August 20, 2010
Epstein Beats Dead Horse (EFCA)
Richard Epstein (Chicago) has just posted on SSRN his article One Bridge Too Far: Why the Employee Free Choice Act Has, and Should, Fail. Here's the abstract:
The Employer Free Choice Act has had enjoyed strong academic support. but thus far has been stymied by fierce political resistance to its central positions that first institute a card-check for the selection of a union and then requires mandatory arbitration if the parties cannot agree to a new contract within 130 days of union recognition. This article critiques the arguments made in support of this fundamental revision of labor law offered by Craig Becker, Benjamin Sachs, and Catherine Fisk & Adam Pulver, all of which purport to show that flaws in the current system of collective bargaining need major prounion adjustments. The key theoretical insight of the paper is that no ad hoc justifications for particular changes in the statute can be considered in isolation of the fundamental decision under the National Labor Relations Act to impose a system of mandatory collective bargaining. Once an employer may not refuse to bargain to a union, it must receive in exchange a broad number of offsetting rights, such as the ability to speak during organizing campaigns, and to reject in good faith those offers that it finds unacceptable, as current law provides. EFCA has failed because of the widespread political perception that it would usher in a new wave of union dominance that would destroy job opportunities and create major administrative burdens and political dislocations.
Epstein's conclusion comes as no surprise given his premise that "Higher rates of unionization mean fewer jobs, and lower levels of production."
The Most Dangerous Jobs
The BLS just came out with its annual occupational fatality/injury report (the NY Times Economix has a nice summary). The most dangerous job (re: fatalities)? Those in the fishing industry, followed by logging, airline pilots and flight engineers (which surprises me somewhat given improvements in flight safety), farmers/ranchers, roofers, and steelworkers. Not surprisingly, educators tied for the safest job--a good reminder that while students might get mad at us, they rarely try to off us.
August 19, 2010
Rick Hills, over at PrawfsBlawg, makes the argument against tenure as necessary for clearing the deadwood. He argues that, to protect professors' freedom of expression, tenure should be replaced with a burden-shifting framework:
[A discharged professor] would proffer something -- anything -- written or said within a year or so of dismissal that could remotely be regarded as controversial[; t]he employer would then bear the burden of showing that the dismissal was unrelated to the proffered writing or utterance.
It Comes with the Job -- Or not
An increasingly common problem for sexual harassment law is what might be called the “it comes with the job” situation – where the work entails some degree of harassment. Although Lyle v. Warner Bros. Television Prods., 132 P.3d 211 (Cal. 2006). applied a kind of BFOQ analysis to one variation – where the writers for Friends justified a pretty raunchy atmosphere as integral to creating a sexually-themed show -- the courts have generally refused to give employers a free pass in circumstances where the job entails some harassment.
The paradigm situation is prisons, and Beckford v. Dep’t of Corr., 605 F.3d 951 (11th Cir. 2010), is a good example. Consistent with Justice Scalia’s prissiness in Oncale, I won’t provide chapter and verse of the harassment the inmates heaped on the 14 plaintiffs, other than to say that it spanned the gamut of sexual epithets and was capped by “gunning,” which involved the prisoners masturbating and ejaculating directly at the women.
Needless to say, the plaintiffs’ internal complaints fell on deaf ears. Indeed, and quite remarkably, the “corrective” action included the warden’s establishing a “three minute rule,” that is, he allowed his female workers to refuse to help inmates who gunned for more than three minutes. The case went to trial, and the 14 plaintiffs were each awarded $45,000 in damages. The circuit court affirmed. Although incarceration may pose special challenges, the employer – as in all third party harassment – is not liable for the conduct itself but for failure to take reasonable steps to deal with it. As with other employers, prisons must act reasonably to safeguard their employees, whether the harassers are co-workers or prisoners. While prisons are limited in what they can do (for example, they obviously cannot eject inmates!), that does not excuse failure to use the tools available.
Beckford is consistent with other circuits’ holdings. E.g., Freitag v. Ayers, 468 F.3d 528 (9th Cir. 2006) (prison liable for inmate’s sexual harassment when it failed to take prompt and immediate corrective actions);
The blogosphere has not done well by Beckford, having often overstated the reach of the case. Writers have concluded that the court held all employers liable for all third party harassment. And then there’s a blogger, a former corrections officer, who criticized the outcome because gunning is simply part of the job and the women likely were given fair warning of the practice before they started to work.
