May 2, 2009
Taking the Confidential Information Argument Too Far
The Legal Ethics Forum blog has a post on a recent Massachusetts appeals court decision that reversed a trial court's dismissal of an unlawful termination claim. The plaintiff is an attorney who discovered child pornography on the computer of one of his firm's important clients. He notified his firm, which instructed him to hire a specialist to erase the pornography from the computer. He refused, stating that they couldn't destroy evidence of a crime and he ultimately notified the FBI. He was--surprise--fired for his trouble. The appellate court held, contrary to the trial court, that revealing the child pornography didn't threaten any protected privileged or confidential information. Hard to believe that it took a reversed trial decision to get to that point.
Hat Tip: Alex Long
May 1, 2009
Happy May Day!
In celebration of the workers' rights version of May Day, and at least not inconsistent with the pagan version, I'd like to highlight my favorite protest so far of the year: the bearded protest of L'Oreal in Paris. The protestors leveled charges that the company did not have enough women managers despite producing products used primarily by women. Additionally, only three of the fourteen board members of the company are women. The company does not have a great track record when it comes to discrimination. It was convicted of racial discrimination (in France this is a crime) in 2007. From the Agence France Presse
The protest took place about two weeks ago, and the protesters themselves also wore beards. Protests today in Europe have had particularly large turnouts and some violence, due at least in part to the current economic situation.
Two-Member NLRB Decisions Struck Down (and Upheld)!
We've posted quite a bit about challenges to decisions issued by the two-member NLRB (see, for instance, here, here, and here) and now the near-final verdict is in: the decisions are struck down. In the Laurel Baye decision issued today, the D.C. Circuit held that the two-member NLRB did not have authority to issue decisions. The key issue in the case was whether the Board correctly interpreted Section 3(b) of the NLRA as permitting two-members decisions. Section 3(b) states that:
According to the court, the Board's interpretation of this provision was improper:
Reading the two quorum provisions harmoniously, the result is clear: a three-member Board may delegate its powers to a three-member group, and this delegee group may act with two
members so long as the Board quorum requirement is, “at all times,” satisfied. But the Board cannot by delegating its authority circumvent the statutory Board quorum requirement, because this requirement must always be satisfied.
Indeed, if Congress intended a two-member Board to be able to act as if it had a quorum, the existing statutory language would be an unlikely way to express that intention. The quorum
provision clearly requires that a quorum of the Board is, “at all times,” three members. A modifying
phrase as unambiguous as this denotes that there is no instance in which this Board quorum requirement may be disregarded. . . .
Congress provided that a quorum of the Board is three members. The Board does not have three members. It cannot act. Though section 3(b) gives the Board power to delegate its authority to a group of members, this authority is necessarily limited by the fact that the delegation authority
allows the Board to grant its power only to a group of three or more members. The Board’s
delegation power is also obviously limited by the fact that the Board quorum provision establishes that the power of the Board to act exists when the Board consists of three members.The
delegee group’s delegated power to act, however, ceases when the Board’s membership dips below the Board quorum of three members. It therefore follows that where, as here, a delegee group acts on behalf of the Board, the Board quorum requirement still must be satisfied.
As I've said before, I agree with this interpretation of Section 3(b), although thought the Board had a reasonable position and an admirable goal of keeping the agency doing what it's supposed to do (and hats off again to Members Liebman and Schaumber for all their hard work during this time). More important, however, is that this decision will impose a significant cost on the Board and the victims of unfair labor practices in all the affected cases--as they'll now have to wait a lot longer to have their cases heard again. To its credit, the D.C. Circuit addressed this reality in its closing:
Finally, we acknowledge that the case before us presents a close question, and that neither OLC’s interpretation nor the Board’s desire to continue to function is entirely indefensible. Both were undoubtedly born of a desire to avoid the inconvenient result of having the Board’s adjudicatory wheels grind to a halt. Nevertheless, we may not convolute a statutory scheme to avoid an inconvenient result. Our function as a court is to interpret the statutory scheme as it exists, not as we wish it to be. Any change to the statutory structure must come from the Congress, not the courts. Perhaps a properly constituted Board, or the Congress itself, may also minimize the dislocations engendered by our decision by ratifying or otherwise reinstating the rump panel’s previous decisions, including the case before us. See, e.g., FEC v. Legi- Tech, Inc., 75 F.3d 704 (D.C. Cir. 1996) (affirming properly reconstituted FEC Board’s ratification remedy for its unconstitutional membership).
