December 10, 2010
The other employment argument at the Supreme Court this week
In addition to Thompson v. North American Stainless, there was a second argument at the Supreme Court this week that related to worklaw: Chamber of Commerce v. Whiting. Whiting involves that "other" Arizona law, the one that penalizes employers that employ workers not authorized to work in the United States. The law allows the state to revoke any license, charter, or permit that allows the business to operate in the state, and it requires employers to participate in the federal government's E-verify system to receive any state grant, loan, or other incentive.
An unusual coalition of plaintiffs including the U.S. Chamber of Commerce and several labor and civil rights groups, brought a federal action seeking to enjoin the enforcement of this law, arguing that it was preempted by federal immigration law. The district court held that the Arizona law was neither expressly nor impliedly preempted. It was not expressly preempted because it was a licensing law, and federal immigration laws do not preempt state licensing laws. It was not impliedly preempted because even though federal law made use of the E-Verify system only optional, it did not expressly prohibit states from making its use mandatory. The Ninth Circuit affirmed.
From questions and comments, it appeared that only one of the eight Justices was a bit uncertain about how to react to the Arizona law — Anthony M. Kennedy. What Kennedy said overall, though, seemed to suggest that he was more skeptical than not of the law’s validity. From what others said, however, Arizona may well win, one way or another.
Were Kennedy to vote to uphold the law, despite apparent reservations, the result probably would be a 5-3 win for Arizona. But if he voted to strike down the law, there seemed likely to be only three other votes to go with his, making the vote 4-4 — but Arizona still would win, because such a split vote would summarily affirm a Ninth Circuit Court decision that upheld the state’s worker control law. Evenly divided results, however, do not set a precedent beyond the individual case, so the result in the future, if all nine Justices took part, might well come out differently: Justice Kagan’s vote could be the swing vote. And other test cases are on the way — including one involving an even broader Arizona anti-immigration law, and a set of alien restrictions adopted by the local government in Hazleton, Pa.
Justice Scalia seemed very annoyed with what he perceived to be the federal government's failure to enforce the immigration law. Most of the other justices seemed concerned about whether the Arizona law really simply mirrored federal law or added a new requirement, with some believing the former, and others the latter.
Justice Breyer came closest to actually asking why the states didn't have to defer to the enforcement balance struck by the executive branch and not challenged to date by Congress. He asked about the balance struck by federal law between deterring discrimination on the basis of national origin, race, or ethnic group on the one hand, and the rules on entry into the country on the other. It seems there is another potential argument lurking there, too. The executive branch and Congress seem to have the primary constitutional authority to decide what our policy toward immigration should be, and part of that policy might be actions that are perceived as underenforcement by some. Perhaps that's too controversial for any of the parties to make, though.
For more information as we anticipate the decision, check out the filings at Scotusblog's case file.
McCormick on the Wal-Mart Class Action
Congratulations to Marcia McCormick, who spoke at LegalTalkNetwork about The Supreme Court and the Walmart Gender Discrimination Class-Action. Marcia's talk is described below. Her entire talk is available by podcast.
A lawsuit on behalf of 500,000 women employees against Walmart is under review by the Supreme Court to decide whether it can proceed as a class action. Guest host Attorney Marsha Kazarosian welcomes Professor Marcia L. McCormick, from Saint Louis University School of Law and co-editor and contributor to the Workplace Prof Blog, to discuss the largest employment discrimination case in U.S. history. They take a look at the alleged gender discrimination at Walmart, the criteria for the Supreme Court to decide on this class action issue and the impact this case could have on employment law and discrimination within companies.
NBA Union Proposal
Negotiations have been heating up between the NBA and the players union. The NBA has proposed a vast overhaul of the NBA's payment system, while the union is seeking more modest changes. How this shakes out and whether it will involve a work stoppage after the July 1 expiration of the current CBA remains to be seen. According to the NY Times, the union's proposals include:
- -An offer to reduce the players’ guarantee of 57 percent of revenue
- -Enhanced trade and signing flexibility
- -Reduce the age limit to 18.
- -Make restricted free agency less onerous.
- -Increased revenue-sharing among the owners.
- -A neutral review of on-court discipline.
- -Increased pension benefits.
As an aside, the union informed the players of its proposal via podcast--a true sign of the times.
December 7, 2010
NLRB Upholds Dana Corp. Voluntary Recognition Agreement
Dana Corp. is back in the news yet again. This time because of a challenge to an agreement between the employer and the UAW under which the employer agreed to voluntary recognize the union if a majority of employees signed authorization cards. In Dana Corp., the Board, as it has done several times before for such agreements, concluded that the procedures did not violate Section 8(b)(1)(A). According to the NLRB's press release:
The National Labor Relations Board, in a 2-1 decision, found that an auto parts manufacturer and the United Auto Workers union did not violate labor law by agreeing to ground rules by which the union would be recognized if a majority of employees signed cards in favor of it, and by creating a framework for any future collective bargaining agreements. . . .
