Saturday, July 5, 2008
Friday, July 4, 2008
David G. Karro has just sent us a copy of his article, Common Sense about Common Claims, which was published in the first issue of volume 25 of the Hofstra Labor and Employment Law Journal. David critiques the class certification in Dukes v. Wal-Mart. One of the theses of the article is that "an important purpose of a certification hearing is to ensure class members will not be deprived of due process by being bound by an unfavorable judgment." More from the introduction:
[M]any courts, probably including both Wal-Mart courts, use class actions as a way of authorizing class counsel to enforce statutes the courts deem important. Yet, the Federal Rules of Civil Procedure cannot expand a plaintiff’s standing to challenge acts and practices. A plaintiff who does not represent a class has standing to ask the court to enjoin any practice or act that aggrieves him, and cannot broaden that standing by challenging acts or practices that do not aggrieve him, even if he represents people they do aggrieve. Class treatment, then, adds nothing to the ability of a litigant to enforce a statute.
Although the focus here is on the Wal-Mart decision, the Ninth Circuit did nothing that other courts don’t do; it just did it more ambitiously than anyone else. This, then, is an article about wide-spread misuse of Rule 23 in modern class actions, and the Wal-Mart decision is a spectacular example of what has gone wrong.
A very interesting read.
Thursday, July 3, 2008
The Irish law firm Peninsula has released a survey reporting that 77% of Irish men report being the target of sexual banter by women. 84% of those are afraid to report it, and 89% of employers admit that they would not initially take a complaint from a man as seriously as one from a female employee. While the majority of things reported in the survey were offensive jokes or other banter, "more serious and direct forms of sexual harassment" are on the rise. The survey covered nearly 2000 male employees in a range of industries.
Jeff has been reporting on the unemployment figures in the aggregate. There has also been news of mass layoffs by particular industries and employers. American has announced that it will lay off almost 7000 jobs, nearly 8% of its workforce. Ford, GM, and Chrysler have announced that they will be temporarily laying off at least 25,000 workers. Under their union contracts, these workers will receive half of their pay plus their benefits. Yesterday, Starbucks announced that it would close 600 stores, laying off more than 12,000 workers in the process. And Monday, the NYT reported that Siemens planned to cut more than 17,000 mostly white collar jobs. These reports show that the layoffs are hitting a wide range of employment sectors. Never a good sign.
BNA's Daily Labor Report (subscription required) is reporting on the creation of the "world's first global union." Apparently, the union--which is an offshoot of two existing unions--intends to act as a formal trade union in each country, while coordinating its activities world-wide:
The heads of the United Steelworkers and the United Kingdom-based Unite the Union July 2 signed an agreement clearing the way for the creation of Workers Uniting, the world's first global union.
Prior to the signing, USW President Leo Gerard said Workers Uniting will be a "fully functional and registered labor organization" in the United States, the United Kingdom, Ireland, and Canada, with the ability to fully represent all of the members of its founding unions immediately. The new union unites USW's 1.2 million active and retired members with the more than 2 million active and retired members of Unite, which was created last year with the merger of Amicus and the Transport and General Workers.
Gerard said the two unions represent workers in every sector of the global economy, with 46 percent of the members in manufacturing and mining and 44 percent in transportation and services. Both USW and Unite will continue to operate independently, but through the new structure, they will be able to work collectively on such issues such as strategic campaigns, collective bargaining, and organizing, according to the USW. In addition, the structure will allow other unions to become part of Workers Uniting in the future. . . .
Gerard said in order to "challenge exploitation anywhere in the global economy, the new union, in conjunction with the National Labor Committee, a human rights advocacy group in the United States, is creating a Global Labor Rights Network that will have allied staff on the ground in Central America, the Middle East, Asia, Eastern Europe, Africa and other regions. He added that the union cannot fight exploitation by limiting itself to North America and the U.K. . . .
According to the new agreement, the two unions in the last year have engaged in joint collective bargaining efforts in the paper, chemical, and titanium industries; international solidarity projects to protect the rights and safety of trade unionists in Colombia and Mexico; participated in each other's education, rapid response, health and safety, civil rights, and women's conferences; and engaged in extensive discussions about strategies that the unions have taken in order to save manufacturing jobs in their respective countries.
