Thursday, July 19, 2018
Ann Hopkins, of Price Waterhouse v. Hopkins fame, has passed away. You can see the NY Times obituary on her here. Especially in the current #MeToo movement, it's important to remember the major impact that her case has had on sex discrimination in the workplace.
The Executive Committee of the AALS Labor Relations and Employment Law Section is seeking abstracts as part of a Call for Papers to be presented at the 2019 Annual Meeting program in New Orleans. The program, titled Increasing Tension: Labor and Employment Law Protections and Religious Accommodations, will take place on Friday, January 4, 2019, from 10:30 am to 12:15 pm, and it is co-sponsored by the AALS Employment Discrimination Law and Law and Religion Sections. This program will follow the Labor Relations and Employment Law and Employment Discrimination Sections breakfast held from 7:00 a.m. to 8:30 that morning.
This program will focus on the increasing tension between workplace and antidiscrimination laws and religious freedom. Panelists will explore the challenges presented by this tension when religious exemptions from workplace and antidiscrimination laws are provided to religious organizations, employers with deeply held religious beliefs, and individual employees. A panel of leading labor and employment law and law and religion scholars will address that issue from varying perspectives, including constitutional law (religious freedom and/or compelled speech and association in the workplace), traditional labor law (NLRB’s jurisdiction over religiously affiliated employers and the impact on employee organizing drives), and employment discrimination law.
We are seeking an additional speaker or speakers who will present on a relevant topic, and we particularly encourage new voices to submit a paper abstract. To be considered as an additional speaker, please submit an abstract of no more than 400 words and a resume to Section Chair, Joseph Mastrosimone, at firstname.lastname@example.org by Friday, September 17, 2018. The Executive Committee of the Section will decide on the additional speaker(s). Any selected speaker(s) will be responsible for his/her registration fee as well as hotel and travel expenses related to speaking at the program on January 4, 2019.
That didn't take long. A week after Janus came down, the Purple Communications firm is trying to use the decision (as well as Becerra) to overturn the NLRB's rule in Purple Communications that permits employees in some instances to use employer e-mail for NLRA-related communications. This argument reflects part of Member Johnson's dissent in Purple Communications.
As I've written previously, I think the argument that it violates the First Amendment to allow employees to communicate about labor matters through employer email is ridiculous. The best rejoinder to this argument was the majority's analogy in Purple Communications that no one would think that a message sent via gmail represents the views of Google. And I see nothing in Janus or Becerra that suggests otherwise. The closest related claim to pass the smell test is the idea that requiring an employer to allow speech hostile to the employer on its own e-mail system is improper. I say it's close to passing the smell test because one can see how an employer would see that as unfair. But that doesn't mean there's any legal basis for the argument. The Court has required employers to let employees use their property for hostile speech for decades (think Republic Aviation) without any constitutional or statutory issues. That said, I guess we can't totally count this argument out given how the Court has been treating labor issues lately.
Hat Tip: Charlotte Garden
Monday, July 16, 2018
Tenure-Track Assistant or Associate Professor Position in Conflict Resolution
The ILR School at Cornell University invites applications for a tenure-track faculty position in the area of conflict/dispute resolution at either the Assistant Professor or Associate Professor level, to begin August 2019. Applicants should have research and teaching interests related to topics such as arbitration, mediation, negotiation, conflict management, dispute resolution, collective action, and social movements. We are open to scholars using qualitative, quantitative, legal, and mixed methods, and studying conflict at various levels of analysis including societal, organizational, group, or individual. Applicants should have a doctorate (PhD or JD) in a relevant field, such as industrial relations, organizational behavior, law, psychology, sociology, or management. A successful candidate’s appointment will be in either the Department of Labor Relations, Law, and History or the Department of Organizational Behavior. Faculty in these departments publish in top-tier journals in their field, such as ILR Review, Industrial Relations, Administrative Science Quarterly, Academy of Management Journal, American Journal of Sociology, American Sociological Review, Journal of Personality and Social Psychology, Psychological Science, Journal of Experimental Social Psychology, Journal of Empirical Legal Studies, and in major law reviews. Evidence of very strong research and teaching potential is essential. Review of applications will begin October 1, 2018. Questions about this position can be directed to Professor Alex Colvin (email@example.com), Professor Harry Katz (firstname.lastname@example.org), Professor Marya Besharov (email@example.com), Professor Pam Tolbert (firstname.lastname@example.org), or Professor Kate Griffith (email@example.com).
