April 26, 2008
Strike authorized at Bloomingdales
According to an AP story printed in New York's Newsday,
Workers have authorized a strike at Bloomingdale's flagship 59th St. store, which could lead to the first shutdown at the famed shopping destination in more than four decades.
A spokeswoman for the Retail, Wholesale and Department Store Union said talks were continuing, but the 2,000 workers at the store have authorized a walkout if a contract dispute is not resolved by Thursday.
Bloomingdale's spokesman David Ender said negotiations have been “mutually respectful,” and that the company expects an agreement before the contract expires Wednesday evening.
Union spokeswoman Carolyn Daly said the union and management are split over health care coverage and raises.
Negotiations began in February, and the contract was extended until Thursday.
Daly said no date has been set for a walkout.
The walkout, if it happens will only be at Bloomingdale's 59th Street store, near Central Park, and not at any of the other 36 stores across the country.
Bloomingdales is owned by Macy's (which used to be called Federated Department Stores before it bought Macy's). Macy's also owns Filene's and the May Department Stores. For an interesting article on the size of this behemoth of a department store company and its effects on prices, see my friend Mark Bauer's article, Give the Lady What She Wants--As Long as It's Macy's. It would be interesting to see what effects this consolidation of department stores has had on employment, as well.
Rosen on Executive Compensation Reform
Kenneth Rosen (Alabama) has just posted on SSRN his article Who Killed Katie Couric? And Other Tales from the World of Executive Compensation Reform. Here's an excerpt from the abstract:
With average Americans perturbed about executive pay, government officials are taking action. Officials appear to be racing against each other to battle corporate excess. The U.S. Securities and Exchange Commission (SEC) engaged in major rulemaking related to the disclosure of executive compensation, and Congress quickly considered executive compensation legislation. More reform, however, is not always better. Concurrent reform by multiple regulators presents perils.
This Article adds to the dialogue about scandal-driven reform. While much discussion exists about the advisability of particular reforms, the focus here is on the process of reform. The Article conducts a comparative analysis of the SEC and House of Representatives' reform processes, which reveals that different policy-making processes may be more or less likely to yield positive reforms. The Article argues that promoting distinct, more delineated roles for certain public actors could improve synergies between regulatory reform efforts.
Top-5 International Employment & Labor Law SSRN Downloads
- Lauren Carasik, Think Glocal, Act Glocal: The Praxis of Social Justice Lawyering in a Global Era (63).
- Sean Cooney, Sarah Biddulph, Ying Zhu, & Li Kungang, China's New Labour Contract Law: Responding to the Growing Complexity of Labour Relations in the PRC (43).
- Stefano Liebman, Multi-Stakeholders Approach to Corporate Governance and Labor Law: A Note on Corporate Social Responsibility (31).
- Martin Gelter (photo above), Review of Political Power and Corporate Control: The New Global Politics of Corporate Governance, by Peter A. Gourevich and James Shinn (24).
- Aukje A.H. Van Hoek, Transnational Corporate Responsbility: Some Issues with Regard to the Liability of European Corporations for Labour Law Infringements in the Countries of Establishment of Their Suppliers (21).
Top-5 Benefits/Compensation/Pension SSRN Downloads
- Lauren E. Willis, Against Financial Literacy Education (151).
- Yaniv Grinstein, David Weinbaum, & Nir Yehuda, Are Perks Excess? Evidence from the New Executive Compensation Disclosure Rules (141).
- Candace Budy & Richard Bales, Naming a Defendant in an ERISA Action (106).
- Oliver G. Spalt (photo above), Small Chances and Large Gains: Why Riskier Companies Grant More Employee Stock Options (89).
- John Bronsteen, Brendan S. Maher, & Peter K. Stris, ERISA, Agency Costs, and the Future of Health Care in the United States (85).
April 25, 2008
Glanville on Rookies and Veterans: A Workplace Lesson for All?
You enter the big leagues (usually) as a young, vibrant, wide-eyed rookie, inspired and inspiring and still able to talk about your career with the excitement of a 5-year-old. Then, at the speed of light, you’re a seasoned veteran, with loads of “experience” by the ripe old age of 34, and it takes two whirlpool massages just to get ready for batting practice . . . .
I understood that I was now entrenched on the other side of the bell curve. I was sliding downward into the “long in the tooth” spiked pit. My competition’s relatively minimal major league experience had become more valuable, in a way, than my library of experience. Somehow I had missed the transition point in my career where my value to a team had intersected with the value of a new kid on the block . . . .
Young players don’t want feel dismissed just because they haven’t been around the block any more than veterans want to have their years of experience discarded. And after all, there are different types of contributions, to be made by young and old, that can get a team to the same place. It just depends on what you are looking for and how you want it done.
Is this a good lesson for all workers in this age of age discrimination in which we seem to live (note the five ADEA Supreme Court cases this Term alone)?
And, of course, GO PHILLIES!!!
Do Workplace Smoking Bans Have A Multiplier Effect?
