Saturday, June 20, 2009
Dennis Nolan sends word of Tewolde v. Owens & Minor Distribution Inc., D. Minn., No. 07-4075, 6/10/09), a non-union arbitration case in which the court held that an arbitrator's finding that an employee claiming national origin discrimination was not qualified for a promotion was entitled to "extraordinary" deference. As Dennis points out, the Tewolde court reads the Supreme Court's recent 14 Penn Plaza case as limiting judicial review of arbitrated statutory claims. To the contrary, Dennis argues -- and I wholeheartedly agree -- that 14 Penn Plaza at least implies quite the opposite. Justice Thomas, attempting to counter the argument that unions might sweep discrimination claims under the rug, wrote that enhanced judicial review of statutory claims would obviate this concern.
Charlie Sullivan (Seton Hall) sends us this note on the scope of the Lilly Ledbetter Act:
42 U.S.C. § 2000e-5(e)(3)(A) (emphasis added). The amendment thus repeals any statute of limitations for any “compensation decision” and for any “other practice” which results in “discrimination in compensation.” On its face, this language requires only causation – if an act was discriminatory when done (e.g., an evaluation) and later results in discrimination in compensation which affects current compensation, there is no statute of limitations. Indeed, this was the position of then-Republican Senator Specter when he sought unsuccessfully to remove the “other practice” language from the statute. (As an aside, Specter understood the risk he was running. He mused, “lawyers …. citing this argument to say, well, if the amendment offered by Arlen Specter was defeated, it must mean that all of those other practices are included, and then some, which is not my intent.” 155 CONG. REC. S694, 697 (daily ed. Jan. 21, 2009)).
This snippet of legislative history is only one indication from the debates that the new statute requires only a showing of effect on current compensation to make a long-ago practice currently actionable. (The Supreme Court’s recent decision in AT&T v. Hulteen requires the qualification that the prior practice must have been illegal within the meaning of the then-applicable law, but it does not alter the basic principle). But why do we need to go to legislative history when the textualist approach favored by the current Court seems to command exactly this result? It’s true that some district courts have shown an ability to read, e.g., Gentry v. Jackson State Univ., 2009 U.S. Dist. LEXIS 35271 (S.D. Miss. Apr. 17, 2009) (past denial of tenure was actionable to the extent it affected current compensation), but several others have not. E.g., Rowland v. Certainteed Corp., No. 08-3671, 2009 U.S. Dist. LEXIS 43706 (E.D. Pa. May 21, 2009).
What’s remarkable is not so much the result reached by Rowland and like courts as the fact that none of the decisions explains why “other practices” doesn’t mean what it says. Whatever one thinks of textualism as a be-all-and-end-all, reading the text seems like a good start.
A caveat for age discrimination cases. In a 5-4
decision, the Supreme Court said a worker has to prove that age was the key
factor in an age discrimination case. Bill Radke talks to Paul Secunda, a law
professor at Marquette University, about what this means for older workers.
- Lucian A. Bebchuk & Holger Spamann, Regulating Bankers' Pay (728).
- David A. Hyman, Employment-Based Health Insurance and Universal Coverage: Four Things People Know That Aren't So (582).
- Susan Mangiero (photo above), ERISA Litigation Study (186).
- Karen C. Burke, Fuzzy Math and Carried Interests: Making Two and Twenty Equal 710 (133).
- Jonathan Barry Forman, Funding Public Pension Plans (118).
- Scott A. Moss & Peter H. Huang, How the New Economics Can Improve Discrimination Law, and How Economics Can Survive the Demise of the 'Rational Actor' (112).
- Brian D. Cadman, Mary Ellen Carter, Katerina Semida, Compensation Peer Groups and Their Relation with CEO Compensation (99).
- Jason S. Scott, John G. Watson, & Wei-Yin Hu, What Makes a Better Annuity? (81).
- Julie C. Suk, Are Gender Stereotypes Bad for Women? Rethinking Antidiscrimination Law and Work-Family Conflict (80).
- David I. Walker, The Challenge of Improving the Long-Term Focus of Executive Pay (78).
Friday, June 19, 2009
Martin Wagner, labor arbitrator, university leader and influential scholar died on Tuesday, June 19, 2009 in his home. He was 97, lived in Urbana, Illinois, and was one of the last living founders of IRRA (predecessor of LERA).