As I've written about recently, coordination is one of the main ways in which unions are trying to engage in collective activity in the global economy. Coordination has many limitations, but unions have had successes in the past, such as the pressure brought against the French company, Sodexho, in its dealings with its American workers. Workers Uniting is the most formal coordinating effort to date, but I feel certain that it won't be the last. What we're witnessing right now is exciting for the labor geeks among us. I expect to see many different attempts by unions to maintain relevance and achieve gains for workers in a global labor market. Some attempts will fail; others will succeed. I, for one, am really looking forward to seeing how it all develops.
Picking up from the previous post, the Department of Labor has just released its June employment data. The unemployment rate remained at 5.5%, although with a decline in payrolls of 62,000 jobs. DOL also revised its May and June figures downwards. Of perhaps more significance are the wage numbers. For most non-hourly workers, the increase in weekly wages grew only 2.8% the last twelve months (compared to 3.2% in May), which is lower than the rate of inflation (which is currently over 4%). Hourly workers wages grew by 3.4% the last twelve months. Combine these numbers with a reduction in hours for full-time employees and you have a very unpleasant situation for most workers or job-seekers.
Wednesday, July 2, 2008
This won't be surprising, but many experts are predicting a weak labor market to extend at least until 2009. The home market is a major factor, as home values are no longer proving the spending safety net they once had. From the New York Times:
The national unemployment rate climbed a full percentage point over the last year to 5.5 percent in May, according to the Labor Department. That does not include people who are jobless and have given up looking for work, or people who have been bumped to part-time jobs from full-time. Add in those people and the so-called underemployment rate rises to 9.7 percent, up from 8.3 percent in May 2007, according to the Labor Department. . . .
The slide in the labor market has become both symptom and cause of a weak economy, pulling many families into a downward spiral. Back when housing prices were still rising, Americans borrowed exuberantly against the value of their homes to finance renovations, vacations and shopping sprees. But that artery of finance has constricted considerably along with access to credit cards, forcing a reversion to the traditional limits of household finance. Millions of American families must now confine their spending to what they can bring home from work.
With job losses growing and working hours shrinking, many paychecks are eroding, prompting millions of families to cut their spending. Soaring prices for food and gasoline are overwhelming modest wage gains for most workers, leaving households with even less money to spend. All of which deprives struggling businesses of sales, prompting them to shed more workers, sending the cycle down another turn. Starbucks announced on Tuesday that it would close stores and eliminate up to 12,000 jobs, about 7 percent of its work force.
This info also dovetails with early posts we've had discussing some of the recent labor data.
The company I love to use as a foil in class got socked with a big verdict recently in Minnesota. Reuters reports that Wal-Mart was found to have violated Minnesota's wage and hour laws by requiring employees to work off the clock. The company faces $2 billion in fines.
ruled that Wal-Mart owes $6.5 million to thousands of current and former employees because of [the] wage . . . violations, which included a failure to give workers their full rest breaks and requiring hourly employees to work off-the-clock during training.
Wal-Mart could now face a fine of up to $1,000 for each violation of the Minnesota wage and hour rules. With more than 2 million violations cited by the judge, that means the discount retailer could face more than $2 billion in fines.
Wal-Mart spokeswoman Daphne Moore said the retailer was still reviewing the order and considering the option of appeal.
"We respectfully disagree with portions of the decision," she said.
She also said the retailer's policies are to pay every employee for every hour worked, and to make rest and meal breaks available for its employees. She said managers who violate the policies are subject to discipline.
If what the spokeswoman says is true, it's another example of how pressure on keeping labor costs low creates a practical culture that conflicts with the policies on the books. $2 billion. That's gonna leave a mark.
The Washington Post has a story on serious delays in the Justice Department's review of qui tam actions--many of which are filed by whistle-blowing employees. Apparently, two major factors are a lack of resources and an uptick in claims related to Iraq contracts, although some are alleging intentional foot-dragging by the DOJ:
More than 900 cases alleging that government contractors and drugmakers have defrauded taxpayers out of billions of dollars are languishing in a backlog that has built up over the past decade because the Justice Deparment cannot keep pace with the surge in charges brought by whistle-blowers, according to lawyers involved in the disputes. The issue is drawing renewed interest among lawmakers and nonprofit groups because many of the cases involve the wars in Iraq and Afghanistan, rising health-care payouts, and privatization of government functions -- all of which offer rich new opportunities to swindle taxpayers.