A couple of Harvard Professors have put out a provocative theory about the impact of smoking bans in the Workplace (from Harvard Kennedy School website):
What makes smokers smoke and what makes them stop? Undoubtedly there are many factors – some physical, others psychological, and some perhaps sociological. A new Kennedy School Working Paper, “Social Interactions and Smoking,” specifically examines whether individuals are more likely to smoke when they are surrounded by other smokers.
The paper is co-authored by David Cutler, Otto Eckstein professor of applied economics in the Faculty of Arts and Sciences (FAS), and Edward Glaeser, Fred and Eleanor Glimp professor of economics and director of Harvard Kennedy School’s Taubman Center for State and Local Government.
The researchers find that peers do affect an individual’s decision whether or not to smoke, and that workplace smoking bans can have a multiplier effect.
“Individuals whose spouse faced a workplace smoking ban were less likely to smoke themselves. The estimates suggest a 40 percent reduction in the probability of being an individual smoking if a spouse quits,” the authors write. “The results suggest that policy interventions that impact an individual’s smoking habit will have both direct effects and also indirect effects through on the smoking of peers.”
April 24, 2008
Senate Passes GINA
The Senate today passed the Genetic Information Nondiscrimination Act. That sends the bill back to the House, which already passed it last year. Here's the New York Times article filed this evening.
New Labor Dep't Rules for FMLA
Today's Washington Post has a story on the comments to the Labor Department's proposed new rules for the Family Medical Leave Act, which was enacted 15 years ago. Those rules would require workers to tell their their employers in advance when they take nonemergency leave, instead of being able to wait until two days after they left. Workers would be required to undergo "fitness-for-duty" evaluations if they took intermittent leave for medical reasons and wanted to return to physically demanding jobs. To prove that they had a "serious health condition," they would have to visit a health-care provider at least twice within a month of falling ill. And employers would have the right to contact health-care providers who authorized leave.
The comment period ended on Friday, April 11, 2008, and over 4000 comments had been filed. Debate on the changes is very hot at the moment. Workers worried about the economy and their job security do not want to see these changes implemented and are pushing Congress for some sort of paid leave. According to the Bureau of Labor Statistics (select option and click "retrieve data"), only 57% of workers have access to paid sick leave, and so many workers rely on FMLA leave to provide job security in case of their own illness or that of a close relative. And Democrats have introduced bills that would provide some paid leave. The Healthy Families Act would give workers seven days of paid sick leave to care for their own medical needs as well as those of a family member. The Balancing Act would provide paid family medical leave, benefits for part-time workers and time off for activities that require parental involvement, such as medical appointments.
Employers are concerned about cost effectiveness and also complain of abuses, for example that employees use the leave to cover up tardiness or absenteeism not due to serious health conditions. The U.S. Chamber of Commerce complains that too many employees take the leave, and one survey of members of the Society for Human Resource Management found that 40% of members allowed FMLA leave when they thought the reasons were illegitimate because they thought the law required them to.
The White House, meanwhile, is intent on putting its stamp on the FMLA. Assistant Labor Secretary Victoria Lipnic said her goal is to finalize the new rules during this administration, but she said it would take a long time to go through all the comments, which the department is required to do. She also acknowledged that although the Labor Department has the authority to rewrite regulations, Congress could stall or halt any changes by refusing to provide money for them. "I think it has a pretty good chance of being battled down," Rep. Lynn Woolsey (D-Calif.) said.
But to Lipnic, the proposals are simply a way to "clean up" the regulations, which have at times been so vague as to spark lawsuits. The proposals are also, she said, an attempt to end some abuses.
Clearly this is a tough issue if the DOL received 4000 comments on the proposed rules. Personally, I have a hard time believing that abuse of the law is as rampant as the Chamber of Commerce, at least, suggests. Because the leave is unpaid, and the fact that between 23% and 40% of workers live paycheck to paycheck, while only 37% of consumers have savings, I have a hard time believing that people can afford to take the leave unless they have to. Especially in a time of declining hours. This NYT story from earlier this the week really highlights the precarious position many workers find themselves in. The FMLA is an important protection, and I would hate to see employers given the green light to deny leave more often or simply make it too hard to take.
April 23, 2008
McCain's Ledbetter Stance and What It Portends for His Supreme Court Nominees
It really irks me when someone says to me that it doesn't matter whether a Republican or Democrat replaces President Bush because at the end of the day the bunch of them are all the same. Or someone who says, "if my Democratic candidate does not win, I'll vote for McCain. He ain't too bad."
I believe with all my heart that it absolutely does matter who one votes for in this election and McCain's Ledbetter stance says much about what his Supreme Court nominees might look like. The AP reports that McCain didn't bother to vote today on the Ledbetter Bill cloture motion, but if he did, he remarked:
he opposes a Senate bill that seeks equal pay for women because it would lead to more lawsuits . . .
"I am all in favor of pay equity for women, but this kind of legislation, as is typical of what's being proposed by my friends on the other side of the aisle, opens us up to lawsuits for all kinds of problems," the expectedpresidential nominee told reporters. "This is government playing a much, much greater role in the business of a ."
