September 13, 2008
SSRN Top-10 List of Recent Employment & Labor Downloads
- Richard L. Kaplan, A Guide to Starting Social Security Benefits (975).
- Marcos Pompeu Pareto, The Health Care Crisis in the United States: The Issues and Proposed Solutions by the 2008 Presidential Candidates (111).
- Meredith R. Miller (photo above), Contracting Out of Process, Contracting Out of Corporate Accountability: An Argument Against Enforcement of Pre-Dispute Limits on Process (81).
- Kenneth M. Casebeer, At-Will Employment (75).
- Matthew T. Bodie, Mother Jones Meets Gordon Gekko: The Complicated Relationship Between Labor and Private Equity (74).
- Orly Lobel, Intellectual Property and Restrictive Covenants (70).
- David I. Walker & Victor Fleischer, Book/Tax Conformity and Equity Compensation (68).
- Robert Flannigan, Fiduciary Mechanics (64).
- Robert Novy-Marks & Joshua D. Raugh, The Intergenerational Transfer of Public Pension Promises (54).
- Mohamed Belkhir & Abdelaziz Chazi, Competitive Incentives, Deregulation and Risk-Taking: Lessons from the U.S. Banking Industry (53).
LPGA Backs down on English Requirement
In an update on an earlier post by Richard, the LPGA Tour backed off a proposed policy that would have suspended players who could not efficiently speak English. The policy was widely criticized as discriminatory, particularly against Asian players, who won three major championships this year alone. The lurking question was whether the tour's english requirement for players was discriminatory? Without waiting for a resolution on the issue, Carolyn Bivens, The Tour's Commissioner, rescinded the plan and has decided to achieve the "shared objective of supporting and enhancing business opportunities for every tour player" through other means.
The english requirement could be considered discriminatory because the requirement could prevent international players, particularly Asians, seeking to play on the LPGA Tour from being able to participate based on their race or national origin. Although the policy is neutral on its face, it is very questionable whether it is justified by a business necessity, especially in light of the fact that the PGA does not have a similar policy.
New Data Unveiled: How The Federal Courts Are Treating Emploiyment Discrimination Plaintiffs
The American Constitution Society for Law and Policy will release a new study showing how job discrimination cases are faring in the federal courts, and host a panel discussion on the issues raised by the study entitled, "Employment Discrimination Plaintiffs in Federal Court: From Bad to Worst?" The authors of the study Cornell Law School Dean Stewart J. Schwab and Cornell Law Professor Kevin M. Clemont, reveal that the study shows that discrimination plaintiff's are disfavored in federal courts.
The program will feature a presentation of highlights of the study and a panel discussion of its implications, with the following speakers:
- Introduction, Judity C. Appelbaum, ACS Director of Programs
- Moderator, Judge Nathaniel R. Jones, Blank Rome LLP; and former Judge on the U.S. Court of Appeals for the Sixth Circuit
- Eric Dreiband, Partner Jones Day; and former General Counsel, U.S. Equal Employment Opportunity Commission
- Wade Henderson, President and CEO, Leadership Conference on Civil Rights
- Cyrus Mehri, Mehri & Skalet, PLLC
- Stewart J. Schwab, Allan R. Tessler Dean and Professor of Law, Cornell University
A light lunch will be served beginning at 12:00 p.m.
12:00 p.m. - 2:00p.m.
Thursday, September 18, 2008
The National Press Club, Zenger Room
529 14th Street NW, 13th Floor
Washington, DC 20045
September 12, 2008
A Different Type of Union Pressure
The fact that Wal-Mart voluntarily recognized China's state-run union was sign enough that "union" in China means something different than what we're used to. But companies operating in China still have some of their normal fears about unionization, despite the fact that the Chinese union is basically a regulatory arm of the government. As The New York Times reports, the Chinese government's push for companies to recognize the union is creating some added fears:
Some of the world’s biggest corporations are facing intense pressure from China to allow the state-approved union to form in their Chinese plants and offices. But many companies fear admitting the unions will give their Chinese employees the power to slow or disrupt their operations and will significantly increase the cost of doing business here. The companies, many of which moved to China to lower manufacturing costs and some to avoid unions in their home countries as well, are now being asked to meet a Sept. 30 deadline to make their offices and factories union shops. Companies that do not comply risk being publicly vilified or blacklisted by the union, and perhaps penalized by the government, since businesses are required by law to allow unions to form.
Lawyers and analysts say that demands of the All China Federation of Trade Unions, the only union the Communist Party allows, could sharply alter business practices of foreign companies in China, including giving lower-level workers the power to bargain over anything from pay raises to whether a Chinese headquarters should be moved elsewhere in the country. “This will dramatically change the landscape here,” said Andreas Lauffs, a lawyer at Baker & McKenzie’s Shanghai office who is an authority on China’s labor laws. “At the very least, company management must now consult, and in many cases bargain, with employees and unions on a wide range of matters, whereas in the past they enjoyed almost unlimited autonomy.”. . . .