Since 2001, 300 to 400 civil cases have been filed each year by employees charging that their companies defrauded the government. But under the cumbersome process that governs these cases, Justice Department lawyers must review them under seal, and whistle-blowers routinely wait 14 months or longer just to learn whether the department will get involved. The government rejects about three-quarters of the cases it receives, saying that the vast majority have little merit. Disputes can stay buried for years more while the government investigates the allegations. . . .
At issue in most of the cases is whether companies knowingly sold defective products or overcharged federal agencies for items sold at home or offered to U.S. troops overseas. Under the Civil War-era False Claims Act, workers who file lawsuits alleging such schemes cannot discuss them or even disclose their existence until Justice decides whether to step in.
By its own account, the 75-lawyer unit in Washington that reviews the sensitive lawsuits is overloaded and understaffed. Only about 100 cases a year are investigated by the team, which works out of the commercial litigation branch of Justice's civil division. . . .
Among the largest false-claims cases to date are a $650 million settlement earlier this year by drugmaker Merck in connection with an alleged failure to repay Medicaid rebates; a $515 million deal with Bristol-Myers Squibb to cover illegal drug pricing and marketing; and a $98 million agreement with software maker Oracle over pricing. . . .
Even bigger lawsuits containing potentially explosive allegations are waiting in the wings. The vast majority, more than 500 cases, involve the health-care and pharmaceutical industries and often involve Medicare and Medicaid funds. Only a few hints of the Iraq and Afghanistan disputes have erupted publicly. One is a suit filed by two former employees of Custer Battles, a defense contracting company in Fairfax. The workers accused the company of inflating expenses on a contract it won to replace the Iraqi currency. After a three-week trial in 2006, a jury found in favor of the plaintiffs and awarded them $10 million. But U.S. District Judge T.S. Ellis III later tossed out the case, ruling that the money at issue, controlled in the early years of the Iraq conflict by the Coalition Provisional Authority belonged to the Iraqi government, not U.S. taxpayers. Justice declined the whistle-blowers' request to intervene before the case went to trial, plaintiffs' lawyers said. The government eventually weighed in with a court brief on behalf of the whistle-blowers when the case was appealed.
The story describes several others cases and is well worth reading in full. With the recent Supreme Court qui tam decision, this relatively hidden area of the law may be getting some of the attention that it deserves.
So can you be fired for grabbing your boss by the neck and pushing him to the ground? Well, if you're a MLB baseball player the answer is it probably depends. Here is the background (via ESPN):
The players' association filed a grievance Tuesday over the release of pitcher Shawn Chacon, saying the team's decision to terminate his contract was without just cause.
Chacon cleared waivers and was released Monday, five days after a physical altercation with Houston Astros general manager Ed Wade in the clubhouse.
Chacon had a $2 million salary this year, and the decision to terminate the contract meant $983,607 won't be paid. He also lost the chance to make up to $1 million in performance bonuses based on innings . . . .
The union alleged Chacon was disciplined without just cause under the collective bargaining agreement and terminated without just cause under the uniform player contract.
The 30-year-old pitcher was suspended after shoving Wade to the floor before the Astros played Texas last Wednesday. Wade said he had asked Chacon to come into manager Cecil Cooper's office for a meeting. Chacon refused, and the confrontation ensued.
The Astros said Chacon violated a provision in the UPC that states the player may be terminated if he shall "fail, refuse, or neglect to conform his personal conduct to the standards of good citizenship and good sportsmanship or to keep himself in first-class physical condition or to obey to the club's training rules."
So, here's the deal. If the union can reasonably believe Chacon's side of the story, they have a duty of fair representation to pursue his grievance. More than that, the arbitration will come down to how the arbitrator interprets the above language and whose side of the story he believes after hearing all the evidence.
Although I would be surprised if he was reinstated, much stranger outcomes have resulted from labor arbitrations.
Tuesday, July 1, 2008
Jeff blogged last week about the report by the DOJ's Inspector General, which found that the DOJ had illegally used political or ideological factors in hiring new attorneys into its Honors Program. The BLT: The Blog of the Legal Times reports on what appears to be the first lawsuit brought in the fallout.
