Sunday, January 28, 2018
This guest post is courtesy of Jack Harrison (NKU-Chase):
On Thursday, January 25, 2018, the United States Court of Appeals for the First Circuit upheld a 2016 jury verdict of more than $700,000, plus $184,000 in legal fees, in a Title VII case involving Lori Franchina, a lesbian firefighter for the City of Providence, Rhode Island. This case is important because it represents yet another decision by one of the Courts of Appeals calling into question precedents in the circuit holding that sexual orientation discrimination is not prohibited by Title VII’s prohibition of discrimination “because of sex.” While Franchina was decided on a sex-plus theory, rather than a sexual orientation theory, the “plus” in the case was Franchina’s sexual orientation.
The Court of Appeals described the horrendous treatment that Franchina had endured in the workplace as follows:
‘Cunt,’ ‘bitch,’ ‘lesbo’: all are but a smattering of the vile verbal assaults the plaintiff in this gender discrimination case, Lori Franchina, a former lieutenant firefighter, was regularly subjected to by members of the Providence Fire Department (‘the Department’). She was also spit on, shoved, and — in one particularly horrifying incident — had the blood and brain matter of a suicide-attempt victim flung at her by a member of her own team.
The First Circuit flatly rejected the city’s argument “that under a sex-plus theory, plaintiffs are required to identify a corresponding sub-class of the opposite gender and show that the corresponding class was not subject to similar harassment or discrimination.” In rejecting this argument, the First Circuit seemed to embrace the broader comparator analysis adopted by the Seventh Circuit in its decision in Hively, finding that sexual orientation discrimination was, indeed, discrimination “because of sex” prohibited by Title VII. The First Circuit also indicated that nothing in its prior decision addressing sexual orientation discrimination, Higgins v. New Balance Athletic Shoe Inc., “forecloses a plaintiff in our Circuit from bringing sex-plus claims under Title VII where, in addition to the sex-based charge, the ‘plus’ factor is the plaintiff's status as a gay or lesbian individual.” The discussion by the court of this precedent appears to call into question the court’s commitment to the position held in Higgins. Such questioning is certainly consistent with language used by other Courts of Appeals in decisions over the last year, including decisions by the Seventh, Eleventh, and Second Circuits, addressing the reach of Title VII in the sexual orientation discrimination context.
Currently, the en banc United States Court of Appeals for the Second Circuit is considering Zarda v. Altitude Express, a case that, like Hively, squarely asks the question of whether Title VII’s prohibition against discrimination “because of sex” includes discrimination based on sexual orientation. Oral argument was held in Zarda on September 26, 2017. While scheduled for only one hour, the arguments actually lasted for almost two hours. The questions asked and the tone of the oral argument would suggest that the Second Circuit is likely to follow the lead of the Seventh Circuit in Hively, concluding that the prohibition against discrimination “because of sex” found in Title VII includes a prohibition against discrimination based on sexual orientation. The Supreme Court recently rejected a petition for certiorari in a case from the Eleventh Circuit that raised this question, but with a decision in Zarda expected any day, the Supreme Court may ultimately have to address this issue.
As many of you know, I spent the better part of winter break in Southeast Asia, teaching or conferencing in Viet Nam, Myanmar, and Cambodia. If any of you have an interest in visiting the area or contacting folks in the labor/academic community there, let me know and I'll be happy to help make connections.
Meanwhile, I've just posted on SSRN an article I've co-authored with Trần Thị Kiều Trang (Hanoi Law University) On the Precipice: Prospects for Free Labor Unions in Vietnam (forthcoming San Diego Int'l L.J.). Here's the abstract:
Viet Nam is rapidly transitioning economically, in large part due to the pro-trade policies that have attracted international capital. A necessary component for Viet Nam to further integrate into the world economy is to develop a system of industrial relations that will ensure industrial stability and reassure international manufacturers that there is no risk of embarrassment resulting from revelations of brutal or unsafe working conditions. Positive signs for rapid labor reform were visible as recently as early 2016 with the Trans-Pacific Partnership (“TPP”), a trade agreement intended to integrate trade among twelve countries (including Viet Nam), which would have set international benchmarks and a fixed deadline for labor reform.