In fact, prisons are an extreme version of third party harassers, both in terms of the egregiousness of the harassment that occurs and in terms of the ability of the employer to minimize it. But the problem has arisen in nursing homes (Pickett v. Sheridan Health Care Center, No. 09-3028, 2010 WL 2541186 (7th Cir. June 25, 2010)) and entertainment venues (Folkerson v. Circus Circus Enters., Inc., 107 F.3d 754 (9th Cir. 1997)). In all the settings, the principle is the same, although its application may vary: the employer must take reasonable steps to protect its employees.
Thanks to Caitlin Petry for her assistance with this.
Best Interview Advice
Corporette has an open thread on advice for job interviewees, and the advice is good. Readers: What are the best questions you use when you're interviewing for faculty positions? Any advice for applicants looking for faculty positions this year?
Hirsch on the NLRB's Appellate Performance
Our own Jeff Hirsch (Tennessee) just posted on SSRN his new article (forthcoming Florida Int'l L. Rev.) Defending the NLRB: Improving the Agency’s Success in the Federal Courts of Appeal. Here's the abstract:
Commentators have made innumerable recommendations to improve the National Labor Relations Board’s administration of the National Labor Relations Act. Yet one subject that has been largely ignored in these discussions is the fact that no matter how good the administrative enforcement of the NLRA is, or could be, it will mean very little if the NLRB cannot defend its decisions in the courts of appeals.
The stakes of this inquiry are high. Because the NLRB cannot enforce its own orders, any losing party can delay compliance with a Board order by seeking review before an appellate court. This delay itself can substantially undermine employees’ labor rights - particularly when a case involves representational issues, in which employees’ support for a union often diminishes as time passes. Yet the problems associated with delay are exacerbated if losing parties believe they have a good chance of winning before the courts. Although some parties may challenge a Board order no matter their chances, others may seriously weigh the costs and benefits of further litigation. For these parties, the prospect of reversing a Board order may lead to additional challenges, more delay, and ultimately an inability of employees to enjoy their labor rights.
This article addresses this issue by proposing several reforms intended to improve the Board’s success in the courts of appeals. These reforms include attempting to improve the format and substance of NLRB decisions, increasing the emphasis on the standard of review, considering limited types of forum shopping, increasing the use of rulemaking, reducing delay, and requesting more injunctive relief. None of these strategies, if enacted, would be a silver bullet that would solve all of the difficulties that the Board faces in court. In the aggregate, however, they could improve the Board’s standing in the eyes of federal appellate courts, thereby improving the Board’s long-term success. Moreover, a renewed focus on the need to win before the courts of appeals could enhance the Board’s success in the short term by improving some of its individual decisions, thereby making them better candidates for court enforcement.
August 18, 2010
Secunda & Lyon on Quon
Paul Secunda (Marquette) and Christine Lyon (Morrison & Foerster) are featured in the August 11, 2010 edition of CCH Labor Law Reports. Both weigh in on the workplace implications of City of Ontario v. Quon. Here's an excerpt:
Will Quon impact private employers? The case involved a public employer’s search of a public employee’s work-issued pager, but the Court’s holding may have implications that extend beyond public employment.... Analysis links reasonableness of search with private sector context. Even though Quon “punts” on the SWAT officer’s privacy expectation in his pager, the Court applies both the plurality’s test from O’Connor v Ortega, 480 US 709 (1987), as well as the concurring opinion from that same case by Justice Scalia, Secunda noted. “As parts of this analysis, the Quon Court determined, under Justice Scalia’s test from O’Connor, that the City had a legitimate reason for the search of Quon’s pager, and it was not excessively intrusive in light of the justifi cation because the search would be ‘regarded as reasonable and normal in the private-employer context,’” Secunda explained. “So because Justice Scalia’s approach explicitly connects the reasonableness of the Quon search as also being reasonable in the private sector, look for private sector employers to contend that Quon supports expansive private employer searches to retrieve work-related materials or to investigate violations of workplace rules by employees,” he predicted.