Great, a private enterprise system that still pays women fractions on the dollar for what men get paid for doing the same job. And ah, the oft-quoted justification for denying the civil rights of employees, students, and others - recognizing such a right will open the proverbial floodgates of litigation.
Give me a break. As I have argued elsewhere, there has been narry a time that the Court has predicted the forthcoming doom of the federal court system and that it has actually happened. But McCain, who already has indicated to the Federalist Society that he would appoint more Robertses and Alitos, would continue a disturbing trend on the current Court of promoting anti-litigation Justices. (Cf. Andy Siegel's The Court Against the Courts: Hostility to Litigation as an Organizing Theme in the Rehnquist Court's Jurisprudence and Scott Moss's Fighting Discrimination While Fighting Litigation: A Tale of Two Supreme Courts.)
And as Moss and others have shown, an anti-litigation Supreme Court usually translates in the labor and employment area to carte blanche for employers and little civil rights and civil liberties protections for public and private employees.
No thanks to all that.
ADEA Meacham RFOA Oral Argument Transcript Analysis
Together with Metlife v. Glenn, the Supreme Court heard another labor and employment law case today, this one involving the "reasonable factors other than age" (RFOA) defense under the Age Discrimination in Employment Act (ADEA) and who has the burden of proving that there is a RFOA.
Our friends at the Cornell Legal Information Institute (LII) provide us with this backgrounder of Meacham v. Knolls Atomic Power Laboratory (06-1505):
In this case, a hair's breadth of analytical difference is worth almost $6 million dollars, as the plaintiffs, former employees at Knolls Atomic Power Laboratory ("KAPL") ask the U.S. Supreme Court to overturn the Second Circuit's finding for the defendants. The plaintiffs had prevailed at trial and on appeal on a disparate impact theory of illegal age discrimination under the Age Discrimination in Employment Act (the "ADEA"), 29 U.S.C. 621 et seq., when the Supreme Court remanded for reconsideration in light of Smith v. City of Jackson.
While upholding the disparate impact theory, City of Jackson also requires the touchstone of the analysis to be whether employers considered "reasonable factors other than age," which the Second Circuit determined was a burden of persuasion to be borne by the plaintiffs. The employee-plaintiffs disagree, maintaining that the "reasonable factors other than age" harbor in the ADEA statute is a traditional affirmative defense on which the employer-defendants bear the burden of proof. In determining where the burden rests, the Supreme Court's decision will impact the nature of future employee litigation under the ADEA, shape the strategies for a successful reduction in force, and determine what deference is due the Equal Employment Opportunity Commission's regulations interpreting the ADEA.
Here is my analysis of today's oral argument transcript in Meacham:
1. A nice encapsulation of the issue by Meacham's counsel, Kevin Russell:
Everyone agrees that under the reasonable factor other than age provision of the Age Discrimination in Employment Act, a business practice that is reasonable is not unlawful even if it has a disparate impact on older workers. The question here is simply what happens in cases in which the proof on reasonableness is in equipoise, which party bears the risk of nonpersuasion. And on that question the statute is not silent such as to leave to the courts to decide for themselves what answer makes the most sense.
In other words, plaintiff is in the unusual situation in this case of making a textualist argument against the employer. Did you ever think you hear an employee counsel say this?: "The question is not what rule would make sense, but what does the statute -- what rule does the statute contemplate? And we think by phrasing the RFOA provision as a traditional affirmative defense." How does Justice Scalia respond? (See below).
2. The argument is that the statute sets up the RFOA defense as an affirmative defense in the ADEA statute itself and it would make no sense to interpret it otherwise. And Russell throws in an administrative deference argument in for good measure:
[W]e agree entirely with the EEOC that that question is still determined by the language of the statute, which makes quite clear that Congress thought that this was an exception to liability upon which the employer bears the burden of proof.
Of course, Justice Ginsburg, the employment discrimination law expert, points out that the EEOC never had disparate impact cases under the ADEA in mind when they made their regulation. Russell responds: "[W]e think that, although it's an inartfully drafted regulation, by using the terms 'individual claim of discriminatory treatment' rather than the term of art "disparate treatment," the language is broad enough to bear their reading." My question is: Does any person arguing before the Supreme Court not beat up on the incompetence of the EEOC?
3. Some more elaboration by Russell on where the RFOA determination comes up in a disparate impact (DI) case still ruled by Wards Cove under the ADEA post-Smith:
Even get to it, because by its 3 terms the RFOA provision only applies to conduct that is 4 otherwise prohibited by Section 4(a)(2), and the test for whether something is otherwise prohibited under 6 Section 4(a)(2) is Wards Cove. This Court in Smith said that language, which was identical to the language Congress used to describe the unlawful- employment practice in Title VII, has the same meaning in both statutes. And in order to establish a violation of Wards Cove, you do have to often look at questions of alternatives.
