Friday, January 27, 2017
"[Acting Chair] Lipnic has served as an EEOC Commissioner since 2010, having been nominated to serve by President Barack Obama, and confirmed by the Senate, initially for a term ending on July 1, 2015. President Obama nominated her to serve a second term ending on July 1, 2020, and she was confirmed by the Senate on November 19, 2015."
An interesting article on the appointment on Reuters can be found here.
-- Joe Seiner
Thursday, January 26, 2017
Hugh Baran, a 3L at NYU School of Law, has organized a petition opposing Andrew Puzder's nomination as Secretary of Labor. Thus far, there are over 1,000 signatories to the letter, which among other things, states:
As students and professors at the nation’s law schools, we are united in opposition to President Trump’s nomination of CEO Andrew Puzder to lead the U.S. Department of Labor. Mr. Puzder is a fast-food CEO who led a company with a well-documented record of labor violations, wage suppression, and sexist advertising. He is unfit to lead a Department that is supposed to uphold basic labor and workplace safety standards for the nation’s wage earners.
If you want to sign or read the letter, you can find it here.
Wednesday, January 25, 2017
Some recent labor and employment stories that may be of interest:
- The NY Times explores why many women are not participating in the work force (hint, family caregiving is a big part of the story).
- A Texas teacher whose license to teach was suspended for two years for using edible marijuana in Colorado, where it's legal, wins an initial step in her challenge to the suspension.
- Uber reaches $20 million settlement with the FTC over exaggerated claims it made to drivers about earnings and car financing.
Although by no means a new question regarding retirement, the noteworthy growth of gig companies in the sharing economy has renewed concerns that even more American workers will lack access to employment-based retirement plans. Although some argue that the gig economy offers workers advantages including more independence and flexibility, company-sponsored retirement saving is not one of them. This is a dangerous state of affairs, as employment-based retirement plans make up a critical part of an individual’s strategy for retirement security.
Such retirement plans, like the nearly-ubiquitous 401(k) plans, provide a necessary bulwark against destitution in old age, especially given that Social Security provides only partial income replacement and few Americans have put away much in private savings. Yet, independent contractors, which is how most gig companies classify their workers, are approximately two-thirds less likely than standard employees to have access to an employer-provided retirement plan.
Much academic and judicial ink has already been spilt over whether Uber drivers and other members of the sharing economy are members of the so-called “contingent” workforce or “precariat” (part-time, leased, temporary, and per diem workers), not entitled to receive retirement benefits as part of their employment. Whether these employees are statutory employees is of utmost importance because it largely determines whether gig workers are covered by employment laws, as most such laws center on the employer-employment relationship.
What all these jobs have in common is that the work activity is happening outside of the traditional safety net of employment and are highly unstable. Whereas statutory employees are covered in the United States by numerous labor and employment law statues that provide security and protection in the workplace, workers in these alternative work arrangements are not. Once stable employment relationships have given way to relationships that are much more arms-length, regardless of whether it is a contractor situation, temporary employment, or a one-time encounter.
Into the breach, a number of proposals have emerged to provide independent workers or independent contractors, who work for gig companies (see a recent law introduced in New York), with some form of portable, occupational retirement benefit. For instance, it has been proposed that retirement coverage be offered in the same way as health coverage has been under the ACA. An expanded Social Security could play the role of Medicaid for low income workers, employers could still offer retirement plans, but employees who lack access could purchase retirement plans on a “federal backstop plan.” The biggest problem with this approach is that it does not necessarily require workers to receive retirement benefits through their employer and therefore, such workers would not be employees entitled to the consumer protections of ERISA.
A different set of proposals involves private-sector companies stepping up to provide retirement programs on their own or in cooperation with gig companies. For instance, private internet companies, like Peers, Honest Dollar, and Betterment, are offering to provide retirement benefits, as well as other benefits and human resource services, to gig companies. However, if gig workers are offered retirement benefits by their employers under this model, such benefits are a mere gratuity, something that the employer has no responsibility for maintaining or administering as a fiduciary.
