Saturday, September 27, 2008

Federal Court: The Plaintiff-Employee's Worst Enemy?

Justice If you represent the employee, you will go hungry!"  This joke, or some variation of it, has been heard time and time again.  But as often realized, sometimes jokes euphemistically reflect reality.

This past week, the U.S. Senate Judiciary Committee heard "extensive" testimony on the increasing struggles employees face in achieving workplace equality.  Federal courts have increasingly refused to hear employment discrimination claims.  According to Senator Patrick Leahy (D-Vt), statistics show that the Federal Courts of Appeal are five times more likely to overturn an employee's favorable trial verdict against her employer than to overturn a verdict in favor of the employer.  The Ledbetter v. Goodyear Tire & Rubber Co. decision is an example of this misfortune.  At trial, Lilly Ledbetter, who discovered that she had been compensated substantially less than her male co-workers, successfully brought suit against Goodyear.  A jury found that Goodyear owed her over $200,000 in pay.  But Ms. Ledbetter's victory was short-lived.  The U.S. Supreme Court overturned the verdict on appeal.

Additionally, a new study released by the American Constitution Society, which I mentioned in a previous post, revealed that the hostility to plaintiffs' employment discrimination claims has resulted in "an absolute drop in employment discrimination cases of 37 percent from fiscal years 1999-2007."  Is it a coincidence that between 1999-2007 the economy began to weaken?  Maybe this is just a case of what is "good for the employee is not good for a weakened economy."  And when faced with two countervailing interests, one has to give to the benefit of the other.  If this is so, then the federal courts will continue to be "out of order" for aggrieved employees for some time to come, or at least until the economy shapes up.  Perhaps what we need is for Congress to continue to amend the anti-discrimination statutes to correct erroneous court decisions?


September 27, 2008 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

SSRN Top-10 List of Recent Employment & Labor Downloads

Health Insurance Costs Rise . . . Again


The Kaiser Family Foundation's Employer Health Benefits 2008 Annual Survey finds:

Premiums for employer-sponsored health insurance rose to $12,680 annually for family coverage this year – with employees on average paying $3,354 out of their paychecks to cover their share of the cost – and the scope of that coverage has changed, with many more workers now enrolled in high-deductible plans, according to the 2008 Employer Health Benefits Survey released today by the Kaiser Family Foundation and the Health Research & Educational Trust (HRET). Key findings from the benchmark annual survey of small and large employers were also published today as a Web Exclusive in the journal Health Affairs.

Premiums rose a modest 5 percent this year, but they have more than doubled since 1999 when total family premiums stood at $5,791 (of which workers paid $1,543). During the same nine-year period, workers’ wages increased 34 percent and general inflation rose 29 percent.

This year many workers are also facing higher deductibles in their plans, including a growing number with general plan deductibles of at least $1,000 – 18 percent of all covered workers in 2008, up from 12 percent last year. This is partly, but not entirely, driven by growth in consumer-directed plans such as those that qualify for a tax-preferred Health Savings Account.

Hat tip: Carol Furnish.


September 27, 2008 in Pension and Benefits | Permalink | Comments (1) | TrackBack (0)

Friday, September 26, 2008

Employers as Immigration Cops

Lee Stephen Lee (Stanford) has just posted on SSRN his article Private Immigration Screening in the Workplace (forthcoming Stanford L. Rev.).  Here's the abstract:

Although public law scholars have long addressed the problems of accountability generated by private decision-making and "privatization," they have largely ignored this phenomenon in the immigration context. Our ignorance is increasingly indefensible. Millions of employers - private parties - are required by law to screen their workers for unauthorized immigrants, and growing evidence suggests that they use their screening power to ignore workplace protections and to otherwise exploit these workers. This article is the first attempt to apply the insights generated by the privatization literature to immigration law. It argues that our nation's employers have emerged as private immigration screeners who, like airport inspectors screening for ineligible entrants and law enforcement officers screening for criminal noncitizens, assist the Department of Homeland Security in identifying unauthorized workers for removal. More than just agents of exploitation, reframing employers as private screeners demonstrates that they are also agents of the state. Borrowing analytical concepts developing in the privatization literature, I argue that the high risk of abuse and the lack of readily available mechanisms for reducing that risk raise troubling implications over the kind of power that employers wield as private immigration screeners in the workplace. Reframing our nation's employers as private screeners gives theoretical coherence to the discretionary decision-making authority they actually wield, and explains why they have used that authority to exploit workers - as private parties carrying out public duties, they are incentivized to serve their own interests instead of verifying the immigration status of their workers in good faith. Examining the problem of private immigration screening also forces us to reconsider two aspects about immigration screening generally. First, although immigration law tends to reward unauthorized immigrants who lay low and tends to punish those who draw attention to themselves, I suggest that we ought to rethink this logic at least in the context of the workplace. Because workplace violations committed by employers are typically enforced by private parties, punishing unauthorized immigrants who attempt to assert these rights and thus draw attention to themselves, only encourages workplace violations by employers and fosters a culture of lawlessness. Second, thinking about how decision-making authority within immigration law should be allocated between the public and the private contributes to the current conversation over how similar decision-making authority should be allocated between federal entities and local entities. Although questions of accountability have lingered in the backdrop of the immigration federalism debate, I suggest that scholars would be well served to foreground these questions and answer them head-on.


September 26, 2008 in Workplace Trends | Permalink | Comments (0) | TrackBack (0)

Thursday, September 25, 2008

ADA Amendments Act of 2008

Longalex That's no typo; it's now official--the President signed today the ADA Amendments Act of 2008.  As a bonus, my colleague, Alex Long (University of Tennessee), has just posted on SSRN his essay forthcoming in the Northwestern University Law Review Colloquy, Introducing the New and Improved Americans with Disabilities Act:  Assessing the ADA Amendments ActIt's a great summary of the changes in the Act and their impact.  Rest assured that this will be my go-to source when I'm scrambling to include the new Act when I teach the ADA in a few weeks.


September 25, 2008 in Labor and Employment News | Permalink | Comments (3) | TrackBack (0)

Seiner on Twombley and Punitive Damages in Employment Discrimination Law

Seiner Two new pieces are recently posted on SSRN by new scholar Joe Seiner of the South Carolina School of the Law.

In the first one, The Trouble with Twombly: A Proposed Pleading Standard for Employment Discrimination Cases, 2009 U. Ill. L. Rev. (forthcoming), the article discusses the possible employment discrimination implications of the Supreme Court’s plausibility standard as set forth in Twombly, and proposes a uniform framework for pleading Title VII cases. 

In the second, The Failure of Punitive Damages in Employment Discrimination Cases: A Call for Change, 50 Wm. & Mary L. Rev. (2008) (forthcoming), Seiner examines the effectiveness of punitive damages in Title VII claims and proposes a different framework for relief in employment discrimination cases.

Joe, relying on his past background as an EEOC appellate attorney, takes on two issues that do not get as much attention as they should.  Especially with punitive damages under Title VII, I can relate from first-hand trial experience that the Kolstad standard is indeed confusing and badly needs to be reconsidered.  I have called for a similar punitive damages reform under ERISA in a recent paper of my own.


September 25, 2008 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 24, 2008

Herbert on The Electronic Workplace

Herbert William Herbert (Deputy Chair, NY PERB) has published in the Employee Rights and Employee Policy Journal his new piece: The Electronic Workplace: To Live Outside the Law You Must be Honest, 12 EREPJ 49 (2008) (Westlaw subscription required).

From the Introduction:

The use of new communication technologies in the performance of work continues to grow at an exponential pace, resulting in the creation of massive amounts of workplace electronic data. According to the United States Department of Labor's Bureau of Labor Statistics, in October 2003, 55.5 percent of all employees in the United States used a computer at work. Over three quarters of those employees utilized workplace computers to access the internet and to send and receive emails. American employees spend approximately one quarter of their workday writing and reading email. A Canadian study found that 60 percent of all employees engage in personal web surfing while at work.

Employer concerns regarding employee productivity, along with fears associated with potential litigation and regulatory requirements such as the Sarbanes-Oxley Act of 2002, have led the vast majority of employers to issue computer use policies and utilize various means to monitor employee email, instant messaging, and internet surfing. Many employers have also installed filters to restrict employee access to particular websites. In one study, more than 25 percent of the employers surveyed had terminated employees for misusing either email or the internet . . . .