Popcorn Lung Verdict
We've been mentioning since 2007 (see here here here and here) the ongoing litigation and regulation over how employees manufacturing microwave popcorn are at risk for developing a severe lung disease from diacetyl. An early jury award is just in: a Cook County, IL jury awarded a man $30.4 million. Here are stories in the Chicago Daily Law Bulletin (subscription required) and the Joplin Globe.
Hat tip: Jason Bent (Penn State).
The Next Pension Crisis: Taft-Hartley Multiemployer Plans
Update: consistent with this post, this Global Pension article describes the jump in terminated multiemployer plans that the PBGC has had to deal with recently.
As many of you out there know, single employer ERISA plans do not constitute the entire universe of employer-provided benefit plans. Additionally, and importantly, union plans are referred to as multiemployer plans or Taft-Hartley plans and are regulated under some different rules, in particular Section 302(c)(5) of the Taft Hartley Amendments of 1947. Under these rules, union trust funds are established to provide employee benefits to union employees and the trustees of the plan are half appointed by the union and half by management.
Many are already aware of the funding issues that many single employer plans have had and also the funding issues surrounding public pension funds. Now, it looks like you can add a third coming pension crisis surrounding these multiemployer plans.
Long-time friend of the blog, Dennis Nolan, brought to my attention this post by The Lid on the underfunding of these multiemployer pension plans A taste:
Many multi-employer plans are struggling after years of financial hits especially after the last recession. Along with the value of the plans going down, as the boomer generation is reaching retirement age, every year the number of people tapping those retirement funds hits a new record.
A 2009 study from ratings firm Moody's Investors Service estimated that the country's largest multi-employer plans have long-term deficits of about $165 billion (108 plans).
According the Wall Street Journal, things are even worse than the Moody's report indicates. The number of union-run pension plans may be in the hundreds . . . .
While Congress is on vacation, union lobbyists are feverishly pushing for the federal government to bail out the troubled multi-employer pension plans via S.3157 The Create Jobs and Save Benefits Act of 2010.
The big problem with these plans is that when one company in the pool goes out of business, the other companies remain on the hook for the cost of the plan. These spiraling liabilities inspired Pennsylvania Senator . . . Bob Casey to introduce legislation to cordon off "orphaned" pensions—those for which an employer has stopped contributing or withdrawn from the plan—and drop them on the federal Pension Benefit Guaranty Corporation.
The federal agency, Pension Benefit Guaranty Corporation (PBGC), is already significantly underfunded and tax dollars are the "go to" place for more funding. The Casey bailout could dump as much as $165 billion in new liabilities on the PBGC.
The rest of the post by The Lid is much hyperventilating about how horrible Progressives spend tax money to provide promised pensions to employees. I understand the concern for the PGBC, which has been under a lot of financial stress without so many terminated plans, but it seems only fair to me that multiemployer plans are insured to a similar extent as single employer defined benefit plans.
The problem is that if this bill passes, Congress will have to think seriously of alternative ways to provide funding for the PGBC. I don't agree that this means necessarily depending on tax dollars as The Lid suggests. Alternatively, this might mean raising insurance premiums for employers with such plans, especially on those funds which are currently underfunded.
All this really just gets me back to first things: why does this country insist that employers are the primary means for providing private pension plans? In most other countries around the world, the government provides social insurance (like Social Security) and also provides other private pension savings plans. Rather than privatize social security as some have suggested (and I believe would be an even greater disaster), why not expand Social Security to provide an additional ability for individuals to save for retirement? The sooner we give up on this idea that employers are ideally suited to be in charge of employee pensions, the sooner we will solve what at the bottom ills are retirement security system.
Unpaid Toilet Leave
The Daily Mail Online reports:
Factory workers who claim their wages were docked every time they went to the toilet are taking their bosses to an employment tribunal. The Unite union said 86 employees at Dunbia in Sawley have raised complaints over the policy forcing staff to clock in and out to use the toilet, with money then being taken from their pay. The workers intend to claim for unlawful deduction, and claim the policy also means their hourly rate could fall below the legal minimum wage.