A former candidate for the Justice Department's honors program is suing for $100,000 in damages, alleging Justice officials violated his rights and those of others when they brought political bias into vetting honors-program applications.
The class action by Sean Gerlich — filed yesterday in U.S. District Court for the District of Columbia — is the first suit resulting from an internal Justice report issued last week that says two former Justice officials illegally screened applicants to the honors and summer intern programs.
The two officials were Esther Slater McDonald, then counsel to the associate attorney general and now an associate at Seyfarth Shaw, and Michael Elston, then chief of staff to Deputy Attorney General Paul McNulty and now a partner at McGuire Woods.
Gerlich's suit says the department politicized the selection process, mishandled the applications and failed to maintain the records, all in violation of the Privacy Act, the Civil Service Reform Act and the Federal Records Act. In addition, the suit claims violations of the First and 14th Amendments.
The suit alleges that Gerlich was not hired because of liberal affiliations that officials discovered by doing internet searches of his name. He had received good reviews as an intern for one of the DOJ chiefs. Stay tuned for more.
The D.C. Circuit issued this opinion last week in The Venetian v. EEOC, concerning the EEOC's policy of disclosing confidential commercial employer information without notice under the ADEA. Although the Commission's rule is somewhat unclear, it appears that the Commission can release information either under its regulations implementing the Freedom of Information Act or its regulations implementing the Privacy Act. The regulations implementing FOIA require prior notice to the party whose confidential commercial information will be released, while the regulations implementing the Privacy Act do not.
These two rules created an odd situation in which the Commission had to notify an employer before releasing confidential information if there was a formal FOIA request, but did not have to if the Commission simply decided on its own to release the information. The Court of Appeals found that maintaining these parallel, inconsistent, and unreconciled policies was arbitrary and capricious under the Administrative Procedure Act. The court did not strike down the policy, though, holding that
We do not say the disclosure policy is necessarily contrary to law; perhaps the EEOC can yet supply a reasoned reconciliation of Compliance Manual § 83.1 and its regulations governing FOIA requests, preferably accompanied by a definitive explanation of exactly when each applies. Until then, however, the agency may not maintain its policy to Venetian’s detriment. Venetian is entitled to an injunction against the release of its confidential information in any manner other than that prescribed in the Commission’s FOIA regulations.
I'm in favor of full disclosure as a general matter, because I think that more information about employment practices and allegations of discrimination are necessary to create the kind of transparency that would allow our enforcement system to operate, as I've argued here. But I can see the need to protect some kinds of information, for example when its release would reveal trade secrets or strategic planning. It seems that prior notice for this kind of information is a good way to give parties a chance to make the case that the information falls into those narrow categories. At the same time, the EEOC shouldn't be required to defer to the employer's classification of the documents and should be allowed to assess for itself whether the information really is commercially sensitive. Still, prior notice does not seem to much of a burden.
After seeing the Fourth Circuit's recent approval of a Gissel bargaining order in Evergreen America Corp. v. NLRB, I wondered how many times a court had approved such an order since the last time I posted on the topic eight months ago. Turns out my semi-hopeful title in that post was premature, because a quick search revealed no other cases.
In Evergreen, the court (2-1) deferred to the Board's determination that an affirmative bargaining order was necessary, despite the union's support falling from 62 signed authorization cards (out of 115 employees) pre-election, to a 52-61 election loss. The reason was a list of unfair labor practices that included a raise two days before the election (the amount was more than the increases over the previous three years), promotions intended to reduce union support, and unprecedented promises linked to a union loss. The case also involved questions about the authenticity of a few of the cards, which both the Board and court concluded were properly counted.
Beyond the uniqueness of the Board making a Gissel order, it is notable that the Fourth Circuit approved it. A sure sign that the court is no longer a lock for a conservative panel that it once was.
Monday, June 30, 2008
The AFP is reporting:
US production studios warned Monday that Hollywood's entertainment industry "is now in a de facto strike" after they presented a final offer to the Screen Actors Guild (SAG) as a labor contract was set to expire at midnight.
"Our industry is now in a de facto strike, with film production virtually shut down and television production now seriously threatened," the Alliance of Motion Picture and Television Producers (AMPTP) said in a statement.