Despite employee perceptions to the contrary, interpretations of constitutional, common law, and statutory provisions establish only minimal employee rights relating to email and internet use in the workplace. In light of this gap between perception and legal reality, “it is time the American people had an open and honest debate on the relative importance of privacy and security.” Without a reasoned and nuanced debate and discussion in legislatures, in the public square, and in the office, employee workplace computer use will continue to live outside the scope of legal protections.

This article will examine various legal issues relating to the use of computer-based electronic technologies in the workplace. Specifically, the article will discuss employee internet and email use at work under the Fourth Amendment, common law torts, the ECPA, and the NLRA . . . .

The article concludes with a call for integrity-based solutions, including legal changes and employer policies that balance employer interests and employee privacy rights, thereby encouraging the most beneficial use of technology without sacrificing important zones of privacy in our society.

Given the growing prevalence of email/internet firings, the NLRB's new rules concerning use of workplace computers for union organizing purposes, and just the overall civil liberties environment in this country associated with this Administration's War on Terror, this article poses the exact questions that need to be asked in determining what workplace privacy law should like in the coming decades.


September 24, 2008 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Gihilarducci on Defined Benefit Pensions are Dead; Long Live DB Pensions

Teresa_ghilarducci Teresa Ghilarducci, Bernard L. and Irene Schwartz Chair of Economic Policy Analysis The New School for Social Research, and  author of “When I’m Sixty-Four: The Plot Against Pensions and the Plan to Save Them," has penned this response to the recent blog post we did on Zelinsky and the 401(k) Lessons from the Crash of 2008.

I appreciate Zelinsky calling like it is -- the so-called 2006 Pension Protection Act and the DOL regulations privilege a faddish approach to investing which is overweighted towards stock. (Zelinsky calls it a “enshrining stock-based approach in the law.”) Government paternalism, though is not the problem as Zelinsky characterizes it. He calls the government’s default option for automatic 401(k) contributions, "paternalism." The problem actually is the government’s lack of caring. The Paulson – Bernacke plan proposes a bailout of the investment firms with very little new regulation and maintaining the same legal biases toward 401(k).

The government should do a lot more, I call for a democratic “paternalism.” Instead of giving investment banks a way out – the government is providing a market for their junk assets – it should be giving near retirees and retirees the option to clear the junk out of their accounts and transfer them to government guaranteed bonds. I describe these vehicles in my new book; they are called “Guaranteed Retirement Accounts.” Every worker would get $600 annually from the government in exchange for investing 5% of their pay every pay period to invest in a retirement account that the government would pay 3% indexed for inflation.

The government is now pursuing a misguided message – retirement security can be achieved through 401(k) accounts. What all workers need is access to the same investment vehicles that most public sector workers have, including all federal workers, and most unionized workers. All workers need a secure vehicle, like a defined benefit plan. All workers deserve to put their retirement dollars in a vehicle that guarantees a low–fee and safe return. If we swap tax breaks for 401(k) plans (70% got to the top 20% of wage earners) for a $600 contribution to a guaranteed account for all workers it would cost the government nothing and help the people who need help the most– unlike all the other proposals swirling around.

Please feel free to send your comments to me if you would like to add your two cents to this most timely of debates.


September 24, 2008 in Commentary | Permalink | Comments (4) | TrackBack (0)

Working Mother's 100 Best Companies

CurrentWorking Mother Magazine has released its annual list of the 100 best companies. Although the name is "working mother," the magazine's focus in this ranking is not gendered. As the magazine's blurb states,

We’ve hit the working-mother lode this year with our 100 Best Companies. From flextime and telecommuting to backup child care and parental leave, these winners are expanding the concept of family-friendly benefits to make sure they cover adoptive parents, fathers and grandparents as well as working mothers—even as the economy stumbles. “It is particularly important to continue enhancing benefits precisely when families are getting squeezed the hardest,” says James Rishwain, firm chair at Pillsbury Winthrop Shaw Pittman, one of this year’s Top 10 companies. We couldn’t agree more.