Professor Wagner served as director of the Institute of Labor and Industrial Relations (now the School of Labor and Employment Relations) at the University of Illinois, Urbana-Champaign, from 1958 to 1968. He continued as a professor until 1982, when he retired and was awarded emeritus status. Wagner played a central role in the development of public sector labor relations laws for the state of Illinois, including serving as the first chairman of the Illinois Educational Labor Relations Board and in leadership roles on numerous state and regional federal commissions and boards on training, labor-management relations, unemployment, wage-price controls, civil service, and related matters.
Early in his career, Wagner served in the WWII Office of Production Management and as a regional director for the National Labor Relations Board in San Francisco and Cincinnati. In 1948, he served as the founding executive director of the Louisville Labor-Management Committee, the nation’s first area labor-management committee. In that same year, he was a founding member of the Industrial Relations Research Association (now the Labor and Employment Relations Association). Prior to his death, he was notified that he was to be recognized for the LERA lifetime achievement award this coming January. He was also recognized recently for 50 years of service in the National Academy of Arbitrators (NAA), a rare accomplishment as individuals are only inducted into the NAA after they have already achieved prominence in the profession. The International Brotherhood of Electrical Workers (IBEW) provided Wagner with a Lifetime Membership Award in 1996, a particularly significant accomplishment for a labor neutral.
Hat tip: Paul Secunda.
The Age Discrimination in Employment Act (ADEA) prohibits employers from taking an adverse action against an employee, such as demoting the employee, “because of such individual’s age.” The issue in Gross was how to interpret “because of”, specifically with respect to decisions based partly on age and partly on legitimate factors such as job performance. Twenty years ago, in Price Waterhouse v. Hopkins, the Court struggled with exactly the same question with respect to Title VII, which prohibits adverse actions against employees “because of such individual’s race, color, religion, sex, or national origin.” The similarity in language is not a coincidence; the ADEA, passed three years after Title VII, was consciously modeled on Title VII and the Court generally interprets comparable language in the two statutes identically. In Price Waterhouse, four justices joined a plurality opinion that interpreted the language to mean that a showing that sex was a “motivating” factor in an employment decision would be sufficient to shift the burden to the employer to justify the action; Justice White and Justice O’Connor each separately concurred, but interpreted the language as requiring a showing that sex was a “substantial” factor. Justice O’Connor’s concurrence is typically considered to provide the holding for the case. Three justices dissented, arguing that a plaintiff should have to prove that sex was the “but-for” cause of the decision.
Luckily, Congress cleared up the issue by amending Title VII to largely codify the plurality’s interpretation (the amendments are considered an override because they supersede Justice O’Connor’s interpretation). The problem is that Congress did not amend the ADEA, the Americans with Disabilities Act (ADA), or other discrimination statutes that include the same “because of” language. Courts therefore have been confused when faced with mixed-motive claims under these other statutes. Most have followed the interpretation in Justice O’Connor’s concurrence. A few have reinterpreted the language in these other statutes in line with the Congressional amendments of Title VII. No one has followed the roundly-rejected dissent in Price Waterhouse—until now.
In a 5-4 decision, reflecting the common conservative-liberal split, the Court interprets the language in the ADEA as requiring a showing that the illegitimate criterion is a “but-for” cause of the decision. The Court justifies its disregard of the amendments by noting that Congress had amended Title VII but not the ADEA, although, as Justice Stevens points out in dissent, there is persuasive legislative history suggesting Congress intended the amendments to apply to the ADEA as well. At first blush, this may seem reasonable. Why shouldn’t we expect Congress to amend the ADEA along with Title VII? The problem with this resolution is that there’s no limiting principle. It’s not too difficult for Congress to draft language that supersedes a statutory interpretation in the particular context of the precedent with which it disagrees. But it is quite difficult for Congress to anticipate every statute and every situation where such an overridden precedent might be deemed relevant.