Perhaps a small silver lining for the Board in this case is that Congress and the Obama Administration will try to move more quickly to get the Board back up to its full complement of members.
Finally, in a late-breaking twist, I've just found out (thanks to Peter Winkler, Dennis Walsh, and Patrick Kavanagh) that the NLRB actually won on the exact same issue today in the Seventh Circuit. The court's analysis in New Process Steel isn't as thorough as the D.C. Circuit's, although much more so than the First Circuit's, which earlier upheld the two-member decisions. In New Process Steel, the Seventh Circuit held that the decisions were valid, stating (among other things) that the Board's reading of Section 3(b):
Thus far--and the way today is going, who knows what other court will weigh in--the count is now 2-1 in favor of the NLRB's current two-members decisions. Unfortunately for the Board, the votes aren't weighted equally. Not only does the D.C. Circuit have jurisdiction over every potential NLRB case (so any party that wanted to challenge a two-member decision can race to file there), its holding generally garners far more respect than those of other circuits.
I don't know how the Board will decide to proceed until it gets more members; it could apply its non-acquiescence rule and continue to plow ahead or it can sit back and wait a bit until it can be sure that what it does won't be struck down because of this issue. I imagine the Board itself doesn't know at this point, so we'll have to wait and see. You can also see the AP story that quotes the NLRB's press release on Laurel Baye.
Hat Tip: Jeff Wilson & Peter Winkler
Thanks to Carol Furnish (NKU-Chase) for sending word of a fantastic (but grim) new tool from Google. If you do a regular Google search on "unemployment rate" followed by a U.S. state or county, you get an unemployment rate chart. What's really great is that you can overlay multiple charts. So, for example, I can see at a glance that my metropolitan area (Cincinnati, centered in Hamilton County) has an unemployment rate that is about a point under the national average, and that the unemployment rate for Ohio as a whole is about a point higher than the U.S. average.
The tool also works for tracking population trends: substitute "population" for "unemployment rate". For further explanation of the tools, see Google's Adding Search Power to Public Data.
April 30, 2009
Chysler Going Into Bankruptcy (Really)
Despite the back and forth recent days over Chrysler filing for bankruptcy, it now appears that it's going to happen. Apparently, a couple of creditor hedge funds are responsible (where have we heard that before), as they refused to sign off on the deal that all other interested parties had agreed to. Now those hedge funds look like they'll be able to see if they're right that they can get more in bankruptcy. There are indications that Chrysler may not look significantly different in bankruptcy as it would have under the proposed deal, but that remains to be seen.
Zelinsky on ERISA 514(a) Preemption
Edward Zelinsky (Cardozo) has just posted on SSRN his essay (forthcoming State Tax Notes) Golden Gate III, ERISA Preemption, and the San Francisco Health Care Security Ordinance. Here's the abstract:
This first premise indicates that a San Francisco employer which regularly contributes to San Francisco pursuant to that City’s health ordinance thereby creates a “plan” for ERISA purposes. The ERISA status of this plan purchasing municipally-administered medical services is the same as the ERISA status of an analogous employer-financed plan paying a private administrator for comparable health care: As to all of these plans, ERISA Section 514(a) preempts state and local regulation.
Moreover, it is not persuasive for purposes of ERISA Section 514 to say (as does the Ninth Circuit) that San Francisco, by its health care ordinance, regulates employers’ health care contributions, but not employers’ health care plans. Contributions are central features of employers’ health care plans for their employees. By regulating employers’ contributions, San Francisco regulates employers’ plans.
NY State Assembly Passes Transgender Antidiscrimination Bill
Hat tip to Mitch Rubinstein at Adjunct Prof Blog for pointing out that the New York State Assembly has passed the Gender Expression Non-Discrimination Act, which would ban discrimination on the basis of transgender in housing, employment, credit, and public accommodations. Here's a descriptive press release. The bill is pending in the state senate.
April 29, 2009
UAW a Winner In the Bailout?