August 17, 2010
Apple Juice Strike
Steven Greenhouse's (New York Times) latest article looks at a strike at Mott's Williamson, NY apple juice plant. The interesting aspect of this strike is the degree to which the employer--Dr Pepper Snapple--has been pressing for wage and benefit cuts while being open about the fact that the company is profitable. In other words, rather than the typical argument from an employer that employee givebacks are needed to keep the company afloat, the employer here has argued that although the plant is doing well, the employees are being paid above-market compensation. Certainly not a message that will get the public on the employer's side, but if they're right and able to get enough replacement workers, then it might be enough to survive the strike (which has gone on for 90 days). Should be interesting to see how this plays out.
More Pressure on Becker
As we've reported, Craig Becker has already survived challenges to his refusal to recuse himself in NLRB cases involving only local chapters of the SEIU, without any involvement from the international union for which he worked. His decision was recently upheld by the NLRB's inspector general. However, new reports show that his opponents aren't going to let this drop (until, presumably, his recess appointment expires). This time, the National Right to Work Legal Defense Foundation is pressing the DOJ to investigate, with support from Rep. Issa, who has long been after Becker.
The RTWF cited a violation of Obama's ethics pledge to ask for a DOJ investigation, which seems to be a stretch, although I don't think it much matters. The aim seems more to continue to put pressure on Becker and ensure that he won't get confirmed than anything else.
Garcetti and Co-Workers
In Abcarian v. McDonald (7th Cir 08/13/2010), Ross explains:
Abcarian sued several co-workers under 42 USC Section 1983, asserting claims for 1st Amendment retaliation and violation of his federal due process and equal protection rights. The trial court dismissed his claims for "failure to state a claim" under Fed.R.Civ.P. 12(b)(6). The 7th Circuit affirmed.
The trial court concluded that Abcarian's 1st Amendment retaliation claim was foreclosed by Garcetti v. Ceballos, 547 US 410 (2006), because all of the speech that allegedly prompted retaliation was made in the course of Abcarian's official duties as a public employee. Abcarian argued on appeal that Garcetti didn't apply to his claim against co-workers. The court rejected that argument, concluding that Garcetti applies to claims against co-workers based on actions that directly advance the employer's interest in maintaining an orderly workplace. The court reasoned that under a contrary interpretation of Garcetti, "the employer would be immune from a retaliation claim but the co-worker would not, despite the fact that he acted only to further the employer's interests." The court explained that "[s]uch a rule would be at least as disruptive to workplace discipline as would a rule allowing retaliation suits against the employer itself - exactly contrary to Garcetti."
Of course, the entire reasoning of Garcetti is fallacious - this idea that somehow public employees stop being citizens when they don a public employee uniform. In any event, this further encroachment of the First Amendment rights of public employees illustrates the lengths that courts will go to implement Garcetti's absurd rule.
Sullivan on Pleading Discrimination Claims
The Supreme Court’s unanimous 2002 decision in Swierkiewicz v. Sorema N.A., which took a very permissive approach to pleading discrimination claims, may or may not remain good law after Ashcroft v. Iqbal. As is well known, Iqbal took a restrictive approach to pleading generally under the Federal Rules, and its application to employment discrimination cases could pose serious problems for plaintiffs attempting to get into federal court.... A respectable view is that Swierkiewicz remains good law although the commentators recognize legitimate questions about its continued vitality. This Article, while agreeing that there are readings of both Swierkiewicz and Iqbal that would permit this result, nevertheless explores the contrary possibility: supposing Iqbal sub silentio overrules Swierkiewicz and applies plausible pleading to discrimination claims, what must a plaintiff plead to avoid dismissal for failure to state a claim?
The most obvious response is that plaintiff should plead a prima facie case of discrimination under the traditional McDonnell Douglas Corp. v. Green standard. Although Swierkiewicz held that this was not necessary (in part because there are other ways of proving discrimination), it did not suggest that such pleading would not be sufficient. There are, however, complications with this approach that should be explored. Further, there are at least three alternatives for attorneys who cannot, consistent with Rule 11, allege such a prima facie case. First, the plaintiff might survive a 12(b)(6) motion by pleading “direct evidence” of discrimination.... Second, the article addresses the possibility of pleading the existence of a “comparator” whose more favorable treatment than plaintiff may make the claim of discrimination plausible.Third, and perhaps most radically, the article argues that plaintiffs should be able to take the Supreme Court at its word in Iqbal that, in deciding a motion to dismiss for failure to state a claim, a district court must take as true all facts (as opposed to legal conclusions) alleged in the complaint. It proposes that plaintiffs plead the existence of social science research showing the pervasiveness of discrimination. Taken as true, this body of literature may well nudge a particular claim across the border drawn by the Supreme Court between a “possible” claim and a “plausible” one.