I couldn't agree more, either, and I particularly support the fact that the magazine appears to recognize that gendering parenting responsibilities and limiting legitimate parenting relationships to biology or direct parentage hurts women and men both.


September 24, 2008 | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 23, 2008

British Reaction to Crash of 2008 and Bonus Pool for Lehman Executives

Moneychanginghands Rightfully pissed off after reading news like this:

Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.

The revelation sparked fury among the workers’ former colleagues, Lehman’s 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.

A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman’s US business, a deal agreed by American bankruptcy courts over the weekend.

I'm really at a loss of words.  One can see the cupidity inherent in the current American system through this example alone.  And also the need for direct oversight of executive compensation, as companies have shown an inability to provide any meaningful limits on such payments.

The Christian Science Monitor agrees:

Wall Street badly needs a culture change at the top. Its leaders must come to view themselves as stewards of institutions for the long term, not as temporary operators of vehicles proficient at finding new ways to throw off wealth, with everything else – including impact on the public interest – a mere detail. Institutional stewardship will mean, in practice, forgoing some opportunities for making a killing when the downside of a bet gone bad may be to jeopardize a franchise . . . .

The most objectionable aspect of CEO compensation isn't primarily the unfairness of the few at the top taking more than their appropriate share, nor that CEOs could cash in their personal gains based on ephemeral financial value, nor even the absurdity of massive "golden parachutes" paid out in cases of failure. The worst affront to the national interest is that these compensation arrangements created incentives for CEOs to "roll the dice" in search of the biggest possible scores for the company (and, not coincidentally, themselves), with too little regard for the downside risk if they bet wrong. And with no appreciation for the potentially dangerous consequences of such gambles, in the aggregate, for the economic security of the American people.

Hat Tip: folo


September 23, 2008 in International & Comparative L.E.L. | Permalink | Comments (0) | TrackBack (0)

Greenhouse on the Big Squeeze and Some More Employment Numbers

Bigsqueeze Well, as mentioned in a previous post, there is an on-line book club discussion at PrawfsBlawg, organized by Matt Bodie (Saint Louis), about Steve Greenhouse's new book: The Big Squeeze: Tough Times for the American Worker.

Yesterday, Steve himself responded to the comments made by the other participants in the book club. Here's a taste:

For starters, I want to say that when I researched and wrote my book, The Big Squeeze, I saw that workers were suffering not just from one squeeze, but from several squeezes. There is of course an economic/financial squeeze with wages stagnating and health and pension benefits getting worse. Then there is a time squeeze with Americans working 1,804 hours a year on average -- 135 hours or nearly three-and-a-half fulltime weeks more than the typical British worker, 240 hours or six fulltime weeks more than the typical French worker and nine fulltime weeks more than the typical German worker.  (Those of you who answer work emails at 11 p.m. know what I'm talking about.) The United States is the only industrial nation without laws guaranteeing workers paid vacation, paid sick day and paid maternity leave. (In the 27 countries of the European Union, workers are guaranteed at least four weeks vacation.)

For lack of a better phrase, workers also face a squeeze over dignity and respect. To a shocking degree, many "respectable" companies treat their workers with a surprising lack of decency or dignity. I think of the company that fired a computer engineer on the very day that his eight-and-a-half-year-old daughter was visiting on Take Your Daughter to Work Day. And I also think of the booklet that Northwest Airlines distributed to laid-off workers, giving them pointers on how to make ends meet. The booklet was called, "101 Ways to Save Money,' and among the tips it gave were "Borrow a dress for a big night out," "Shop at auctions or pawn shops for jewelry," and "Don't be shy about pulling something you like out of the trash."

Then there's another type of squeeze that I found quite surprising and appalling: the frequency with which many companies break the law in how they treat -- and cheat -- their workers. Perhaps I'm naive, but I was shocked at how prevalent such lawbreaking was.  Or perhaps because I went to law school (N.Y.U. Class of '82), I drank the Kool-aid and thought that corporate managers would actually behave better and  would try very hard to comply with the law . . . .

I write about all this because I'm surprised at how broken many of the nation's workplaces seem to be . . . .

