January 26, 2008
ASU to Host Debate on Employer-Sanction Law
Arizona State will host on Tuesday a debate on an Arizona state law that punishes employers for knowingly hiring undocumented workers. At issue is whether the law is an unconstitutional attempt to regulate immigration, such that it would violate the 14th Amendment and/or be preempted by the Immigration Reform and Control Act of 1986. Betsy Grey (photo at left) will moderate.
Top-5 International Employment & Labor Law SSRN Downloads
- Simon Deakin, Priya Lele, & Mathias M. Siems, The Evolution of Labour Law: Calibrating and Comparing Regulatory Regimes (83).
- Ying Ge, What Do Unions Do in China? (64).
- Vicki Schultz (photo above), Sex and Work (60).
- Kevin Kolben, Wal-Mart Is Coming, But It's Not All Bad: Wal-Mart and Labor Rights in Its International Subsidiaries (42).
- Michael J. Zimmer, Decent Work with a Living Wage (photo above) (30).
Top-5 Benefits/Compensation/Pension SSRN Downloads
- Stephen F. Diamond, Legal Implications of Proposed GM/UAW VEBA (230).
- Susan Liemer & Hollee Temple, Did Your Legal Writing Professor Go to Harvard?: The Credentials of Legal Writing Faculty at Hiring Time (168).
- Jie Cai & Ralph A. Walkling, Shareholders' Say on Pay: Does It Create Value? (104).
- Zvi Bodie (left), Doriana Ruffino (center), & Jonathan Treussard (right), Contingent Claims Analysis and Life-Cycle Finance (83).
- Guy Davidov, The (Changing?) Idea of Labour Law (82).
January 25, 2008
Second Circuit Issues Important FLSA Decision on Non-Scheduled Overtime
Dan Schwartz at the Connecticut Employment Law Blog has the details and some analysis:
The short issue of the case is whether employees must be paid overtime wages for work that their employer has prohibited and does not desire. The Court indicates that this is a matter of first impression and answers the question in the affirmative.
And quoting the court:
In the course of their assignments at client hospitals, Gotham nurses are sometimes asked to work overtime by hospital staff. Nurses who agree to work an unscheduled shift will on occasion contact Gotham first to request approval in compliance with Gotham's rule. If Gotham authorizes an assignment, the nurse is guaranteed premium wages for any resulting overtime. But three out of four approval requests are denied. At other times, nurses accept unscheduled shifts without obtaining the staffing agency's approval. When these nurses report their overtime for the preceding week, Gotham attempts to negotiate with the hospital to procure an enhanced fee for the overtime hours already worked. If Gotham succeeds -- as it does ten percent of the time -- it pays the nurse time and one-half wages for the unauthorized overtime hours. Otherwise, the nurse receives straight-time wages for the extra hours worked . . . .
On this appeal the Secretary presents us with two questions: first, whether Gotham's overtime practices violate the Act; and second, if so, whether the violation provides an adequate basis for civil contempt. We think the trial court erred in labeling the nurses' overtime hours as anything other than work and answer the first question in the affirmative. But because we believe Gotham acted on a reasonable interpretation of then unsettled law, we answer the second question in the negative, and affirm the district court's judgment on the alternative ground that the Secretary did not meet her burden to prove contempt.
The case is Chao v. Gotham Registry, Inc. (available here). Because this decision creates a split in the circuits, this case may be in prime position for review by the labor and employment-crazy Supreme Court.
Happy 4th Birthday to Ross' Employment Law Blog
Congratulations to Ross Runkel (Willamette), publisher of the esteemed Employment Law Memo and various blogs, for the 4th Birthday of the Employment Law Blog!
Ross, founder of LawMemo, is Professor of Law Emeritus at Willamette University College of Law. He has spent 35 years specializing in employment law, employment discrimination, labor law, and arbitration.
Courses he has taught include: Arbitration, Civil Rights, Constitutional Law, Contracts, Dispute Resolution, Employment Discrimination, Employment Law, Federal Rules, Internship, Labor Law, Legal Ethics, Mortgages, Natural Resources, Negotiation, Sales, Suretyship, and Uniform Commercial Code.
