Saturday, December 15, 2007
- Katherine V.W. Stone, In the Shadow of Globalization: Changing Firm-Level Employment Practices and Shifting Employment Risks in the United States (78).
- Maria Linda Ontiveros, Immigrant Workers and the Thirteenth Amendment (44).
- Sanford M. Jacoby, Labor and Finance: Perspectives on Risk, Inequality, and Democracy (43).
- Simon Deakin (left), Priya Lele, & Mathias M. Siems (right), The Evolution of Labour Law: Calibrating and Comparing Regulatory Regimes (39).
- Michael C. Duff, Days without Immigrants: Analysis and Implications of the Treatment of Immigration Rallies under the National Labor Relations Act (30).
- William F. Sharpe, Jason S. Scott, & John G. Watson, Efficient Retirement Financial Strategies (260).
- Stephen F. Diamond, Legal Implications of Proposed GM/UAW VEBA (152).
- James A. Wooten (photo above), A Legislative and Political History of ERISA Preemption, Part 1 (140).
- James A. Wooten (photo above), A Legislative and Political History of ERISA Preemption, Part 2 (128).
- Katherine V.W. Stone, In the Shadow of Globalization: Changing Firm-Level Employment Practices and Shifting Employment Risks in the United States (78).
Friday, December 14, 2007
The Sports Law Blog (via the Mental Floss blog) reports on some of the odder clauses found in baseball player major league contracts:
The Mental Floss Blog has put together an amusing list of odd clauses inserted into the contracts of certain major league baseball players. The Uniform Player Contract (page 210 etc. of the Basic Agreement), of course, permits "special covenants" of this nature, but some of these seem quite weird.
These special covenants include: Nine limo trips for player's wife from Maryland to Canada, $100 worth of mustache wax, 37 boxes of orange jello, and a Caterpillar Bulldozer.
Peter Siegelman (Connecticut) has published in the William
and Mary Law Review: Contributory Disparate Impacts In Employment
Here's the abstract:
An employer who adopts a facially neutral employment practice that disqualifies a larger proportion of protected-class applicants than others is liable under a disparate impact theory. Defendants can escape liability if they show that the practice is justified by business necessity. But demonstrating business necessity requires costly validation studies that themselves impose a significant burden on defendants—upwards of $100,000 according to some estimates. This Article argues that an employer should have a defense against disparate impact liability if it can show that protected-class applicants failed to make reasonable efforts to train or prepare for a job related test. That is, I propose that when plaintiffs contribute to a disparity in this way, the employer should not be liable. I demonstrate that the “lack of effort” defense is consistent with the text of Title VII and the case law, which has largely ignored this issue. Finally, I show that my proposal is supported by both the theoretical rationales underlying disparate impact and a consequentialist analysis.
A very thought-provoking theory, but while it may make it easier for defendants to fight off disparate impact claims, it does not make it any easier for plaintiffs to prevail on them. I think to be more fair it would be necessary to balance this proposal with a similar "lack of effort" argument for plaintiffs; that is, to get around a self-fulfilling prophecy, defendant employers should also have to show that they did not contribute to the disparate impact through a lack of effort.
In this way, it would be an affirmative defense of the Ellerth/Faragher variety: there would have to be a showing both that the employer acted reasonably under the circumstances AND the plaintiff acted unreasonably or otherwise failed to avoid the harm.
An instructive case presented by Brian King at the ERISA Law blog:
From the U.S. District Court for the Western District of Missouri comes a recent noteworthy case involving the scope of ERISA preemption and the efforts of a health insurer to assert a reimbursement, a/k/a subrogation, claim. You can read the decision in Pruitt v. United Healthcare Services, Inc., here in the website library. The case provides some insights into strategies ERISA plan participants and beneficiaries can use to fend off insurers or other entities who try to interfere with personal injury recoveries . . . .
[The participant] sued UHC [the insuruer] in Missouri state court alleging that UHC was interfering with her contract and expected recovery from American Family. UHC removed the case to federal court and alleged that ERISA preempted Pruitt’s claim. If UHC succeeded in this argument, the legal terrain on which the battle between UHC and Pruitt would be fought would be much more favorable to UHC. Whether ERISA preemption existed was key. If it did not, there would be no jurisdiction for the federal court to hear the case. Pruitt argued that ERISA did not preempt her state law claim and asked the federal court to dismiss the case and remand it back to state court.
