September 15, 2007
Top-5 International Employment & Labor Law SSRN Downloads
- Vivek Wadhwa, Guillermina Jasso, Ben Rissing, Gary Gereffi, & Richard B. Freeman, Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain: America's New Immigrant Entrepreneurs, Part III (1006).
- Vivek Wadhwa, Ben Rissing, AnnaLee Saxenian, & Gary Gereffi, Education, Entrepreneurship, and Immigration: America's New Entrepreneurs, Part II (352).
- Keith Cunningham-Parmeter, Fear of Discovery: Immigrant Workers and the Fifth Amendment (144).
- Laurence R. Helfer, Monitoring Compliance with Un-Ratified Treaties: The ILO Experience (45).
- David J. Doorey (photo above), Can Factory List Disclosure Improve Labour Practices in the Apparel Industry?: A Case Study of Nike and Levi-Strauss (25).
Top-5 Benefits/Compensation/Pension SSRN Downloads
- Matthew D. Hutcheson, Retirement Plan Disclosure: Ethical Principles and Legal Obligations (204).
- Kenneth M. Rosen (photo above), Fiduciaries (176).
- Zvi Bodie , Jonathan Treussard , & Paul Willen, The Theory of Life-Cycle Saving and Investing (133).
- Jeffrey N. Gordon, The 'Prudent Retiree Rule': What to Do When Retirement Security Is Impossible? (109).
- Sharon Reece, ERISA Preemption and Fair Share Legislation (90).
September 14, 2007
GAO on The Treatment of Pension and Health Benefits in Chapter 11 Bankruptcy
The General Accounting Office (GAO) has put out an important report entitled: Employer-Sponsored Benefits: Many Factors Affect the Treatment of Pension and Health Benefits in Chapter 11 Bankruptcy.
The report was necessary because:
In recent years, considerable debate has centered on companies using the chapter 11 bankruptcy reorganization process to reduce or eliminate employer-sponsored benefits in an effort to become more competitive. Congress recently enacted several laws, in part, to help address this issue. Most notably, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) and the Pension Protection Act of 2006 (PPA). BAPCPA contained provisions related to chapter 11 business bankruptcies and sought to address the treatment of benefits during the bankruptcy process. In addition, the PPA amended several Employee Retirement Income Security Act of 1974 (ERISA) provisions related to defined benefit (DB) plans in bankruptcy.
This report addresses (1) how, if at all, recent legislative changes affected the treatment of pension and health benefits during chapter 11 bankruptcies, and (2) what is known about the extent to which businesses have modified employee or retiree pension and health benefits. GAO reviewed filings of 115 public companies that filed for bankruptcy between October 17, 2004 and October 17, 2006, and conducted interviews with various experts on the treatment of benefits in the bankruptcy process. Relevant federal agencies agreed with the findings contained in this report.
Some of the more interest findings include:
The effects of recent legislation, including BAPCPA and PPA, on employers’ decisions to modify benefits are difficult to distinguish from the effects of other factors that lead to changes in benefits both within and outside of the bankruptcy process. Most bankruptcy professionals agreed that while BAPCPA included some changes that will affect the treatment of employer-sponsored benefits—such as the look-back period for the reinstatement of retiree health benefits—it will not substantially affect employers’ decisions to modify benefits. Some bankruptcy professionals suggested that PPA may affect employers’ decisions to maintain their defined benefit (DB) plans. Bankrupt employers consider many other factors when trying to reorganize successfully, including competing claims, their stakeholders and creditors, and outside forces such as the financial market and industry competition . . . .
Most of the 115 employers we reviewed did not offer benefits that specifically needed court approval to change. We found only 20 of these employers had DB plans, 18 had retiree health benefits, and 28 had employees covered by a CBA. Nine employers terminated at least one of their DB plans, and 3 have terminations pending; 5 sought to modify their retiree health benefits; and 8 sought to modify or reject CBAs. While most employers received approval to continue employee benefits in their initial motions, it is unknown how many employers that offered health benefits to active employees or DC plans continued to fund them because employers do not always need to seek court approval to change these benefits.