For years, Western labor activists have taken aim at China’s manufacturing industry, exposing hundreds of exploitive factories that employ child labor, force workers to toil as many as 100 hours a week without overtime pay or benefits, and violate labor and safety rules. And some of the world’s biggest brand names, like Wal-Mart, Disney and Adidas, have been singled out for using contractors that violate China’s labor laws. The companies have, in many cases, investigated the claims and fired contractors. The new government pressure seems to be part of a sweeping effort aimed at addressing some of the ugly consequences of China’s dynamic economic growth, like rampant pollution, a growing income gap and widespread labor abuse.
Up until now, though, the state-controlled union has done little to agitate on behalf of workers, legal experts say, and has often done more to control workers than to benefit them. The union’s reputation for allowing abuses to exists has led some to doubt whether it can properly represent workers. But the union, which says it already has 200 million members, is promising to truly represent workers, and is gaining standing with Communist Party leaders.
In 2004, the National People’s Congress, the state legislative body, carried out inspections of companies operating in China to ensure that they were following labor laws and had dues-paying union members. Union officials, using increasingly bold tactics, have zeroed in on the China operations of the 500 biggest global corporations, which would mean millions of new union members. The union says it intends to combat worker exploitation. . . .
I'll believe it when I see it. The union's and government's past history makes me far from optimistic, especially--as the article notes--the likelihood that real changes will come with economic costs. However, if this push actually made some significant strides, it will be interesting to see whether there is any spillover in the companies' operations in other countries or is emulated elsewhere. I may have to update my piece on methods of global collective action to include a section on "Totalitarian Government Ramming Collective Action Down Foreign Companies' Throats."
Hat Tip: Barry Hirsch
ADA Reform Bill on Track
Today's Daily Labor Report (subscription required) notes that the Senate yesterday approved the ADA Amendments Act, which would overturn Sutton v. United Airlines (mitigating measures) and Toyota v. Williams (applying a "demanding standard" to whether an individual is substantially limited in a major life activity). The House already has passed a similar measure. DLR also reports that a presidential signature is likely.
September 11, 2008
Union Loses Driver Privacy Suit
Another chapter in the long-running feud between UNITE HERE and Cintas. This time, the Third Circuit has held that the union violated the federal Drivers' Privacy Protection Act by getting employees' addresses from their license plates. According to BNA's Daily Labor Report (subscription required) desciption of Pichler v. UNITE:
Writing for the court to affirm a lower court's summary judgment against the union on the issue of liability, Judge Michael A. Chagares rejected the union's argument that the activity was allowed under DPPA exceptions for activity related to litigation or law enforcement, stating that the union attempted to mask its "clear labor-organizing purpose" for obtaining the vehicle records. Judge Thomas M. Hardiman joined in the majority opinion. Judge Dolores K. Sloviter dissented from the ruling on DPPA liability, finding that the union's primary purpose should have been examined at a trial rather than on summary judgment. The Third Circuit also reversed the lower court's decision not to award punitive damages against UNITE, finding that the trial court failed to address whether the plaintiffs' damage claim could be resolved on summary judgment. . . .
The union argued on appeal that the lower court misapplied DPPA, 18 U.S.C. §2721, and failed to recognize that the union's activity was authorized by several "permissible uses" specified in the statute. . . .
One of the exceptions recognized in the statute . . . allows use of information in connection with civil proceedings and "in anticipation of litigation." "UNITE advances a unique argument," Chagares said, by claiming that its effort to organize Cintas workers could not be separated from its objective of investigating and preparing charges and lawsuits against the company. The court rejected the argument. "The litigation component to UNITE's campaign should not obscure what UNITE was trying to accomplish--organizing labor," Chagares wrote, adding that "[t]he same may be said for its acting on behalf of the government purpose." . . .
Dissenting from the ruling on UNITE's liability under DPPA, Sloviter said that the union's brief to the Third Circuit cited dozens of lawsuits and administrative actions that the union or Cintas employees had commenced against the company. The union claimed that litigation was a "major component" of union organizing, and Sloviter said the majority "does not suggest that it doubts that UNITE did in fact have this objective." "I would reverse the District Court's grant of summary judgment for plaintiffs on liability and would remand so that a jury could decide whether UNITE's primary purpose in obtaining and using the information gleaned from motor vehicle records was to receive information from Cintas employees about potential legal violations, an expressly protected activity," the dissent concluded.
This is an example of another method for unions to contact workers being shut down. I'm somewhat ambivalent on this issue in a vacuum, as I'll confess that the idea that someone would track down my home address based on my parked car's license plate isn't appealing (although not particularly disturbing either). But, this is part of a much larger context in which unions have been shut off from virtually any meaningful access to employees. Indeed, this issue is particularly ironic because, as some readers may remember, the Supreme Court in Lechmere specifically noted that unions didn't need access to employer property because they had other means to contact employees--including finding their home addresses via license plates.
A further reminder that if employees' right to freely choose whether to unionize is to have any meaning, there has to be more ways in which unions can contact employees and inform them about collective bargaining.
Hat Tip: Dennis Walsh
Feldblum on Phased Retirement as National Policy
Congratulations to Chai Feldblum (Georgetown) for testifying as part of the ERISA Advisory Panel's discussion on phased retirement.
BNA DLR reports:
The ERISA Advisory Council should consider recommending to the labor secretary that phased retirement be encouraged as a matter of "national policy," Georgetown University law professor Chai R. Feldblum said Sept. 9 . . . .