The federal court, Magistrate Judge William A. Knox, agreed with Pruitt. He ruled that whether ERISA preempted Pruitt’s state law claims had to be decided by looking at the terms of the Complaint Pruitt filed in state court. That complaint made no reference to any ERISA plan.
The outcome would have been different if there were a claim for benefits under 502(a)(1)(B). In that scenario, there would have been complete preemption under the Supreme Court's Taylor decision. But instead, because the plaintiff was seeking money damages for interference a the settlement agreement she made with the third-party, and there was not a similar claim available under ERISA, her state law claim was not preempted. In ERISA Travelers speak, it was because the plaintiff's claim only an indirect impact on ERISA plan administration.
This outcome seems consistent with the general movement in ERISA preemption from a field preemption approach to a conflict preemption approach.
Paul Fronstin of EBRI says not quite, but we're close. See The Future of Employment-Based Health Benefits: Have Employers Reached a Tipping Point?:
This paper examines the notion that employers have reached a tipping point over health costs and will cease offering health care benefits to their workers. In the end, an evaluation of recent data does not suggest that the end of employment-based health benefits is upon us. However, the message from some associations representing employers is that the existing employment-based system must be reformed because the status quo is unsustainable. Some individual employers, including leaders in the field, appear to share this new vision. However, many individual employers believe that there is a business case for offering health benefits to their workers, and they continue to invest substantial amounts of money in their health programs. They also tend to agree that if one major employer were to drop health benefits, others would follow. And they tend to agree that public policy changes, such as the erosion or elimination of ERISA (federal) pre-emption of state insurance regulation, could mean the end of voluntary employment-based health benefits.
The first section of this report examines recent trends in health benefits. It then discusses whether employers have reached a tipping point with health benefits. This is followed by a discussion of what is driving employers to a tipping point with respect to retiree health benefits.
Thursday, December 13, 2007
Negotiations between writers and the Hollywood studios have been going downhill fast and have now resulted in a charge filed with the NLRB. As reported by the AP:
Union officials representing striking Hollywood writers said Thursday they filed an unfair labor practices [charge] claiming studios violated federal law by breaking off negotiations. The Writers Guild of America also demanded that the Alliance of Motion Picture and Television Producers return to the bargaining so the six-week strike can be ended and thousands of workers idled by the walkout can return to their jobs. Negotiations broke off Dec. 7 when the alliance refused to bargain further unless the union dropped a half-dozen proposals that included the authority to unionize writers on reality shows and animation projects. . . .
The guild said in its statement that it was ''a clear violation of federal law for the AMPTP to issue an ultimatum and break off negotiations if we fail to cave to their illegal demands.'' It also said it was irresponsible for the alliance to break off talks in the midst of the holiday season, ''with thousands of our members and the membership of other unions out of work.'' . . .
The [charge] came on the same day the Directors Guild of America said it may open its own contract negotiations with studios next month, a move that's expected to put more pressure on writers to reach an agreement. A quick deal by directors could undercut the bargaining power of writers by serving as an industry template for new media and other issues. . . . .
Directors delayed starting their contract talks for two months ''out of respect for our sister guild,'' directors union President Michael Apted and negotiations chair Gil Cates said in the statement. ''But now the situation is dire. The WGA-AMPTP impasse has cost the jobs of tens of thousands of entertainment industry workers, including many of our own members, and more lose their jobs every day the strike continues,'' the statement said. . . .
An interesting development. I don't know enough specifics about the studios' demands to determine whether they violated their duty to bargain. The one thing I feel fairly certain about is that this matter won't be resolved by the Board. Although bleak now, there's too much money at stake for both sides to let this go on forever. Of course, my predictions are often wrong, so maybe I'll be to blame for countless reruns over the next year. One factor that does undermine my prediction from the union's perspective is that the strike appears to have overwhelming support from members, which could extend negotiations if the studios don't budge:
Union sentiment so far contrasts sharply with the previous writers strike in 1988 that lasted 22 weeks, said Ross Brown, a longtime member of both the writers and directors guilds and an assistant professor at Chapman University's Dodge College of Film and Media Arts. ''Nobody likes the fact that there's a strike. But I heard open complaining in 1988 about the strike, and there were meetings of open dissent,'' he said. ''I haven't heard a peep about that this time.''