It does not appear that this report establishes any bright-line findings concerning whether current law helps or hinders participants in employee benefit plans when their companies become bankrupt. Recent news stories, including ones involving Northwest Airlines and the U.S. auto industry, show that there is a critical need to consider how to protect participants' interests in their pension and benefits when their employers face financially difficult times.
Hat Tip: Jon Forman
Areheart on Regulating Cyberbullies Through Notice-Based Liability
Brad Areheart has published in the Yale Pocket Part his article: Regulating Cyberbullies Through Notice-Based Liability.
From the Introduction:
With the growth of the Internet’s uses and abuses, Internet harassment is making headlines. Given its immediacy, anonymity, and accessibility, the Internet offers an unprecedented forum for defamation and harassment. The salient problem with such “cyberbullying” is that victims are typically left without adequate recourse. The government should provide recourse by curtailing the near absolute immunity Internet Service Providers (ISPs) currently enjoy under the Communications Decency Act (CDA) and implementing a notice and take-down scheme—similar to that for copyright infringement under the Digital Millennium Copyright Act (DMCA)—for certain torts.
Although not an out-and-out employment piece, clearly Brad's piece has important implications for workplace law given the role that the workplace plays in many cyberbullying scenarios. It's a quick and interesting read. Check it out!
Detroit Cops Successful on First Amendment Retaliation Claim
Although the Pickering framework has become increasingly difficult for plaintiffs to succeed under in a post-Garcetti world, there have been successes. Take for instance this case concerning two formers cops in Detroit and the Mayor of Detroit:
Two former police officers were awarded more than $6.5 million on Tuesday by a jury that agreed with the officers’ argument that they were discharged in retaliation for investigating misconduct by the mayor and his security detail.
Mayor Kwame M. Kilpatrick said the debt-ridden city would appeal the unanimous verdict, which the 11-member Wayne County Circuit Court jury reached after three hours of deliberation.
The verdict followed weeks of testimony on misdeeds by Mr. Kilpatrick and his bodyguards, including the guards’ helping him have affairs with his chief of staff and other women.
“I’m absolutely blown away at this decision and I know Detroiters are, too,” said Mr. Kilpatrick, who denied under oath that he had cheated on his wife . . . .
While working as a bodyguard for the mayor in 2003, one of the former officers, Harold Nelthrope, complained that other bodyguards had helped Mr. Kilpatrick’s trysts, covered up drunken driving accidents and falsified overtime records.
After City Hall released a confidential memorandum identifying him as the source of accusations, Mr. Nelthrope sued under the Michigan Whistle-Blowers Protection Act and was awarded $2.9 million plus interest.
The other plaintiff, Gary Brown, who as deputy police chief and head of internal affairs had begun looking into Mr. Nelthrope’s statements when Mr. Kilpatrick ousted him in May 2003, is to get $3.6 million plus interest.
This is the way the law is supposed to work! It will be interesting to see if any significant issues emerge on appeal.
Hat Tip: Elaine Mittleman and Holly Williams
Shout Out to New Blog: Connecticut Employment Law Blog
We would like to welcome to the blogosphere a new employment law blog run by Dan Schwartz of Epstein, Becker: Connecticut Employment Law Blog.
Dan describes the scope of what he hopes to cover as:
While practicing law in Connecticut for over a dozen years, I have seen my fair share of cases. I have also seen a lack of coverage of employment law issues for human resources professionals and in-house employment counsel in Connecticut. The mainstream press (to generalize) often prints about cases only when they are first filed, but the reader is left to wonder what happened to them. In addition, discussion of particular decisions or laws typically contains only the briefest of details or analysis. I hope this blog can fill that void by being a place where those items are discussed, debated and explored. Your involvement in the blog through suggestions, comments, criticisms and praises is crucial to its long term success.
Sounds like a worthwhile addition to our little part of the blogosphere. I especially like the idea of following up on cases first reported on the news. Check it out!