He is a neutral arbitrator in labor-management disputes in the Western states, serving on a number of permanent panels (police, fire, lumber, maritime) and rosters (FMCS, Oregon ERB).
He has served as Chair of the Oregon State Bar Section on Labor and Employment Law, Commissioner and Vice-Chair of the Oregon Dispute Resolution Commission, Director of the Willamette University Center for Dispute Resolution, Director of the Portland Branch of the Federal Reserve Bank of San Francisco, and in a number of other professional and civic positions.
In short, Ross is a major labor and employment law diety and we love having him as a neighbor in the blogosphere.
To many more years, Ross!
Some Good News for Unions in 2007
The Bureau of Labor Statistics (BLS) is reporting a rise in union membership:
In 2007, the number of workers belonging to a union rose by 311,000 to 15.7 million, the U.S. Department of Labor's Bureau of Labor Statistics reported today. Union members accounted for 12.1 percent of employed wage and salary workers, essentially unchanged from 12.0 percent in 2006. In 1983, the first year for which comparable union data are available, theunion membership rate was 20.1 percent.
Other interesting findings include:
Workers in the public sector had a union membership rate nearly five times that of private sector employees.
The union membership rate for public sector workers (35.9 percent) was substantially higher than for private industry workers (7.5 percent). Within the public sector, local government workers had the highest union membership rate, 41.8 percent.
Black workers were more likely to be union members (14.3 percent) than were whites (11.8 percent), Asians (10.9 percent), or Hispanics (9.8 percent). Within these major groups, black men had the highest union membership rate (15.8 percent) while Hispanic women had the lowest rate (9.6 percent).
About 1.6 million wage and salary workers were represented by a union on their main job in 2007, while not being union members themselves.
In 2007, among full-time wage and salary workers, union members had median usual weekly earnings of $863 while those who were not represented by unions had median weekly earnings of $663.
Hat Tip: Cornell Institute for Workplace Studies
January 24, 2008
The 2-0 NLRB Decisions Have Begun
As Rick noted in an earlier post, the remaining two members of the NLRB previously asserted that they have the authority to issue decisions. Now, they've made it official. Members Liebman and Schaumber have issued a decision in Aluminum Casting & Engineering Co., 352 N.L.R.B. No. 1 (Jan. 18, 2008), a backpay specification case (illustrating my comment to Rick's post that this development will generally help unions and employees). In its decision, the Board (if you can still call it that) notes:
Effective midnight December 28, 2007, Members Liebman, Schaumber, Kirsanow, and Walsh delegated to Members Liebman, Schaumber, and Kirsanow, as a three-member group, all of the Board’s powers in anticipation of the expiration of the terms of Members Kirsanow and Walsh on December 31, 2007. Pursuant to this delegation, Members Liebman and Schaumber constitute a quorum of the three member group. As a quorum, they have the authority to issue decisions and orders in unfair labor practice and representation cases. See Sec. 3(b) of the Act.
The Board had earlier cited a 2003 Office of Legal Counsel memo on this issue That memo answers the question "whether, having delegated all of its powers to a group of three members, the National Labor Relations Board (“Board”) may issue decisions and orders in unfair labor practice and representation cases once three of the five seats on the Board have become vacant." The OLC responded that "[w]e believe that the Board may issue such decisions and orders if the two remaining members are part of the three-member group to which the Board delegated all of its powers and if they both participate in such decisions and orders." The statutory basis for the OLC's conclusion was that:
The statute permits the Board to “delegate to any group of three . . . members any or all of the powers which it may itself exercise.” 29 U.S.C. § 153(b). In the proposed arrangement, the three remaining members of the Board would constitute themselves a “group” of the Board and would delegate to that group “all of the [Board’s] powers.” The statute further declares that, where the Board has delegated power to a group of three or more members, a quorum of the group shall be two members. Id. The provision for a two-member quorum of such a group is an express exception to the requirement that a quorum of the Board shall be three members: “[T]hree members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated” by the Board. Id. Moreover, the statute states that “[a] vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board.” Id. (emphasis added). We therefore conclude that the plain terms of section 153(b) provide that the Board could form a “group” that could exercise all of the Board’s powers as long as it had a quorum of two members.