After I finished writing my book, I kept wondering, Why do so many corporate managers break the law? Why do they show so much contempt for the law and for their workers? Yes, they often face tremendous pressures to keep their payroll costs to a minimum. But I always thought, evidently naively, that that the desire to follow the law would serve as a powerful brake on managers breaking the law and cheating employees.  What exactly, I often wonder, are the managers of today and tomorrow learning in the ethics classes and human resources classes that they take in business school?

Of course not all managers are breaking laws and certainly not all managers are going to business or HR school (and therefore may be inadvertently breaking the law).  But it seems to me that Steve is suggesting  that there is large group of corporate managers that know the law and break it anyway. Does the shareholder-primacy norm mean that sometimes they must break employment law to meet the directive of corporate law - maximize shareholder wealth?  Or is it a malaise in the workplace culture of the United States, born from the endless hours that Americans spend on, and at, work.

I do not pretend to know the answer to some a complex question. However, this is the current the economic picture (as painted by the Bureau of Labor Statistics):

In August, employers took 1,772 mass layoff actions, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Each action involved at least 50 persons from a single employer; the number of workers involved totaled 173,955, on a seasonally adjusted basis. Layoff events reached a program high for the month of August (with data available back to 1995), and associated initial claimants reached its highest level for the month since 2001.

In such an environment, can we be surprised that managers look out for themselves and care less about the welfare of their subordinates? And doesn't this type of workplace atmosphere lend itself to cutting corners?


September 23, 2008 in Book Club | Permalink | Comments (0) | TrackBack (0)

Zelinsky on 401(k) Lessons from the Crash of 2008

Ownershipsociety_2 Good piece here from Ed Zelinsky (Cradozo) on the 401(k) aspect of the 2008 economic collapse from Oxford University Press Blog:

Even as we contemplate the financial carnage of the Crash of 2008, the federal government sends a strong, paternalistic and, ultimately, misguided message to 401(k) participants: Invest your retirement savings in common stocks.

Congress, in the Pension Protection Act of 2006 (PPA), directed the Secretary of Labor to promulgate regulations specifying the “default investments” to which 401(k) funds will be directed if participants fail to make their own investment choices . . . .

When one cuts through the bureaucratic verbiage, a strong message emerges: 401(k) funds, particularly the funds of younger participants, should be invested in common stocks . . . .

Surveying the wreckage of the Crash of 2008, this looks like misguided paternalism. Many investors who buy common stocks in the current bearish environment are likely do well in the long run. But, as they say, past performance is no guarantee of future success. And some, particularly smaller investors, may sincerely and (from today’s perspective) rationally prefer to avoid the volatility associated with common stocks . . . .

Before the Crash of 2008, such paternalism looked plausible. At an as yet unknown date in the future, such paternalism may look plausible again. Today, it looks misguided.

Right on point and yet another way of diminishing the on-slaught of ERISA stock-drop litigation associated with the 2008 Crash.   Less owned common stock, less pain felt by employee-participants, and less possible stock-drop litigation.

Furthermore, I think there is an important lesson that can be drawn from the securities class action lawsuits of yore and the Contract with America response to it, the Private Securities Litigation Relief Act of 1995 (PSLRA).   The PSLRA response to lawyer-driven lawsuits was almost the complete elimination of private attorney generals to regulate the financial industry.  The Enron debacle was egg on Congress' face and led to the passage of Sarbanes-Oxley in 2002.  SOX has proven largely ineffective in cleaning up the mess because it largely relies on internal stuctures of self-regulation.  Hence, the crash of 2008.

Instead, legislation to reform ERISA should focus on where the problems lies.  Not int the ability to bring private lawsuits under ERISA, but in the way Congress has provided incentives for employees to invest in their own company stock in their 401(k).  A common sense limit, like the one that exists for defined benefit plans at 10% common stock for those pension funds, makes a lot of sense in light of the 2008 crash and the proliferation of stock drop litigation cases.