Accommodating the Female Body
Jessica Roberts (Yale grad, currently clerking for Roger Gregory on the 4th Circuit), has just posted on SSRN her very thoughtful essay on the nature of sex discrimination. The title is Accommodating the Female Body; here's the abstract:
This essay presents a novel approach to understanding sex discrimination in the workplace by integrating three distinct areas of scholarship: disability studies, labor law, and architectural design. Borrowing from disabilities studies, I argue that the built environment serves as a situs of sex discrimination. In the first section, I explain how the concept of disability has progressed from a problem located within the body of an individual with a disability to the failings of the built environment in which that person functions. Using this paradigm, in the next section, I reframe workplaces constructed for male workers as instruments of sex discrimination. I then explain how built environments intended for the male body constitute disparate impact under Title VII. In the final section, I present the architectural school of universal design, which has been a source of crucial innovation in the disability labor rights framework, as a means for both de-abling and de-sexing the workplace.
Kentucky Federal Court Requires Arbitration of USERRA Claim
The United Services Employment and Reemployment Rights Act (USERRA) protects returning military personnel from being stripped of the employment rights and benefits they would have enjoyed had they not been deployed to serve their country. Federal courts currently are split over whether USERRA rights are subject to compelled arbitration under mandatory arbitration agreements. A pair of federal district courts have held that the statutory language and legislative history of the statute indicate clearly that employees cannot be compelled to arbitrate their USERRA claims. The Fifth Circuit has held the opposite. The U.S. District Court for the Western District of Kentucky has just sided with the Fifth Circuit, holding that an optometrist deployed to Afghanistan can be compelled to arbitrate his claims that employer demoted him because of his military service.
The case is Landis v. Pinnacle Eye Care, LLC, No. 3:06-CV-569-R, 2007 WL 2668519 (Sept. 6, 2007) (Westlaw subscription required).
Avoiding "Fair Share" Preemption
Darren Abernathy, a student at William & Mary, has just posted on SSRN his Note (forthcoming 2008) on drafting "fair share" laws to avoid ERISA preemption. Paul has covered the preemption issue extensively on this blog, and Sharon Reece has posted an article on the topic. Here's Abernathy's abstract:
This Note examines Maryland's preempted statute and the United States District Court case that granted its opponents declaratory relief. After reviewing the Fair Share Act, the federal ERISA statute, and the significant changes in Supreme Court jurisprudence towards ERISA preemption in the past decade, this Note will offer new approaches through which states can modify the analytical framework outlined by the Fair Share Act to achieve improvements in the state-financing of Medicaid through large private employers. The goal of this Note is to analyze ways to fit future “fair share” legislation within the non-preempted confines of ERISA.
The proposed modifications include: (1) rewriting “fair share” laws as unequivocal, non-regulatory Medicaid taxes from which compliant employers may become exempt; (2) dulling the sharp edge of the FSA's punitive texture through decreasing the 100% shortfall tax to 35-50%; (3) expanding the options that employers have as “outlets” for meeting the 8% health expenditure benchmark, such as through an increase in non-medical fringe benefits, thus giving the statute a less coercive feel; (4) a “total package” benefits approach analogous to unpreempted ERISA prevailing wage cases; and (5) a state-initiated higher minimum wage for very large employers, with an incentivized exemption provision stating that an employer can revert back to the state or federal government's general minimum wage if the employer spends a certain percentage of payroll wages on employee health insurance.
PJH Law reports that a survey by recruiting firm Badenoch & Clarke has found that lawyers are the happiest office workers in the UK. The survey shows that 64% of UK lawyers are happy in their current jobs - the highest for any profession in the UK. US lawyers, of course, are notoriously unhappy. Why the discrepancy?
September 13, 2007
Like a diseased appendix bursting and spreading infectious bacteria throughout the abdomen, fun is insinuating itself everywhere, into even the un-hippest workplaces. Witness the August issue of Inc. magazine . . . . Emblazoned on its cover was “Fun! It's the New Core Value.” . . . There are 18 pages of stories to instruct and inspire employers to keep their employees happy at all costs, because happy employees make for happy customers. There are rubber chickens, Frisbee tosses, mustache-growing contests, pet psychics, interoffice memos alligator-clipped to toy cars, and ceremonies that honor employees for such accomplishments as having “the most animated hand gestures.” Perks include on-campus wallyball courts, indoor soccer fields, air hockey, ping pong, billiards, yoga and aerobics classes, company pools and hot tubs, and Native-American themed nap rooms so that employees can sleep (sleep!) at work. And that's all at just one company.