Notwithstanding the withdrawal of the U.S. from TPP negotiations, labor reform in Viet Nam continues, as there is currently a vigorous debate within the country over which direction reform should take. This article describes the existing labor regime in Viet Nam, and how the ILO and the TPP jump-started the most recent wave of labor reform. It then analyzes Vietnamese labor law, specifically as compared to ILO norms, and evaluates current proposals for reform.
Sunday, January 21, 2018
Ken Dau-Schmidt asks the following question--if anyone has a case that comes to mind you can email Ken or, better yet, post a comment, as I couldn't think of an example but would love to see one:
Are there any cases where a worker is an employee under the right to control test, but NOT an employee under the economic realities test? You’d need a worker who was controlled, but not economically dependent. It’s not hard to find cases where workers are employees under the economic realities test but not an employee under the right to control test (the news boys case under the NLRA or the pickle picker cases under the FLSA) but I’m not sure I’ve ever seen a case the other way around.
Wednesday, January 17, 2018
Lynne Bernabei (founding partner) and Kristen Sinisi (senior associate), Bernabei & Kabat in D.C., have published in Law 360 The Legal Case Against Weinstein’s Suppression Efforts. With permission of the authors and of Law360, I am reproducing their article here in full:
For decades, disgraced film producer Harvey Weinstein succeeded in silencing his victims. Authorities in three different countries are now considering whether to bring criminal charges against him, but will he have the same success burying information in the courts as he did on the job?
More than eighty women have spoken up publicly about Weinstein’s pattern of sexual assault spanning more than three decades. A recent report from The New Yorker substantiated the fear Weinstein’s victims faced in coming forward. The Hollywood mogul did not limit his retribution to empty threats. Weinstein engaged private intelligence companies — Kroll and Black Cube — to dig up dirt on his sexual accusers and the media members who threatened to air victims’ stories. Weinstein leveraged the information to keep his victims quiet, and until recently, it worked.
An alarming number of victims have come forward about the sexual assault and harassment they faced at the hands of Weinstein, but questions remain about the judicial system’s ability to serve justice. In the United States, many of the public claims against Weinstein are likely time-barred. Authorities in London who are investigating Weinstein with respect to nearly a dozen victims there may fare better, given that it does not have a strict statute of limitations for serious sex crimes.
Another question about the limits of the judicial system concerns evidence that prosecutors may be able to collect from Weinstein’s former attorney, David Boies. Initially, Boies’ involvement with Weinstein was thought to be limited to helping him negotiate a new employment contract with The Weinstein Company when his contract came up for renewal in 2015. At that time, Boies negotiated terms that enabled Weinstein to keep his job despite his criminal misdeeds (in the absence of a criminal indictment or verdict or fraud against the company).
As if that weren’t enough, The New Yorker’s report revealed that Boies’ involvement in the Weinstein web ran deeper than previously known. In July 2017, as The New York Times, then another Boies client in unrelated litigation, prepared to release a story about the allegations against Weinstein, Boies took steps to bury the stories.
He personally executed an agreement retaining the services of Black Cube, a business intelligence company comprised of a “select group of veterans of elite units in the Israeli intelligence community,” on behalf of Weinstein. The agreement’s primary objectives included “[p]rovid[ing] intelligence which will help [Weinstein]’s efforts to completely stop the publication of a new negative article in a leading NY newspaper.”
Black Cube defined “success,” entitling it to a $300,000 “success fee,” as “stop[ping] the Article from being published at all in any shape or form.” Although Boies released a statement in which he said that he engaged Black Cube merely to vet the accuracy of the Times’ article, the express contract provisions he signed contradict that claim.
Boies went on to say that he declined to represent Weinstein with respect to the alleged sexual assaults for which Weinstein hired other counsel and that he told Weinstein “the Times story could not be stopped through threats or influence.” Boies further stated that Weinstein and the counsel he engaged selected private investigators to assist him and drafted a contract, which Weinstein asked Boies to sign. Although Boies signed the agreement, he denied selecting the investigators or directing or controlling their work, tasks which Weinstein and his lawyers did, according to Boies.