There is a broader question that needs to be addressed before acting on tax and qualification issues related to phased retirement, which fall within the jurisdiction of the Treasury Department and the Internal Revenue Service, and the form and type of notices to be provided and those concerning fiduciary responsibility and liability, which fall within the jurisdiction of the Labor Department, Feldblum said.
Many of these tax and notice issues are necessarily intertwined with policy decisions that first need to be made on the broader question of "how to meet employer workforce needs while ensuring adequate retirement security for American workers," Feldblum said.
The rationale for providing preferred tax treatment to qualified pension plans is to "carry out a labor purpose," Feldblum said.
"That is, Congress has made a policy judgement that such preferred tax treatment advances the welfare of American workers," Feldblum said. "The Department of Labor is obviously a critical source of information on what actually advances the welfare of workers," she said.
Ultimately, Congress may have to establish a coherent policy in this area, Feldblum said. She said such a policy would intelligently take into account the legitimate needs of employers, while still ensuring the adequate retirement security of American workers. If Congress chooses to take up this task in earnest, it will look to the Labor Department, Treasury, IRS, and many other agencies for recommendations, she said.
I agree with Chai on her sentiments on phased retirement. Tax and labor policy should be synchronized so they are jointly promoting retirement security. This is especially important in these days of the ownership society, when government is placing more responsibility on workers for their own retirement needs.
FMLA Technicalities Hurt Employers Too
Earlier this week, I posted about an employee who missed being eligible for FMLA leave by 12 minutes of work in the prior twelve months. Via BNA Highlights comes Spencer v. Marygrove College, out of the Eastern District of Michigan, no. No. 07-CV-11135, 13 WH Cases 2d 1811 (E.D. Mich. 2008) (subscription required). In Spencer, it's the employer who loses a motion for summary judgment on a strict reading of the time period. The FMLA allows for twelve weeks of unpaid leave per year. That year can be a calendar year or it can be calculated a number of different ways, but the employer has to give the employee advance notice of which way the year will be calculated, according to the Department of Labor's regulation. If it does not do so, the one most generous for the employee will govern.
The employee here took leave beginning on December 6, and was terminated March 18. She was able to return to work on March 25. If the twelve weeks run with the college's fiscal year, are counted from when the leave began, or are counted backwards from the date of the termination, the employee had exhausted her leave and was not entitled to come back to work. If, however, the twelve weeks run with the calendar year, the employee had not exhausted her leave, and was entitled to come back to work.
The college's handbook failed to specify how FMLA leave would be calculated. Although the handbook did say in a separate section that sick and vacation leave would be counted on the fiscal year, it didn't say anything in the FMLA section other than "year." Additionally, the college provided conflicting evidence of which other method it actually used. Accordingly, the most generous leave governed, and summary judgment was denied.
Disturbing Trend in HIPAA Wellness Programs
Today's Alexander Hamilton Institute (AHI) Benefits Alert describes what it characterizes as a disturbing trend: "some wellness program vendors are taking advantage of employers' increased interest by aggressively marketing programs that seem to skate very close to the legal line drawn by the Health Insurance Portability and Accountability Act (HIPAA)."
AHI first gives a good overview of how HIPAA treats wellness programs:
HIPAA splits wellness programs into two categories. In the first category are programs that reward employees just for participating. They include reimbursing employees for gym memberships; rewarding employees who participate in a diagnostic testing program; well-baby visits; reimbursing smokers for the cost of smoking cessation without regard to whether they actually quit; and rewarding employees who attend monthly health education seminars.
The second category includes programs that require participants to meet a health-related standard before they can collect their rewards. These types of wellness programs must meet five standards [including limits on the amount of rewards, must have reasonably-designed standards with some flexibilty, participants must be able to qualify at least once a year, reasonable alternative standards for receiving the award must be established in some circumstances, and wellness plans must the availability of a reasonable alternative standard.] . . . .
With these background rules in mind, AHI warns out to look out for the following when considering wellness programs if you are an employer:
Supplemental health plans that are provided under separate policies are excluded from HIPAA. However, most wellness programs aren't supplemental health plans under a Department of Labor safe harbor . . . .
Wellness programs that reward employees for achieving a health-related result must be reasonably designed to promote health and prevent disease, and provide reasonable alternatives for obtaining the reward if it's unreasonable for certain participants to attempt to satisfy the original standard. A program that assesses a participant's health once a year, and that provides only one appeal to be re-tested, may fail because it doesn't offer any reasonable alternatives.
In short, if a wellness program seems too good to be true, employers should seek legal advice before inadvertently violating HIPAA law in this area.
A Whistleblower Wins! A Whistleblower Wins!
In an unsual case (as far as the success rates of these cases (and here)), and one that might still be overturned by an appellate court, the DOL's Administrative Review Board (ARB) finds in favor of a mine cleanup whistleblower.
In Dixon v. Dept. of the Interior, No. 06-147 (8/28/08), the ARB found that a federal employee of the Department of Interior's Bureau of Land Management (BLM) engaged in protected activity under the whistleblower provisions of several environmental statutes. Consequently, he properly received back pay and compensatory damages.