Lost in the shuffle of the latter part of the Supreme Court's term this year was Lucia v. SEC. In that case, the Court held that ALJs are "Officers of the United States" that must be appointed by the president or agency heads. In response, the Administration recently issued an executive order requiring ALJs to be hired by the respective agencies, rather than a central pool maintained by OPM. Although some fear that this will inject more politics into ALJ selection, it seems like an obvious move after Lucia.
It's unclear the extent to which this affects workplace agencies. For instance, my understanding is that the NLRB already follows a hiring procedure that would pass muster under Lucia. I believe the case is similar from safety ALJs, like those under MSHA and OSHA. Indeed, it's not a certainty that Lucia would apply to all of these ALJs, as that holding was limited to ALJs who carry out important duties with significant discretion (although my sense is that they would meet this threshold).
This all may be a nothing-burger, but it's worth keeping an eye on.
Wednesday, June 27, 2018
The Supreme Court has just released its decision in Janus v. AFSCME. I’m not typically the best predictor of what the Court will do, but even I had this one called from the moment Justice Gorsuch was confirmed. The Court, in a 5-4 decision by Justice Alito, overruled its own Abood decision to hold that public-sector union fees are unconstitutional. I won’t repeat how we got to this point (although you can start at my earlier post on the Janus oral argument, which has links on the aborted Friedrichs case, as well as our coverage of 2014’s Harris v. Quinn, in which Alito made clear where he wanted to go on this issue), but the upshot is that public-sector unions nationwide must now operate on an opt-in basis for all union contributions—even contributions that go to core collective-representation services. In other words, the free rider issue that exists for the private sector in right-to-work states now exists for all public-sector workplaces.
The basis for the decision is that dissenting employees’ have a 1stAmendment right not to pay any funds to the union representing them—even for collective bargaining and other work that goes to the benefit of all unit employees. This follows the dicta in Harris, but is a clear departure from the Court’s public-sector employment jurisprudence, which does not look favorably on individual employees' 1st Amendment claims. In particular, if this case didn’t involve unions, you would expect the Court to hold that concerns about dues paid to a third party are not matters of public concern. This result, to my mind, is the culmination of several related factors: in addition to the strong pro-business bent of this Court, we’ve seen public-sector unions becoming more powerful than their private-sector counterparts, while also becoming strongly aligned with one political party. This has occurred during a period of time in which political antagonism is on the rise and we’ve more jurists appear willing to join that battle. As a result, unions as a whole, but public-sector ones in particular, have been targeted both politically and legally. And they just took a massive loss at the Court today.
Janus, of course, is not the end (although some unions may feel like it right now). Here are some questions I have after the decision—please add more (or responses) in the comments:
- Will courts try to apply Janus to the private sector? There has been some loose language by the Court in the past that raises the possibility that court enforcement of union fee agreements is enough for state action, particularly in more highly regulated areas. The Court since then has been moving towards a more narrow interpretation of state action, but as Janus shows, that doesn't mean they won't make an exception when unions are involved. Indeed, in Janus, the Court stated that the line between chargeable and uncharitable expenses is "unworkable" (it's certainly difficult at times, but this seems a stretch). On the other hand, in its defense of overruling Abood, the Court in Janus stressed the difference between public- and private-sector collective bargaining and footnote 24 the Court described this state action argument as "more questionable" now then when Abood was decided. This could be considered a minor win for unions. See Joe Slater’s helpful article on this topic in which he argues persuasively that this holding should not apply to the private sector.