This sets out another problem for Weinstein and Boies: can Boies be compelled to provide evidence about his communications with Weinstein because this contract had nothing to do with providing legal advice?
Monday, January 15, 2018
Shu-Yi Oei & Diane M. Ring (both of Boston College Law) have just posted on SSRN their essay Is New Code Section 199A Really Going to Turn Us All into Independent Contractors? Here's the abstract:
There has been a lot of interest lately in new IRC Section 199A, the new qualified business income (QBI) deduction that grants passthroughs, including qualifying workers who are independent contractors (and not employees), a deduction equal to 20% of a specially calculated base amount of income. One of the important themes that has arisen is its effect on work and labor markets, and the notion that the new deduction creates an incentive for businesses to shift to independent contractor classification. A question that has been percolating in the press, blogs, and on social media is whether new Section 199A is going to create a big shift in the workplace and cause many workers to be reclassified as independent contractors.
Is this really going to happen? How large an effect will tax have on labor markets and arrangements? We think that predicting and assessing the impact of this new provision is a rather nuanced and complicated question. There is an intersection of incentives, disincentives and risks in play among various actors and across different legal fields, not just tax. Here, we provide an initial roadmap for approaching this analysis. We do so drawing on academic work we have done over the past few years on worker classification in tax and other legal fields.
Friday, January 12, 2018
Sexual harassment claims reached the federal judiciary when Judge Alex Kozinski was accused of sexual misconduct a few weeks ago. He has since resigned. As Tessa wrote here yesterday, one thing that kept some clerks from coming forward to report this misconduct was the policy of strict confidentiality that clerks must uphold while in chambers with their judges. Some judges, like Kozinski, may further rigidly enforce this pact as well, making it very difficult for clerks or other judicial employees to make reports.
In rapid response to this concern the Federal Judicial Center amended the Federal Law Clerk Handbook yesterday to read:
In a section of the clerk handbook that proclaimed “law clerks owe judges complete confidentiality as to case-related matters,” two boldfaced sentences were added:
“However, nothing in this handbook, or in the Code of Conduct, prevents a clerk, or any judiciary employee, from revealing misconduct, including sexual or other forms of harassment, by their judge or any person. Clerks are encouraged to bring such matters to the attention of an appropriate judge or other official.”
Concurrently, a signature campaign has been circulated to former law clerks and others urging for clarification on the confidentiality rules. It seems at least with regard to the Handbook, the amendment above may be sufficient to ensure judicial personnel feel comfortable making reports. The letter is due to be delivered on Thursday, December 21, 2017, to "Third Circuit Judge Anthony Scirica, chair of the Judicial Conference’s Committee on Judicial Conduct and Disability, Judge Jeremy Fogel, director of the Federal Judicial Center, James Duff, director of the Administrative Office of the U.S. Courts, and Chief Justice John Roberts Jr. in his capacity as presiding officer of the Judicial Conference." The United States Supreme Court is not governed by the Judicial Conference, and the letter makes no recommendations to the Court.
The letter can be found here and will remain open for signature.
Paul Caron over at TaxProf Blog sends word that the American College of Employee Benefits Counsel is sponsoring its 14th Annual Employee Benefits Writing Competition on any topic in the field of employee benefits law. The competition is open to any J.D. and graduate (L.L.M. or S.J.D) law students enrolled at any time between August 15, 2017 and August 15, 2018. Two $1,500 prizes may be awarded. The submission deadline is June 1, 2018.
I posted yesterday on the conference earlier this week on minimum wage laws in developing countries. Daniel Helman (Ton Duc Thang University, Labor Relations & Trade Unions) circulated a follow-up email making a point about minimum wage laws I hadn't considered before. I suspect his argument has equal force when a single state or municipality in the U.S. raises its minimum wage significantly above (extraordinarily low, by any historical standard) national base rate. Here is Daniel's argument:
During my recent visits to Australia and Singapore (in December) I spent some time networking with academic colleagues. In both places people were talking about how Vietnam was projected to be the most important economy in SE Asia in twenty years. One of the key indicators of this projection is the rate of rise of wages here in Vietnam. The rapid wage increase is seen as a reflection of economic strength and an indicator of future economic growth.