Number 3 would kind of turn Iqbal on its head -- not a bad thing, in my book. I'm hoping, though, that the lower federal courts decide that Swierkiewicz is still good law unless and until the Supreme Court expressly overrules it.
Unknowing Waiver of a Judicial Forum
A recent, albeit nonprecedential, Sixth Circuit struck down the waiver of judicial forum in an employment arbitration agreement. Although plaintiffs in Alonso v. Huron Valley Ambulance, Inc., 2010 U.S. App. LEXIS 8592, (6th Cir. Apr. 26, 2010), had signed an application for employment which contained a notice of an internal grievance procedure and a six-month limitations period for any employment-related grievance, the provision was held not to preclude later suit. And that despite language that the internal Grievance Review Board would be the " 'exclusive' " forum for any employment disputes.
Despite this seemingly clear language, the Sixth Circuit held that the plaintiffs did not "knowingly and voluntarily waive their right to a judicial form when they were not informed of the alternative procedures until a month after" their employment started. Presumably, the waiver would have been effective had the details of the procedure been communicated to the plaintiffs when they signed the waiver. The problem, for the court, was the pig-in-the-poke nature of their agreement. Of course, Alonso did turn on the “knowing and voluntary” requirement for waivers, and other courts have rejected that standard for evaluating waivers. E.g., Caley v. Gulfstream Aero. Corp., 428 F.3d 1359, 1371 (11th Cir. 2005) (ordinary contract principles govern the enforceability of arbitration agreements, rather than the heightened " 'knowing and voluntary' " standard, even with regard to federal statutory claims involving a trial by jury).
The decision seems a step in the right direction, but, in addition to its nonprecedential status, its persuasive power may be limited by the extreme facts at play. While it is probably not uncommon that employees don’t get relevant documentation until after they sign away their rights, the Grievance Board's structure was very problematic to begin with – three of the members of the Board had to be managers!. Had the applicants agreed to arbitrate any claims, and the arbitration provision been the more usual resort to an independent body such as the AAA, it’s not so clear that the absence of knowledge would have been sufficient to invalidate.
In other words, the plaintiffs didn’t just buy a pig-in-a-poke – it was a pretty odd pig.
Thanks to Temi Kolarova
August 16, 2010
Blackberry Overtime Claim
A couple of years ago Jeff blogged about wage and hour lawsuits created by the wave of employer-issued Blackberry and other PDA devices. At the time, it seemed unlikely that we'd see many of these suits for two reasons: 1. most people who are issued a PDA by an employer tended to be professional or executive employees, exempt from the FLSA's overtime provisions; and 2. fear of retaliation would deter employees from complaining.
Indeed, it's taken a couple of years for a high-profile case to hit the press. Now, a Chicago police sergeant has brought a class action against the city seeking compensation for overtime connected with his Blackberry use. According to an NPR story on the case,
Chicago police Sgt. Jeffrey Allen argues his connection means the city of Chicago owes him lots of overtime. His attorney Paul Geiger says it's a simple case.
"What we are saying is he's using this mobile device at the behest of the Police Department very routinely and very often off duty and not being compensated for all the time spent on the device doing the city's work," Geiger says.
Allen is an hourly employee, and if what his attorney says about the circumstances is correct, the City is likely in for a big bill. This isn't the first case arising out of PDA use, but it may be the first public sector case. It's a good reminder for employers who don't want to pay overtime to caution non-exempt employees not to use the PDA they are issued when they are off duty.
Hat tip: David Yamada
And employers might want to get away from issuing PDAs entirely in any event to maximize the quality of work employees can perform. The New York Times has this really interesting story about a group of neuroscientists who took a trip that would leave them unconnected from technology for a week, in part to understand how heavy use of digital devices changes how we think and behave, and how a retreat into nature might reverse those effects.