It is therefore essential that individuals who work in the sharing economy be considered common-law employees for retirement purposes under the control test established in Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992), so as to qualify for consumer protections under the Employee Retirement Income Security Act of 1974 (ERISA). Indeed, the crux of ERISA relies upon the fact that plan assets are held in trust and those that discretionarily operate, manage, or administer them are fiduciaries and/or trustees of the plan. Such fiduciary status means that plan fiduciaries must put their own self-interest aside, and act for the sole interest of plan participants and beneficiaries.
The good news is that there is an increasing trend of finding gig workers to be employees under ERISA. Although not directly under ERISA, employing a similar control test in the United Kingdom, two Uber drivers were recently found to be employees for purposes of British minimum wage laws. In Switzerland, a Swiss insurance agency found an Uber driver to be an employee for whom the company must pay social security contributions. Similarly, in the United States, a recent decision from the California Employment Development Department, found an Uber driver to be an employee for purposes of eligibility for unemployment law. As these laws rely on similar factors as the control test under ERISA, there is good reason to believe that workers, especially those that receive a majority or their exclusive income from gig companies and work full-time hours, will also be considered employees and qualify for ERISA protections. In any case, and this issue is far from being definitively decided, there is at least a reasonable argument that some gig workers, including Uber drivers, qualify as employees under the common-law control test of Darden.
Assuming for the sake of argument that some gig workers will qualify for protection under ERISA as common-law employees, the best mechanism for providing these employment-based retirement benefits is through open multiple employee pensions (“open MEPs”). These open MEPs would allow unaffiliated employers to pool their resources and offer retirement plans to their employees under the statutory protections of ERISA. More specifically, open MEPs permit two or more unrelated private employers to adopt a defined contribution pooled employer plan (PEP) as long as the PEP has a pooled plan provider (PPP) as the named fiduciary to the plan. The only fiduciary duty that members of the PEP would retain would be to prudently select, and then monitor, the PPP, thus limiting their exposure to potential fiduciary liability. Additionally, the price tag of permitting the formation of these organizations is relatively low: 3.2 billion dollars over 10 years from loss of tax revenue from the additional tax deduction for employers and tax-exempt status for employee contributions.
Open MEPs are gaining traction legislatively. Senator Orrin Hatch introduced the Retirement Enhancement and Savings Act of 2016, which would have permitted open MEPs for private sector employees and allow multiple employers to pool retirement funds into a single 401k retirement plan starting in 2020. Under current law, independent employers who wish to pool funds for retirement plan purposes must demonstrate a common interest. Moreover, another difficulty under current law is the so-called one-bad-apple rule, that disqualifies the entire MEP from favorable tax treatment if one employer does not meet the applicable tax rules.
Senator Hatch’s open MEP proposal would remove the common interest requirement and the one-bad-apple rule. In the recent past, this proposed model has had wide bipartisan support. Unfortunately, Hatch’s bill was not enacted in 2016, yet it is not too far-fetched, given current legislative developments, that the open MEP bill will be reintroduced during the coming Trump presidency and will soon be available for multiple employers in the private sector.
As Senator Elizabeth Warren perceptively recognized during hearings on Hatch’s bill, this new approach is well-suited for gig employees. The bill would allow various gig companies to pool their contributions to a common 401k retirement plan, with all the advantages that come with belonging to a large fund. Most importantly, such funds would have the advantages of providing participating employees diversification, low costs, reporting and disclosure requirements, and fiduciary protections based on the trust-based status of such 401k plans.
I explore the topic and proposal in greater depth in a recently-published paper available via SSRN.
Monday, January 23, 2017
I've mentioned on Facebook that I've spent the last couple of weeks teaching at a Saigon labor college. I'm writing now to give an update -- and a heads-up to anyone who might be interested in either a short-term gig or a longer-term Fulbright here. Both, I think, would be terrific options.