4. Justice Alito, the lone outlier in the Burlington Northern retaliation decision, challenges the seeming illogic in Russell's position: "Isn't it a strain to say that an employment practice was because of an individual's age, but at the same time was based on reasonable factors other than age?" Russell uses a weight lifting hypothetical to respond:
We use the example in our brief of a weight-lifting requirement. It's quite possible for that requirement, and quite likely, that it will have a disparate impact on older workers because of their age. The effect will be felt by workers because of their age. At the same time, it is quite possible that that practice itself will be entirely reasonable. And the difference is between what the "because of age" refers to in the two different provisions.
Okay, get ready for some down and dirty statutory interpretation about these two different provisions in the ADEA:
[Y]ou have the language of the RFOA provision, and the reasonable -- the "factors other than age" refers to in that case the differentiation, that is the business practice itself. But if you . . . look at the language of (a)(2), the business practice, that is, the limiting, segregating, or classifying, doesn't have to be because of age. [(a)(2) refers to the provision used for DI claims as opposed to disparate treatment (DT) claims.] There wouldn't be a disparate treatment claim. Instead what "because of age" refers to there is the effect of that
facially neutral practice. That is, the employee has to show that the neutral practice deprives or tends to deprive people of opportunities because of their age. And the way that you do that is through the first step of the Wards Cove analysis, by showing that the practice falls more heavily on older workers as a group, so that you can reach the conclusion that the plaintiff is feeling the effect because of her age as opposed to because of her sex or some other reason specific to her. So it's not the fact that a showing of RFOA negates the showing that a disparate impact is felt because of age by the plaintiff.
Phew. That was a mouthful, but seems to be a reasonable response to Alito's qualms.
5. The U.S. is on the side of Meacham on this one: "Congress made very clear in the statute that the 'reasonable factors other than age' provision is precisely such an affirmative defense." Knock me over with a feather but Justice Scalia actuallly helps plaintiff's case by mixing latin with chickens!:
JUSTICE SCALIA: I suppose you could appeal to the maxim noscitur ex sociis, couldn't you -
MR. JOSEFFER: Right.
JUSTICE SCALIA: -- and say if it's in with two other chickens, it's probably a chicken?
6. Justice Ginsburg challenges the ASG on whether his reading of the statute makes sense:
The problem is that you would be making this provision more generous to the
plaintiff than -- for example, in Title VII the defense is business necessity; the employer has the burden of production; the employee has the burden of persuasion. Here you'd read -- you're saying you come into the covered category, you were shown because of age through
impact, and then the burden -- the total burden is on the employer.
Two points. One, I have always found it difficult to say for sure whether it is the burden of production or persuasion after a prima facie DI case is made under Title VII. Clearly, Justice Ginsburg believes it is merely a burden of production, which makes some sense if the employee must that show by a preponderance of the evidence a less burdensome alternative practice (per CRA 1991). Two, on Justice Ginsburg's point, the US responds, "that reflects the fact that there are more innocent explanations for age disparity."
7. Attorney for KAPL, Seth Waxman, former SG in the Clinton Admin., focuses on the difference between age discrimination and other forms of discrimination, the fact that employees are able to discover evidence more easily in these cases, and that the EEOC should not be deferred to if the statute is considered ambiguous because it never considered DI cases under the Smith ADEA standard. The problem Waxman has is that it seems that most of the Justices are in agreement that the placement of the RFOA language in the statute means the burden of persuasion for RFOA justification is on the employer.
8. It appears that Waxman is attempting to say that an ADEA DI case is no different from the normal three-step McDonnell Douglas DT framework and therefore, that RFOA is at the second step a type of legitimate non-discriminatory reason that merely has to be articulated. The Justices don't seem to be buying it and FWIW, I never understood Wards Cove that way even before Smith.
9. One last curious point about this case that Justice Stevens brings out on Russell's rebuttal argument: "You have an unusual case where the decisive issue, at least when you get to this Court, is something the jury never passed on." The jury never passed on RFOA because it was wrongly believed by both parties (following EEOC regulations at the time) that business necessity was the appropriate standard. One wonders whether then this was the appropriate vehicle to consider the RFOA burden question.
In any event, I still think this is a relatively easy case (I know I am now tempting fate), but I see a 9-0 unanimous opinion in favor of Meacham on purely textualist grounds.
Ledbetter Pay Fairness Bill Falls to Republican Filibuster
Senate Republicans on Wednesday blocked a bill that would make it easier for people to sue over pay discrimination, an effort to roll back a 2007 Supreme Court ruling that limited such cases.
Republicans complained that the bill would produce a flood of lawsuits and criticized the chamber’s Democratic leaders for putting off the vote until the party’s two presidential candidates, Senators Hillary Clinton and Barack Obama, returned from the campaign trail.
Though several Republicans broke ranks to support the bill, the 56-42 vote was four short of the 60 needed to break the GOP filibuster. Clinton and Obama spent most of the day in Indiana, one of the two states in the next round of Democratic contests, but both returned to the Senate in time for the vote.
This one hurts. To quote the NYT, this filibuster is "a significant civil rights setback."