Somewhat overshadowed by the Supreme Court’s oral argument last week in LaRue v. DeWolff Boberg & Associates was the Court’s denial of certiorari in another significant ERISA case, Eichorn v. AT&T Corp., 484 F.3d 644 (3d Cir. 2007) ("Eichorn II"). Eichorn II provides a vehicle to address dual ERISA mysteries: (1) Is an ERISA Section 510 claim possible when the plaintiffs are a class of employees affected by a corporation reorganization?; and (2) If so, is there a remedy for such a Section 510 claim under ERISA Section 502(a)(3) that qualifies as equitable relief?
The facts of Eichorn, which are somewhat unique, are described in detail in Eichorn v. AT&T, 248 F.3d 131 (3d Cir. 2001)("Eichorn I"). Greatly summarized, the case arose out of the 1995 reorganization of AT&T. As part of the reorganization, AT&T agreed to sell its subsidiary, Paradyne Corporation. Part of the sale agreement included an agreement by AT&T and its remaining subsidiary corporations that they would not rehire any Paradyne employee with a salary above $50,000 for eight months after the sale. This "no-hire" agreement effectively eliminated certain "bridging rights" that would allow an employee to retain pension service and vesting credit under the AT&T pension plan (which had a five-year cliff vesting schedule) for time away if the employee returned to work for AT&T or one of its subsidiaries within six months.
In Eichorn I, the Third Circuit held that the plaintiff-employees affected by the no-hire agreement had presented sufficient evidence to survive summary judgement on their claim under ERISA Section 510 that the no-hire agreement was specifically intended to interfere with their rights under the AT&T pension plan. In Eichorn II, however, the Third Circuit held that the plaintiff-employees had no remedy under ERISA Section 502(a)(3), and therefore upheld the district court’s grant of summary judgment for AT&T.
The denial of certiorari in Eichorn II is mysterious for several reasons. First, the case presented an opportunity to clarify the meaning of "equitable relief" under Section 502(a)(3) in the context of Section 510 claims. Equitable relief under Section 502(a)(3) for a violation of Section 510 has been an area of emerging controversy in the wake of the Supreme Court’s cryptic dicta in footnote 4 of the majority opinion in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002), which suggested that back pay awards may not constitute "equitable relief."
More fundamentally, Eichorn is symbolic of a new genre of Section 510 claims where the claim of interference is not made by a lone individual who allegedly was targeted for retaliation, but rather stems from a corporation restructuring where employee benefits (most notably, their costs) are a factor in how the reorganization is structured. Other examples include Register v. Honeywell Federal Manufacturing & Technologies, LLC, 397 F.3d 1130 (8th Cir. 2005), and Millsap v. McDonnell Douglas Corporation, 368 F.3d 1246 (10th Cir. 2004). From an employer’s perspective, Honeywell illustrates a best practices approach; Millsap illustrates what not to do.
The Supreme Court previously has addressed a 510 claim in the corporate reorganization context once before in Inter-Modal Rail Employees Association v. Atchison, Topeka & Santa Fe Railway Co., 520 U.S. 510 (1997). Inter-Modal involved a corporate restructuring that affected benefits under a collective bargaining agreement. Inter-Modal, however, was limited to the narrow question of whether alleged interference with welfare plan benefits (as opposed to vested pension benefits) could lead to an actionable claim under Section 510. (The Court said "yes.")
One has to wonder whether part of the reasoning for denying certiorari in Eichorn II stems in part from a general unwillingness on the part of the Supreme Court to fall again into the trap of Mertens v. Hewitt Associates, 508 U.S. 248 (1993). In Eichorn II, was the Court reluctant to rule on the remedies available under Section 502(a)(3) "where it is unclear that a remediable wrong [under Section 510] has been alleged"? See 508 U.S. at 255.
Finally, the mystery deepens further when one sees observes the diminishing viability of the McDonnell Douglas burden shifting analysis under Title VII. Is McDonnell-Douglas going to remain as the judicial approach to Section 510 claims in the future? What could (or should) replace McDonnell Douglas as an analytical framework for the federal courts to follow in Eichorn-like corporate reorganization claims under Section 510?