This decision was an affirmance of an ALJ decision, which held that Earle Dixon complained about an intergovernmental effort to clean up a Nevada copper mine that were protected by the Safe Drinking Water Act and other statutes. Additionally, ALJ found that the BLM failed to prove that it had legitimate reasons for firing Dixon.
As a result of this vicotry, Dixon would receive $10,000 in compensatory damages and backpay. But lest this be a complete victory, the ARB and ALJ both agree that Dixon is not elgible for front pay or punitive damages.
As mentioned above, many pro-employee ARB decisions are still overturned by reviewing appellate courts, especially on the ground that the activity is not protected, so expect a challenge to this decision by the government.
In any event, it is probably too early for Mr. Dixon to celebrate.
GAO on Women's Earnings and Enforcing Antidiscrimination Laws
The Government Accountability Office (GAO) yesterday released a report entitled Women’s Earnings: Federal Agencies Should Better Monitor Their Performance in Enforcing Anti-Discrimination Laws (GAO-08-799). The report found that the EEOC did not monitor gender pay discrimination charges in an effective manner and the Labor Department's Office of Federal Contract Compliance Programs (OFCCP) OFCCP did not either.
In 2003, GAO found that women on average, earned 80 percent of what men earned in 2000 and workplace discrimination may be one contributing factor. The Equal Employment Opportunity Commission (EEOC) and the Department of Labor (Labor) enforce several laws intended to prevent gender pay discrimination. GAO examined (1) how EEOC enforces laws addressing gender pay disparities among private sector employers and provides outreach and what is known about its performance, and (2) how Labor enforces laws addressing gender pay disparities among federal contractors and provides outreach and what is known about its performance. GAO analyzed relevant laws, regulations, monitoring reports, and agency enforcement data and conducted interviews at the agencies’ central offices and two field offices experienced in gender pay cases.
. . .
GAO recommends that EEOC and OFCCP monitor performance of their enforcement efforts related to gender pay and that OFCCP ensure its planned new data system uses reliable data, measure performance of its outreach efforts, evaluate the mathematical model used to target contractors, provide links between pertinent guidance, and devise a unique violation code to track any non-compliance with the selfevaluation requirement. EEOC agreed with GAO’s recommendation; Labor neither agreed nor disagreed; and both provided additional perspective on their enforcement efforts.
Senators Tom Harkin (D-IA) and Hillary Clinton (D-NY), who were among the Senators requesting this study, issued a press release criticizing the Bush administration for failing to crack down on pay discrimination and urging the Senate to pass legislation that would strengthen pay discrimination laws and take steps to erase pay inquiries, including the Lilly Ledbetter Fair Pay Act (see also here), the Fair Pay Act (more here), and the Paycheck Fairness Act (more here). Senator Clinton held a press conference, which is available on YouTube to discuss GAO’s report.
Hat tip: Pat Schaeffer
September 10, 2008
Employer Duty of Care to Employees' Children
A case just down the road from me: the Tennessee Supreme Court has held that Alcoa owed a duty of care to the daughter of a former employee (as a sign of how important the company is to the area, the name of the town where the plant is located is "Alcoa"). Satterfield v. Breeding Insulation involved a negligent lawsuit alleging that the company was responsible for the daughter's asbestos-related death. According to BNA's Daily Labor Report (subscription required):
The matter stems from the development of mesothelioma, a rare and often deadly cancer associated with asbestos exposure, by Amanda Satterfield. In December 2003, she filed her lawsuit in the Tennessee Circuit Court for Knox County claiming that she contracted the disease "as a direct and proximate result of her exposure" to asbestos through the clothing of her father, a former Alcoa worker. . . .
In the complaint, Satterfield said her father worked at Alcoa's facilities in Alcoa, Tenn., during the 1970s and early 1980s. Satterfield claimed that, despite being aware of the risks of exposure to asbestos, Alcoa failed to warn her father about such risks or take adequate steps to reduce the asbestos exposure of workers and their families. Alcoa argued that it had no duty of care to the younger Satterfield, a claim the trial court agreed with in dismissing the case. . . .
Upon its consideration, the state Supreme Court said that, based on the allegations in Satterfield's complaint, the appeals court was correct in finding that Alcoa owed a duty of care to the younger Satterfield. "Under Tennessee law, Alcoa has a duty to prevent foreseeable injury from an unreasonable risk of harm that it had itself created," the high court said. The facts alleged in Satterfield's complaint claim that Alcoa failed to inform its employees of the risks associated with asbestos and provide them with meaningful alternatives to wearing home their contaminated work clothes, according to the state Supreme Court.
As the court notes, other states are split on this issue. This also raises one of the concerns of the dissenters in the Johnson Controls BFOQ case (that's the no child-bearing-aged women can work with lead batteries case), who were worried about liability under state tort law. Finally, as Dennis Walsh noted when he flagged the case, the list of amici show the importance of the issue to business groups: The American Chemistry Council, Chamber of Commerce of the United States, Coalition for Litigation Justice, National Association of Manufacturers, National Association of Mutual Insurance Companies, National Federation of Independent Business Legal Foundation, Pacific Legal Foundation, and Property Casualty Insurers Association of America.