Thus the trend in wage increases signals to the rest of the world that the economy of Vietnam is becoming increasingly robust. Such a signal leads to foreign investment at a consumer level—as international companies aim to establish an economic presence here in Vietnam. They do this now so that in the future, as the domestic demand is large, they will have a well-established presence and will be able to command a large share of the market in their sector.
Of course Vietnam has other features that influence its future success, such as a single-party system which allows for more focused and beneficial policies to be implemented more easily than in other systems; and a culture that is perhaps more focused on its own success after so much hardship for so many decades; and other intangibles, such as respect for the role of work and effort in the family. But the increase in wages—based in large part on the increases in the minimum wage over the past several years, has done a great deal to place Vietnam very high in its economic forecast. Such a signal leads to future investment, and these facts can form a strategy to (rightly) promote future increases in the minimum wage here so that it will reach the level of a living wage sufficient to meet more basic needs. It is similar to the point [ILO Vietnam Country Director] Dr. Chang-Hee Lee made on the first day [of the conference], about how increases in the minimum wage increase demand.
Obviously the totality of pathways and feedbacks are more complicated than what I have written above, but the essential point is that the rate of increase in wages is a signal of the growing robustness of the domestic market; and that this signal is read by global economic stakeholders and influences their behavior.
Thursday, January 11, 2018
Earlier this week I participated in a conference on minimum wage laws in Viet Nam (and SE Asia generally) at the Tôn Đức Thắng University Labor College in Ho Chi Minh City (Saigon), Viet Nam. International wage & hour law is not my specialty, so it was a pleasure to learn from the many law faculty, workers' advocates, employer representatives, and even even the former head of the VGCL (the government-controlled unified trade union) attending. My key take-aways:
The traditional neoclassical economic argument that increasing the minimum wage decreases employment may have even less salience in developing countries than in developed ones. Even in the countries like Viet Nam that produce a large quantity of the clothing, electronics, and other goods consumed in the West, the vast majority of workers still work in services and manufacturing for the local economy. Raising minimum wages can increase both worker productivity and domestic consumption, which can have a positive effect on economic growth and employment and thus offset potential negative effects.
The risk of capital flight in response to raising the minimum wage is overstated. A MNC that has built a factory here is unlikely to relocate it because of a requirement that it spend an extra few cents per hour on wages. It's less clear how increases in minimum wage laws might influence future capital allocation decisions.
- Companies looking to maximize profits by minimizing labor costs are barking up the wrong tree -- they should instead be looking to cut supply-chain costs. The pair of Nikes we spend $150 for in the West costs about $12 to make, of which $2-3 is labor costs. The $138 difference between retail price and cost-of-production is where companies should be looking if they want to squeeze further profits. Nike could slash those costs by vertically integrating, which would have the salutary effect of making Nike directly and obviously responsible for the workers who make the company's shoes. The fact that the Nikes of the world aren't doing this is telling.
- The proportion of workers in the informal economy has a huge impact on the efficacy of minimum wage laws. Minimum wage laws may actually exacerbate wage inequality in countries where a large proportion of workers are off-the-books.
- Minimum wage laws can perform an important signaling effect in developing countries. I'll add a guest post on this topic shortly.
Thursday, December 28, 2017
Leora Eisenstadt (Temple) recently published a fascinating piece in the San Francisco Chronicle about how employment laws can protect harassers and discourage victims from raising complaints. The piece is wonderfully written and takes an interesting look at this timely issue. It is definitely worth taking a look at as these issues continue to emerge in the headlines.
— Joe Seiner
Tuesday, December 19, 2017
- Bill's new article, written with Jacob Apkarian and appearing in LERA's Perspective on Work, Everything Passes, Everything Changes: Unionization and Collective Bargaining in Higher Education is now on SSRN. The abstract:
This article begins with a brief history of unionization and collective bargaining in higher education. It then presents data concerning the recent growth in newly certified collective bargaining representatives at private and public-sector institutions of higher education, particularly among non-tenure track faculty. The data is analyzed in the context of legal decisions concerning employee status and unit composition under applicable federal and state laws. Lastly, the article presents data concerning strike activities on campuses between January 2013 and May 31, 2017.