- Is this the beginning of the end for exclusivity? Up to now, American labor law has been built on the notion that unions act as the exclusive representative of all employees in a unit. I predict (see warning above) that Janus will usher in more challenges to exclusivity. This may include unions being more willing to explore members-only representation, as well as the NLRB at some point addressing whether the NLRA requires employers to bargain with minority unions. For instance, a bill has already been introduced in NY that would allow unions to decline to represent non-member employees for grievances and other matters, while also allowing them to provide insurance and other benefits only to members; other states (California and NJ) have recently enacted and/or are working on other pro-union measures. One limit to this, however, is that in Janus, the Court seemed to double-down on the notion that unions and public-sector employers cannot agreed to contracts that treat nonmember employees worse. That doesn't preclude members-only unionism, but it does serve as a reminder that there would be limitations to such representation.
- Related to the exclusivity issue--is this also the end of fair representation? Even before the Janus decision was announced, unions filed suit in state courts challenging the idea that they have a duty to fairly represent all unit employees. Now that Court has held that the Constitution precludes dissenting employees from paying for union representation, unions will argue in turn that it is unconstitutional to force them to expend time and resources representing employees who pay nothing. Janus gives some mixed signals. In one direction, the Court stated that unions' "duty of fair representation is a necessary concomitant of the authority that a union seeks when it chooses to be the exclusive representative." Thus, unions may have to seek to be members-only to push this argument. In the other direction, the Court seems to approve of arrangements in which union charge nonmembers for using grievance or arbitration procedures.
- While exclusivity and fair representation are weakened, will Janus usher in a strengthening of public-sector employees’ 1st Amendment rights? The language in Janus suggests so, as it now states that public-sector working conditions are matters of public interest that warrant more 1st Amendment protections. Despite that, however, the answer I think is “no.” Although it’s not defensible, I believe the Court will limit its broad 1st Amendment interpretation to cases brought against unions. Individual employees, I predict, will continue to face steep challenges raises these claims. Indeed, in Janus, the Court made a point of stressing that union speech is a public concern and it distinguished Pickering by stressing the difference between a union pushing for a wage increase and an individual employee--all of which seems to be a to distinguish individual employees' free speech claims. In addition, I doubt the Court will be as concerned with the 1stAmendment when unions challenge Section 8(b) limitations on their right to protest, picket, and boycott. See Charlotte Garden’s article on this.
- How badly will this hurt unions? We saw fairly steep declines in union membership following major changes in states like Wisconsin. Will Janus and its new opt-in requirement extend that affect nationwide? I suspect that, on average, public-sector unions will see a big hit, but that the effect will not be consistent everywhere. This is especially true given that some states have already made moves to add protections for public-sector collective bargaining in anticipation of Janus.
- On a minor note, while discussing the difficulty in challenging what's chargeable and what's not under Abood, the Court in Janus stressed the "substantial" costs in bringing an arbitration case to make such a challenge. It wasn't central to either case, but that's one of the exact arguments in Epic Systems (and the earlier Italian Colors) that the Court didn't seem concerned about.
- On a non-labor related note, the number of precedents overruled by the Court in the last couple of weeks is remarkable--and that's just the ones overruled explicitly. For whatever reasons, the Court this term has seemed more willing to break from its past to achieve the result it wants, and it will be interesting to see if that trend continues next term.
Tuesday, June 26, 2018
Just a heads up: the Supreme Court just announced that tomorrow is the last day of the term. Which means that we'll have Janus. Not that the outcome is in doubt, but I'll have the decision posted, along with some thoughts ASAP. So stay tuned tomorrow morning, including following us on Twitter.
Friday, June 15, 2018
Some recent labor & employment stories in the news recently:
- The New York Times has a piece out today on the prevalence of pregnancy discrimination, which includes background on Peggy Young and her suit against UPS that went to the Supreme Court. It reminded of my time one summer as a law student working on a pregnancy discrimination trial at Vladeck Waldman in NY. I distinctly remember the attorneys being worried about our case--which should've been an easy one based on the facts--because of their past experience facing resistance to such claims in front of judges' and juries. Our client ultimately won this one, but looking back, it's crazy how much evidence of discrimination it took.
- The California Department of Industrial Relations found the Cheesecake Factory jointly liable for wage and overtime violations against janitors at its restaurants. The case involved new state laws imposing more legal liability on companies for their contractors's violations. In this case, a subcontractor was directly responsible for the violations, but both the Cheesecake Factory and the contractor it hired, which in turn hired the subcontractor, were held jointly liable.