For those in the legal academy who complain that their scholarship is being ignored by the judiciary and lawmakers, these are certainly mysteries worth writing about. In the meantime, labor and employment lawyers need to add the possibility of a claim under ERISA Section 510 to their checklist of legal claims (WARN, ADEA, etc.) that possibly can arise from a corporate reorganization, downsizing, or outsourcing of labor functions. It is cold comfort to the employer to "win" when winning entails years of litigation in the federal courts.
Under United States labor law, if a company wants to move to another location to save costs, under Dubuque Packing (D.C. Cir. 1993), the employer, in order to avoid bargaining with the union, may need to show that labor costs were not a factor in the decision or even if they were, the union could not have offered concessions that could have changed the employer's decision to relocate.
According to BBC News, the law in Europe is about to become somewhat similar, with an added twist:
The European Union's highest court has backed the right of companies to move to another EU state to cut costs.
The European Court of Justice (ECJ) was ruling on a Finnish ferry company, Viking, which replaced the crew on one of its ships with Estonian workers.
Trade unions intervened, preventing Estonian union members from negotiating with the company.
The court said unions were allowed to take collective action, if jobs and work conditions were under threat.
The ECJ decided it was up to the national court to decide whether jobs were likely to be affected.
But it warned the unions that collective action would be illegal if it restricted the EU's freedom of establishment, which guarantees a company's right to carry out economic activity in other member states.
So just like in this country where employers have historically moved from highly industrialized areas of the country to the South to avoid unionization, a similar phenomenon is taking place in Europe:
The ruling is being seen by unions as a test-case on what has become known as social dumping, the transfer of jobs from Western countries to other EU countries in Central and Eastern Europe.
Further clarification on the issue of social dumping will be forthcoming soon, as "[t]he ECJ will rule next week on a similar case in which unions in Sweden prevented a Latvian construction firm from fulfilling a contract in Sweden because it offered Latvian pay and conditions."
Wondering why it is so important for ERISA fiduciaries to prudently select mutual funds with reasonable management fees? Here's a telling chart provided to us by the good people at the New York Times' The Board Blog:
The chart below shows the effect on earnings of even one percentage point difference in annual fees on a 401(k) balance of $20,000 invested over 20 years.
Most 401(k) fees are deducted directly from your returns so, clearly, the higher the fees, the smaller your account balance. Yet most employees have no idea what their 401(k) fees are and many employers don’t either, even though companies that offer 401(k)’s have a responsibility to ensure that a plan’s charges are reasonable.
Seeking to provide 401(k) plan participants and other mutual fund investors with information that is easier to use, SEC voted unanimously to propose amendments to Form N-1A that will require inclusion, at the front of the fund’s prospectus, of a new “summary section” that will report key information about the fund including investment objectives, risks, costs and performance. The new summary section, designed to enable an apples-to-apples comparison between mutual funds, is envisioned to be no longer than 3-4 pages and may also be utilized separately as the fund’s Summary Prospectus. If a Summary Prospectus is used, the obligation under the Securities Act to deliver a statutory prospectus can be satisfied by giving the Summary Prospectus and making the statutory prospectus available online.
Sounds like a constructive way for helping less sophisticated 401(k) investors to know what they are getting themselves into. Of course, investors still have to read the prospectus and not just toss it into the trash.
Feldman and Lobel on Behavioral Versus Institutional Antecedents of Decentralized Enforcement in Organizations
Yuval Feldman (Bar-Ilan) and Orly Lobel (San Diego) have posted on SSRN their new piece: Behavioral Versus Institutional Antecedents of Decentralized Enforcement in Organizations: An Experimental Approach.
Here's the abstract:
Social enforcement, the decentralized action by organizational actors of monitoring, identifying, and reporting legal violations, is widely recognized as a key factor in ensuring good governance. This article reports on a study conducted in the United States and Israel examining the behavior of individuals when confronting unlawful conduct within their workplaces. The study provides novel insights into the relationships between state - based, organizational - based, and employee - based enforcement. It finds that the likelihood and the manner of reporting will vary depending on the type of illegality and is strongly correlated to perceptions of legitimacy, job security, and voice within the workplace. Comparing illegalities, employees prefer to report clear violations by rank - and - file employees rather than violations by managers. At the same time, external reporting to government or media entities is most likely when violations involve the organization as a whole or implicates top management. The study also finds cultural and gender differences in reporting patterns. Finally, the study demonstrates that social norms are more predictive of social enforcement than expected organizational costs.
This is a welcome empirical piece by two scholars who are at the cutting edge at corporate self-governance theory and whistleblowing law.