I'll admit that, after reading the OLC memo, I'm not as skeptical of its conclusion as I once was. That's not to say that I'm convinced, however. It's not clear to me that the language above authorizes a three-member panel to delegate authority to a two-member panel once that three-member panel no longer exists. In other words, I'm suspicious of the argument that a group of Board members can give a delegation that continues after that group is gone. What I think is more obvious is that Congress wasn't thinking about this situation when it enacted the NLRA (not that they had any reason to). It's hard to believe that Congress would be OK with a Board issuing decisions while it has only two members for an indefinite amount of time. These provisions seem directed more to temporary delegations.
About the only thing that I feel confident about is that this will be tested in court (probably the D.C. Circuit). I'm looking forward to seeing how this comes out.
Hat Tip: Jason Walta
Another Reversal for the NLRB
As I noted in one of my first posts on this blog, the NLRB has faced a significant number of reversals by circuit courts holding that the Board improperly ruled against a union or employee. Another notable example just came out of the Sixth Circuit, which is as hostile to unions as they come. Moreover, the opinion was authored by Chief Judge Danny Boggs, who is not known for his union sympathies. In Jolliff v. NLRB, No. 06-2434 (Jan. 22, 2008), the Sixth Circuit held that substantial evidence didn't support the Board's finding that a letter sent by workers contained a false statement made with malice. As described by BNA's Daily Labor Report (subscription required):
The letter, which was drafted by truck driver Emerson Young of TNT Logistics of North America Inc. with input from dozens of other employees, stated that "[s]ome drivers are being asked [by dispatchers and management] to fix their log books to make extra runs." The company suspended and then fired Young and two other drivers thought to be responsible for the letter. The board ruled 2-1 that the letter lost protection under the National Labor Relations Act because the employees either knew the statement about the logbooks was false or acted in reckless disregard of the truth.
Writing for the appeals court, Judge Danny J. Boggs found that there is "little or no direct evidence on whether Young knew that the statement was false" and that the board majority made "unwarranted inferences and misinterpretations of testimony" in reaching its conclusion. . . . He said the Sixth Circuit has recognized that employees have the right to engage in concerted communications with their employer's customers regarding grievances and terms and conditions of employment. However, an appeal to customers loses its protected status if the communication does not relate to the employer's labor practices or is maliciously false, Boggs said. He found that a statement loses NLRA protection if it was capable of a defamatory meaning and not opinion, hyperbole, or rhetorical exaggeration, the statement was actually false, and it was made with actual malice--meaning that it was made with knowledge that it was false or with reckless disregard of whether or not it was false. . . .
Although two of the drivers did not contest on appeal that the statement was actually false, Boggs observed that the evidence "is surprisingly thin on the matter." He said the ALJ and the board failed to make the necessary analysis and should have made a specific finding that the general counsel failed to prove the truth of the statement.
The court criticized the Board's decision in several other ways. Most notable was the court's holding that the Board made a "bizarre"
interpretation that a driver threatened to punish the company for losing business by spreading
As I said a while back, cases like these show how far tilted the Board has moved towards employers. This case is part of a larger pattern, yet is significant by itself. As labor law observers are well aware, the Sixth Circuit has repeatedly pushed the envelope in employers' favor in NLRB cases. Moreover, this was a unanimous decision--centered largely on factual findings--by a panel consisting entirely of Republican nominees. I normally don't like to stress judicial politics too much, but the circumstances here amount to a pretty big slap against the Board.
CA Supreme Ct: Medical Marijuana Firing OK
Just handed down by the California Supreme Court today is an interesting case concerning the overlap between medical marijuana laws and an employer's right to fire an employee for drug use.
In Ross v. Ragingwire Telecommunications, Inc., S138130 (CA Jan. 25, 2008), the California Supreme Court held (5-2) that the California Compassionate Use Act of 1996 did not prevent an employer from not firing a new employee who failed a preemployment drug test.
Some background and highlights from the opinion:
Plaintiff, whose physician recommended he use marijuana to treat chronic pain, was fired when a preemployment drug test required of new employees revealed his marijuana use. The lower courts held plaintiff could not on that basis state a cause of action against his employer for disability-based discrimination under the California Fair Employment and Housing Act . . .
We conclude the lower courts were correct: Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and duties of employers and employees. Under California law, an employer may require preemployment drug tests and take illegal drug use into consideration in making employment decisions . . . .