The New York Times has an article examining whether the possible government bailouts of the U.S. automakers will strengthen the UAW. Given all of the cuts that UAW workers are facing, the question itself seems odd at first glance. However, the article makes the case for a UAW upswing:
According to restructuring plans proposed this week, the union will have more than half the stock in Chrysler and a third of General Motors, meaning it will have tremendous influence, with the government, in determining the future of the companies. The United Automobile Workers union said Wednesday that its members ratified a cost-cutting deal with Chrysler by a 4-to-1 margin. . . .
The U.A.W. members at both automakers stand to lose some of their pay and benefits, but the cuts are not as deep as those faced by airline and steel workers when their companies went bankrupt. Under proposed deals devised by the Treasury Department, U.A.W. pensions and retiree health care benefits would largely be protected.
The U.A.W. has derived its leverage in part from the support of a Democratic president and Congress. But it also results from a long-term strategy to build support in Washington that stretches back more than 60 years. . . .
Mr. Gettelfinger, the current president, has also been an effective, steel-nerved leader, and has managed to maintain the union’s importance in recent negotiations, even though the U.A.W. has lost nearly 200,000 members since he took office in 2003. Mr. Gettelfinger’s influence stems in part from the fact that the U.A.W. represents nearly all the auto workers at the Detroit companies. (Workers at a few plants are represented by the I.U.E.) By contrast, airline workers are represented by multiple unions.
The point about the UAW possessing additional power because it's the 800 pound gorilla for workers in the auto industry is an important one. However, I'm not sure that I'd call the UAW (or anyone save the foreign automakers) a "winner" in this situation. It may be true that the union comes through in OK shape, but it's going to lose a lot of members and those members are going to lose a lot of money and benefits. Any way you slice it, that's still not a good thing.
On the Proposed Restatement of Employment Law
The American Law Institute has proposed a Restatement (Third) of Employment Law. In late 2008, concerned with the adequacy of the Restatement draft, the Labor Law Group formed working committees to examine each of the draft chapters. On February 7, 2009, those committees presented their findings at a conference sponsored by the LLG and U.C.-Hastings. Here is a summary of the committees' findings, written by LLG Chair Ken Dau-Schmidt:
Here are links to the committees' downloadable findings, as well as links to other articles/essays presented at the LLG/Hastings conference. Special thanks to Paul Secunda for uploading all of these onto SSRN.
- Dau Schmidt, A Conference on the American Law Institute’s Proposed Restatement of Employment Law.
- Schiller, “It is Not Wisdom, But Authority that Makes a Law:” a Historical Perspective on the Problem of Creating a Restatement of Employment Law.
- Nolan et al., Working Group on Chapter 1 of the Proposed Restatement of Employment Law: Existence of Employment Relationship.
- Hyde, Response to Working Group on Chapter 1 of the Proposed Restatement of Employment Law: On Purposeless Restatement.
- Finkin et al., Working Group on Chapter 2 of the Proposed Restatement of Employment Law: Employment Contracts: Termination.
- Arnow-Richman, Response to Working Group on Chapter 2 of the Proposed Restatement of Employment Law: Putting the Restatement in its Place.
- Grodin et al., Working Group on Chapter 4 of the Proposed Restatement of Employment Law: The Tort of Wrongful Discipline in Violation of Public Policy.
- Zimmer, The Restatement of Employment Law is the Wrong Project.
Today's Argument on the Voting Rights Act and What It Might Mean for State Employment
The Supreme Court heard its last oral argument of the term today in Northwest Austin Municipal Utility District Number One v. Eric Holder, Jr, Attorney General, known to those who follow it as the "NAMUDNO" case. The case concerned Congress' extension in 2006 of Section 5 of the Voting Rights Act, which requires some jurisdictions to get advance approval (preclearance) of changes to election laws. The preclearance is designed to prevent discrimination in the ability to vote on the basis of race. What, you may ask, does this have to do with workplace law? A lot, as it turns out, if you happen to be a state employer or state employee.
The primary challenge to this Section 5 is that it exceeds Congress' power under that other Section 5--Section 5 of the Fourteenth Amendment. To be validly enacted under Section 5 of the 14th Amendment, a statute must be congruent and proportional to remedy a documented constitutional harm, as the Court held in City of Boerne v. Flores. The remedies of the Voting Rights Act were held to be valid enactments in their original incarnation in Katzenbach v. Morgan and South Carolina v. Katzenbach. However, because of the passage of time since most of the original constitutional violations, it's no longer as clear that the remedies which go beyond what the constitution itself would provide remain within Congress' powers. (I have written on the passage of time issue--here is a link to it on SSRN).