BTW, both Clinton and Obama voted for the bill, while Sen. John McCain did not vote at all, but it is good to know that he says he'd have voted against it:
"I am all in favor of pay equity for women, but this kind of legislation, as is typical of what's being proposed by my friends on the other side of the aisle, opens us up to lawsuits for all kinds of problems," the expected GOP presidential nominee told reporters. "This is government playing a much, much greater role in the business of a private enterprise system."
Glenn ERISA Case Oral Argument Transcript Analysis
The Supreme Court heard oral argument this morning in the ERISA enforcement case of Metlife v. Glenn. The case concerns the issue highlighted here before about structural conflicts of interest (dual-role insurers) in ERISA denial of benefits case under Section 502(a)(1)(B).
Here are some thoughts and highlights based on my reading of the Glenn oral argument transcript:
1. Metlife counsel, Ms. Posner, challenges that there is a "conflict in actuality" in these dual insurer situations. Justice Scalia helpfully clarifies her point:
MS POSNER: [T]hese terms to designate in actuality a conflicted fiduciary is one that has been infected or the decision was infected by the conflict.
JUSTICE SCALIA: No. That's, that's a conflicted fiduciary who allows the conflict to warp its judgment. But the conflict exists whether you, whether you give it effect or not.
They like the same opera, but Justice Ginsburg ain't buying it: "Let me follow up on Justice Scalia's question because I think your brief really goes astray on that . . . .I've always understood that the term 'conflicting interests' means just that; you have conflicting interests. It doesn't mean that you necessarily slide over into misconduct. And I think that if you would keep that separation in mind, is there a conflicting interest? Yes, there is."
2. Ms. Posner seems unable to give a satisfying answer to Chief Justice Roberts or anyone else on what seems to be the heart of the matter in Glenn:
How does the review differ as a functional matter? He says he looks at it and says, well, normally that would be within the discretion, but I've got to remember he's got a conflict, so I'm going to determine that this particular procedure should be covered because of the conflict.
Justice Scalia comes to Posner's rescue again, pleading with her seemingly to get
their her argument straight:
But you're saying it doesn't make any difference. You say you should take it into account, but if it was a reasoned decision, which is the test whether or not he's a fiduciary, if it's a reasoned decision the fact that he's a fiduciary makes no difference, right? Isn't that what you're saying?
Unbelievably, she says, "No, Your Honor . . . .it must be a factor that's weighed with the other factors."
Later, Justice Alito tries to help her: "JUSTICE ALITO: Could I just get this clear? I thought your position in your brief was that there has to be a demonstration that the conflict had an effect on the decision before there is any departure from the standard abuse of discretion - MS. POSNER: That's correct, Justice Alito. JUSTICE ALITO: -- the standard of review." One gets the sense in reading over this part of the transcript that Ms. Posner is having a difficult time articulating her client's view while at the same time satisfying the Firestone abuse of discretion standard and the friendly (read: conservative) Justices questions on the matter.
Justice Souter, for one, is exasperated with her inability to follow his hypothetical and give a simple answer as to the current impact of Firestone. Justice Ginsburg gangs up: "That's the question that Justice Souter posed, and you seem not to want to face up to it and answer it." Ouch.
3. Finally, a last ditch effort again by Chief Justice Roberts: "Now, which is right: Justice Souter's case in which the conflict tips the scales, no matter what the reason is; or Justice Alito's case where the conflict plays a role in the decision process? MS. POSNER: We believe that it's the Justice Alito hypothetical, where it does play a role." Hooray! Finally, the answer four Justices were looking for. In sum, Ms. Posner's less than stellar performance can be encompassed by this response: "MS. POSNER: No -- yes, Justice Alito, and I think you hit the nail on the head there." [Sigh].
4. Justice Stevens has another issue with MetLife's position: "[I]t's hard for me to understand how you're going to prove an insurance company's particular claim adjustment was really motivated by a conflict of interest rather than thinking the claim wasn't valid." Indeed, why should plaintiffs put to the proof in these cases when employers have the best access to such information. In such instances, shouldn't the burden be placed on them to justify their benefits decision?
5. Counsel for Glenn, Rosenkranz of Rumsfeld v. FAIR fame and the Solomon Amendment, tries to makes some heads and tails of all this ERISA mumbo-jumbo. Justice Ginsburg asked for a proposed standard and she gets a three-pronged one:
I would say three things to the district courts. Number one, this is not just some form of
arbitrary and capricious agency review with just a little bit more bite. This is reasonableness review under trust law, which is very, very different. Number two, the judicial eye is peeled, as this Court said in Rush, for conflict of interest. Kick the tires. Here are seven, eight, nine illustrations of the sorts of things that lower courts should be on the lookout for as they are trying to discern whether the conflict tainted the result. Number three, if -- if you are at the outer bounds of reasonableness for an unconflicted trustee, you can contract that zone of reasonableness because you don't -- when -- when an unconflicted trustee is right at the outer edge, there is no reason to suspect his motive.