Plaintiff’s position might have merit if the Compassionate Use Act gave marijuana the same status as any legal prescription drug. But the act’s effect is not so broad. No state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law (21 U.S.C. §§ 812, 844(a)), even for medical users (see Gonzales v. Raich, supra, 545 U.S. 1, 26-29; United States v. Oakland Cannabis Buyers’ Cooperative, supra, 532 U.S. 483, 491-495). Instead of attempting the impossible, as we shall explain, California’s voters
merely exempted medical users and their primary caregivers from criminal liability under two specifically designated state statutes. Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and obligations of employers and employees.
Justice Kennard, writing in concurrence and dissent, and joined by Justice Moreno, writes:
In a decision conspicuously lacking in compassion, however, the majority holds that an employer may fire an employee for such marijuana use, even when it occurs during off-duty hours, does not affect the employee’s job performance, does not impair the employer’s
legitimate business interests, and provides the only effective relief for the employee’s chronic pain and muscle spasms. I disagree.
The Court's reasoning appears sound (I don't see how you get by the illegality of the drug), but I would be interested in hearing from any California readers to get a sense of whether there are differences under the FEHA from Title VII that makes this decision unsound.
Restaurant Association Will Not Appeal San Francisco ERISA Preemption Decision
Thanks to co-blogger, Jeff Hirsch, for brining to my attention that the Golden
Gate Restaurant Association has decided not to challenge the recent 9th Circuit
decision to issue an emergency stay of a district court order and allow a San
Francisco health reform program to go forward.
Yesterdays' BNA's Daily Labor Report (subscription required) states:
The Golden Gate Restaurant Association (GGRA) Jan. 21 announced that, after extensive research, it has decided not to petition the U.S. Court of Appeals for the Ninth Circuit for full court review of an order that allowed a controversial San Francisco city ordinance to take effect as planned.
The group said it decided not to pursue the petition for en banc review at this time because it found the petition has a "minimal opportunity for success." It noted that the three-judge panel opinion was unanimous and that the appeal of the U.S. District Court for the Northern District of California's opinion on the merits of the case is on a fast-track schedule, with initial briefs due in April.
In other words, this does not mean there will be no further review of the San Francisco law, but the challenge will be by San Francisco to the decision of the district court. This makes sense from Golden Gate's point of view because they rather be an appellant in a case brought by San Francisco than an appellee challenging a stay decision.
Further, I agree with the author of the DLR piece that if another panel of the 9th Circuit agrees with the initial panel that the San Francisco plan survives ERISA preemption, en banc review, and even Supreme Court review, could certainly be in the cards.
Zimmer on A Chain of Inferences Proving Discrimination
From the abstract:
The third element - defendant's intent to discriminate - is the most challenging and is the focus of most individual disparate treatment discrimination cases. Part of the difficulty is that the second question - the level of linkage of plaintiff's harm to defendant's action - has been tied up in the discussion of the intent issue. After the Supreme Court decisions in Reeves and Desert Palace, however, it is possible to clarify both the question of the level of linkage and the array of different kinds of claims that can be used to prove discriminatory intent. It is becoming clear that either the but-for or "determinative influence" standard based on the "because of" language of §703(a) of Title VII or the "a motivating factor" standard found in §703(m) can be used to analyze any claim that the defendant acted with discriminatory intent.
Direct, direct-lite, or circumstantial evidence (or any combination of the three) can be used to prove individual disparate treatment discrimination.
The variety of claims of what can be used to prove discriminatory motivation or intent include straightforward claims of unequal treatment, defendant's admissions that it discriminated, actions based on stereotypes, and the McDonnell Douglas approach whether it is characterized as proof that defendant lied in its assertion of a legitimate, nondiscriminatory reason for its action, as proof that completely knocks out defendant's explanation, or as proof by a process of elimination of the likely nondiscriminatory reasons. This is not a complete list of such claims as different evidence and therefore different claims of what can be the basis for drawing the inference of discrimination will no doubt will appear as litigation continues to develop.
In the confusing world of discriminatory intent in employment discrimination law, this categorization of different types of cognizable disparate treatment claims will surely add much clarity to this area of the law.