The AMPTP said it presented its "final offer" to SAG, the main union of US movie and television actors, on Monday after 42 days of negotiations on a new labor contract between the two sides.
Recall that there was recently a writers' strike, so this has the potential to be an active labor year in Hollywood.
The Supreme Court last week denied cert. in two ERISA cases, Amschwand v. Spherion and Geddes v. United Staffing Alliance Employee Medical Plan. As Paul noted in an earlier post, the Solicitor General had recommended cert. in Amschwand, so the denial come as a bit of a surprise. The outcome in Geddes was more predictable, as the SG had recommended holding the petition until the Court's MetLife decision, which "resolved" the standard of review issue raised in Geddes.
Sunday, June 29, 2008
The NLRBPA--the union representing HQ employees at the NLRB, which is not to be confused with the much larger NLRBU union that represents mainly regional workers --has released a press notice detailing its objections to the implementation of a new performance-appraisal program at the Board. One interesting twist is that the union is complaining about the Democratic Board member and not the Republican one.
Full disclosure: when I worked at the NLRB, I was a member of the NLRBPA (including one year as probably one of the worst stewards ever); however, I don't know anything about this current dispute and am posting on it solely as a matter of interest to readers. The NLRBPA press release states:
The National Labor Relations Board Professional Association, the union representing attorneys at the Board’s D.C. headquarters, is fighting to prevent another September Massacre. The “massacre” that the Union fears isn’t dozens of controversial decisions but a wave of unfair and discriminatory mid-year appraisals and reprisals against its members.
A new performance-appraisal program sparked this battle. Applying a “forced distribution” model like those popular with corporations like General Electric, the Board forced attorney ratings to fit a pre-established distribution. As a result, the Board’s staff attorneys were more or less equally divided into Exceptional, Commendable, and Proficient categories.
To get this predetermined distribution, Board managers unfairly tinkered with individual ratings. The resultant ratings “downgrades,” in many instances of attorneys long rated in the highest category, prompted grievances by more than one third of 45 staff attorneys.
In addition, because the NLRB’s “rank-and-yank” appraisal system had a discriminatory, adverse impact on the Board’s older female and disabled attorneys, the new system generated discrimination complaints with the Equal Employment Opportunity office and a grievance of the new system’s discriminatory impact on the bargaining unit by the Union.
Board management’s response to the Union’s efforts has been anything but predictable. The NLRB’s lone Democratic member, Wilma Liebman, has not settled a single grievance and threatened reprisals against grievants and a Union officer. Meanwhile, Chairman Peter Schaumber, despite his conservative, pro-employer reputation, has cooperated with the Union to settle most of the appraisal grievances of the attorneys assigned to him.
The Union recently filed grievances against retaliatory conduct by Member Liebman and contacted Congress and the NAACP for help remedying discrimination at the Board.
Stay tuned for any future developments.
About a week ago, I blogged about Ricci v. DeStefano, in which the Second Circuit affirmed per curiam a decision involving the New Haven Fire Department. The Department had decided not to use, in the promotional process, exam results that the city found likely had a disparate impact on African American and Hispanic applicants.
The applicants filed a petition for rehearing en banc, which the Second Circuit denied 7-6.
CORRECTION: Karen Torre, the attorney for the plaintiffs wrote to tell me that she did not in fact file a petition for rehearing either with the panel or with the full court. My apologies to her for erroneously stating otherwise. The Second Circuit brought this issue up sua sponte. That seems an unusual practice to me, although my appellate practice was in the Seventh Circuit, so maybe this is standard practice for the Second. In any event, the fact that the court thought this case important enough to do that for certainly signals the difficult nature of the issues present in this case. It also may signal that the court believes the Supreme Court should take cert.
Five judges issued opinions in connection with the denial. Three of them, Judge Katzmann (deny), Judge B.D. Parker (deny), and Judge Cabranes (grant) issued these opinions simultaneously with the denial order.
Judge Katzmann stated that the denial was appropriate because the plaintiffs had filed a petition for cert with the Supreme Court, and the Second Circuit has a "longstanding tradition of general deference to panel adjudication - a tradition which holds whether or not the judges of the Court agree with the panel's disposition of the matter before it." The district court's decision, the panel decision, and the dissents and concurrences attached to the denial of rehearing would define the issues clearly enough that an opinion from the full court was unnecessary. Judge B.D. Parker added that the district court had followed the guiding authority in the circuit, and because there was such guiding authority, an additional opinion was unwarranted.