Today’s Board decision stemmed from an attempt by the UAW to organize about 300 employees at a Dana plant in St. Johns, Michigan. As called for in the agreement, the union began the process by requesting a list of employee addresses from Dana. Three employees filed unfair labor practice charges with the regional NLRB office in Detroit, claiming that the pre-recognition agreement violated a section of labor law that prohibits employers from providing certain kinds of support to unions or creating their own company unions.
In their majority opinion, Chairman Wilma Liebman and Member Mark Pearce agreed with ALJ Kocol that the agreement was lawful. “The Board and courts have long recognized that various types of agreements and understandings between employers and unrecognized unions fall within the framework of permissible cooperation,” they wrote. That is not to say that every pre-recognition agreement is lawful, they added. “Each case, rather, will depend upon its own facts.”
Dissenting, Member Brian Hayes said the agreement between Dana and the UAW was factually and legally similar to an earlier case (Majestic Weaving Co., 147 NLRB 859, (1964)), in which the employer and union were found to have acted unlawfully. “My colleagues’ approach threatens to reinstate the very practice that those statutory provisions were meant to prohibit, i.e., the establishment of collective-bargaining relationships based on self-interested union-employer agreements that preempt employee choice and input as to their representation and desired terms and conditions of employment.”
The irony is that the UAW never got a majority of cards, but I guess the ruling means that it can still hope.
Supreme Court Hears Oral Argument in Third-Party Retaliation Case
This is a rather busy posting day for the 'ol Workplace Prof Blog. I continue with yet another important labor and employment law development today and that is the U.S. Supreme Court oral argument in a third-party retaliation case under Title VII of the Civil Rights Act of 1964. Here is the oral argument transcript.
You may recall that Thompson v. North American Stainless involves:
employee, Eric Thompson, who was allegedly fired because his then-fiancée, Miriam Regalado, had filed a charge of sex discrimination with the EEOC over the actions of their shared employer. In a fractured en banc decision, the Sixth Circuit Court of Appeals held that Thompson did not have a retaliation claim under § 704(a) of Title VII.
Arguing for the appellant, Mr. Thompson, Eric Schnapper (Washington Law) argued in front of the Supreme Court that Thompson should have a claim as an "aggrieved person" under 706(f) even though he did not oppose an unlawful employment practice or participate in a hearing or proceeding under Title VII under Section 704(a). When asked by Justice Alito how closely individuals must be related, Schnapper maintained that the appropriate test is in the Burlington Northern decision: whether a reasonable person would be dissuaded from filing a claim under the law. So, if you fire my spouse or fiancee that would dissuade me, but not if you might fire a rather distant acquaintance of mine. Schnapper was supported by the SG's office in this appeal. This is also the position long maintained by the EEOC.
The attorney for the company maintained that such association retaliation claims are not provided for in the text of Title VII and said the decision of the en banc 6th Circuit Court of Appeals should be affirmed. She also argued the slippery slope saying allowing such a claim would make employers keep track of various types of relationships throughout their workplace.
I have to say that this might be another one of those retaliation cases where this conservative-leaning Supreme Court has consistently, and remarkably, come out in favor of the plaintiff. I am not sure that Justice Alito, the lone dissenter in Burlington Northern will be on board, but Eric Schnapper outlined a textualist argument that might just appeal to the other normally pro-employer Justices.
Going out on a limb, I predict 8-1 in favor of the plaintiff.
Resisting the "Allure of Congruity"
The New Jersey Supreme Court just issued an opinion which, by a somewhat different route, reaches the same result as the Lilly Ledbetter Fair Pay Act for state law claims under NJ's Law Against Discrimination. Alexander v. Seton Hall University was brought by three female professors claiming age and sex discrimination in compensation. Since I'm employed by the University and have written about the Lilly Ledbetter Act, it's important to stress that I had nothing to do with the case, on either side of the dispute!
The plaintiffs claimed that they were the victims of discrimination in salary at the time of their hires, which had occurred twenty or thirty years before they filed their complaint. They also claimed, however, that the initial discrimination had continued to influence their salaries the entire time. The salary discrepancies apparently came to light as the result of a University 2004-05 study showing higher salaries being paid to younger professors and to male professors. For example, one plaintiff was earning $50,000 less than two younger (female) professors with far less service.
New Jersey has a two year statute of limitations for LAD claims, and the NJ Supreme Court ultimately held that the plaintiffs could recover for any discriminatory pay received during that period. Essentially, it adopted a paycheck rule. In the process, it rejected what it called plaintiffs' "sea change" argument that the discrimination in pay was a continuing violation such that they could recover all compensation ever lost (in much the same way a sexual harassment plaintiff can recover for any act of harassment that is part of a contaminated environment that continues into Title VII's charge-filing period).