Wednesday, January 18, 2017
Elizabeth Tippett (Oregon), Charlotte S. Alexander (Georgia State), and Zev J. Eigen (Littler) have just published their explosive article When Timekeeping Software Undermines Compliance (19 Yale J.L. & Tech. 1 ). When I say "explosive" I am not exaggerating one iota. Their article exposes how choices and algorithms deliberately built into timekeeping systems cheat workers out of time worked or overtime owed. I am reproducing the abstract below, but strongly encourage everyone to read the full article. I expect this article will spawn loads of high-dollar litigation; more optimistically, I would hope the article will encourage software firms and their corporate clients to be far more diligent in complying with wage & hour law.
Here's the abstract:
Electronic timekeeping is a ubiquitous feature of the modern workplace. Time and attendance software enables employers to record employees’ hours worked, breaks taken, and related data to determine compensation. Sometimes this software also undermines wage and hour law, allowing bad actor employers more readily to manipulate employee time cards, set up automatic default rules that shave hours from employees’ paychecks, and disguise edits to records of wages and hours. Software could enable transparency, but when it serves to obfuscate instead, it misses an opportunity to reduce costly legal risk for employers and protect employee rights. This article examines thirteen commonly used timekeeping programs to expose the ways in which software innovation can erode compliance. Drawing on insights from the field of behavioral compliance, we explain how the software presents subtle situational cues that can encourage and legitimize wage theft. We also examine gaps in the Fair Labor Standards Act’s recordkeeping rules – unchanged since the 1980s – that have created a regulatory vacuum in which timekeeping software has developed. Finally, we propose a series of reforms to those recordkeeping requirements that would better regulate timekeeping data and software systems and encourage wage and hour law compliance across workplaces.
Monday, January 16, 2017
On her blog, Friend of the Court, Sandra Sperino discusses the new Third Circuit decision in Karlo v. Pittsburgh Glass Works. In that case, the Third Circuit held that the ADEA permits "subgroup" disparate impact claims--that is, claims that an employer policy creates an unlawful disparate impact against a certain subgroup of a protected class.
Check it out, definitely worth a read.
Friday, January 13, 2017
Today, the Supreme Court announced that it would review the NLRB's D.R. Horton rule, which concludes that employment class action waivers can violate Section 8(a)(1) of the NLRA. The Court consolidated a group of cases under review that we be familiar to readers of the blog: NLRB v. Murphy Oil, Ernst & Yong v. Morris, and Epic System v. Lewis. Should be an interesting case and here's hoping that my follow blogger Charlie Sullivan and his co-author Tim Glynn picks up a Supreme Court citation on the way.
We'll keep you posted on the oral argument and developments that follow.
Thursday, January 12, 2017
The EEOC just announced that the public input period is now open for its proposed Anti-Harassment Guidance. The guidance is available here, and the input period ends on February 9, 2017. From the press release:
"The public is invited to submit input about the proposed Enforcement Guidance on Unlawful Harassment via www.regulations.gov. Alternatively, members of the public may send written feedback to: Public Input, EEOC, Executive Officer, 131 M Street, N.E., Washington, D.C. 20507. Please provide input in narrative form and do not submit redlined versions of the guidance document. Input will be posted publicly on www.regulations.gov, so please do not include personal information that you do not want made public, such as your home address or telephone number."
This is a great opportunity to review and weigh in on this important guidance.
Wednesday, January 11, 2017
Last week, outgoing Labor Secretary Thomas Perez authored an exit memorandum outlining the present and future of employment rights. The memo is very well written and makes some compelling arguments in a number of areas. The Secretary touches on several of the high-profile topics of the day, including wages, equal pay, retirement benefits, worker compensation, child labor, family leave and worker categorization in the modern economy. A brief excerpt, which discusses the future of employment in the gig sector:
“The largest question for the next administration and beyond is how we embrace innovation in this dynamic economy while ensuring that the changing nature of work continues to honor the bedrock principle that workers are not in it alone in securing basic protections. Today, due in part to new business models and the more transient and attenuated employment relationships that characterize the fissuring of work, we are seeing more workers lose the assurance of a fair wage guaranteed by the FLSA, the support promised by the workers’ compensation system when they are injured on the job, and the promise of a secure retirement provided by defined benefits plans.”