- The NLRB has made explicit what has been clear for a while: it's going to engage in rulemaking on the joint employer test. Oh, and it will also conduct a comprehensive review of its ethical policies and standards for Board Member recusals.
- Thomas Edsall writes an op-ed in the NY Times about worker struggles in the current economy, particularly under the Trump administration. He quotes top economists, Sachin, and some other guy who blogs here.
Tuesday, June 5, 2018
Though a formal contract has not yet been signed, the ABA Labor & Employment Law Section Newsletter has announced that the ABA Journal of Labor & Employment Law will be moving from University of Minnesota to St. Louis University. Miriam Cherry, Matt Bodie, and Marcia McCormick will be taking the reins from Laura Cooper and Steve Befort. Congrats to all!
Monday, June 4, 2018
The Supreme Court just released its decision in Masterpiece Cakeshop, which dealt with a cake shop owner's claim that his religious freedom should allow him to refuse customers who wanted a cake for a same-sex wedding. The Supreme Court reversed a state commission's decision against the shop owner, holding that the decision violated his right to free expression. But the decision is narrower than it may first appear. In particular, the Court appeared to hinge the decision on the state commission's decision in the case, which it viewed as being impermissibly hostile to religion (this may have led to the 7-2 lineup at the Court).
This was not an employment case, but there are parallels. As a result, although the Court seemed to duck the underlying issue about free expression v. antidiscrimination laws, employers will no doubt try to use Masterpiece as a defense. But its value will depend on employers' ability to couch their employment discrimination as expression because one of the unique aspects of Masterpiece was that the shop owner claimed that making cakes was artistic--that is, constitutionally protected expression. Because of that, and the Court's criticism of the state commission, most employers will not be able to make an argument like Masterpiece. There will no doubt be exceptions--maybe a religious-themed artist that hires assistants--but there are not a lot of business that involve both the level of expression needed for such a claim, as well as the level of hostility that the Court perceived. But I'm sure many employers will make the argument nonetheless . . . .
Friday, June 1, 2018
Some recent labor and employment law issues in the news:
- Well, it wasn't the big unit, but some employees at Boeing's South Carolina plant have voted to unionize. On Thursday, 178 technicians and inspectors voted (104-65) to be represented by the International Association of Machinists and Aerospace Workers union.
- The largest federal employees union, American Federation of Government Employees, is suing to stop new rules put in place by recent executive orders. The central target of the dispute is a new 25% cap on "official time" that union officials can spend on union business; the other orders encourage more terminations of federal employees and restrict agencies' ability to negotiate collective-bargaining agreements. The official time challenge is based on the Civil Service Reform Act provision that permits official time and the First Amendment. This latter claim may be difficult given the Davenport decision, although the union is making more of a discrimination argument based on the executive orders application only to work done on other employees' behalf rather than work that a union official does on his or her won behalf.
- Casino strike averted? Just hours ago, the Culinary Workers union reached a deal with Caesar's to avoid what was looking to be a massive strike in Las Vegas. Caesar's only employs about a quarter of the 50,000 workers who could potential strike, so nothings certain yet. But it does look like the strike threat is paying off for the union.
Wednesday, May 23, 2018
The NFL has just adopted a new policy on national anthem protests, which raises some potential labor law issues. As I understand the new policy, it implements three new features. First, it allows each team to establish its own policy on national anthem protests. The second feature, however, limits the first as it gives the NFL the power to fine any team if one of its players protests during the national anthem. The third feature also limits teams' ability to establish their own policy by eliminating the previous league-wide requirement that players must stay on the field during the anthem.
So what does this all mean? It appears that players who do not want to stand for the national anthem have at least two choices: stay in the locker room or take a knee during the anthem (or other types of protest). What happens to a player who takes the latter option depends on his team. At a minimum, the NFL will fine the team. But whether the individual player is disciplined depends on whether the team has established a policy barring such protests.