September 23, 2008 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

The Gloves-Off Economy

Glovesoff Noah Zatz (UCLA) bring to our attention a new collection of essays:  “THE GLOVES-OFF ECONOMY: Workplace Standards at the Bottom of America's Labor Market."  It is the latest volume in the Labor and Employment Research Association (LERA) research series published by Cornell’s ILR press.  Here is another link from Amazon.  Noah has a chapter in it, but he promises that, "despite that, there should be lots of good stuff from a range of academics in different disciplines and from advocates in the field."

Here's the blurb:

Across the United States, increasing numbers of employers are breaking, bending, or evading long-established laws and standards designed to protect workers, from the minimum wage to job safety standards to the right to organize. This “gloves-off economy,” no longer confined to a marginal set of sweatshops and fly-by-night small businesses, is sending shock waves into every corner of the low-wage labor market. In the process, employers who play by the rules are under growing pressure to follow suit, intensifying the search for low-cost business strategies across a wide range of industries and ratcheting up into ever higher reaches of the labor market. Although other books have touched on pieces of this problem, The Gloves-off Economy is the first to provide a comprehensive, integrated analysis-and quite a disturbing one.

This book examines a range of gloves-off practices, the workers who are affected by them, and strategies for enforcing workplace standards. The editors, four respected labor scholars, have brought together economists, sociologists, labor attorneys, union strategists, and other experts to offer varying perspectives on both the problem and the creative solutions currently being explored in a wide range of communities and industries. Annette Bernhardt, Heather Boushey, Laura Dresser, and Chris Tilly and the volume's other authors combine rigorous analysis with a stirring call to renew worker protections in the twenty-first century.

Timely collection. Check it out.


September 23, 2008 in Book Club | Permalink | Comments (0) | TrackBack (0)

Monday, September 22, 2008

Union Benefits to Latino Workers

Money The BNA's Daily Labor Report (subscription required) describes an interesting study in which researchers have found that the union wage premium was higher for Latino workers:

The advantage of union representation in workers' pay and benefits is greater for Hispanics than for blacks or U.S. workers in general, although Latinos are less likely to be represented by a union, according to a study released Sept. 16 by the Center for Economic and Policy Research. . . . 

Among Hispanics, the median hourly wage for workers with union representation is about $2.60, or 17.6 percent, higher than for those without representation. The hourly union wage premium is smaller for blacks (12.1 percent, or $2.00) and all U.S. workers (13.7 percent, or $2.00). . . .

The union advantage for Latino workers is larger with respect to health insurance and pension coverage than for wages, the study found. The proportion of Hispanic workers who are covered by an employer-provided health care plan is twice as high for those with union representation than those without (70 percent versus 35 percent), and the disparity in pension plan participation is even greater (58 percent versus 22 percent).  By comparison, the difference in benefits for black workers with and without union representation is less for both health care coverage (76 percent versus 51 percent) and pension plan participation (66 percent versus 40 percent).

Although the study shows a greater effect for Latino workers, it confirms the fact that the union wage premium in the U.S. still remains surprisingly high.  That shows that unions still provide benefits to its members, although may also help explain some of the employer resistance to unionization.

Hat Tip:  Dennis Walsh


September 22, 2008 in Labor and Employment News | Permalink | Comments (1) | TrackBack (0)

O'Donnell on Hiring During a Lockout, California Unemployment, Prescient Books, and the Lack of a Worker and Consumer Buyout

Miscellaneous Thanks for this guest commentary by friend of the blog, Patrick O'Donnell:

Although our paper is precipitously shrinking in content, some important news is still being covered: "8 indicted over hiring during Ralphs lockout."

And the bad news: "California unemployment rate soars to 7.7% in August: The jump from 7.4% in July puts the state in a tie with Mississippi for the third-highest jobless rate in the U.S."

Fortunately, we have Kevin Phillips to help us put all this in proper perspective within the bigger picture.

As Phillips noted yesterday evening in conversation with Bill Moyers, workers and consumers aren't being bailed out....

Good stuff (or should I say bad stuff), Patrick, but thanks for bringing this all to our reader's attention.


September 22, 2008 in Commentary | Permalink | Comments (1) | TrackBack (0)

The Story of the Economic Collapse from Main Street

Sinking_ship More from Bloomberg: Joblessness Rising in 12 Battleground States for Obama, McCain

The following news stories from the Associated Press this past Friday confirm that that Wall Street financial meltdown is also being felt throughout the country on Main Street.