Such activities, Labash notes, reduce employees to the sophistication of six-year-olds. What would Mr. Labash consider fun? Leaving early. See Are We Having Fun Yet? The Infantilization of Corporate America.
The governor of Ulyanovsk region in Russia is offering prizes to couples who have babies in exactly nine months - on Russia's national day on 12 June.
Sergei Morozov wants couples to take the day off work to have sex. If a baby is born on national day, they will receive cars, TVs or other prizes.
Mr Morozov has declared Wednesday [September 12] "family contact day" as part of efforts to fight Russia's demographic crisis.
But if you missed the 12th, you're in luck: Evil HR Lady has calculated that for a due date of June 12, you need a conception date of September 20.
That's a week from today.
September 12, 2007
The Chemerinsky "Firing" and First Amendment Retaliation
Update (9/17): Reasonable minds prevail; Chemerinsky hired after all.
The recent news reported by Rick that the eminent constitutional law professor, Erwin Chemerinsky, was hired and fired as the founding dean at UC-Irvine within one week because he was too "politically controversial" has got me thinking. And anyone who reads this blog knows what I'm thinking: does Erwin have a First Amendment retaliation claim?
Let's look at the Connick/Pickering/Garcetti framework, which I have previously discussed here among other places, and see what it tells us.
(*) Initial Question: Can expression engaged in while not employed in the job be the basis for a First Amendment Retaliation claim: The answer is yes. See Rankin v. McPherson, 483 U.S. 378, 395 (1987) (“We have . . . recognized that the government’s power as an employer to make hiring and firing decisions on the basis of what its employees and prospective employees say has a much greater scope than its power to regulate expression by the general public.”; Hubbard v. EPA, 949 F.2d 453, 460 (D.C. Cir. 1992) (applying the Pickering balancing test to a hiring decision, observing that “[m]erely because an employer is hiring rather than firing . . . does not justify unconstitutional action”).
I actually think this is a hiring case, rather than a firing case, because although Erwin signed an employment agreement with Irvine, it was apparently contingent on the Board of Regents signing off on it. So I think for these purposes, his "firing" can be treated as a "failure to hire" case.
(1) The Garcetti/NTEU question: Is the speech and expression that Erwin engaged either not job-related so that it comes under NTEU and a normal First Amendment scrutiny or pursuant to job duties, so that it is not protected at all by the First Amendment pursuant to Garcetti? Well, I think neither apply. Being fired for being too liberal suggests that Erwin's previous expression is very much related to the job in question, but on the other hand, he has not started the job yet and has not acted pursuant to any official duties and therefore, does not fall under Garcetti either.
(2) The Connick Question: Is the expression to be considered pursuant to a matter of public concern? I cannot imagine one's thoughts on such things as constitutional interpretation and the place of law in society can be an any more weighty matter of public concern.
(3) The Pickering Balance: Weighing the First Amendment rights of Erwin as a citizen against the efficiency interests of UC Irvine, it appears the balance decidedly favors Erwin. As discussed in (2), the individual interests are weighty whereas it is hard to argue that Erwin is substantially disrupting UC Irvine Law School or its image since it was not even public that he was hired as Dean in the first place? What did he substantially disrupt? Can it be that Irvine stakeholders already did not know Erwin's jurisprudential background and thought that after all the interviews and the process that he was likely to administer the law school in a way that would be unpalatable to certain groups? [Update (9/14): More from Brian Leiter on the background facts of the case].
(4) Mt. Healthy I: The first Mt. Healthy question is whether Erwin's past expressions on matters of public concern motivated or substantially caused Irvine's decision to motivate. I think there is little doubt based on earlier reports of his dismissal.
(5) Mt. Healthy II. Would Irvine have made the same decision of firing Erwin if it were not for past expression on matters of public concern. Let me be short here: I really don't think so.
In all, it appears that Erwin, who probably knows better than I do, has a viable First Amendment retaliation claim for its failure to hire him based on passed expression on matters of public concern. Of course, this is just a legal analysis and there are many reasons why Erwin may choose not to pursue this course.
In all events, I wish him and his family the very best and I am deeply troubled by Irvine's actions. Certainly not the right way for a new public law school to get off on the right foot. I can only agree with John Eastman, the dean of Chapman University Law School in Orange, California, that "UCI's move [is] 'a serious misstep.'"