The Ledbetter Fair Pay Act, the first statute signed into law by President Obama, makes this clear. The Act was an override of another unpopular Supreme Court decision interpreting Title VII. Recognizing the confusion that has followed earlier overrides in this area, Congress clearly tried to anticipate and resolve the problem. In addition to amending Title VII, the Fair Pay Act also amends the comparable provisions in the ADEA and specifies that it will apply to claims brought under the ADA and the Rehabilitation Act of 1973; it makes these changes retroactive to the day before Ledbetter was decided. But even this has not been enough to end reliance on the Court’s repudiated holding. A recent district court case, Maher v. International Paper Co., 600 F. Supp. 2d 940 (W.D. Mich. 2009), while noting correctly that the Act amends all of these other statutes, held that Ledbetter remains “persuasive authority except where overruled by statute”—and applied it to a claim brought under the Family and Medical Leave Act.
In my article, I advocate an alternative approach to better allow overrides to play their expected role in preserving the separation of powers. Although I agree that Congress would be well-served by drafting overrides to head off some of these issues, I also argue that courts should adopt interpretive conventions that are more respectful of the significance of the override. Specifically, I propose that enactment of an override should create a rebuttable presumption that the prior judicial-interpretation of the pre-existing statutory language is superseded, and that courts should therefore do “fresh” interpretation of the language. But, importantly, rather than deeming Congress’s “failure” to amend the ADEA free license to adopt the Price Waterhouse dissenter’s interpretation of Title VII, an interpretation that Congress clearly rejected, the Court should, I believe, have reinterpreted the language in the ADEA in-line with the interpretation Congress endorsed in Title VII: that is, that a plaintiff may succeed in a claim by showing that age was a motivating factor in the decision.
As we noted, the NLRB has petitioned the D.C. Circuit for rehearing and rehearing en banc on the Laurel Baye decision holding that two-member NLRB decisions are invalid. Following the court's request, the employer has issued its response (Download Laurel Baye's Response). Among the expected arguments, including a pretty strong statement that the Board's position is unreasonable, the employer makes a somewhat unusual stance against rehearing the case en banc:
I'll be curious to see if they make the same admission if the NLRB ends up petitioning the Supreme Court for cert in this case.
Hat Tip: Justin Keith
Thursday, June 18, 2009
Alvin Goldman sends us this update on the XIX World Congress for the International Society for Labor and Social Security Law, to be held in Australia, from September 2-4, 2009 at the Sofitel Wentworth.
- Regulatory frameworks and law enforcement in new forms of employment.
- Workers’ representation and social dialogue at the workplace level.
- Emerging patterns of social protection in light of structural changes (aging population, changing family structures, immigration, budgetary constraints, political and ideological realignments).
Immediately prior to the Society’s world congress, the International Industrial Relations Association will hold its world congress—also in Sydney.
The Supreme Court issued its opinion in Gross v. FBL Financial Services today, reversing the decision of the lower courts. It was a 5-4 decision, written by Thomas, with two dissents. Justice Stevens filed a dissent joined by
Justice Souter, Ginsburg, Breyer. Justice Breyer filed a dissent joined
by Justices Souter and Ginsburg. When we've had a chance to read and digest the decision, we'll post a more full analysis. Here's the syllabus for now:
(a) Because Title VII is materially different with respect to the relevant burden of persuasion, this Court’s interpretation of the ADEA is not governed by Title VII decisions such as Price Waterhouse and Desert Palace, Inc. v. Costa, 539 U. S. 90, 94–95. This Court has never applied Title VII’s burden-shifting framework to ADEA claims and declines to do so now. When conducting statutory interpretation, the Court “must be careful not to apply rules applicable under one statute to a different statute without careful and critical examination.” Federal Express Corp. v. Holowecki, 552 U. S. ___, ___. Unlike Title VII, which has been amended to explicitly authorize discrimination claims where an improper consideration was “a motivating factor” for the adverse action, see 42 U. S. C. §§2000e–2(m) and 2000e–5(g)(2)(B), the ADEA does not provide that a plaintiff may establish discrimination by showing that age was simply a motivating factor. Moreover, Congress neglected to add such a provision to the ADEA when it added §§2000e–2(m) and 2000e–5(g)(2)(B) to Title VII, even though it contemporaneously amended the ADEA in several ways. When Congress amends one statutory provision but not another, it is presumed to have acted intentionally, see EEOC v. Arabian American Oil Co., 499 U. S. 244, 256, and “negative implications raised by disparate provisions are strongest” where the provisions were “considered simultaneously when the language raising the implication was inserted,” Lindh v. Murphy, 521 U. S. 320, 330. Pp. 5–6.
