and Democratic President. The Civil Rights Act of 2009 might do the same thing with Ledbetter that the Civil Rights Act of 1991 did to Lorrance.
6. Thinking back to Melissa Hart's article about the lack of deference the Supreme Court has given to the EEOC over the years, we have in Ledbetter another example where the majority disagrees with EEOC's expert interpretation of the statute (even though Chevron deference is concededly not applicable).
7. Some kudos: Justice Ginsburg both cited to Rafael Gely and Len Bierman's piece on the lack of employee discussions of salary information and to Charlie Sullivan, Mike Zimmer, and Rebecca White's employment discrimination casebook for clarification of the relationship between Title VII and the Equal Pay Act (EPA).
In sum, this decision is inconsistent with the purposes of the Title VII to both make victims of discrimination whole and to eradicate employment discriminatory practices from society at large. It leads to an absurd situation where employees either must bring pay claims prematurely when there is not enough evidence that there has been unlawful pay discrimination or wait to a later time when there exists more substantial evidence of pay discrimination and be barred from bringing such claims by the statute of limitations (as in Ledbetter). This inequitable state of affairs cannot stand and, it is my hope, it will be legislatively nullified.
Supremes Hold that Discriminatory Acts, Not Discriminatory Effects, Trigger Limitations Period
Per Ross Runkel's Employment Law Blog, the Supreme Court has just held 5-4 that the Title VII limitations period begins to run when an employment decision is made and communicated to an employee. The case is Ledbetter v. Goodyear Tire & Rubber Co., Inc., No. 05-1074 (May 29, 2007). The official holding: "Because the later effects of past discrimination do not restart the clock for filing an EEOC charge, [the plaintiff's] claim is untimely." The Court's line-up was entirely predictable: Alito, Roberts, Scalia, Kennedy, and Thomas voted for the employer; Ginsburg, Stevens, Souter, and Breyer dissented.
- Rachel Arnow-Richman (left), Public Law and Private Process: Toward an Incentivized Organizational Justice Model of Equal Employment Quality for Caregivers, 2007 Utah L. Rev. 25.
- David B. Torrey (center), Compromise Settlements Under State Workers' Compensation Acts: Law, Policy, Practice, and Ten Years of the Pennsylvania Experience, 16 Widener L.J. 199 (2007).
- Michael D. Paul (right) & Ian C. Crawford, Refocusing Light: Alex Sheshunoff Management Services, L.P. v. Johnson Moves Back to the Basics of Covenants Not to Compete, 38 St. Mary's L.J. 727 (2007).
Comments & Notes
- Jessica Lynn Mok O'Neill, If You Love Me Dear, Please Sign Here: Will the "Love Contract" Play a Role in Protecting Employers from Sexual Harassment Liability?, 40 John Marshall L. Rev. 311 (2006).
- Gabriel F. Siegle, Switching Tracks: Complete Preemption Removal and the Railway Labor Act, 2007 Ill. L. Rev. 1107.
May 28, 2007
Federal Minimum Wage To Increase
Lost in the news that the political parties have come to agreement on an Iraq spending bill is the fact that the same legislation included the first raise of the federal minimum wage in some 10 years. Here's a summary from Mitch Rubinstein at the Adjunct Law Prof Blog:
Stephen Labaton in his May 25, 2007 New York Times article entitled "Congress Passes Increase in Minimum Wage" reports on the House approving the first increase in minimum wage in a decade. Two hours later, it was approved by the Senate where it was combined with a Bill providing more money for the war in Iraq. This Bill, which the President is expected to sign, would raise the minimum wage to $7.25 from its current $5.15 over two years.
A welcome development, but like Mitch I wonder why this legislation had to be tied to war spending. Minimum wage legislation should stand or fall on its own merits and not be held hostage to other agendas.
May 27, 2007
Top-5 Employment SSRN Downloads
- Benjamin Barton, Do Judges Systematically Favor the Interests of the Legal Profession? (397).
- Samuel R. Bagenstos, Implicit Bias, Science, and Antidiscrimination Law (139).
- Edward A. Zelinsky, The New Massachusetts Health Law: Preemption and Experimentation (108).
- Anne Marie Lofaso, Toward A Foundational Theory of Workers' Rights: The Autonomous Dignified Worker (92).
- Richard Moberly (photo above), Unfulfilled Expectations: An Empirical Analysis of Why Sarbanes-Oxley Whistleblowers Rarely Win (87).
Top-5 Labor SSRN Downloads
- Anne Marie Lofaso, Toward A Foundational Theory of Workers' Rights: The Autonomous Dignified Worker (92).
- Bryan H. Wildenthal, Federal Labor Law, Tribal Sovereignty, and the Indian Law Canons of Construction (52).
- Mitchell H. Rubinstein, Assignment of Labor Arbiration (34).
- Orly Lobel, Big-Box Benefits: The Targeting of Giants in a National Campaign to Raise Work Conditions (30).
- Ronald McCallum, In Defense of Labour Law (18).