Update: Leiter points out that, "Art. 9, § 9 of the California Constitution, regarding the powers and duties of the Regents of the University of California, provides that, 'The university shall be entirely independent of all political or sectarian influence and kept free therefrom in the appointment of its regents and in the administration of its affairs.'"
Chemerinsky Gets Fired After 1-Week Deanship
Brian Leiter reports that
About a week ago, Erwin Chemerinsky, the well-known constitutional law scholar at Duke, signed a contract to be the inaugural Dean of the new law school at the University of California at Irvine. Yesterday, the Chancellor of the University of Cailfornia at Irvine flew to Durham and fired Chemerinsky, saying that he had not been aware of how Chemerinsky's political views would make him a target for criticism from conservatives.
Amir Efrati of the Wall Street Journal's Law Blog says he has spoken with Chemerinsky and confirmed -- see The O.C. -- Law School Edition.
Says everyone: who doesn't know that Chemerinsky leans a bit to the left of Orange County?
NLRB Event Cancelled Because of Protest
As we have been reporting (most recently here), the NLRBU has been keeping the pressure on the NLRB's General Counsel, Ronald Meisburg, for his challenge of a FLRA decision to allow Board- and General Counsel-side employees in the same bargaining unit. As reported by the BNA Daily Labor Report (subscription required), the NLRBU seems to have won the latest skirmish:
Organizers of a program to mark the 50th anniversary of the National Labor Relations Board's regional office in Newark, N.J., cancelled the program scheduled for the evening of Sept. 10 because members of a union representing NLRB employees announced that they would engage in informational picketing at the event at which General Counsel Ronald Meisburg planned to speak. . . .
Management attorney Angelo J. Genova, who chairs the state bar's labor and employment law section, said Sept. 11 that he and the other members of the event committee "collectively and unilaterally chose to cancel the event" after learning of the planned picketing in order to respect "the concerns professed by a number of our speakers affiliated historically or presently with organized labor."
Another factor was "the practical recognition that the prospect of the Union's exercise of its right to establish a picket line at the event would deter numerous attendees from participating," which would defeat the purpose of celebrating "the history, tradition, collegiality and professional respect" enjoyed by labor, management, and NLRB professionals in Region 22, Genova said.
As the AALS discovered a couple of
years ago during the San Francisco hotel dispute, many pro-labor
individuals are very careful about never crossing a picket line of any
kind. Although the NLRBU stated that they did not intend to cause the events cancellation, you can be sure that they're pleased with the result.
Thou Shall Not Contradict The Boss Three Times
This labor and employment law gem is from the good folks at the NewsDash at PlanSponsor.com yesterday:
CONTRADICT SHUN? A woman is suing her former employer after falling victim to a company policy of terminating staff who contradict their boss three times. According to Reuters, HWA-1 Enterprise Co Ltd, a light industrial manufacturer based in China's southeastern port city of Xiamen, sacked a woman surnamed Ni for refusing to pay fines she incurred for talking back to superiors, Xinhua news agency said, citing a local newspaper.
For whatever reason, this puts me in the mind of that famous scene from Monty Python and the Holy Grail involving the Holy Hand Grenade.
Even Best U.S. Companies Lacking on Maternity Leave
This dispiriting news, courtesy of CCH Pension and Benefit NetNews, puts the status of paid maternity leave in this country in real perspective:
A new fact sheet released by the Institute for Women's Policy Research (IWPR) reports that nearly one-quarter (24 percent) of the best employers for working mothers provide four or fewer weeks of paid maternity leave, and half (52 percent) provide six weeks or less.
Here's the fact sheet from IWPR. One need not imagine too much to know what the not-so-good employers are doing in this regard.
I believe that one way for dealing with this situation is by amending the FMLA to provide a certain amount of paid leave for maternity and other medical issues. Such legislative proposals are currently percolating through Congress. Such an amendment would start getting us closer to where the rest of the industrialized world is in this area.