(b) The ADEA’s text does not authorize an alleged mixed-motives age discrimination claim. The ordinary meaning of the ADEA’s requirement that an employer took adverse action “because of” age is that age was the “reason” that the employer decided to act. See Hazen Paper Co. v. Biggins, 507 U. S. 604, 610. To establish a disparate-treatment claim under this plain language, a plaintiff must prove that age was the “but-for” cause of the employer’s adverse decision. See Bridge v. Phoenix Bond & Indemnity Co., 553 U. S. ___, ___. It follows that under §623(a)(1), the plaintiff retains the burden of persuasion to establish that “but-for” cause. This Court has previously held this to be the burden’s proper allocation in ADEA cases, see, e.g., Kentucky Retirement Systems v. EEOC, 554 U. S. ___, ___– ___, ___–___, and nothing in the statute’s text indicates that Congress has carved out an exception for a subset of ADEA cases. Where a statute is “silent on the allocation of the burden of persuasion,” “the ordinary default rule [is] that plaintiffs bear the risk of failing to prove their claims.” Schaffer v. Weast, 546 U. S. 49, 56. Hence, the burden of persuasion is the same in alleged mixed-motives cases as in any other ADEA disparate-treatment action. Pp. 7–9.
(c) This Court rejects petitioner’s contention that the proper interpretation of the ADEA is nonetheless controlled by Price Waterhouse, which initially established that the burden of persuasion shifted in alleged mixed-motives Title VII claims. It is far from clear that the Court would have the same approach were it to consider the question today in the first instance. Whatever Price Waterhouse’s deficiencies in retrospect, it has become evident in the years since that case was decided that its burden-shifting framework is difficult to apply. The problems associated with its application have eliminated any perceivable benefit to extending its framework to ADEA claims. Cf. Continental T. V., Inc. v. GTE Sylvania Inc., 433 U. S. 36, 47. Pp. 10–11.
This is pretty sweeping for age and probably disability cases, but at first glance, doesn't seem to affect Title VII.
Wednesday, June 17, 2009
It's been an interesting week or so on the LGBT front for the Obama administration. The Department of Justice filed this brief defending the Defense of Marriage Act (for a good discussion, see this post at Hunter of Justice), and the President by memorandum extended some employee benefits to same sex partners. It seems that the lack of progress in this area (and lack of fulfillment of campaign progress) is not lost on the President:
But this Presidential Memorandum is just a start. Unfortunately, my Administration is not authorized by existing Federal law to provide same-sex couples with the full range of benefits enjoyed by heterosexual married couples. That's why I stand by my long-standing commitment to work with Congress to repeal the so-called Defense of Marriage Act. It's discriminatory, it interferes with States' rights, and it's time we overturned it.
I am also proud to announce my support for an important piece of legislation introduced in both Houses of Congress last month -- the Domestic Partners Benefits and Obligations Act of 2009. This legislation will extend to the same-sex partners of Federal employees the same benefits already enjoyed by the opposite-sex spouses of Federal employees.
The Washington Post reports that the NFL has announced it will extend its Rooney Rule on hiring people of color to front-office hires.
From the article,
Under the new rule, any team seeking to hire a senior football operations official for its front office must interview at least one minority candidate.
"The discussion at the league meeting identified the strong reasons for taking this step, which in large part simply confirms a recommended practice that clubs have voluntarily embraced," Goodell said in a written statement released by the NFL. "The recommendation also recognizes that this process has worked well in the context of head coaches, and that clubs have deservedly received considerable positive recognition for their efforts in this respect."
The rule previously had required each club with a head coaching vacancy to interview at least one minority candidate.
For good background see Jeremi Duru's article, which appeared in the Virginia Sports and Entertainment Law Journal last Spring (here's the link on SSRN), and for more on how the rule significantly expanded diversity among head coaches, see this ESPN article by Greg Garber and this issue brief by the American Constitution Society.
Now if only there was a similar rule for women. But I'm getting ahead of myself.
The EEOC voted today to begin the process of revising its ADA regulations to conform to the ADA Amendments Act of 2008. The ADAAA makes it easier for an individual seeking protection under the ADA to establish that he or she has a disability as defined by the ADA.