More Agriprocessors Troubles
No not an immigration issue (see here for more on that). This time, it's been announced that the Postville plant has also been accused of violating child labor laws. The Iowa Attorney General has just charged the plant with thousands of misdemeanors. From the AP:
The owner and managers of the nation's largest kosher meatpacking plant were charged Tuesday with more than 9,000 misdemeanors alleging that they hired minors and in some cases had children younger than 16 handle dangerous equipment such as circular saws, meat grinders and power shears.
They are the first criminal charges against operators of the Agriprocessors plant in Postville, where nearly 400 illegal immigrants working at the facility were arrested in May in one of the largest single-site immigration raids in U.S. history.
The complaint filed by the Iowa attorney general's office said the violations involved 32 illegal immigrant children under 18, including seven who were younger than 16. Aside from handling dangerous equipment, the complaint also says that children were exposed to dangerous chemicals such as chlorine solutions and dry ice. . . .
Charged are the company itself, plant owner Abraham Aaron Rubashkin, former plant manager Sholom Rubashkin, human resources manager Elizabeth Billmeyer, and Laura Althouse and Karina Freund, management employees in the company's human resources division. Each defendant faces 9,311 individual counts -- one for each day a particular violation is alleged for each worker. Iowa Attorney General Tom Miller said at a news conference on Tuesday that he would not elaborate on what evidence led to the indictment. . . . The charges are simple misdemeanors, each carrying a maximum penalty of 30 days in jail and a fine of $65 to $625.
I keep wondering when the troubles at Agriprocessors will stop, but they never do. Makes you wonder what's going on at other plants . . . .
Hat Tip: Dennis Walsh
Which Is More Effective at Reducing Discrimination, Competition or Law?
This was the question that Gary Becker (left) and Judge Richard Posner (right) exchanged viewpoints on at the Becker-Posner blog earlier this week. Becker's post and comments to it can be found here, and Posner's here. As a preliminary matter, neither disagreed that employment discrimination laws were justified on grounds of morality and justice. But both explored the role of law and of economics on reducing discrimination.
Becker began by suggesting that competition has been more effective than law in India to reduce discrimination against untouchables. That assertion was contested in the comments to Posner’s post, but the analysis he goes through under that assumption is interesting, nonetheless.
Becker defined discrimination somewhat oddly as "when [an employer] refuses to hire [minority candidates] even though they are cheaper relative to their productivity than the persons he does hire." I don't think that is what he meant to define discrimination as--solely in market terms, because he continued with the explanation of why discrimination is economically inefficient, suggesting that he meant to link discrimination (refusing to hire minority candidates) with the inefficiency--that these candidates are cheaper relative to their productivity. He continues to explain the economic inefficiency of discrimination:
Discrimination in this way raises his costs and lowers his profits. This puts him at a competitive disadvantage relative to employers who maximize their profits, and hire only on the basis of productivity per dollar of cost. Strongly discriminating employers, therefore, tend to lose out to other employers in competitive industries that have easy entry of new firms.
Becker further describes how discrimination will promote segregation in the workforce by catering to the discriminatory preferences of employees.
Posner seems to take a dimmer view of the power of competition to promote integration or diminish discrimination, stating that "[t]here is no reason for competition to affect that aversion [discriminators have], other than by bringing the costs of it home to employers and through them to their [discriminating] workers and customers."
At the same time, he discusses why antidiscrimination laws will not be efficient in economic terms.
Suppose white employees have a strong aversion to working with blacks. Then forbidding discrimination will impose a heavy cost on the white employees. If there are more of them than there are blacks, the cost to the white employees may exceed the benefits to the black employees. Of course, an antidiscrimination law may rest on a political or moral judgment that costs imposed by thwarting a taste for discrimination should not count in the social calculus, but that is a judgment outside of economics.
In other words, discriminating employees may have negative feelings that they get a lot of utility out of--that aversion may be a powerful positive feeling for the employees who hold it. Posner also suggests that antidiscrimination laws aren’t likely to be effective without very serious penalties, which we don’t impose:
[An] employer who wants to continue discriminating against blacks can (within limits) reconfigure his work force to reduce his demand for skills likely to be possessed by black applicants for employment, can substitute capital for labor, and can relocate to areas in which the applicant pool contains few blacks. Second, felt legal pressure to hire blacks results in "affirmative action," which both creates resentment among whites and casts some doubt on the average quality of black employees and so in effect stigmatizes the entire class. And third, because a discrimination law makes it more difficult to fire a member of the class protected by the law, it increases the cost of hiring members of the class and so increases the incentive to discriminate in hiring.
A fourth reason, I would submit, is that given that discrimination can operate below the fully self-aware level and can be very difficult to detect, it is too easy for discrimination to be hidden by reasonable sounding motivations.
The comments are interesting too–some touch on how cognitive bias makes it particularly difficult for “enlightened self-interest” to work so that the market alone can eliminate discrimination, although as Posner points out, neither he nor Becker has argued that it can be.
The exchange is very thought-provoking as most of what Becker and Posner write is. I'm not sure that I agree with all of the assumptions or conclusions, and I also think that the economic analysis of law is of limited usefulness, but I highly recommend reading it.