The Assistant to the Solicitor, arguing on the same side as Glenn, puts it this way: "an administrator's discretionary decisions should be reviewed for reasonableness where the conflict of interest is considered as a factor," and "I think the problem with this inquiry is that reasonableness does not have mathematical standards. It's a determination that the court needs to make weighing all of the facts and circumstances."
6. Classic moment at the beginning of Rosenkranz' s argument:
MR. ROSENKRANZ: . . . .There's no reason for this Court to overrode its well-reasoned and
unanimous conclusion [in Firestone] which
JUSTICE SCALIA: Dictum.
MR. ROSENKRANZ: It was dictum, Your Honor, but it was very well-considered dictum because -- (Laughter.)
This case looks like it is going the way of most remedy cases - a debate between the literalist and remedialists on the court. The literalists (Roberts, Alito, Scalia, and Thomas) think that the statutory provision is clear and there shouldn't be a separate standard of review for conflicts. The remedialists (Stevens, Souter, Breyer, and Ginsburg) believe that the common law of trust must inform the meaning of ERISA's remedial sections because that is where ERISA derives from.
So as always, the question is whether Kennedy is a literalist or remedialist. In most cases decided under ERISA in his tenure, he has been on the literalist side, but this case might provide the limits of where he is willing to push a literalist interpretation given the clear conflicts in these cases.
Here goes nothing: 4-1-4 remedialists with a controlling concurrence by Kennedy. He seems to want to provide for a compromise by providing for certain procedural mechanisms an employer can take (a la Faragher and Ellerth) to avoid liability:
JUSTICE KENNEDY: Suppose that the insurance company shows or may be required to show, at least by the burden of production, that it has established firewalls, very careful procedures, written regulations that claims administrators are not to consult with the people that set policy and prices. Does that suffice to permit, simply, abuse of discretion review? MR. ROSENKRANZ: No, Your Honor. It would be a factor -
JUSTICE KENNEDY: So that there is nothing the fiduciary can do in order to avoid intrusive -
highly -- a high degree of scrutiny in review of every close case?
MR. ROSENKRANZ: Well, Your Honor, first, just to be clear, we are talking about still a
deferential standard. It's just not as deferential as it would otherwise be. Absolutely. An insurer can come in and say, look, we've created all these procedures; they have mitigated the conflict, but it can never get -
JUSTICE KENNEDY: So that all insurance company claims adjustors have less deferential review than independent claims administrators?
MR. ROSENKRANZ: Yes, Your Honor, unless the insurance company comes in and can demonstrate in a case that we've never heard of
JUSTICE KENNEDY: You want us to institute 22 an industrywide rule differentiating insurance companies . . . .
And so on. But Kennedy is looking for a workable compromise and he might just go the sexual harassment affirmative defense route we see with supervisor liability issues in hostile environment claims. The test might read: (1) Did the employer act reasonably in setting up policies to shied itself from conflict and (2) did the employee act unreasonably in not following these procedures or otherwise avoiding harm.
Cloture Vote on the Lilly Ledbetter Fair Pay Act
Paul, who is busy with today's oral arguments sent me the link to this story. James Oliphant at The Swamp, the Chicago Tribune's Washington Bureau reports that Harry Reid, the Senate's Democratic leader, has shut down
the Senate from Tuesday until this evening so that Clinton
and Obama can come to Washington to vote on a motion to cut off debate
on the Lilly Ledbetter Fair Pay Act. The Act seeks to amend Title VII to essentially reverse the Supreme Court's decision in Ledbetter v. Goodyear Tire, analyzed by Paul here.
A vote to invoke cloture must occur within 30 hours of the motion being filed and within one hour after the Senate convenes. To ensure that he has enough votes for cloture, Reid is simply shutting down the Senate.
A cloture vote would cut off debate and send the bill to the floor for a vote. Republicans would rather avoid that; as Oliphant notes "[w]ho wants to vote against equal pay"?
From the article:
So he isn't going to convene the session until 5 pm Wednesday, giving both senators time get here and also show their support for equal pay. Then the cloture vote will take place at 6.
If the cloture vote passes, then the Senate will vote directly on the Ledbetter bill and then push off the vets bill until afterward.
"We were all surprised to learn that the Democrat leaders would shut down the Senate--and with it the veterans' bill--all so that their candidates could get back for a procedural vote on a separate bill unrelated to veterans," Don Stewart, a spokesman for Republican leader Mitch McConnell said Tuesday evening. "Their action delays the veterans' bill even though they said today that it would be 'unfair' to delay it."
For their part, the Senate Democratic leadership says that Republicans have dragged their feet on taking up the Ledbetter bill, which the House passed last year. And now the Ds are forcing the Rs feet to the fire.
Tuesday had previously been declared "Equal Pay Day," by the National Women's Law Center, as the day that women's wages catch up with men's from last year.