The count is now 3-1 in favor of two-member NLRB decisions being valid, following the Second Circuit's recent ruling in support of those decisions in Snell Island SNF v. NLRB. As a reminder, the D.C. Circuit has held that such decisions are improper, while the First, Second, and Seventh Circuits have approved the decisions. My Internet access is spotty now, so I can't get into too much detail on the Second Circuit's holding, but it takes more of an administrative law angle. We've heard the pros and cons view on the law several times now. The Second Circuit acknowledged that both views are reasonable and then deferred to the NLRB's interpretation under Chevron. A sample:
In our view, [the Board's view] is a reasonable interpretation of the statute. Indeed, we commend the NLRB for its conscientious efforts to stay “open for business” in the face of vacancies that it did not create and for which it lacked the authority to fill. Of course, the D.C. Circuit’s view that where a Board loses its authority, so does its panels, see Laurel Baye Healthcare, 2009 U.S. App. LEXIS 9419, at *12, is also a reasonable interpretation of the Act. However, in applying Chevron deference, an agency’s “view governs if it is a reasonable interpretation of the statute—not necessarily the only possible interpretation, nor even the interpretation deemed most reasonable by the courts.” Entergy Corp. v. Riverkeeper, Inc., __ U.S. __, 129 S. Ct. 1498, 1505 (2009) (emphasis omitted). Accordingly, we hold that the NLRB panel in this case was a lawfully convened panel of three members. Because of the existence of a two-member quorum, the panel continued to operate in accordance with section 3(b) of the Act after one of its members ceased to serve on the Board and even though the Board itself lost a quorum.
This further supports the Board's decision to apply its nonacquiescence policy and makes the chance for Supreme Court review even higher. It may also show how the Court would come out. Justice Scalia, in particular, likes Chevron arguments and one could easily conclude that the two views are reasonable. What's less clear is whether the Court would hold that Chevron applies, as at times, they've been less willing to defer to agency pronouncements that are not the norm--that is, rather than the NLRB interpreting the substantive provisions of the NLRB, it is deciding its own power, which (I don't think) is necessarily a Chevron case. Hopefully, we'll have a chance to find out.
Hat Tip: Patrick Kavanaugh, Dennis Walsh, and others.
The National Law Journal reports that last Friday, a Wisconsin judge struck down Milwaukee's sick leave law, which had been enjoined before it could go into effect, as unconstitutional under rules for disclosure on ballot initiatives. The ordinance had provided that employers with 10 or more employees were required to provide paid sick leave to employees up to a maximum of 72 hours per employee per year. Employers with fewer than 10 employees were required to provide the benefit to employees up to a maximum of 40 hours per employee per year. The ordinance had contained an additional provision that made domestic abuse victims eligible for paid sick days for taking time off to seek shelter or pursue legal action. This provision didn't fit the single subject that the bill purported to cover in the judge's view, prompting him to make this statement that is rather puzzling to me, "The provisions regarding domestic violence and sexual assault are not rationally related to the ordinance's overall objective of protecting the public welfare, health, safety and prosperity of the city." Update: see the comment below for the context of the quote and the url for the decision
Most of the controversy about the bill had been the fact that it was a city ordinance rather than a state or federal law. From the article,
Milwaukee County Executive Scott Walker expressed similar sentiments.
"This is good news for everyone concerned about jobs in Milwaukee. Had the sick leave ordinance been implemented, it would have surely driven jobs out of the city. We can not afford to push jobs out of our community," Walker said in a statement.
Tuesday, June 16, 2009
The Arizona Supreme Court has just held that a spousal caregiver of an injured employee can be paid for caregiving services. Compensability, the court held, turns on the nature of the services, not on the identity of the provider. The case is Carbajal v. Industrial Comm'n of Arizona.
Hat tip: Ted McClure, Administrative Law Prof Blog.
The Supreme Court yesterday granted certiorari on whether an arbitral class action is permitted when the underlying arbitration agreement says nothing about class actions. The circuits are split on the issue. Though the issue arises here in an antitrust case, it is prevalent in employment cases also.