Automatic IRA Bill
Over the years, Congress has improved incentives for employer-based retirement and pension plans by providing more flexibility, increasing the limits, and lessening the administrative burdens. Still, about one in four employees who have access to these successful retirement vehicles do not take advantage of them.
What is a much more difficult group to reach, though, are the estimated 75 million workers who do not have access to these employer-based plans. GAO estimates that half the private sector workforce has no access to an employer-provided retirement plan. That is why today, we are filing legislation to create automatic payroll deposit Individual Retirement Accounts, or Auto IRA’s, for workers who do not have access to employer-provided qualified pension plans. Our bill would require employers to automatically enroll employees in an Auto IRA unless the employee opts out. These are “set it and forget it” payroll deposit accounts. Recent research from Fidelity showed that only one in ten workers eligible for automatic enrollment in employer-provided plans proactively opted out of the plan. The non-partisan Retirement Security Project has estimated that the Auto IRA proposal could raise net national savings by nearly $8 billion annually.
This is especially important for younger and low-income workers, as GAO projects that under current law, 37% of all workers will retire with zero plan savings, and of young and low-income workers, 63% will have no plan savings at retirement. According to a “retirement ready” study from the Employee Benefit Research Institute (EBRI) released last month, 64% of workers earning less than $30,000 a year will run out of money within 10 years of retirement. And this problem exists even among large employers with qualified plans. A recent study by Hewitt projecting the retirement needs of 2.1 million employees of 84 large employers finds that the baseline case for full-career contributing employees will only meet about 85% of their predicted retirement needs at age 65.
We are, of course, sensitive to any increased burden on small businesses, so the bill provides for a temporary tax credit for employers with less than 100 employees in order to offset the up-front administrative cost of establishing this program. Only employers with at least 10 employees, which have been in business for at least two years, would be covered by the bill.
Love the idea, as lower income workers are usually do not participate in 401K plans. This mechanism would both increase personal savings and retirement security. I also hope the tax incentive gets smaller employers involved in the program.
Recently Published Scholarship
- Leslie Larkin Cooney, Employee Fiduciary Duties: One Size Does Not Fit All, 79 Mississippi L.J. 853 (2010).
- Mark Firman (photo above), Protection for Private Pension Plans: What Canada Can Learn from the U.S. Employee Retirement Income Security Act, 67 U. Toronto Fac. L. Rev. 201 (2009).
Banks on Trade Agreements and Labor Law
Kevin Banks (Queen's Univ.) has just posted on SSRN his article Trade, Labor and International Governance – An Inquiry into the Potential Effectiveness of the New International Labor Law. Here's the abstract:
Globalization has led states and civil society groups to seek new and more effective governance in international labor law. The United States and Canada have each concluded a path-breaking, controversial and still-evolving series of international trade-related labor agreements with their trading partners. These agreements, and ongoing critiques that continue to influence their development, have been shaped by a particular model of governance. That model seeks, in the interests of effectiveness, a set of sharply defined rules and court-like adjudication processes directly linked to economic sanctions. The potential effectiveness of this governance model has received no systematic evaluation. This article undertakes the first such assessment. Drawing on game theory, it first sets out a stylized picture of the likely interests of industrialized and developing economy states in international labor standards. It then assesses, in the light of international relations theory and empirical research into the effectiveness of international labor law and analogous regimes, the potential capacity of competing models of governance to exert required international influence. It examines in a similar manner the particular challenges for international governance posed by the political, policy and administrative complexity of raising labor standards through the necessary sustained state interventions. It concludes that the new international trade and labor agreements offer important potential gains in effectiveness for international labor law. However, in their present form these agreements are unlikely to lead to widespread improvements in respect for even the most fundamental of labor standards. This is because they rely too heavily on a complaints adjudication model of governance. The influence of adjudication is likely to be too episodic, too uninformed, too lacking in strategic focus, too divisive and too easily contained to handle the problem of raising labor standards on its own, or even as the principal strategy within a more complete toolkit of approaches. The paper then points towards an alternative and more promising approach described as Leveraged Deliberative Cooperation, grounded in New Governance theory and experience under the United States Cambodia Textiles Agreement.
Though I am not by any stretch an expert in trade agreements, the points he makes about the role of the Labor Arbitration Council in Cambodia are dead-on consistent with my own observations.