House and Senate Subcommittees have announced witnesses for Thursday's hearing on recent NLRB decisions:
- Robert Battista, Chair, NLRB
- Wilma Liebman, Member, NLRB
- Matt Finkin, Prof., Ill. (photo above)
- Jon Hiatt, General Counsel, AFL-CIO
- Feliza Ryland, Old Star Resort
- Charles Cohen, Partner, Morgan Lewis
The quote of the day, courtesy Workplace Horizons, comes from Senator Mike Enzi (R-WY):
This hearing is a clear effort to politicize the judicial functions of NLRB, and to force that agency to bend to the will of the Democrat majority and its union supporters. Make no mistake, union bosses are directing this assault on judicial independence, and the Majority is willing to comply with their goals at the expense of judicial integrity . . . . Unfortunately, it is clear to me that this hearing is far more about staging partisan political theater than it is about any of the legitimate and responsible uses of Congressional hearing or oversight authority.
Which, of course, demonstrates a regrettable ignorance of how the Board has always worked, and was designed to work. Of course, the posturing cuts both ways -- Democrats who will criticize Battista at the hearing for the Board's pro-management decisions know full well that President Bush appointed him not for his impartiality and "judicial independence," but because Bush knew he would be a reliable pro-management vote. Board members are not judges -- they are political appointees. Pro-union folks have an opportunity to change the Board's tilt, not at Thursday's hearing, but at November's election.
And if that happens, within a couple of years, the Democrats will be lauding an "impartial" Board and the Republicans will be decrying its politicization.
Kevin Kolben (Rutgers Business) has just posted on SSRN his article (forthcoming UCLA J. Int'l L. & For. Affairs) Wal-Mart Is Coming, But It's Not All Bad: Wal-Mart and Labor Rights in Its International Subsidiaries. Here's the abstract:
This article analyzes Wal-Mart's conduct in its international operations from a comparative and transnational labor law perspective. It shows that while Wal-Mart is fiercely anti-union in its home operations, its subsidiaries do not necessarily act the same way abroad. In fact, rather than simply exporting its rather distinct animus towards unions and collective bargaining, Wal-Mart generally adapts to host-country institutional, political, and regulatory environments. Consequently, in most countries outside of North America, Wal-Mart peacefully co-exists with unions.
To make sense of this phenomenon, the article proposes a transnational labor framework to help explain and predict the conduct of Wal-Mart as well of other MNCs in their foreign operations with regards freedom of association and collective bargaining. This framework looks at firm-level analyses of MNCs in industrial relations and human resources scholarship; domestic legal and political regimes; private regulatory regimes and local norms; and host-country "tempering effects" to help explain MNC conduct. The article concludes that a) contrary to predictions of its immanent demise, local and national-level labor regulation and industrial relations systems remain relevant, even in the context of a highly anti-union MNC; and b) that the diffusion of MNCs, particularly low standard ones such as Wal-Mart, can possibly function in certain contexts as labor rights catalysts. As such, these catalysts can set in motion dynamics that will lead to improved labor conditions, and stronger regulatory regimes and industrial relations systems.
Of course, this begs the question: if Wal-Mart can get along with unions in other parts of the world, why can't it do so at home? My question is not a rhetorical one. Perhaps, as the U.C. Berkeley’s Labor Center's study (see Paul's post last week) suggests, Wal-Mart can and chooses not to. Or perhaps it indicates that American labor law uniquely encourages companies to take a hard-line stance against unions. The latter is suggested by Kolben's observation that other transnational companies, such as British Tesco and Swedish H&M, have an amicable relationship with unions at home but are strongly anti-union in the U.S. This would suggest that the solution is not to try to change Wal-Mart, but to change American labor law.
Wednesday, December 12, 2007
I am already a big fan of the work of Ed Zelinsky (Cardozo) on such employee benefit issues as cash balance plans and ERISA preemption. So when Rebecca Ford of the Oxford University Press (OUP) Blog wrote me to plug Ed's new book, The Origins of the Ownership Society: How the Defined Contribution Paradigm Changed America, and a post he wrote in support of that book, of course I was going to post it.