AnimalFeeds sued several shipping firms alleging antitrust violations. The case went to arbitration, and the parties stipulated that the arbitration panel would decide whether the arbitration agreement permitted the case to go forward as a class action. The arbitration panel ruled that it could. The shipping companies challenged the ruling in court, and the federal court for the S.D.N.Y. vacated, finding that the arbitration panel acted in manifest disregard of the law because the arbitration agreement said nothing about class actions. The Second Circuit reversed, and the Supreme Court now has granted cert. Stolt-Nielsen v. AnimalFeeds Int'l Corp., U.S., No. 08-1198, cert. granted 6/15/09).
I hope the Court will resolve the circuit split, and hold that a silent arbitration agreement does not preclude class actions. I think this is the correct outcome for three reasons:
- Class actions are not inherently inconsistent with arbitration. Reading a class-action prohibition into the FAA reads into the statute something that is not there.
- I doubt seriously that most employees understand that by agreeing to arbitration, they may be waiving their right to a class action. Preserving class actions in the face of contractual silence therefore best effectuates the intent of the parties.If the employer (who is also the stronger party and the drafter) wants to prohibit class actions, such a prohibition should be explicit (if it is allowed at all).
- There are strong policy reasons to allow employees to bring class actions. Class actions promote efficient and uniform resolution of claims. Some employment claims are negative-value claims, meaning that the employee’s potential award is small and the cost of asserting the claim is large. This may be especially true of some FLSA and FMLA claims. If employees are not permitted to aggregate their claims, they will not be able to assert their claims, and legitimate grievances will go unremedied. This would be inconsistent with the Supreme Court’s prescription that arbitration be an effective alternative to litigation.
Nonetheless, I think there's a serious risk that the Supreme Court will decide this case on much narrower grounds:
- The Court could hold, as in Bazzle, that the issue of whther an arbitration agreement permits class actions is always for the arbitrator to decide.
- The Court could hold that the parties in this case agreed to let the arbitration panel decide whether the arbitration agreement at issue here permits class actions.
- The Court could cite Hall Street for the proposition that the judicial review provisions in the FAA are exclusive, that "manifest disregard" is not a statutory review standard, and that the district court's reliance on this standard to vacate the arbitration panel's ruling therefore was misplaced.
Hat tip: Dennis Nolan.
- L. Camille Hebert (left), Transforming Transsexual and Transgender Rights, 15 William & Mary J. Women & L. 535 (2009).
- Daniel P. O'Gorman (right), Construing the National Labor Relations Act: The NLRB and Methods of Statutory Construction, 81 Temple L. Rev. 177 (2009).
- Katie Putnam, On Lilly Ledbetter's Liberty: Why Equal Pay for Equal Work Remains an Elusive Reality, 15 William & Mary J. Women & L. 685 (2009).
- Chad E. Kurtz, Adding Weight to the ADA: Why Anorexia Should Constitute a Disability and Thus Be Protected Under the Americans with Disabilities Act, 81 Temple L. Rev. 331 (2009).
- Adam P. Greenberg, Are Children Who Participate on Reality Television Shows Covered Under the Fair Labor Standards Act?, 82 S. Cal. L. Rev. 595 (2009).
Monday, June 15, 2009
Charlie Sullivan (Seton Hall) has just posted on SSRN his article Raising the Dead? The Lilly Ledbetter Fair Pay Act. Here's the abstract:
This Article analyzes the new statute, generally concluding that its most radical implications are, in fact, the correct interpretation of the law and that, so read, Congress acted well within its constitutional powers in making the Fair Pay Act retroactive. Ironically, the justices who read Title VII as it was originally enacted to impose a strict limitations period, an interpretation that triggered the Lilly Ledbetter Fair Pay Act override, will be compelled by their own approach to statutory interpretation to read the Act as it is written. The Article does recognize, however, that laches may limit the impact of the new statute – most obviously where the plaintiff was aware both of the adverse employment action at the time it was taken and of the probability that that action was discriminatory.
Photos are here
Video of Rep. Woolsey’s Opening Statement
Video of Rep. Grayson’s Testimony
Video of Rep. Delauro’s Testimony
Video of Debra Ness’ Testimony
Video of Sandra Poole’s Testimony
Video of Rajiv Bhatia’s Testimony
Video of Deborah Frett’s Tesitmony
And the press release is here
Lots of good stuff here.