The way this issue impacts workplace law is that it relates to how Congress can subject states as employers to suits for money damages brought by injured employees--think Title VII in particular. The state is ordinarily immune from suits for damages brought by individuals either in federal court (11th amendment) or their own courts (state sovereign immunity). Congress can abrogate that immunity, but only under its Section 5 of the 14th Amendment powers. We had a series of cases right around the turn of the century at the Supreme Court and the lower federal courts holding that a number of federal statutory provisions couldn't be used by state employees to sue their employers.
If the Supreme Court holds that the extension of Section 5 of the Voting Rights Act is unconstitutional, look out for renewed litigation on the employment statutes, particularly the disparate impact provisions of Title VII, which are also under at least a veiled attack (by some amici) in Ricci v. DeStefano. According to SCOTUSblog, the Court seems evenly divided on this constitutional question with Kennedy being the swing vote. Rick Hasen (Loyola LA) at Election Law blog thinks that the Court will find this unconstitutional. We'll have to wait and see what the Court does.
April 28, 2009
Stone on the EFCA
Auto Warriors: The Onion on Downsizing via Reality TV
Bloggers emeritii Joe Slater and Paul Secunda sent us this Onion News Network clip: Autoworkers Compete to Keep Jobs, Livelihoods on New Reality Show. It's painfully amusing and not the only job-related video currently up. Another good one is More American Workers Outsourcing own Jobs Overseas. You might have a look around. And in print news, I especially like, What the Hell Am I Supposed to Do with All of these Constitutional Rights. I love the Onion . . .
Specter To Become A Democrat
Arlen Specter has just announced that he will switch to the Democratic party. No doubt motivated by yet another conservative primary challenge, this switch has huge implications for labor and employment law. The first question is whether Specter will switch back to supporting EFCA [hat tip to a reader who sent a link suggesting that he won't]. Even if he doesn't, many other labor and employment bills could benefit from a Democratic filibuster-proof majority (which would exist if Franken is seated). Moreover, the federal bench could look significantly different, which has an obvious impact on litigation.
Happy Equal Pay Day!
Today is the day of the year when women’s aggregate wages catch up to men’s aggregate wages from the previous year, and many groups are blogging for fair pay today and speaking out about pay equity. Here is an example from Business and Professional Women/USA:
Over a lifetime of work this loss adds up. On average, the families of working women lose out on $9,575 per year because of the earnings gap. Women may lose $434,000 in income, on average, due to the career wage gap. Women at all education levels lose significant amounts of income due to the career wage gap, but women with the most education lose the most in earnings. Women with a college degree or higher lose $713,000 over a 40-year period versus a $270,000 loss for women who did not finish high school. Women lose hundreds of thousands of dollars from the career wage gap no matter where they live.
Forty-six years after President John F. Kennedy signed the Equal Pay Act ensuring “equal pay for equal work,” women working full time earn on average 22% less than their male counterparts. This is a marked improvement over the 59 cents a woman was paid on the dollar in 1963, when the Equal Pay Act was passed. But it is clearly still too far from true economic and social equality. The Lilly Ledbetter Fair Pay Act, signed into law on January 23, 2009, ensures that victims of discrimination have fair access to the courts, but additional legislation is needed to close the persistent gap between men’s and women’s wages.
BPW and other women's groups like the National Women's Law Center are advocating passage of the Paycheck Fairness Act, (HR 12, S 182), which passed the house on January 9, 2009 as part of the House version of the Lilly Ledbetter Fair Pay Act, and which is on the Senate calendar.
Chysler Dodging Bankruptcy Bullet?
Despite a couple of recent posts on an imminent bankruptcy filing by Chrysler (see here and here), it's now appearing that the carmaker may be able to avoid bankruptcy. The proposed restructuring is quite interesting and poses some good labor law issues. According to the Washington Post:
Chrysler also reached a deal over the weekend with the United Auto Workers, in which the union would own a majority stake in the automaker. A source familiar with the matter said if the restructuring of the storied American automaker is completed according to the tentative deal, the union would have a 55 percent stake in the company, the Italian automaker Fiat would eventually hold a 35 percent stake, and the government and Chrysler's lenders would share a 10 percent stake in the company. The source spoke on condition of anonymity because he was not authorized to comment publicly on the talks.