What was more interesting to me than the result was the Supreme Court's approach to the relationship of state and federal law. To hold the way it did, Alexander had to also reject the lower court's application of Ledbetter v. Goodyear Tire, which would have held actionable only "fresh" acts of discrimination that occurred during that period:
The courts below succumbed to the draw of aligning our LAD jurisprudence to that which was developing under federal law for wage discrimination claims, We do not see the allure of that congruity....
Now, it's not like NJ doesn't succumb to the lure of congruity often, certainly in meshing LAD with Title VII, For example, the Court essentially adopted for LAD purposes the Morgan continuing violation doctrine under Title VII, although it has departed from Title VII with respect to the Faragher/Ellerth scheme of employer liability for sexual harassment.
The overarching question is why the state and federal laws should align in the first place. Alex Long addressed this question a few years ago in a piece at 40 Ga. L. Rev. 469, which is well worth reading.
To frame the question anew, however, the respective statutes were enacted (or amended) by a different sovereign at different times using different language and reflecting (somewhat) different policy goals. LAD, in fact, antedated Title VII by two decades. While certain obvious differences between various state and federal laws (coverage for example) are routinely recognized, state courts,not merely in NJ, seem to have a sense that the federal courts know better about discrimination. That's far from clear to me.
Further, it's far from clear that the federal and various state court systems are even approaching the task of statutory interpretation in a similar manner. If, in fact, state courts take, say, a nontextualist approach to state law interpretation, why should they defer to federal courts taking a textualist approach to an entirely different statute? At this point, I'd like to give a hat tip to Abbe Gluck's terrific work on state statutory interpretation methodology and its possible significance in federal courts adjudicating state claims, work which sheds new light of the desirability of congruity.
There are, I am sure, a number or responses to this point. The most obvious is that the state courts are not exactly deferring, but rather simply looking to federal authority as persuasive precedent. This, of course, raises the question of why construction of a different statute should be (very) persuasive. The second argument is that there's some value to the employers of the world in having a unified regulatory regime; I concede the point, but question whether it should have any influence in any but the closest of cases.
In any event, I wonder if the academy is not partially responsible. By and large, we have left state law to its own devices (and to student notes), which means that almost any analysis of a particular question is likely to focus primarily, if not exclusively, on the federal level. It's surely understandable why. But, given the repeated disappointments employment discrimination scholars have faced in having their views accepted by the federal courts, maybe a shift in focus might be worth considering -- even if, unlike New Jersey, many state courts systems have a more explicitly political bent due to judicial elections....
Feuer on QDROs and Top-Hat, Excess Benefit, and Bonus Plans
Albert Feuer has just posted on SSRN his article, "The Effects of Marital Property Rights, Alimony, Child Support, and Domestic Relations Orders on Top-Hat Plans, Excess Benefit Plans, and Bonus Plans," which will be published in the Compensation Planning Journal. The abstract:
Bonus plans and unfunded excess benefit plans must generally follow domestic relations orders, i.e., those state orders relating to child support, alimony payments or marital property rights. Top-Hat Plans are unfunded pension plans maintained primarily to provide a select group of management or highly compensated employees with deferred compensation. These plans, other than unfunded excess benefit plans, generally need not follow state domestic relations orders unless the plan terms require such deference. However, under certain circumstances Top-Hat Plans may have to follow spousal disclaimers in such orders and those orders that “satisfy the requirements” of a Qualified Domestic Relations Order (a “QDRO”).
Sponsors of Top-Hat Plans, other than unfunded excess benefit plans, generally decide the degree, if any, of plan deference to state domestic relations orders. Sponsors of a Top-Hat Plan (including unfunded excess benefit plans) or of a bonus plan decide the extent, if any, to which a domestic relations order, that does not address such plan’s benefits, affects the plan’s benefits, such as the effectiveness of a participant’s death benefit designation of a former spouse.
Administrators of Top-Hat Plans (other than unfunded excess benefit plans) who make benefit payments contrary to the plan terms (which may require deference to a QDRO or to a disclaimer in a domestic relations order) may, like all ERISA plan administrators, be liable to make double payments – the one to the wrong person and the one to the correct person – and possibly have to pay the attorney fees of the person entitled to such payment.
Recently Published Scholarship
- Paul M. Secunda, Cultural Cognition at Work, 38 Florida St. U. L. Rev. 107 (2010).
- Alan Hyde, Labor Arbitration of Discrimination Claims After 14 Penn Plaza v. Pyett: Letting Discrimination Defendants Decide Whether Plaintiffs May Sue Them, 25 Ohio St. J. Disp. Resol. 975 (2010).