Torture at Work
It sounds like something out of The Office, but it happened in real life. The Washington Post reports that Chad Hudgens, a sales representative for Prosper, Inc., is suing his employer for waterboarding him as part of a "team building exercise." Hudgens volunteered, he claims, not knowing specifically what the exercise would be. The last time the team had done an exercise outside it was an egg toss. Two coworkers held him down, leaning backwards, while his supervisor poured water over his nose and mouth. His supervisor remarked immediately afterwards, "You saw how hard Chad fought for air right there. I want you to go back inside and fight that hard to make sales."
There's more, too, although less dramatic. From the article:
Hudgens alleged that if the 10-person sales team went a day without a sale, members had to work the next day standing up; [their supervisor,] Christopherson took away their chairs. The team leader also threatened to draw a mustache in permanent marker on the face of sales people for "negativity," Hudgens said. Christopherson kept on his desk a piece of wood, "the 2-by-4 of motivation," he said.
1,000,000 Page Views!
Thanks first to my wonderful co-bloggers, Rick and Jeff, for making this blog thing work on a daily basis.
Second, thanks to all the commentators who constantly challenge us with their insight, outrage, and humor.
Finally, thanks to all of you who have this page bookmarked everyday to read about the latest developments in the world of labor and employment law and also thanks to you who just accidentally come to this site while looking for the latest teacher sex videos or butt painting scandal on your google box!
CRR Brief: The Miracle of Funding by State and Local Pension Plans
To partially rememdy this shortcoming, we highlight this Issue in Brief from The Center for Retirement Research at Boston College: "The Miracle of Funding by State and Local Pension Plans," which was co-authored by Alicia H. Munnell, Kelly Haverstick, Steven A. Sass, and Jean-Pierre Aubry.
Here are the key findings:
· State and local pension plans, overall, are as well funded as private plans, with assets covering nearly 90 percent of liabilities.
· This outcome is striking, even “miraculous,” given that public plans:
· tend to pay larger benefits;
· use a more stringent funding yardstick; and
· are not covered by any national legislation governing their funding status.
· While most plans are reasonably well-funded, a number — mostly small plans —fall below acceptable levels.
Manpower’s Annual 10 Hardest Jobs To Fill Survey
Some highlights from Manpower's press release:
Engineers, machinists and skilled trade workers are among the nation’s most challenging positions to fill, according to survey findings released by Manpower Inc.
“From our research it is clear that across the country employers are experiencing a mismatch between the talent their businesses need and the skills and abilities potential employees possess,” said Jonas Prising, President of Manpower North America.
The 10 Hardest Jobs to Fill, as reported by U.S. employers for 2008, are
2. Machinists/Machine Operators (10)*
3. Skilled Trades
4. Technicians (4)
5. Sales Representatives (1)
6. Accounting & Finance Staff (8)
7. Mechanics (3)
8. Laborers (9)
9. IT Staff
10. Production Operators
*Rank in 2007 Top 10 Hardest Jobs to Fill
For the third consecutive year, sales representatives, technicians, accountants/finance staff and machinists remain on the Hardest to Fill list, confirming that job seekers with specific skill sets are still in demand. Second on the list in 2006, engineers found themselves in the number one position this year, after dropping off completely in 2007. Employers are also finding it difficult to fill openings for skilled trades people, IT staff and production operators, all new to the 2008 list.
I think Melanie Holmes, Vice President, World of Work Solutions for Manpower North America, is right when she observes, “It is essential for companies to find a balance where they are attracting and retaining aging workers while still developing innovative recruiting programs targeting young professionals, especially those interested in technical and trade careers,” and that, "[c]ompanies want employees who have the soft skills, work ethic and culture traits that fit their company."
The findings come from a global study in which more than 42,500 employers across 32 countries were surveyed in late January 2008.
Graduate Student Bargaining Rights
Thanks to Dana Nguyen, a graduate student herself, for pointing out this interesting development on the graduate student bargaining rights front (from Marc Bousquet at the Valve):
[Ted] Kennedy has introduced a bill guaranteeing graduate student bargaining] rights, seeking to put them beyond the increasingly dishonest political manipulation of the NLRB:
More than ever in modern education, teaching and research assistants are in classrooms every day, educating students in colleges and universities across the country. Their numbers are increasing as the number of full time faculty dwindles. Often, teaching and research assistants are now doing the same job as junior faculty members.
In fact, the classroom is a workplace for these scholars. It's where they earn the money they need to pay to put food on their tables and a roof over their heads. They deserve the right to stand together and make their voice heard in their workplace. Like other employees, they should have the right to join a union and improve their working conditions. Obviously, better wages and working conditions for them also means better education for their students.
In 2004, however, a decision by the National Labor Relations Board changed the law and denied fundamental workplace rights and protections for teaching and research assistants. This ruling stopped an active organizing movement in its tracks and deprived thousands of teaching and research assistants of their right to organize and bargain over their wages and working conditions.
It's hardly the only bad decision by the National Labor Relations Board under the Bush Administration, which has been the most anti-worker, anti-labor, anti-union NLRB in history. The Board has let workers down at every turn. It has blocked efforts to gain union representation, undermined workers' attempts to improve their pay and benefits, and exposed them to penalties for seeking to improve their working conditions.