The agreement with the UAW, which must be ratified by union members, and the deal with the automaker's lenders are milestones in the effort to keep Chrysler and its 54,000 employees out of bankruptcy. . . . The agreement with the union essentially relieves Chrysler of a portion of the $10 billion it owes to the union's retiree health fund. In exchange for giving up its claims to some of that $10 billion, the union is getting the significant equity stake in the company.
Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass., said that if the union winds up with a majority stake in its employer, that "puts the UAW in a strange position." "If it takes company stock as a part owner in the company, it would be bargaining against itself," he said. "It can never act as adversarial in that relationship. Also it's in a position that to make the company more stable, it has to reduce health-care benefits of its own retirees."
As Chaison notes, the union's potential majority ownership raises some conflict of interest concerns. I wrote an article a while back on employee stock ownership plans with significant ownership stakes and the problems such plans may have under the NLRA (this was way back when employees actually wanted stock). The bottom line is that these issues are something that UAW needs to be careful about, but there are well-worn strategies that other employee-owned companies have used (e.g., United and its Board of Directors that was structured to prevent majority union control and put up a firewall around the companies labor-relations team) that can make everything lawful as far as labor law is concerned.
Gastwirth and Miao on EEOC's 4/5ths rule in disparate impact cases
Joseph Gastwirth (Statistics, George Washington) and Weiwen Miao (Math, Haverford College) have posted on SSRN their recent article on statistical analysis of small samples in disparate impact cases: Formal Statistical Analysis of the Data in Disparate Impact Cases Provides Sounder Inferences than the Government’s “Four-Fifths” Rule: Examining the Statistical Evidence in Ricci v. DeStephano.
From the abstract:
This is a very interesting explanation of the difficulties of determining whether an outcome is likely a product of chance when very low numbers are involved and an important caution to the EEOC's 4/5ths rule.
Thanks to Jerry Kalish (National Benefit Services & Retirement Plan Blog) for sending us a link to this map of the anticipated staggered recovery for the various U.S. metropolitan areas. Major Texas cities should return to pre-recession employment levels by the end of this year or next; most of California by 2012; New York and southern Michigan, not until 2015 or later. The map comes from yesterday's Chicago Sun Times. It's the perfect flip-side to the interactive map we described last week on Vanishng Employment.
April 27, 2009
DOL To Issue Popcorn Lung Rules
The Associated Press is reporting that the Department of Labor will announce on Tuesday new rules limiting workers exposure to diacetyl, the artificial butter flavoring that causes "popcorn lung." Rick's post last week noted the recent litigation resulting from workers being harmed by diacetyl, but the previous DOL had not issued any regulations on the chemical.
There are no details yet, but they're expected tomorrow from Secretary Solis.
Ninth Circuit Reverses NLRB's Badlands Decision
In an unpublished decision (only Westlaw link available), the Ninth Circuit has reversed the NLRB's Badlands Golf Course case--the Board split 3-2; you know the lineup. At issue was whether the employer bargained with the union for a reasonable period of time before withdrawing recognition, as required by Lee Lumber. As the NLRB dissent emphasized, the parties were seeking an initial contract, although they had been negotiating off and on for several years. The central question was whether the parties started bargaining "from scratch." The Board majority found that they had not started from scratch because of negotiations two years earlier--a finding that led the majority to discount the fact that the parties were negotiating an initial contract.
The court's holding was based a straightforward complaint about a lack of substantial evidence:
It's odd to have a 3-2 NLRB decision flipped by an unpublished decision, but given that holding, it's not a big surprise. It's also a good reminder that the NLRB, like other agencies, have to be very careful about making sure that the record supports where the agency wants to go.
Workplace Fairness Blog Nominated for Webby
Workplace Fairness Blog has been nominated for Best Law Blog in the 13th Annual Webbies. Workplace Fairness "is a non-profit organization working to preserve and promote employee rights. The site provides comprehensive information about job rights and employment issues nationally and in all 50 states. It is for workers, employers, advocates, policymakers, journalists, and anyone else who wants to understand, protect, and strengthen workers' rights."