Here are some highlights from Ed's Post on the OUP Blog:
The financing of medicine has emerged as the central domestic issue of the 2008 presidential campaign. Hovering over this debate is the memory of the failed health care initiative spearheaded by the then First Lady in 1993. Senator Clinton’s supporters suggest that Senator Clinton has learned from that earlier, unsuccessful experience. Her opponents contend otherwise.
There is, however, an important lesson learned since 1993 which, so far at least, most health care reformers have been unwilling to embrace: “National” health care needn’t be national; indeed, it should not be. The states can and should be in the forefront of health care policy. Different states can experiment with different formulas and can adapt to local preferences about health care. The federal government ought to permit state innovation to flourish in the financing of medical care, rather than impose a single set of nationwide rules . . . .
Before legislating federally, we should wait to see how the Massachusetts experiment plays out. Perhaps Massachusetts’ experience will confirm the value and practicality of individual and employer mandates as well as expanded insurance subsidies for low income persons. Perhaps the Massachusetts experiment will reveal that some or all of these approaches should be modified or abandoned. A great strength of federalism is that Massachusetts, and other states, can act as laboratories of public policy and thus generate useful information for the nation as a whole . . . .
Today, the major impediment to state-by-state experimentation with health care is the Employee Retirement Income Security Act of 1974 (ERISA) which prohibits the states from enacting laws which “relate to” employer-provided medical care. Since employer-provided health care is central to the status quo, this prohibition legally dooms much productive experimentation, like the new Massachusetts health plan. Accordingly, the first order of business for federal health care reformers should be the modification of ERISA to permit state-by-state innovation in the financing of health care.
Check out the whole post and by all means, buy Ed's book as is it will likely be a hot topic of conversation during the 2008 Presidential campaign.
The ACSBlog has this write-up on an article that appeared in the Washington Post yesterday about a report by the Center for American Progress which accuses the Office of Labor Management Standards under the Bush administration of attempting to bury unions in paper work:
The Center for American Progress has released a new report entitled, "Beyond Justice: Bush Administration's Labor Department Abuses Labor Union Regulatory Authorities," by Scott Lilly.
In the report's introduction, Lilly points out that in recent years many regulatory agencies have laxly enforced their rules "to the significant financial benefit of certain businesses and at the expense of those whose health and safety those laws were designed to protect." But in the governance of organized labor, "rigorous and in fact pernicious regulatory enforcement was the course chosen by the Bush administration."
Lilly argues that the "underlying purpose, of course, is to undermine the reputation of the labor union movement through a classic political misinformation campaign—all under the supervision of a lifelong partisan political operative whose career has been dedicated to the destruction of his political opponents.
The Washington Post article points out that the paperwork burden on unions has increased 60% since 2005.
This is hardly surprising when one considers that:
[t]he standards office has been led since 2005 by Don Todd, a former Republican National Committee strategist. Todd is credited with helping George H.W. Bush win the presidency in 1988 by convincing Lee Atwater to use a television ad featuring furloughed murderer Willie Horton and portraying Bush's Democratic challenger as soft on crime.
Don't want to be overly cycnical but isn't putting someome like Todd in charge of OLMS like putting the fox in charge of guarding the hen house?
Hat Tip: Joe Slater
I learned today from the LERA listserv that there will be a new labor law blog focused on the National Labor Relations Board (NLRB). Erin Johannson of the new Eye on the NLRB blog wrote the listserv:
For over three years, American Rights at Work has published “Workers’ Rights Watch: Eye on the NLRB,” publicizing the insufficiency of U.S. labor law while raising awareness of a little-known agency making critical decisions affecting workers' lives and freedoms.
I’m excited to share that we are re-launching this publication as a blog, allowing me to post more frequent and timely commentary on NLRB decisions, and to generate more attention to decisions which make the case for labor law reform. You can find Eye on the NLRB at www.eyeonthenlrb.org. You can sign up to receive alerts when there are new postings so you can stay on top of developments at the NLRB.
I also want to encourage you to send me cases, law articles, or reports that you think I should post to the blog.
A hearty welcome to the blogosphere!
Cooney, Howe and Murray on Understanding the New Australian Workplace Relations Act as a Scheme of Regulation
Sean Cooney (Melbourne), John Howe (Melbourne) and Jillian Murray (La Trobe) have put on SSRN their piece in the New South Wales Law Review: Time and Money Under Work Choices: Understanding the New Workplace Relations Act as a Scheme of Regulation.