Bipartisan Effort to Make Application of Whistleblower Laws More Fair
Two U.S. senators accused the Department of Labor of violating the "spirit and goals" of a federal law aimed at protecting employees who report corporate wrongdoing, and called on the agency to stop rejecting claims from workers at subsidiary companies.
In a letter to Secretary of Labor Elaine Chao, Sen. Patrick Leahy, a Vermont Democrat who is chairman of the Judiciary Committee, and Sen. Charles Grassley, an Iowa Republican who also is on the committee, wrote that they were dismayed that the "administration -- the Department of Labor in particular -- has been using overly restrictive interpretation of this law to dismiss a majority of the complaints" filed under the whistleblower-protection provisions of the 2002 Sarbanes-Oxley Act.
Sen. Leahy and Sen. Grassley, who wrote those provisions, said that "there is simply no basis to assert" that employees of the subsidiaries of publicly traded companies aren't covered under the act, as the department has asserted in numerous recent cases.
The letter cited an article in The Wall Street Journal last week that reported on the department's stance. Department records show the government has ruled in favor of corporate whistleblowers 17 times out of 1,273 complaints filed since 2002. An additional 841 cases have been dismissed, the records show, with many of the dismissals made on subsidiary-exclusion grounds. The rest of the cases are either pending, withdrawn, or were settled.
I hope Chao's "Department of Management" gets the message and it is also great that the studies that my friend Richard Moberly (Nebraska) has done in this area are finally getting the attention they deserve.
Richard's piece, along with numerous others, will be appearing in book that I am editing which is due for publication in October: The Proceedings of the 60th Annual NYU Conference on Labor: Retaliation and Whistleblowers.
Prawfs Book Club on New Greenhouse Labor Book
And here I thought I would never be able to use the book club category on this blog. Thank you, Matt Bodie:
I'm delighted to announce an upcoming PrawfsBlawg book club. This club will be discussing "The Big Squeeze" by Steven Greenhouse, the labor and workplace reporter for the New York Times. "The Big Squeeze" is Greenhouse's wide-ranging exploration of the plight of the American worker. Looking at both broad trends and individual stories, he paints a fairly grim picture of inequality and unfairness in the workplace. "The Big Squeeze" has been praised as "an important and infuriating book . . . [that] tells, in detail, how far we as a nation have sunk from the standards of workplace decency that once existed here and that many Americans still take for granted."
Joining Orly Lobel and me for the club will be Melissa Hart and Noah Zatz. Melissa is a professor at the University of Colorado Law School. She has written extensively on employment discrimination issues, with a focus on litigation and compliance . . . . Noah is a professor at UCLA School of Law. His research interests include employment & labor law, welfare law and antipoverty policy, work/family issues, feminist legal & social theory, and liberal political theory. This year Noah is a fellow in the Program on Law and Public Affairs at Princeton University.
Steven Greenhouse will also be joining us for the discussion. Greenhouse's articles are must-reads for labor and employment law professors, and I expect that many profs will be interested in hearing more about "The Big Squeeze." In fact, I have heard that the book is already finding avid readers in law school seminars. Greenhouse is an alum of NYU Law, having finished first in his class, so it's not surprising that his work is so adept in its legal analysis. He is also a graduate of Wesleyan University and the Columbia Graduate School of Journalism.
The Book Club will begin on Monday, September 22. Matt hopes interested individuals will join them in the discussion of the book at Prawfs.
The Washington Post has a story about Sarah Palin billing the state for per diems while she was living at home. As a colleague reminded me--don't ask why I needed reminding--there are obviously employment law issues involved with the story. The basic facts:
Alaska Gov. Sarah Palin has billed taxpayers for 312 nights spent in her own home during her first 19 months in office, charging a "per diem" allowance intended to cover meals and incidental expenses while traveling on state business.
The governor also has charged the state for travel expenses to take her children on official out-of-town missions. And her husband, Todd, has billed the state for expenses and a daily allowance for trips he makes on official business for his wife.
Palin, who earns $125,000 a year, claimed and received $16,951 as her allowance, which officials say was permitted because her official "duty station" is Juneau, according to an analysis of her travel documents by The Washington Post.
The expenses appear to be legal under Alaskan law, but some other issues may arise. The Feminist Law Professor's has an interesting post on the possible tax issues. Readers of this blog will recognize some questions as well. For instance, how is her work time and work place defined? Under federal law, her receipt of a per diem suggests that she is working during those days at her Wasilla home--and more importantly that her job required her to do work in Wasilla. Thus, if she was a federal employee and her official "duty station" is Juneau then she could only get per diems when her job required her to be elsewhere. Moreover, under the FLSA and Portal-to-Portal act, an employee who voluntarily lives away from work cannot include commuting time as paid work time. As salaried employee, this isn't directly an issue for Palin, but may say something about reimbursing costs that result from personal choices.
Ultimately, what this looks like to me is that she's telecommuting. My wife does this with a federal agency, in part to be with our son, and I'm all for it. But, there was a period when she had to travel to D.C. once a month and there was no suggestion that we would get any reimbursement--and, trust me, she hasn't gotten a dime of per diem for her time at home.
There are obviously more employment law issues, so feel free to weigh in.