Labor law aficionados will see the potential NLRA issues here. The NFL owners established this new policy without discussing it with the NFLPA (players union). This raises some potential labor law problems. First, the new policy could violate the existing collective-bargaining agreement; indeed, the union said it was reviewing whether such a conflict exists. Second, by establishing a new policy without discussing it with the union, the NFL may have violated Section 8(a)(5) of the NLRA, which prohibits an employer from unilaterally implementing changes in work conditions without first bargaining with the union. The NFL is likely to argue that this duty to bargain isn't implicated because players have the option to avoid any penalties (i.e., adverse work actions) by staying in the locker room. That's a plausible argument, but it's not obviously a winning one because the union could respond that there has been a change in the terms of work, namely that players were previously required to stand on the sidelines during the anthem and could take a knee without penalty, while under the new policy that's no longer an option.
Stay tuned . . . .
Monday, May 21, 2018
The Supreme Court today issued its decision in Epic Systems, ruling for employers who, as part of mandatory arbitration clauses, require their employees to waive their right to class actions. This should come as a surprise to no one, as the case pitted the Court's hatred of class actions against the NLRA.
The 5-member majority decision followed a typical pattern in many respects, including a continuation of its ever-broadening reading of the Federal Arbitration Act's protection of arbitration agreements and a rejection of an argument to grant the NLRB Chevron deference. What's more surprising though was the majority's reading of the NLRA's Section 7. Although it was not required to do so, the Court essentially overruled long-standing NLRB precedent holding that Section 7 protected employees who join together in collective legal actions to advance their workplace conditions. The Court defended this conclusion by, among other things, saying that "Section 7 focuses on the right to organize unions and bargain collectively" and holding that Section 7's protection for "other concerted activities," "like the terms that precede it, serve to protect things employees 'just do' for themselves in the course of exercising their right to free association in the workplace, rather than 'the highly regulated, courtroom-bound ‘activities’ of class and joint litigation.'” I've taught labor law for many years and have never seen Section 7 described in this narrow of a fashion. Indeed, the Court oddly cites the famous Washington Aluminum case for the proposition that "§7 cases have generally involved efforts related to organizing and collective bargaining in the workplace, not the treatment of class or collective action procedures in court or arbitration." One may debate whether Section 7 was originally thought to encompass class actions, but describing Washington Aluminum as an "organizing and collective bargaining" case is nuts--that's the classic decision involving non-union collective action. It involved a walkout by non-union workers who were sick of severely cold conditions in their plant; there was no union on the scene, no attempt to organize a union, and no collective bargaining.
Justice Ginsburg's dissent does a thorough job of showing why Section 7 is much broader than the majority makes it out to be. Using history, the NLRA's text, and NLRB precedent she also emphasized that access to the legal enforcement was a key aspect of the new rights embodied in the NLRA. She finishes with this:
If these untoward consequences stemmed from legislative choices, I would be obliged to accede to them. But the edict that employees with wage and hours claims may seek relief only one-by-one does not come from Congress. It is the result of take-it-or-leave-it labor contracts harking back to the type called “yellow dog,” and of the readiness of this Court to enforce those unbargained-for agreements. The FAA demands no such suppression of the right of workers to take concerted action for their “mutual aid or protection.”
Given that this case will likely be followed shortly by a loss for public-sector unions in the Janus case, this term looks to go down as one that brought a major constriction of labor rights.
Tuesday, May 1, 2018
Yesterday, the California Supreme Court issued what is likely to be a bombshell decision in Dynamex Operations v. Lee. Dynamex involved a wage claims brought by a driver under California law. The employer defended with the oft-used (and often successful) argument that the driver and his similar colleagues were independent contractors, not employees. You can check out the decision for the facts, but they will be very familiar to those who spend any time looking at this area. What is more important is how the court analyzed them.
In Dynamex, the court decided to change its standard for determining whether a worker is an employee or independent contractor under the part of the state wage statute that defines "employ" as "to suffer or permit work" (there are two other definitions of "employ"). In particular, it adopted what is referred to as the "ABC test." Under this rule, a worker is presumed to be an employee unless the purported employer can establish three factors. Because of its importance, I'm going to quote the court's formulation, while editing the layout for easier reading:
This [ABC] standard, whose objective is to create a simpler, clearer test for determining whether the worker is an employee or an independent contractor, presumes a worker hired by an entity is an employee and places the burden on the hirer to establish that the worker is an independent contractor. Under the ABC standard, the worker is an employee unless the hiring entity establishes each of three designated factors:
(a) that the worker is free from control and direction over performance of the work, both under the contract and in fact;
(b) that the work provided is outside the usual course of the business for which the work is performed; and
(c) that the worker is customarily engaged in an independently established trade, occupation or business (hence the ABC standard).