Aditi Bagchi (Penn) has just posted on SSRN her article Contract v. Promise. Her article uses employment promises/contracts to illustrate a broader point about promises/contracts generally. Here's the abstract, which I have excerpted to focus on the employment angle:
Contract has been conceptualized as a species of promise. Treating contractual promise as a kind of promise highlights certain important aspects of contracting, but it also obscures essential differences between legally binding and everyday, or what I will call "private," promises. The moral character of a private promise depends on the fact that it is not only freely made but also freely kept. Most contractual promises are not intended to have and (by definition) do not have this voluntary character. A promisor essentially opts out of the private practice of promising when she assigns to a third party the authority to coerce performance of her promise.
In [some] contexts, the distinction between private and legal promise calls for an expansion of the domain of contract. For example, promises made in the context of radical inequality in power, as in most employment circumstances, are often located outside the law. A promisor with vastly superior bargaining power need not promise in the contractual form in order to induce the desired conduct by the promisee; the promisor has no incentive to submit the unequal relationship to legal authority. 'Downward' promises between hierarchically situated persons are not easily enforced by the state. Thus, performance of those promises usually remains at the discretion of the promisor. Such promises are false private promises. To the extent we see the depersonalization of the employment relationship as an important achievement of the liberal market economy, this account clarifies one task of contract law: the displacement of private promise in the realm of employment. Just as par ties should have to go out of their way to make a private promise legally binding, legal defaults should make it relatively onerous for employers to avoid legal consequence when they make promises to their employees.
TSA Workers Win Right to Bring Constitutional Claims
Transportation Security Administration (TSA) workers won an important victory in front of the 9th Circuit last week, as reported by Stephen Barr in the Washington Post:
Even though the government's 43,000 airport screeners do not have full civil service rights, they still can file claims under the Constitution, a U.S. appeals court has ruled.
The ruling came in a case brought by a union and John Gavello, who had worked as a federal security screener at the Oakland International Airport. He was fired in 2004 after being warned by his bosses against posting union materials without their approval . . . .
Writing on behalf of a three-judge appeals court panel, Judge William A. Fletcher said, "If Congress wishes to deny federal employees the ability to redress alleged constitutional violations, it must state its intention clearly."
Fletcher sent the case back to the district court, saying that the court has jurisdiction over Gavello's claims and that the AFGE has standing to bring the case.
The Gavello case is part of a larger effort by organized labor to win bargaining rights and union protections for security officers at the TSA.
This is indeed an important development as it vindicates the idea that federal workers should have similar First Amendment rights as their state and local employee counterparts. Even federal employees with civil service protections under the Civil Service Reform Act of 1978, however, currently have a less meaningful free speech remedy as a result of being required to bring these claims to the Merit Systems Protection Board (MSPB) rather than directly to federal court.
In a recent paper, Whither the Pickering Rights of Federal Employees, I established, through an analysis of all federal employee First Amendment free speech cases under the Pickering framework, that there is no meaningful redress for federal employees under the current administrative scheme as not a single federal employee had been successful on the merits in front of the MSPB or Federal Circuit.
I therefore argue for the reestablishment of a direct constitutional tort claim under Bivens for these types of cases, which would require the overturning of the Supreme Court case of Bush v. Lucas.
Isiah Thomas on the Sexual Harassment Hot Seat
A high-profile sexual harassment case began yesterday involving the former NBA star and current coach Isiah Thomas:
The former New York Knicks executive who filed a $10 million sexual harassment lawsuit against coach Isiah Thomas testified Tuesday that the NBA legend repeatedly called her "bitch" and "ho" in private conversations before abruptly switching gears and professing his love.
Anucha Browne Sanders told a jury of five women and three men that Thomas, the Knicks' head coach and president of basketball operations, would blow up any time she tried to recruit him or his players for marketing campaigns . . . .
Browne Sanders' testimony came on the first day of the closely watched civil trial in federal court in Manhattan. It followed opening statements in which another attorney for Thomas sought to portray the plaintiff as a liar who made up charges to deflect attention from her incompetence . . . .
The plaintiff contends that despite being showered with rave performance reviews and raises for most of her tenure, the Knicks fired her from her "dream job" in January 2006 in retaliation for daring to hire a lawyer and pursue sexual harassment allegations against Thomas.
It is always interesting to hear public reaction to these types of cases. Has the public become more or less accepting of these types of alleged actions in the workplace? My thought is less, but, of course, these cases turn on the personalities and the facts as determined by the jury.