Fifth Circuit Issues SOX Decision
The Fifth Circuit Tuesday issued an important decision describing a whistleblower's "protected activity" under Sarbanes Oxley. The decision, Allen v. Administrative Review Board, is ably described and analyzed by Jason Zuckerman at Whistleblower Law Blog and Michael Fox at Jottings By an Employer's Lawyer.
January 23, 2008
File Under Damning with Faint Praise
Hooray! The largest employer in the world, worth tens of billions of dollars, bragged yesterday in an article in the Wall Street Journal:
Wal-Mart Stores Inc. said the percentage of its work force enrolled in its health plans has increased significantly from a year ago after it expanded choices, including lower-cost options.
The Bentonville, Ark., retailer has been criticized by union-backed groups and others for offering employees skimpy benefits in an effort to contain costs. Wal-Mart also has come under fire for considering a proposal to keep a lid on spiraling health costs by discouraging older and unhealthy workers from its employee ranks.
The world's biggest retailer by sales said 690,970 employees, or 50% of its almost 1.4 million staff, signed up for company-furnished health insurance during its open-enrollment period late last year, up from 47% a year earlier.
The remaining employees are covered by either family members' plans or government-provided health care or forgo insurance altogether. During the past year, the percentage of Wal-Mart employees reporting that they had no coverage from any source fell to 7.3% from 9.6%.
For those keeping track at home, that means 700,000 employees do not have health insurance through Wal-Mart and my bet is that a good percentage of them have no insurance or depend on government Medicaid programs.
Take it away David Nassar of Wal-Mart Watch:
We are surprised that Wal-Mart is proud to report that half its employees choose not to take Wal-Mart's health-care plan, including 7.3% who think Wal-Mart's plan is worse than nothing at all . . . . Since Wal-Mart neglects to release the enrollment numbers for specific plans, it is impossible to determine if enrolled employees signed up for the cheap plans, which offer little coverage and high deductibles, or whether employees signed up for the expensive plans with better coverage.
But thankfully Wal-Mart is planning a study about why more of its worker don't accept their health insurance plan. Phew!
Senate to Take Up Ledbetter Pay Discrimination Bill
ACSBlog gives us the heads up that tomorrow, the:
Senate Health, Education, Labor, and Pensions Committee [will hold] hearings to examine S.1843, which amends title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967 to clarify that an unlawful practice occurs each time compensation is paid pursuant to a discriminatory compensation decision or other practice.
Democrats Look to Revitalize OSHA Agenda
Democratic presidential candidates say they would work toward enactment of an ergonomics law, expand OSHA to include public employees, increase the agency’s budget, stop the emphasis on the voluntary protection programs and strengthen protections for whistleblowers if elected to lead the country in November. Republican candidate former Gov. Mitt Romney (MA)
wants to reduce the regulatory burden on industry and Sen. John McCain (RAZ)
would focus on making radio spectrum available to first responders.
Notice a slight different in emphasis between the parties? You can read the rest of the article here.
Willborn a Finalist for Deanship at U. Wash.
January 22, 2008
Lacy To SMU; O'Gorman To Barry
Two related faculty moves to report. In the first, D. Aaron Lacy (to the left) recently accepted a teaching offer from Southern Methodist University Dedman School of Law. Currently, Aaron is teaching as an Assistant Professor of Law at Barry University School of Law. He joined Barry in 2005, where he teaches employment discrimination, employment law, critical race theory and contracts. In August 2008 he will begin teaching at SMU as an Associate Professor of Law. He will be teaching employment law, employment discrimination, selected topics in employment law and critical race theory. Aaronâs recent articles have appeared in the Nebraska Law Review, Texas Wesleyan Law Review, and Berkeley Journal of Employment and Labor Law. His scholarship primarily focuses in the area of race discrimination in the employment context with an emphasis on the intersection of race and gender and the differing effects on Black men. His current project examines and explores the unique status of Black men as it relates to discrimination based on hairstyle.