On-registration has begun for the National Center's 45th annual higher education labor-management conference in New York City on April 15-17, 2018. The theme of the conference is Facing New Realities in Higher Education and the Professions.
The keynote speaker will be Dean David Weil of the Heller School for Social Policy and Management, Brandeis University, and author of the Fissured Workplace.
The conference plenary will discuss Dr. Martin Luther King, Jr. and his legacy for our times withWilliam P. Jones, University of Minnesota; Derryn Moten, Alabama State University, and Jeanne Theoharis, Brooklyn College, CUNY.
The following are the subjects of some of the confirmed conference workshops and panels:
-Workshops on April 15, 2018: Unionization and collective bargaining for administrators and academic labor; bargaining over health care in higher education; preparing, presenting, and defending at arbitration; financial analysis in higher education; effective lobbying for higher education
-Panels on April 16-17, 2018: Responding to Janus: collective bargaining and membership engagement; recently negotiated first contracts for adjunct faculty; bargaining a first contract for graduate student employees; interest-based bargaining at community colleges; wage discrimination at universities and professional schools; creative solutions for resolving wage compression; unionization at religiously-affiliated colleges and universities; unionized environments at academic libraries; and unionization of doctors and nurses.
Sunday, December 17, 2017
Thanks to Paul Harpur (TC Beirne - Queensland) for sending word of this disability case currently pending in Ohio:
On December 15, 2017, Denoewer, an adult individual with intellectual and developmental disabilities who is autistic, non-verbal, and epileptic, sued his employer of 7.5 years for disability discrimination and has joined his employer’s client claiming it was an accessory to the discrimination. The claim is available here.
Denoewer pleaded he experienced disability discrimination at the hands of his employer, Uco, a 501(c)(3) non-profit that exists to employ individuals with disabilities in a setting that is purportedly integrated (essentially a sheltered workshop). He contends that Uco breached the ADA and Ohio Rev. Code through treating him less favourably than workers without disabilities. He is seeking compensation for an amount between his actual rate of pay, and pay-related benefits, and the amounts earned and accrued by workers performing tasks that Denoewer was not permitted to perform, even though he claims he could complete, due to his impairment.
The aspect of this case which is novel is the move to sue Uco’s customer, HONDA of America MFG., Inc., for being an accessory to Uco’s disability discrimination. Honda’s accessorial liability is based upon 2 key grounds:
First Honda exercised significant economic power so as to ensure that UCO’s labor costs were lower than were lawfully possible.
Second, Honda’s specific production demands also determined which of UCO’s Production Associates would be permitted to work on the line. As a result, in some instances, non-disabled individuals were placed on the line instead of individuals with disabilities, such as Denoewer, in order to meet Honda’s specific demands.
As a consequence Denoewer is arguing that Honda aided and abetted UCO’s discriminatory conduct.
Friday, December 15, 2017
Another twofer from the NLRB today. The first is another expected change--the Specialty Healthcare decision that has been much derided by employers. In Specialty Healthcare (2011), the Board concluded that if, after there is a determination pursuant to the traditional unit determination test, an employer argued that employees should be added to a union's proposed unit, the Board would find the proposed unit appropriate unless the employer could show that the excluded employees shared an overwhelming community of interest with the proposed group of employees. In PCC Structurals, the NLRB reversed Specialty Healthcare and its "overwhelming community of interest" standard, instead using only the multi factored test for a unit determination in most cases. Also, although it wasn't presented in PCC Structurals, the NLRB also reinstated the Park Manor standard for nonacute health care facilities (like nursing homes), that prompted the Specialty Healthcare decision. Legally, the issue over the traditional v. Specialty Healthcare tests hinges on what is meant by the NLRA's mandate that a unit merely be "an appropriate" unit rather than the "most appropriate" unit and how much the interests of excluded employees should play a role. But in reality, the disagreement is mainly based on the fact that, in general, the smaller the unit, the easier to organize.