From the Associated Press on September 19th:

Florida's unemployment rate rose to 6.5 percent in August. According to the state labor department that's the highest the state has seen in more than 13 years. The number is up from 6.2 percent in July, and up from 4.2 percent since August 2007. The state's total number of jobs lots in the past year rose to 99,100. According to federal numbers, that's the largest loss in the nation for the third month running. 606,000 residents are currently without work in the state. In Miami-Dade County, the unemployment rate is 5.5 percent, up from 3.8 a year ago, according to the U.S. Bureau of Labor Statistics.

Adjusted numbers are not available for other Florida counties, but Broward's unadjusted number is 6.1 percent, up from 3.9 a year ago. Monroe County is at 4.8 percent, and was at only 3 percent in August 2007. Florida's unemployment numbers are being pushed by job losses in the construction industry and related fields. The current national rate is 6.1 percent. Only Rhode Island saw a larger unemployment spike in the past year.

Again from the Associated Press on September 19th:

Ohio's unemployment rate rose again last month, to 7.4 percent, and the state is one of many seeing the worst joblessness in years. Michigan has reported an 8.9 percent unemployment rate for August, and unemployment hit 8.5 percent in Rhode Island, the highest in 15 years.

The loss of manufacturing jobs has pulled Ohio's rate to a 16-year high. The last time the state had 7.4 percent unemployed was in October 1992. The Ohio jobless figure tops the national rate of 6.1 percent. The state Department of Job and Family Services says 445,000 Ohio workers were out of work in August. That's nowhere close to the record of 715,200 who were unemployed in December of 1982.

Finally, one last one from the Associated Press on the 19th again:

A record number of Rhode Island workers are searching for a job in as the seasonally adjusted unemployment rate has risen rose to 8.5%.The August showing is its worst in 15 years and more than 2%age points above the national rate.Michigan's unemployment rate was 8.9% in August. The number of people looking for work in Rhode Island grew by 4,300 since July to a record-breaking total of 48,800 last month. The state unemployment rate stood at 5.1% during the same period last year.Rhode Island shed an estimated 1,200 jobs from July to August, marking the eighth-straight month of jobs losses.

Given these astounding unemployment figures, it is imperative that any bail out of Wall Street also consider how to turn around the economic carnage being felt in many states around the country. 

A bailout only focused on the financial markets neglects responding to the devastating consequences unleashed by eight years of deregulatory strategy and again establishes the need for common sense regulation of all aspects of the American economy. 


September 22, 2008 in Agenda 2009 | Permalink | Comments (1) | TrackBack (0)

Disability Fraud at the LIRR

Lirr_logo_2 Here is a disturbing report from the New York Times yesterday concerning the awarding of disability benefits to former workers at the Long Island Rail Road:

During the workweek, it is not uncommon to find retired L.I.R.R. employees, sometimes dozens of them, golfing there. A few even walk the course. Yet this is not your typical retiree outing.

These golfers are considered disabled. At an age when most people still work, they get a pension and tens of thousands of dollars in annual disability payments — a sum roughly equal to the base salary of their old jobs. Even the golf is free, courtesy of New York State taxpayers.

With incentives like these, occupational disabilities at the L.I.R.R. have become a full-blown epidemic.

Virtually every career employee — as many as 97 percent in one recent year — applies for and gets disability payments soon after retirement, a computer analysis of federal records by The New York Times has found. Since 2000, those records show, about a quarter of a billion dollars in federal disability money has gone to former L.I.R.R. employees, including about 2,000 who retired during that time.

The L.I.R.R.’s disability rate suggests it is one of the nation’s most dangerous places to work. Yet in four of the last five years, the railroad has won national awards for improving worker safety.

Read the whole article.  Its details are sickening.

Clearly, there are two problems here: those awarding benefits are not doing the necessary review of the files and are granting benefits when they are not appropriate.  Second, there is a break down of oversight over this determination process by federal Railroad Retirement Board:

In a statement in response to the Times article, the L.I.R.R. said that no one from the railroad or the transportation authority “was involved in the granting of these disability pensions by the U.S. Railroad Retirement Board.”