Because it covers such a broad range of areas, I recommend taking a look at this memo to those who have any interest in labor and employment law.
-- Joe Seiner
Thursday, January 5, 2017
A city in Sweden experimented with a six-hour work day for a group of nurses working in elder care. The city has decided to scrap the approach, however, citing the excessive costs. From MSN/Bloomberg news:
“The take away was largely positive, with nurses at the home feeling healthier, which reduced sick-leave, and patient care improving. . . But the city has no plans in making the measure permanent or broadening it to other facilities. To do that it would need much more money and even help from the national government. To cover the reduced hours for the 68 nurses at the home it had to hire 17 extra staff at a cost of about 12 million kronor ($1.3 million).”
It is interesting to see local governments looking into cutting worker hours as well as the impact of these types of approaches.
-- Joe Seiner
Wednesday, January 4, 2017
The EEOC issued regulations yesterday on the role of the federal government to engage in affirmative action for workers with disabilities. The EEOC notes the government's role as a "model employer," and provides regulations on how the government can achieve this standard. The EEOC also provides a question and answer document to further assist with compliance issues. From the press release:
"The regulations set goals for federal agency workforces of 12 percent representation for individuals with disabilities and 2 percent for individuals with "targeted" disabilities. Targeted disabilities are defined as disabilities that the government has, for several decades, emphasized in hiring because they pose the greatest barriers to employment, such as blindness, deafness, paralysis, convulsive disorders, and mental illnesses, among others. The goals apply at both higher and lower levels of federal employment.
The regulations also require federal agencies to provide personal assistance services to employees who need them to perform basic human activities at work, such as eating and using the restroom. These services will allow individuals with significant disabilities to enjoy the opportunity and independence of paid employment, which may reduce the amount of taxpayer funds spent on public disability benefits."
These regs are definitely worth taking a look at if you research or write in these important areas.
Wednesday, December 28, 2016
Paul Caron over at TaxProf Blog posts on Lauren Rivera (Northwestern) & András Tilcsik (Toronto), How Subtle Class Cues Can Backfire on Your Resume, Harvard Business Review. The article describes the authors' study of the hiring practices of large U.S. law firms. I've excerpted the take-away from the abstract, but the entire abstract (and article) are well worth reading:
Even though all educational and work-related histories were the same, employers overwhelmingly favored the higher-class man. He had a callback rate more than four times of other applicants and received more invitations to interview than all other applicants in our study combined. But most strikingly, he did significantly better than the higher-class woman, whose resume was identical to his, other than the first name.
. . .
But even though higher-class women were seen as just as good “fits” as higher-class men, attorneys declined to interview these women because they believed they were the least committed of any group (including lower-class women) to working a demanding job. Our survey participants, as well as an additional 20 attorneys we interviewed, described higher-class women as “flight risks,” who might desert the firm for less time-intensive areas of legal practice or might even leave paid employment entirely. Attorneys cited “family” as a primary reason these women would leave....
The New York State Bar Association has just published Lefokwitz on Public Sector Labor & Employment Law (4th ed. 2016), edited by William A. Herbert, Philip L. Maier, and Richard K. Zuckerman. Here's the publisher's description:
This landmark text is the leading reference on public sector labor and employment law in New York State. Editors William Herbert, Philip Maier, and Richard Zuckerman bring together leading attorneys in the field to contribute their expertise to this two-volume work.
Covering all aspects of this area of law, Lefkowitz on Public Sector Labor and Employment Law includes chapters on the Taylor Law, the representation process, the duty to negotiate, improper practices, strikes, mini-PERBS, arbitration and contract enforcement, and more. Much of the discussion in this two-volume resource has been revised and contains updated case and statutory references throughout. Practitioners new to the field, as well as the non-attorney, will benefit from the book's clear, well-organized coverage of what can be a very complex area of law. All practitioners will benefit from the exhaustive coverage of this book, whether they represent employees, unions or management.