If the hirer fails to show that the worker satisfies each of the three criteria, the worker is principal federal wage and hour legislation.
Although it remains to be seen how soon and how big an effect this decision will have, I'm not going out on a limb by predicting that this represents a major change. The ABC test is clearly broader than the FLSA's "economic realities" test, so at a minimum more California workers will enjoy protection under the relevant statute. But California's size and the fact that this is likely to impact gig work could lead to a shift in how some companies classify and pay their gig workers in other states. Time will tell . . . .
Tuesday, April 17, 2018
Lance Compa (Cornell ILR) sends us word of a report describing the "wrong turn" taken by an arbitration panel in the first-ever case decided under the labor chapter of a free trade agreement. The case involves worker's rights violations in Guatemala. Here's a press release describing the case and a report critical of the case co-authored by Lance:
A new report from the International Labor Rights Forum (ILRF) says that an arbitral panel’s ruling in the first case ever decided under the labor chapter of a free trade agreement “got it wrong” on workers’ rights violations in Guatemala. Written by three prominent international labor law experts, “Wrong Turn” edits down the 300-page decision into a reader-friendly 30 pages, and provides analysis and commentary at key points showing the arbitral panel’s flawed approach and conclusions.
Following a 2008 complaint by the AFL-CIO and a coalition of Guatemalan unions, the United States government initiated the arbitration case in 2011 under the labor rights chapter of the 2005 U.S.-Central America Free Trade Agreement (CAFTA). That chapter defines as its central purpose to “protect, enhance, and enforce basic workers’ rights.” The United States charged Guatemala with failing to effectively enforce its national labor law to halt mass firings of workers who try to form unions and to remedy minimum wage, health and safety, and other violations of employment standards. Effective enforcement of national law is a central obligation of the CAFTA labor chapter.
In their report, Lance Compa of Cornell University, Jeff Vogt of the Solidarity Center, and Eric Gottwald of ILRF note that two of the three members of the arbitral panel were prominent trade lawyers who normally represent multinational companies in commercial disputes, but have no labor experience or expertise. As a result, “The decision is based on a narrow, trade-oriented analysis divorced from labor law reality - particularly in a developing country like Guatemala.”
Importantly, the arbitral panel did find that Guatemala repeatedly failed to effectively enforce its labor law. However, the panel found that such failures did not occur “in a manner affecting trade,” as required by the labor chapter, leading the arbitrators to rule in favor of Guatemala. In contrast, the report’s authors argue that, “A rights-focused analysis would say the CAFTA labor chapter is meant to protect workers’ fundamental rights, not competition in the free trade area.”
Gottwald, Vogt and Compa suggest that the arbitral panel erected an impossibly high barrier to workers prevailing in such cases. All violations and the failure to enforce labor laws occurred in trade-related sectors such as apparel manufacturing, agriculture, and shipping, but the panel found that this was insufficient to meet the “manner affecting trade” requirement. The arbitrators demanded evidence that companies took advantage of the government’s enforcement failures to gain a price advantage in the marketplace. But such information, argue the report authors, is impossible to obtain without subpoena power – a tool that is not available in the CAFTA dispute resolution system.
The authors also decry the failure of the U.S. government to present evidence on widespread violence against trade unionists in Guatemala, including death threats and assassinations – an important part of the unions’ original 2008 complaint. Reflecting this failure, they note that “In the full 299-page decision of the Panel, not once does the word ‘violence’ appear.”
The ILRF report concludes with recommendations to address the “wrong turn” in the CAFTA arbitration decision. They include requiring arbitrators to be experts in labor law and labor relations and to consider reports and decisions from international human rights bodies, not just the WTO, in their decision-making process; allowing trade unions and victimized workers to participate in arbitration proceedings, correcting the interpretation of the “manner affecting trade” clause, and making the labor chapter of all trade agreements a human rights chapter.