The second is Dan O'Gorman (to the right), who has accepted a position as Assistant Professor at--you guessed it--Barry University School of Law in Orlando, Florida. Dan is currently an Assistant Professor at the University of Central Florida in the Department of Criminal Justice and Legal Studies, where he teaches Employment Discrimination, Contracts, and Law and Society. He will start at Barry in August 2008, and anticipates teaching Labor Law, Employment Law, and Employment Discrimination. Dan has published articles in the Penn State Law Review, the Nebraska Law Review, and the University of Pennsylvania Journal of Labor and Employment Law. He has an article forthcoming in the Temple Law Review.
Congratulations to both Aaron and Dan!
Labor Law Remedies
Over at Balkinization, David Luban explains in Much Ado About Nothing that one of the issues raised in the suit brought by Jose Padilla against John Yoo is whether "a lawyer [can] be held liable for advising a client about the law."
I've been thinking about this issue a lot recently in the context of labor law remedies. Remedies for violating the NLRA, especially in the context of a union organizing drive, are notoriously weak. As a practical matter, the the worst thing that's likely to happen to an employer who fires a union organizer is that, 2 or 3 years down the road, the employer will have to reinstate the employee with back pay, less mitigated damages. The employer's "penalty" of paying $20K in back-pay damages pales in comparison to the amount of money (and management perogatives) the employer will save if firing the employee helps defeat the organizing drive.
Labor, of course, has been complaining about this for years. The effects of this calculus are obvious: employers routinely and flagrantly violate the law, knowing full well that the reward for violating the law far outweighs any penalty that will be assessed.
What is a management-side lawyer to do? And how should I teach this in my Labor Law course? On the one hand, the lawyer should neither break the law nor counsel his/her client to do so. A lawyer can add "but if you do, here are the likely consequences," and lead the client to do the third-grade math equation him- or her-self.
The employer doesn't have to be an economist to figure out that when the economic costs to an employer of a successful union organizing drive are high, the "rational" thing to do is to flout the law to bust the union. And that is exactly what is happening today.
Management attorneys and union-busting consultants may be leading employers down this path with a wink and a nod, but I think something more is going on here. Neither Congress nor the courts nor the Board [the Bush II Board excepted, perhaps] are under any illusion that the current remedial structure provides an effective deterrent. Labor remedies have been so weak, for so long, that I think there is active acquiescence to union-busting going on here.
I think the underlying argument (or maybe it's an unstated assumption) is that it is a good thing for employers to bust union organizing drives if the drive would result in a significant wage premium. It's the same economic argument that undergirds the permanent-replacement rule for strikers: if the union demands a wage premium that's too high, the employer will easily hire replacements and break the strike; if the employer demands a wage rate that's too low, the union will strike and the employer will not be able to find replacements on the spot labor market.
Applied to remedies, the argument is that if the wage premium likely to result from union organizing is low, then employers should play by the rules. If the wage premium is likely to be high, then employers should fight organization tooth-and-nail, punching below the belt at every opportunity. Thus, by keeping penalties for unfair labor practices way below the rate needed to deter employer violations, Congress and the Court are inviting employers to fire union organizers when the economic benefits to the employer are overwhelming, but not when the benefits are marginal. The presumed benefits will flow, as with the permanent-replacement rule, to downstream consumers of the employer's product.
What do you think? I don't pretend to have thought this all the way through, so comments are welcome.
Supreme Court Asks SG's Opinion on Pension/Discrimination Case
Update: Some important insights by Paul Mollica on this case.
Here's another one from SCOTUSblog:
The Court asked the U.S. Solicitor General to offer the federal government’s views on two new cases — one involving pension benefits, the other a significant test case on antitrust law. There is no deadline for the Solicitor General to file the responses.
The pension case (AT&T Corp. v. Hulteen, 07-543) raises the question of whether federal law requires an employer to set current pension benefits at a level that makes up for a denial of work credit that was legal when it occurred in the past. The Circuit Courts are split on the issue of whether a denial of full service credits for past maternity leave amounts to a new violation of the 1978 federal law against pregnancy discrimination on the job. In the AT&T case, the Ninth Circuit Court found a current violation in the failure to count past service time that was denied earlier.
I've said it before and I'll say it again: this Supreme Court is employment law obsessed!
Brown Labor Preemption Case Oral Argument Set
Heads up from SCOTUSblog that the United States Supreme Court has just set oral argument for the Chamber of Commerce v. Brown case on Wednesday, March 19th.