In the second case, Raytheon Network Centric Systems, the NLRB reversed a 2016 case, DuPont, in which the Board had concluded that an employer must bargain with a union before instituting a change that is consistent with a previous practice that was created under an expired management rights clause or made pursuant to employer discretion. In Raytheon, the NLRB stated that an employer need not bargain before implementing any change that is similar in kind and degree with an established past practice that is similar to the unilateral change--even if the past practices were created under a collective-bargaining agreement, even if there was no agreement when the disputed change was implemented, and even if the past practices involve some degree of employer discretion. The dissent argues strenuously that this new rule violates the Supreme Court's decision in Katz.
We now have four NLRB reversals over two days, all of which were issued without any notice or invitation for comment. Moreover, they all mirror Chairman Miscimarra dissents. The Chairman's term is expiring tomorrow, so I wouldn't be surprised to see several more decisions even running into next week (dated Dec. 16).
Congratulations to Orly Lobel (San Diego) on the publication of her book You Don't Own Me: How Mattel v. MGA Entertainment Exposed Barbie's Dark Side (Norton 2017). Here's the publisher's excerpt:
The battle between Mattel, the makers of the iconic Barbie doll, and MGA, the company that created the Bratz dolls, was not just a war over best-selling toys, but a war over who owns ideas.
When Carter Bryant began designing what would become the billion-dollar line of Bratz dolls, he was taking time off from his job at Mattel, where he designed outfits for Barbie. Later, back at Mattel, he sold his concept for Bratz to rival company MGA. Law professor Orly Lobel reveals the colorful story behind the ensuing decade-long court battle.
This entertaining and provocative work pits audacious MGA against behemoth Mattel, shows how an idea turns into a product, and explores the two different versions of womanhood, represented by traditional all-American Barbie and her defiant, anti-establishment rival―the only doll to come close to outselling her. In an era when workers may be asked to sign contracts granting their employers the rights to and income resulting from their ideas―whether conceived during work hours or on their own time―Lobel’s deeply researched story is a riveting and thought-provoking contribution to the contentious debate over creativity and intellectual property.
Thursday, December 14, 2017
Congratulations to Melissa Hart, who was just named to the Colorado Supreme Court! Apparently, she will continue to teach, which I'm sure her colleagues and students at University of Colorado will be happy to hear.
Well, that didn't take long. A mere day after our post about possible changes from the new NLRB, the Board has announced two major rule reversals.
The second case announced, as will surprise exactly no one, reverses the NLRB's Browning-Ferris decision on joint employer status. In Hy-Brand Industrial, the NLRB returned to the pre-Browning standard, under which joint employment is found only if actual control is exercised in a "direct and immediate" manner that is not limited or routine. You can see our previous coverage of the standards here. This has been a major issue for many employers, such as franchise businesses, and the subject of a lot of activity in Congress, so this move was expected.
The first case announced reversed a 2004 decision, Lutheran Heritage, which concluded that an employer's facially neutral workplace rule will be unlawful if employees would reasonably construe it as prohibiting the exercise of NLRA, Section 7 rights. Under the new case, The Boeing Co., the NLRB will only find facially neutral rules to be unlawful by weighing the nature and extent of the potential impact of the rule on NLRA rights, and the employer's legitimate justifications for implementing the rule. The Board also emphasized that an otherwise lawful rule could still be applied in an unlawful fashion. To provide more clarity, the Board is establishing three categories; according to the NLRB announcement:
Wednesday, December 13, 2017
Charlotte Garden (Seattle) has just posted on Take Care Blog that there were plenty of red flags at Judge Kozinski's confirmation hearings -- and that the Senate ignored them. She provides extensive excerpts from the Senate record, then concludes:
It is impossible not to read the Senate record on Kozinski’s time at the MSPB as a precursor to last week’s Post story and subsequent reports about his behavior. That is, disturbing reports about Judge Kozinski are not just an open secret – they are also a matter of congressional record.
With the benefit of hindsight, we should ask whether the Senate failed in executing its responsibility to assess nominees’ temperament to serve, thereby failing the clerks and other employees who have now come forward reporting abusive behavior. There is a lesson here: The Senate’s confirmation process should be attentive to warning signs about nominees’ managerial temperaments; if a nominee’s track record shows a pattern of abusive intra-office behavior, the Senate should not confirm.