Here is the full report.
Tuesday, April 3, 2018
Yesterday, the US Supreme Court decided Encino Motorcars v. Navarro in a way that rejected past precedent requiring courts to read FLSA’s statutory exemptions narrowly. In a 5-4 ruling, the Court ruled that FLSA exempts a service adviser at a car dealership from its overtime protections under the exemption for “any salesman . . . primarily engaged in . . . servicing automobiles.” 29 U.S.C. § 213(b)(10)(A).
In doing so, however, Justice Thomas, writing for the majority, rejected the general “principle that exemptions to the FLSA should be construed narrowly.” Encino, Slip Op. at 9. Here’s his reasoning:
We reject this principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.” Scalia, Reading Law, at 363. The narrow construction principle relies on the flawed premise that the FLSA “‘pursues’” its remedial purpose “‘at all costs.’” American Express Co. v. Italian Colors Restaurant, 570 U. S. 228, 234 (2013) (quoting Rodriguez v. United States, 480 U. S. 522, 525-526 (1987) (per curiam)); see also Henson v. Santander Consumer USA Inc., 582 U. S. ___, ___ (2017) (slip op., at 9) (“[I]t is quite mistaken to assume . . . that whatever might appear to further the statute’s primary objective must be the law” (internal quotation marks and alterations omitted)). But the FLSA has over two dozen exemptions in § 213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. See id., at ___ (slip op., at 9) (“Legislation is, after all, the art of compromise, the limitations expressed in statutory terms often the price of passage”). We thus have no license to give the exemption anything but a fair reading.
In so reasoning, Justice Thomas’s majority opinion didn’t “acknowledg[e] that it unsettles more than half a century of our precedent.” Dissent of Justice Ginsburg, Slip. Op. at 9-10 n.7. See A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945) (FLSA “was designed ‘to extend the frontiers of social progress’ by ‘insuring to all our able-bodied working men and women a fair day’s pay for a fair day’s work.’ Message of the President to Congress, May 24, 1934. Any exemption from such humanitarian and remedial legislation must therefore be narrowly construed, giving due regard to the plain meaning of statutory language and the intent of Congress. To extend an exemption to other than those plainly and unmistakably within its terms and spirit is to abuse the interpretative process and to frustrate the announced will of the people.”); accord Citicorp Industrial Credit Co. v. Brock, 483 U.S. 27, 35 (1987); Mitchell v. Kentucky Finance Co., 359 U.S. 290, 295 (1959)(“It is well settled that exemptions from the Fair Labor Standards Act are to be narrowly construed.”)(citations omitted). In her dissent, Justice Ginsburg called this FLSA precedent a “well-grounded application of the general rule that an ‘exception to a general statement of policy is usually read . . . narrowly in order to preserve the primary operation of the provision.’” Dissent Slip. Op. at 9 n.7 (quoting Maracich v. Spears, 570 U.S. 48, 60 (2013)).
Management-side lawyers will likely now invoke Encino often in FLSA exemption litigation. But, it’s hard to know how much this will affect FLSA case outcomes, because it’s unclear how much the “narrowly-read FLSA exemptions” rule had affected FLSA case outcomes in any event, that is, how often that rule operated as makeweight versus a genuine tie-breaker.
More puzzling: The Court could have easily sidestepped the issue by saying that, given the strength of all the other reasons to read § 213(b)(10)(A) the way it did, there was, in this case, really no tie for the “narrowly-read FLSA exemptions” rule to break. Instead, the Court’s majority seems to have wanted to overrule this prior FLSA precedent but without expressly saying that it was directly overruling it as precedent. The mystery is which Justice(s) in the Encino majority (Thomas, Roberts, Kennedy, Alito, Gorsuch) wanted this in the opinion, and why.
Wednesday, March 7, 2018
David Doorey from York University in Toronto sends along a plug for Osgoode Hall Law School's part-time specialist LLM degree with a specialization in labor and employment law. From David:
The US Department of Labor (DOL) unveiled yesterday a new six-month pilot program to encourage employer compliance with the Fair Labor Standards Act. Under the Payroll Audit Independent Determination program (PAID), DOL would cover any back pay employers owed to workers under FLSA (wages owed under FLSA’s minimum wage or overtime provisions). In exchange, the employees would release any of FLSA claims for those violations, and employers would agree to self-auditing procedures for their pay practices. See here, the PAID website here, along with mixed reactions reported here.