Judge Cabranes in dissent wrote,
This appeal raises important questions of first impression in our Circuit--and indeed, in the nation--regarding the application of the Fourteenth Amendment's Equal Protection Clause and Title VII's prohibition on discriminatory employment practices. At its core, this case presents a straight-forward question: May a municipal employer disregard the results of a qualifying examination, which was carefully constructed to ensure race-neutrality, on the ground that the results of that examination yielded too many qualified applicants of one race and not enough of another? In a path-breaking opinion, which is nevertheless unpublished, the District Court answered this question in the affirmative, dismissing the case on summary judgment. A panel of this Court affirmed in a summary order containing a single substantive paragraph. . . . Three days prior to the filing of this opinion, the panel withdrew its summary order and filed a per curiam opinion adopting in toto the reasoning of the District Court, thereby making the District Court's opinion the law of the Circuit.
The use of per curiam opinions of this sort, adopting in full the reasoning of a district court without further elaboration, is normally reserved for cases that present straight-forward questions that do not require explanation or elaboration by the Court of Appeals. The questions raised in this appeal cannot be classified as such, as they are indisputably complex and far from well-settled. These questions include: Does the Equal Protection Clause prohibit a municipal employer from discarding examination results on the ground that "too many" applicants of one race received high scores and in the hope that a future test would yield more high-scoring applicants of other races? Does such a practice constitute an unconstitutional racial quota or set-aside? Should the burden-shifting framework applicable to claims of pretextual discrimination ever apply to a claim of explicit race-based discrimination in violation of Title VII? If a municipal employer claims that a race-based action was undertaken in order to comply with Title VII, what showing must the employer make to substantiate that claim? Presented with an opportunity to address en banc questions of such "exceptional importance," Fed. R. App. P. 35(a)(2), a majority of this Court voted to avoid doing so.
Judge Cabranes characterized the actions of the city differently than Judge B.D. Parker had. Judge Cabranes wrote that the city's actions were not neutral: "neutral administration and scoring that is followed by race-based treatment of examination results" may not immunize the defendants from a charge that their actions are discriminatory. In fact, this may be an explicit racial classification.
Several days after the denial, Judge Jacobs added a dissenting opinion, which focused on the Second Circuit's tradition of denying review, arguing that discretion in the rules had become a default rule of denial and that this default rule was inappropriate. A few days after that Judge Calabresi issued a separate opinion concurring in the denial. The point that he added was that while this was an interesting and important case, the parties had essentially waived the interesting and important issue, making this a poor case for review.
The judges who voted to deny review were certainly correct that the record and the arguments on both sides are pretty well developed. At the same time, it is very useful to read the full analysis that Judge Cabranes wrote to understand both sides to this issue. And considering the work that all that analysis must have taken, the only thing missing from this review is a vote by all of the judges on the merits--but that's a pretty important data point.
As a fairly driven woman, articles about "nontraditional" gender roles and relationships often catch my eye. Today's NYT has an interesting article about women business owners who hire their husbands.
At a time when high-profile women have suffered some setbacks on Wall Street and when women in general still struggle for pay parity, a group of entrepreneurs has proved that women are comfortable not only with running their own companies, but also with having their husbands work for them. In addition to finding ways to work together at home, the couples have created a separate balance of power in their business relationship. And though it may help that both partners do this to enrich a family enterprise, the woman may make a conscious effort to ensure that her mate is getting appropriate recognition.
While there is no data on the number of such companies, women were the majority owners of 7.7 million privately held firms at the end of 2006, up 42.3 percent from 10 years earlier, according to the Center for Women’s Business Research.
Not every couple is successful at this, but the article concluded that one key was clearly defining responsibilities both at work and at home, and the more successful couples brought different skills to the company. For some couples, balancing salaries may be important. The article also suggested that the men who accepted these roles tended to do well because they were comfortable enough to accept the subordinate position in the first place, but that they put up with some scorn from others for their choices.
These stories give me hope that gender roles are becoming less rigid all of the time, which is a good development.