Because this is an attempt at labor law reform on an issue that probably will not get a lot of non-labor types excited, I am not sanguine about the prospects of a bill such as this from surviving a Republican filibuster. But, of course, we shall see.
Big Employment Law Day at Supreme Court
Ross Runkel provides the background documents and these brief descriptions:
Meacham v. Knolls Atomic Power Laboratory
The employer laid off employees during an involuntary reduction in force. Of the 31 employees laid off, 30 were over 40 years old. The workforce as a whole was 60% over 40. Some of the laid off employees sued under the Age Discrimination in Employment Act (ADEA), using a disparate impact theory. A jury found in favor of the plaintiffs. The 2nd Circuit (2-1) vacated the judgment of the district court and remanded the case with instructions to enter judgment for the employer. The 2nd Circuit majority held that plaintiffs have the burden to prove that the employer's "reasonable factors other than age" (RFOA) justification is unreasonable. The dissenting judge would look at the RFOA defense as an affirmative defense as to which the employer would have the burden of persuasion . . . .
MetLife, an ERISA plan administrator, terminated Glenn's disability benefits on the ground that she had improved to the point of no longer being totally disabled. Glenn sued to recover her benefits. The 6th Circuit noted that MetLife operated under an apparent conflict of interests because MetLife both decides the claims and pays the claims. Although the trial court upheld MetLife's denial of the claim, the 6th Circuit reviewed the evidence and directed the trial court to reinstate Glenn's benefits.
Here is another backgrounder on the Glenn case.
As always, I will have an analysis of the oral arguments this afternoon.
District Court Approves Action By 2-Member NLRB
As we noted earlier, the NLRB has asserted its ability to function with only two-members. Despite some doubt regarding the legal grounds of such authority, a Southern District of West Virginia judge has approved the move in one circumstance. In Muffley v. Massey Energy (April 14, 2008), Judge Goodwin rejected the employer's motion to dismiss the NLRB's 10(j) motion based on the argument that the 2-member Board lacked authority to seek the injunction.
The respondents are correct that 29 U.S.C. § 160(j) gives the Board the power to petition for a temporary injunction after a complaint is issued pursuant to the NLRA. The respondents completely ignore, however, the effect of 29 U.S.C. § 153(d). Section 153(d) is titled “General Counsel; appointment and tenure; powers and duties; vacancy,” and provides that the General Counsel “shall have such other duties as the Board may prescribe or as may be provided by law.” 29 U.S.C. 153(d). This statutory provision explicitly allows the Board to delegate to the General Counsel other duties, such as the authority to petition for § 10(j) injunctions.
The court in Evans v. International Typographical Union, 76 F. Supp. 881 (D. Ind. 1948),
addressing this very issue, reasoned that “[t]he provision that the General Counsel shall have ‘such other duties as the Board may prescribe’ must mean necessarily that the Board may confer upon the General Counsel functions other than those specifically committed to him by statute; otherwise, it would be ‘superfluous and without meaning or purpose.’” Id. at 888-89. Moreover, “since these ‘other duties’ which the Board may prescribe for the General Counsel are obviously not duties which relate to functions he already has under the statute, they necessarily are functions which are expressly or impliedly lodged with the Board.” Id. at 889. Relying on § 153(d), Judge Swygert held that the Board had the authority to delegate to the General Counsel the powers conferred by § 10(j) to petition for an injunction. Id. I agree with Judge Swygert that 29 U.S.C. 153(d) gives the Board the authority to delegate its § 10(j) powers to the General Counsel.
This is not to say that the Board can delegate any or all of its powers to the General Counsel. The legislative history cited by the respondents does evince an intent on the part of Congress to keep the General Counsel in the investigative realm rather than the judicial. “The Board could not delegate away its authority on a quasi-judicial adjudicatory decision, absent specific authorization from Congress.” Kentov, 258 F. Supp. 2d at 1328-29. As noted in Kentov, however, “[t]here is a critical distinction between the Board delegating the authority Congress reposed in it to grant relief on the merits of a claim, from the delegation of its authority to seek relief from another adjudicative body.” Id. at 1328. The distinction is particularly important in the instant case, “where the delegation of authority to seek judicial injunctive relief is ancillary to the General Counsel’s statutorily delegated authority to issue complaints alleging unfair labor practices under [29 U.S.C.] Section 160, and where the delegation is supported by a congressional authorization that the Board may give the General Counsel ‘such other duties’ as it may prescribe.” Id. Because the instant case does not involve the Board impermissibly assigning its core functions, the delegation is proper.
As this last paragraph illustrates, doubts about 2-member decisions still remain. Motions for 10(j) injunctions are largely a prosecutorial function that is more appropriate for delegation to the GC, which has exercised influence over 10(j) decisions in the past (I'd love to hear if anyone can give more info on past GC control over this area). Issuing decisions is different matter and I don't think this decision will shut the door on challenges to 2-member decisions.