- Howard L. Brown & Hon. Raymond D. Austin, The 25th Anniversary of the Navajo Preference in Employment Act: A Quarter-Century of Evolution, Interpretation, and Application of the Navajo Nation's Employment Preference Laws, 40 New Mexico L. Rev. 17 (2010).
- Keith S. Blair, Better Disabled than Devout? Why Title VII Has Failed to Provide Adequate Accommodations Against Workplace Regligious Discrimination, 63 Arkansas L. Rev. 515 (2010).
- Deborah J. Anthony, The Hidden Harms of the Family and Medical Leave Act: Gender-Neutral Versus Gender-Equal, 16 Am. U. J. Gender, Social Pol'y, & L. 459 (2008!).
Seiner on Plausibility Pleading and the Affirmative Defense
Joe Seiner (South Carolina) sends us this timely guest post:
By now we have all seen the dramatic impact the Twombly and Iqbal plausibility standard has had on employment discrimination cases. This new pleading standard requires that all civil plaintiffs set forth enough facts in the complaint to give rise to a plausible claim to relief. Many of us have already written on the potential implications of these decisions for workplace litigants. For those unfamiliar with this excellent work, I would particularly recommend the recent pieces of Professors Charles Sullivan and Suja Thomas, which are available here and here.
A new issue has recently surfaced on this front which has not yet been addressed – whether the Court’s plausibility standard similarly applies to a defendant’s affirmative defenses. The lower courts are already in conflict on this issue, and the question has substantial significance for employment discrimination plaintiffs. Thus, for example, must a defendant plead enough facts to plausibly allege a direct threat defense under the Americans with Disabilities Act? Similarly, what must a defendant allege to properly assert the good faith defense to a Title VII punitive damages claim?
In my view, there is little reason not to apply the plausibility standard to a defendant’s answer. Indeed, the same policy rationales and practical considerations discussed in Twombly and Iqbal in the context of the complaint would apply equally to a defendant’s responsive pleadings. But there is certainly room for debate. And those courts which have already weighed in on both sides of this question have applied varying rationales. My early attempt to broadly explore this issue for all civil defendants is available here. By way of example, this piece uses the affirmative defense to hostile work environment claims to help explain how the plausibility standard should apply to defendants. I invite and welcome your comments on this draft.
While these pleading questions are largely considered within the world of civil procedure professors, those of us working with employment issues should not overlook the importance of this topic. This is particularly true given the difficulty many employment discrimination plaintiffs face when pursuing federal court claims. Stay tuned as we see what the appellate courts – and perhaps the Supreme Court – ultimately decide on this question.
December 6, 2010
Percent Job Losses in Post-WWII Recessions
From Calculated Risk, this graph "shows the job losses from the start of the employment recession, in percentage terms aligned at maximum job losses. For the current employment recession, employment peaked in December 2007, and this recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse)."
The current recession is in red.
Hat tip: Carol Furnish.
Recently Published Scholarship
- David J. Doorey, In Defense of Transnational Domestic Labor Regulation, 43 Vanderbilt J. Transnat. L. 953 (2010).
- Jessica Knouse, Restructuring the Labor Market to Democratize the Public Forum, 39 Stetson L. Rev. 715 (2010).
- Nicole Buonocore Porter, Synergistic Solutions: An Integrated Approach to Solving the Caregiver Conundrum for "Real" Workers, 39 Stetson L. Rev. 777 (2010).
- Katherine Francys Lambrose, Getting Back to Sex: The Need to Refine Current Anti-Discrimination Statutes to Include All Sexual Minorities, 39 Stetson L. Rev. 925 (2010).
- Jeffrey Douglas Jones, Enfeebling the ADA: The ADA Amendments Act of 2008, 62 Okla. L. Rev. (2010).
- Sandra Sperino, The New Calculus of Punitive Damages for Employment Discrimination Cases, 62 Okla. L. Rev. (2010).
Supreme Court Grants Cert. on Dukes v. Wal-Mart
We'll soon have to cite this case as Wal-Mart v. Dukes, because the Supreme Court just granted cert. to review the largest employment discrimination class action in history. As readers are aware, the issues at this point are not whether discrimination occurred, but whether there is a proper class. The questions granted by the Court, according to Scotusblog, are:
The first question will be whether, under Federal court Rule 23, a lawsuit may seek a money verdict — in this case, a claim for back pay — when the class was created under a provision that limits remedies to corrective court orders, not money. Besides agreeing to hear that, the Court told the parties to file briefs and prepare to argue on a second question — whether the class was a proper one, under Rule 23, when it was cleared to go forward under Rule 23(b)(2). A negative answer to the second issue might still leave open the possibility of a class case under a different part of Rule 23, part (b)(3) that does allow money claims.
As I noted earlier, I predict a reversal of the Ninth Circuit's grant of the class in Dukes. The questions presented makes the outcome possibly more nuanced, although I still doubt that the Court is going to allow any type of class this big. Stay tuned.