Governor Patterson has already announced an investigation into this appalling situation and I would expect for many heads to roll and a lot less golf being played by these former LIRR workers.

Hat Tip:  Dana Nguyen


September 22, 2008 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Sexist Men Make More Money

Sexism So finds a recent study conducted by researchers at the University of Florida, as reported by BBC News (via pjhlaw):

The researchers asked [interviewees] whether they believed a woman's place was in the home, or whether the employment of women was likely to lead to higher rates of juvenile delinquency.

Predictably, more men tended to hold these views than women, although the gap has narrowed significantly over time.

However, when the men were asked about their salaries, another gap emerged, with those holding "traditional" views earning [on average, $8500 per year more than those with more progressive views. Women with traditional views earned an average of $1500 less than women with traditional views.]


Dr Magdalena Zawisza, a psychologist from Winchester University, said that there were a number of theories which might explain the difference.

She said: "It could be that more traditionally-minded men are interested in power, both in terms of access to resources - money in this case - and also in terms of a woman who is submissive.

"Another theory suggests that employers are more likely to promote men who are the sole earner in preference to those who do not - they recognise that they need more support for their families, because they are the breadwinner."

For more, see Men With Sexist Views Earn More.


September 22, 2008 in Employment Discrimination | Permalink | Comments (7) | TrackBack (0)

Wall Street Collapse = ERISA Stock Drop Litigation

Graphup Not surprising development at all.  From BNA Daily Labor Report (subscription required):

As several heavy hitters in the financial world have come under pressure or have gone bankrupt in the past couple of months because of the subprime mortgage and lending crisis that has battered investment firms and banks, the employer "stock drop" cases that proliferated in the post-Enron Corp. and post-WorldCom Inc. age are on the rise.

Although the Employee Retirement Income Security Act claims raised in these stock drop cases have not been identical, there are two central claims that arise in these cases. The first claim typically raised is that the plan fiduciaries breached their duties by offering company stock as a plan investment option when the stock was an imprudent or unwise investment. The second claim focuses on the disclosure obligations of the plan fiduciaries and often alleges that the fiduciaries breached their duties by not telling plan participants of financial matters of the plan sponsor that made the sponsor's stock an imprudent investment.

Among firms that recently have been hit with stock drop lawsuits are Lehman Brothers Holdings Inc., American International Group Inc. (AIG), Bear Stearns, Wachovia Corp., UBS, IndyMac Bank, and Fifth Third Bancorp.

I have written abut this type of stock drop litigation before.  The issues at the forefront are how ERISA is overtaking securities as the litigation vehicle of choice by plaintiffs who suffer stock losses and how these cases almost never make it to trial because the firms being sued are forced to settle if certification of the class is granted by the court.

Given the financial pain being felt by everyone these days, and with little hope of an end being in sight, I would suspect courts to either cut down on certification of these classes or for a movement by the corporate lobby to amend ERISA to cut down on these types of suits.


September 22, 2008 in Pension and Benefits | Permalink | Comments (1) | TrackBack (0)

Recently Published Scholarship

Rosenthal Porter_2 Glissman


  • Lawrence D. Rosenthal (left), Reading Too Much Into What the Court Doesn't Write: How Some Federal Court Have Limited Title VII's Participation Clauses's Protections After Clark County School District v. Breeden, 83 Wash. L. Rev. 345 (2008).
  • Nicole B. Porter (center), The Perfect Compromise: Bridging the Gap Between At-Will Employment and Just Cause, 87 Nebraska L. Rev. 62 (2008).

Student Scholarship

  • Lauren LeGrand, Proving Retaliation After Burlington v. White, 52 St. Louis U. L.J. 1221 (2008).
  • Garth Glissman (right), Resolving the Ambiguity -- A post-Trosper Guidebook for Courts and Employers: Trosper v. Bag 'N Save, 273 Neb. 855, 734 N.W.2d 704 (2007), 87 Nebraska L. Rev. 270 (2008).


September 22, 2008 in Scholarship | Permalink | Comments (0) | TrackBack (0)