Because of the large amount of traffic on this post (thank you, Instapundit readers), I thought it would be worth addressing some of the substantive comments. There are too many to answer directly, so I'm going to try to group the ones from our comment page or that Glenn forwarded to me. Hopefully, that will cover most everything. Before I respond, however, I want to make clear that this post wasn't intended to grind any political axes. I applaud some of Gov. Palin's efforts to cut spending, but if I were an Alaskan taxpayer, I wouldn't like her charging per diems in this case. More important, it's a high-profile issue that intersects with what I teach--just the sort of thing we blog about a lot here. So if employees of the DNC try to unionize or RNC employees argue there not getting paid overtime, I'm there.
With that, here are my responses:
1. "Gov. Palin didn't charge or accept a housing per diem payment for the time she stayed in Wasila and commuted to Anchorage or Juneau. She took a travel-expense portion."
I was well-aware of the distinction when I wrote my original comments. "Per diem," by definition, excludes lodging expenses. For reasons that I explain more below, charging "travel" per diems in this situation would've been unlawful had she been a federal employee and her commuting time from her home would not be included as work time under federal law.
2. "Gov. Palin is working away from home on an extended work assignment. Her employer, the state of Alaska, considers Wasilla to be her "residence". The state capital (which can be reached from Wasilla only by air or sea) is her "duty station". In the business world in such circumstances, it is not unusual for the business to pay for some expenses that normally would be considered purely personal."
This comment gets to what I view as the major distinction here. This view--which is shared by many--is that she is basically on temporary assignment to Juneau. If that's correct, then she should be able to charge per diem expenses while in Juneau, not while in Wasilla (or the nearby office in Anchorage). Charging per diems that other way around makes no sense under that scenario. The only way it would make sense is if she had to be in Anchorage/Wasilla temporarily for work--but because she, not her employer, made the choice to work and live there, that's not the case (one reader suggested that she was in Anchorage "supervising," but I've seen no evidence of that and the idea that a governor would have to "supervise" a single state office, and do so that many times, isn't plausible. I understand that she would need to be in Anchorage some for official business--and if so, charge away--but from everything I've seen she was there mainly because she wanted to be at home not because work required it.).
A further problem is that classifying the governorship as temporary doesn't pass the smell test. Temporary work assignments refer to assignments that are made at the behest of an employer. That's not what Palin is doing. She--not her employer--chose to live away from her duty station. As I noted in my original post, that's her choice, but most employment laws (and tax, as explained more here) do not view that as something that the employer needs to pay for.
Moreover, temporary work assignments are, well, "temporary." That's not what's going on here. Gov. Palin applied/ran for a new job and got it. The job is full-time (see below for the difference from most legislatures) and has a four-year term, with a two-term limit. Thus, under normal circumstances, she would hold the job for four to eight years. That's not close to temporary. More important, it's not temporary because once her assignment to Juneau is over, she's not going to be reassigned to Wasilla. She's simply not going to have the job anymore.
To put it another way: do you think that Pres. Bush should be able to charge per diems for the time he spends in Crawford?
3. "The legislature in Alaska has considered this issue and has decided that it's in the state's interest for a high level politician to bring their family along for business trips which invariably involve state interests. Thus, the practice of allowing per diem for families is allowed under state law."
Assuming that it's legal, there's some indication that it's only because of moves that Murkowski made, which isn't a ringing defense. Moreover, as I noted, I'm not writing about this to argue that she actually broke some law. Rather, for labor and employment geeks like me it's an insteresting issue that we can use to help examine various employment laws. Basically, this is the type of hypothetical question that I use in class all the time (that's a little heads-up for my students reading this).
Also, after checking a bit into Alaska law it looks like the only reason it's legal is that the governor is exempted from the rules that apply to virtually every other state employee (if a reader knows something I missed, please let me know). Those rules state that a per diem is allowed only "while traveling on official business." Obviously, there may have been times when that applied to Gov. Palin, but I've yet to see anything suggesting that most of the 312 days in Wasilla were for official business. So again, she didn't appear to violate Alaska law, but she does appear to be doing something that other state employees are prohibited from doing. For what it's worth, most states don't allow governors to do this, nor does the federal government; U.S. congressional representatives often maintain home residences, but are not allowed per diems while there (although I think they can get some travel expenses).
4. "Tennessee state legislators do receive a per diem for food, travel, and lodging. My State Rep. . . . lives a stone's throw from the Capitol, but collects the max travel allowance anyway, at nearly $20K per year. Of course, in her case, that's the least of her moral lapses."
This is probably true of most states. The big difference is that state legislatures are truly temporary jobs; a governorship is full-time. I don't defend a per diem for a legislator who lives in the same city as the capitol, but paying a per diem for a legislator who is at the capitol for a few weeks when the legislature is in session is far different than a governor choosing to live away from the capitol and seeking a per diem for that, no matter how big the state is. If she wants to live in Wasilla rather than Juneau, that's fine, but most government employees wouldn't expect to get reimbursed for it.