With this edition, this treatise has been renamed to recognize Jerome Lefkowitz, who served as former Public Employment Relations Board chair, as Editor-in-Chief of the first three editions, and who transformed New York's labor landscape by helping to write the Taylor Law.
Monday, December 26, 2016
As the New Year approaches there is good news for many workers across the country. Numerous states and cities are set to raise the minimum wage for workers (though the exact date of the increase varies). The amount of the raise depends on the particular jurisdiction, and as we are all well aware, there has been no increase to the minimum wage under federal law. CNN has an interesting article about these wage hikes, including a list of those states and cities raising the rate.
Thursday, December 22, 2016
There is an interesting article in the LA Times today which looks at some purported policies at Google that address worker communications. Recent litigation argues that these alleged company policies prevent employees from engaging in proper whistleblowing activities. From the article:
"The lawsuit alleges that Google has wide-ranging confidentiality agreements and employee communication policies that prevent employees from disclosing violations both internally and externally. According to the lawsuit, Google restricts what employees say, even in internal emails, advising employees not to say 'I think we broke the law' or 'I think we violated this contract.' . . . The policies, according to the lawsuit, go so far as to prevent employees from discussions with a spouse or friends 'about whether they think their boss could do a better job,' [or] talk of wages . . . without prior approval from Google."
This is an interesting case and set of allegations. If you are interested in this area of employment law, I recommend taking a look at the article, which also includes a company response to the case.
-- Joe Seiner
Tuesday, December 20, 2016
In June, I posted on Pauline Kim's forthcoming article arguing that employer use of algorithms in evaluating applicants and employees could hard-wire discrimination into the evaluation process. For a different take on the issue, I've teamed up with 3L David Savage in an article arguing that if algorithms are carefully used and periodically evaluated, they can avoid causing both disparate treatment and disparate impact discrimination and address the discriminatory concerns created by unconscious bias. The article is David D. Savage & Richard A. Bales, Video Games in Job Interviews: Using Algorithms to Minimize Discrimination and Unconscious Bias, 32 ABA J. Labor & Employment Law (forthcoming 2017); here's the abstract:
As the number of applicants for many job openings grows into the thousands, employers have searched for methods to efficiently sort through these applications and compile a shorter list of individuals to interview for open positions. One method growing in popularity is using algorithms to analyze statistical information and determine the candidates that will perform the best if hired based on factors such as cognitive ability, management skills, and workplace performance. Predictive analytics involving algorithms are being used by 8% of companies in the United States. Some of these employers have had applicants play video games created by developers that use these algorithms to analyze their performance and select the best candidates for the job. Scholars have argued that the use of algorithms in general and in video games may lead to discrimination in the workplace. Although any type of employment practice can cause discrimination, this article argues that the use of algorithms in video games to evaluate job candidates may be a cost-effective and beneficial business method that can help avoid discrimination. If created and administered carefully, video games using algorithms have the ability to minimize human bias, including unconscious bias, from the initial job hiring process.
Saturday, December 17, 2016
Paul Harpur (Queensland) writes to tell us that an Australian disability wage-setting tool has been found discriminatory, and that the Australian government has agreed to pay 9,735 intellectual disabled workers entitlements which may reach $100 million AUD. Here's Paul's analysis:
An Australian government disability wage setting tool used to assess the wages of intellectually disabled workers who were employed in an Australian Disability Enterprise (a form of government subsidized employment) resulted in people with certain disabilities being under paid.
The tool in question, the Business Services Wage Assessment Tool, was used to determine how much each worker should be paid and if they were entitled to wage increases.
It was alleged that the imposition of the condition or requirement that wages be fixed using the tool amounted to indirect disability discrimination within the meaning of s 6 of the Disability Discrimination Act 1992 (Cth).