One DOL-touted benefit of PAID: Participating employers won’t have to pay FLSA “liquidated damages or civil monetary penalties” so long as those employers “proactively work with WHD to fix and resolve the compensation practices at issue.” DOL won’t make them and, it seems, employees would at least release the employer from any liquidated damages otherwise owed under FLSA for the “identified violations” and relevant time period.
This matters. An employer that violates FLSA is on the hook not just for the wages it should have paid but didn’t (back pay) but also “an additional equal amount as liquidated damages,” 29 U.S.C. § 216(b), unless the employer can show that it’d acted “in good faith” and had “reasonable grounds for believing that his act or omission” didn’t violate FLSA, 29 U.S.C. § 260. So, if a worker is owed $40 in unpaid wages, she may recover up to $80, that is, the $40 in unpaid wages plus and the “additional equal amount” (another $40, the “liquidated damages”).
The FLSA liquidated damages provision isn’t just a damages multiplier. Rather, according to the US Supreme Court, it refers a separate item of compensatory damages: the loss that results because the employer didn’t pay the owed wages on time. Such as loss is real, especially where the worker needs the wages paid on time to maintain a minimal standard of living, but Congress thought that type of loss “too obscure and difficult of proof for estimate other than by liquidated damages.” Brooklyn Savings Bank v. v. O’Neil, 324 U.S. 697, 707-08 (1945).
Accordingly, the employer who gets PAID stands to save up to double–not just the back pay they’d owe the employee, but also the liquidated damages they’d also pay, in cases where the employee would otherwise sue and win. Since FLSA has a fee-shifting statute, employers stands to save more still in such cases. (Even more still if employers fear a FLSA hot-goods injunction. More on that here.) By the same token, however, employees who sign FLSA releases under PAID stand to give up any liquidated damages award, that is, up to half of what they’d recover if they sue and win. DOL’s view: Under PAID, employees will get all their owed back wages “faster” than if they had to sue, and “without having to pay any litigation expenses or attorneys’ fees.”
Now, a puzzle: How would an employer getting PAID fare under parallel State wage and hour law? Like FLSA, many States have wage and hour laws with liquidated damages provisions. See, e.g., Cal.Labor Code § 1194.2; Md. Labor and Employment Code § 3-427(a)(2); W. Va. Code § 21-5B-4(a). In States where the employer’s acts or omissions violated both FLSA and a State’s wage and hour law, would the employee’s release under PAID cover only any FLSA claim or any and all legal claims (including State law claims) arising from the employer’s underpayment? In some States and localities, this matters, because the minimum wage and overtime provisions are more generous there. This issue matters less in, for example, the five States with no State minimum wage.
Monday, February 26, 2018
Well, that didn't last long. Two months following its several of the Browning-Ferris joint-employer standard in Hy-Brand, the NLRB has vacated that recent decision. No, it wasn't a change of heart. Rather, the NLRB vacated Hy-Brand because its Inspector General recommended that action due what it viewed as the improper participation of Member Emanuel, who participated in the case despite the fact that his former firm represented one of the parties involved with the Browning-Ferris litigation, which was still involved in litigation that would be influenced by the NLRB's joint-employer standard.
Needless to say, as soon as JohnRing is confirmed--and he now has a hearing date of March 1--we will likely see Hy-Brand again under a different name.
Today, the Supreme Court heard oral arguments in Janus v. AFSCME, the newest in several decisions in which a bloc on the Court has attempted to strike down public-sector mandatory union fees (see here, here, and here for some of our earlier coverage). I'm going to go out on a limb and predict that this time is the charm. The 8 veteran Justices age no reason to think that they moved from previous positions, which results in a 4-4 split on this issue. The newer Justice Gorsuch was uncharacteristically silent during oral argument, but I'd be stunned if he doesn't vote with the conservative bloc to overturn Abood and find such fees to be unconstitutional. You can judge for yourself by reading the oral argument.