Gregory on Unprotected Injured Employees
David Gregory (St. John's) has just posted on SSRN his article Unsafe Workplaces, Injured Employees, and the Bizarre Bifurcation of Section 7 of the National Labor Relations Act. Here's the abstract:
A particularly pernicious constriction of the scope of protection available under Section 7 of the National Labor Relations Act has occurred with respect to injured employees. Employees who complain about workplace safety and health issues are within the ambit of Section 7, protected against employer retaliation for having complained. Meanwhile, however, employees injured by those same workplace safety and health hazards, and who consequently exercise their state workers compensation law statutory rights to claim workers compensation monetary and medical care benefits, are not protected by Section 7. If the employer retaliates against the injured employee for claiming state workers compensation benefits, the employee's protections against such retaliation are under state workers compensation law, but not under the federal National Labor Relations Act. This undue constriction of Section 7's umbrella has fractured the practical and jurisprudential coherence of Section 7. Furthermore, this bizarre bifurcation has spawned atomistic progeny wholly antithetical to the spirit and purpose of Section 7. Perhaps most egregiously, the National Labor Relations Board now considers employees filing individual sexual harassment complaints with the United States Equal Employment Opportunity Commission to have acted individually, and thus not within Section 7's concerted, protected activities. This essay will critically analyze the genesis and evolution (mutation) of this bizarre bifurcation of Section 7 in this context, and will propose avenues for rectification.
September 9, 2008
Sealing on Sex, Allies, BFOQs: The Case for Not Allowing Foreign Corporations to Violate Title VII in the United States
Keith Sealing (Louisville-Brandeis) has posted on SSRN his new piece: Sex, Allies, BFOQs: The Case for Not Allowing Foreign Corporations to Violate Title VII in the United States.
Here is the abstract:
The extent to which foreign corporations as well as their domestic subsidiaries can discriminate against American employees on the basis of sex, age, religion, and national origin in a manner that would be acceptable under their own laws and customs but inimical to American law is currently determined by a muddled jumble of circuit court opinions interpreting a "[w]e express no view" Supreme Court footnote. As a result, American victims of sexual discrimination have much less protection under Title VII of the Civil Rights Act of 1964 when the discriminating actor is a foreign corporation or its domestic subsidiary than they do when the discrimination is by a wholly domestic corporation.
This results from the courts' interpretations of the relationship between a common Treaty of Friendship, Commerce and Navigation (FCN) provision that allows foreign corporations to hire executive-level employees "of their choice," and Title VII and its 703 bona fide occupational qualification (BFOQ) exception that allows discrimination on the basis of religion, sex, or national origin (but not race) for certain jobs. This Article will argue that this result, repugnant to the purpose of civil rights laws, is the result of a series of badly reasoned courts of appeal cases and a lack of guidance by the Supreme Court.
I agree wholeheartedly with Keith on his conclusion in the Title VII context. I came to a similar conclusion regarding foreign corporations and their domestic subsidiaries in the United States in the ERISA context. There, unlike Title VII, however, there is more guidance under Section 4(b)(4) of ERISA of when foreign actors are subject to ERISA's requirements when it comes to employee benefit plans.
It is also important to determine whether the foreign state actor is government-run, as the Foreign Sovereign Immunity Act (FSIA), and its commercial activity exception, may play a role.
Using the Power of Baseball to Help Inspire the Disabled
That's the idea about this campaign by the U.S. Department of Labor and Major League Baseball.
Together, they are launching the ‘PITCH’ campaign to encourage businesses to hire people with disabilities. Former Major Leaguer Jim Abbott, a famous in baseball history for being to make it to the majors level to pitch with only one hand, will be serving as campaign spokesman.
Here are some highlights from the press release:
The U.S. Department of Labor's Office of Disability Employment Policy (ODEP), in cooperation with Major League Baseball, today announced the launch of the PITCH (Proving Individuals with Talent Can Help) campaign to encourage businesses to hire individuals with disabilities.
Former Major League pitcher Jim Abbott will serve as the campaign's spokesman. The campaign will include radio public service announcements, media awareness activities and appearances at the Little League World Series as well as Major League ballparks during September and October.
Abbott, born without a right hand, was an Olympic Gold Medalist in 1988. In 1993, while pitching for the New York Yankees, he tossed a no-hitter against the Cleveland Indians. He pitched 10 seasons in the major leagues with the California Angels, New York Yankees, Chicago White Sox and Milwaukee Brewers.
Neil Romano, assistant secretary of labor for ODEP, said, "We are thrilled to have the support of Major League Baseball for this significant campaign. Having Jim Abbott as our spokesman demonstrates that given the opportunity people with disabilities can make substantial contributions to any business. Jim succeeded based on his talent. The goal of this campaign and of our office is to have all businesses consider the great talent that people with disabilities can bring to their organizations." . . . .
According to the Census Bureau's American Community Survey, the employment rate for people with disabilities in 2006 was 37.7 percent. That is compared with an employment rate of 79.7 percent for people without disabilities, a glaring 42 percent difference.
There can be little argument that individuals with disabilities represent a severely underutilized talent pool and I'm glad to see this private-public partnership doing something meaningful to inspire especially children with disabilities to realize that there are many ways to succeed through careers of their own choosing.
I saw this type of success on a first-hand basis as a special education mediator for the State of Mississippi for five years, with kids leaving schools and going on to prosper in educational environments and promising careers.