The tool fixed the amount of a wage by an assessment of competency and of productivity. The assessment of competency was made by reference to eight elements. Some of these competencies were irrelevant to the work actually undertaken by workers and the assessment processes relating to other competencies was flawed. The assessment processes used abstract answers in an interview situation with intellectually disabled workers. If workers did not provide a prescribed response they scored zero.
The Australian government accepted that this tool was discriminatory and has agreed to pay back wages for thousands of workers. The government introduced legislation to create a framework to repay wages in the Business Services Wage Assessment Tool Payment Scheme Act 2015 (Cth) (see also the Business Services Wage Assessment Tool Payment Scheme Bill 2014 (Cth) Explanatory Memorandum) and on 16 December 2016 the wage claims and discrimination claims by a class of 9,735 workers was approved by the Federal Court of Australia in Duval-Cowrie v Commonwealth of Australia (2016) FCA 1523. The length and size of these under payments are substantial and are estimated to cost the Australian government $100 million AUD.
Friday, December 16, 2016
Congratulations to Rachel Arnow-Richman and Nantiya Ruan (both at Denver) on the publication of their new book Developing Professional Skills: Workplace Law (West 2016). Here's the author's description:
Incorporating professional skills and ethics into the traditional workplace law course is a critical but challenging undertaking. This easy-to-use book simplifies the effort, offering eleven discrete exercises designed to help students develop skills in the key areas of drafting, counseling, negotiation and advocacy. Each exercise involves a different substantive area of workplace law, including covenants-not-to compete, wage and hour law, employment discrimination, whistleblower protection and general common law and tort principles. The book is flexible enough to supplement any doctrinal casebook, or can be used to teach a stand-alone skills course.
Fortunately for us in the field of workplace law, Rachel Arnow-Richman and Nantiya Ruan have just eliminated a tremendous amount of that work. Over several iterations, they developed a first-rate experiential course in this field. And they are willing to share their work, so that we do not have to reinvent this well-designed wheel. The result is their forthcoming book (due for release in the next week or so), Developing Professional Skills: Workplace Law.
This narrow volume provides a rich set of workplace law problems that can be used, off the shelf, to teach a problem-based course. There are 11 chapters, each of which contains a detailed but manageable workplace law scenario. And while all of the scenarios are fun and thoughtfully crafted, you might consider using even a subset of them, given the book’s low price point ($25, from what I understand).
This is terrific. Developing the material for teaching skills is by far the hardest and most time-consuming part.This book is a very welcome addition to our pedagogical toolbox.
Wednesday, December 14, 2016
Deborah Brake (Pittsburgh) has just posted on SSRN her article (forthcoming Georgetown L.J.) The Shifting Sands of Employment Discrimination: From Unjustified Impact to Disparate Treatment in Pregnancy and Pay. Here's the abstract:
In 2015, the Supreme Court decided its first major pregnancy discrimination case in nearly a quarter century. The Court’s decision in Young v. United Parcel Service, Inc., made a startling move: despite over four decades of Supreme Court case law roping off disparate treatment and disparate impact into discrete and separate categories, the Court crafted a pregnancy discrimination claim that permits an unjustified impact on pregnant workers to support the inference of discriminatory intent necessary to prevail on a disparate treatment claim. The decision cuts against the grain of established employment discrimination law by blurring the impact/treatment boundary and relaxing the strictness of the similarity required between comparators in order to establish discriminatory intent. This article situates the newly-minted pregnancy discrimination claim in Young against the backdrop of employment discrimination law generally and argues that the Court’s hybrid treatment-by-impact claim is in good company with other outlier cases in which courts blur the boundaries of the impact/treatment line. The article defends the use of unjustified impact to prove pregnancy discrimination as well-designed to reach the kind of implicit bias against pregnant workers that often underlies employer refusals to extend accommodations to pregnant workers. While Young is not likely to prompt an earthquake in employment discrimination doctrine, this article identifies and defends a parallel development in the law governing pay discrimination that similarly incorporates unjustified impact into a disparate treatment framework.