Here's the asbtract:
This article is an assessment of changes to labour standard-setting in Australia brought about by the Workplace Relations (Work Choices) Act 2005 (hereafter Work Choices). We examine whether Work Choices is an example of sound regulatory practice, and whether it is likely to address the key social problems associated with work in Australia in the early twenty-first century. We conclude that it is not, and indeed is largely directed at increasing the discretionary power of employers.
Part II of the article establishes a framework for analysing Work Choices. We raise normative arguments in favour of maximising not merely work but decent work and contend that the private law of employment is, on its own, unable to deliver decent work. Public regulation of the employment relationship is also required. We then consider what modes of public regulation are most appropriate in the employment context, drawing on the now extensive literature on effective (and in particular responsive) regulation.
Part III applies this framework to Work Choices, focusing on the regulation of time and pay. The Part begins with an explanation of the ways in which Work Choices departs from the previous system of setting labour standards for decent work. We then find that Work Choices favours 'command and control' rather than responsive regulation. We further observe that although this form of regulation purports to 'guarantee' basic labour standards, it often exacerbates the problems of private law by expanding the scope of employer action.
The article concludes by suggesting that a better approach to workplace reforms, while not returning to the past, would draw on, rather than marginalise the successful elements of the previous system.
As always, looking across the world and investigating employment issues can lead to rewarding insights for our own employment laws. Check it out!
Paul Mollica does a nice analysis over at Daily Developments of the the Ninth Circuit's "new & improved" version of Dukes v. Wal-Mart (class certification of a nationwide sex discrimination case). As Paul points out, though, there probably will be a Part III when Wal-Mart petitions for en banc rehearing, but even that is unlikely to be The Final Chapter.
Tuesday, December 11, 2007
In what has seemed like a season of labor unrest in the entertainment industry, MTV is the latest to feel the pressure. A group of self-described "permalancers"--permanent freelancers who receive fewer benefits than official full-time employees--just went on strike and are picketing the headquarters of Viacom, MTV's parent company. As reported by the New York Times:
Waving signs that read “Shame on Viacom,” the workers, most of them in their 20s, demanded that MTV Networks reverse a plan to reduce health and dental benefits for freelancers beginning Jan. 1. In a statement, MTV Networks noted that its benefits program for full-time employees had also undergone changes, and it emphasized that the plan for freelancers was still highly competitive within the industry. Many freelancers receive no corporate benefits.
But some of the protesters asserted that corporations were competing to see which could provide the most mediocre health care coverage. Matthew Yonda, who works at Nickelodeon, held a sign that labeled the network “Sick-elodeon.” . . .
Sara Horowitz, the founder of the Freelancers Union, an organization of 40,000 New York area freelancers, said permalancing was widespread, particularly in the media industry. Protests, however, are not. “I really think it’s getting to a point where people are not willing to take it anymore,” she said. . . .
The changes to the benefits package were announced last Tuesday. Freelancers were told that they would become eligible for benefits after 160 days of work, beginning in January. While that eased previous eligibility rules, which required freelancers to work for 52 weeks before becoming eligible, it would have required all freelancers not yet eligible for benefits to start the waiting period over again on Jan. 1. The 401(k) plan was also removed. On Thursday, acknowledging the complaints, MTV Networks reinstated the 401(k) plan and said freelancers who had worked consistently since March would be eligible for the new benefits package without an additional wait. Still, other changes continued to cause anger.
Fueled by a series of blog posts on the media Web site Gawker — the first post was headlined “The Viacom Permalance Slave System” — a loose cohort of freelancers created protest stickers and distributed walkout fliers last week. . . . Outside Viacom’s headquarters, several workers held posters with the words, “There’s too many of us to ignore.” It was unclear how many freelancers are on the company’s payroll; an MTV Networks spokeswoman said the figure was not known because it rises and falls throughout the year. . . . Two freelancers and one full-time employee, who asked not to be identified for fear of retribution, estimated that the percentage of freelancers in some departments exceeded 75 percent.
As the article notes, although the protests are new, significant use of permanent freelancers to avoid providing benefits isn't. Employers, of course, have a lot of freedom to structure their benefit packages. However, MTV is quickly learning that a major concern of employees is fairness and treating them differently based on an artificial and inaccurate job description isn't perceived as fair. Given the costs involved, particularly health benefits, this problem isn't going away anytime soon. But, companies may be more sensitive about who they cover in the future.