Monday, December 31, 2007

Letterman Inks Deal With Writers

Letterman As we noted earlier, David Letterman was trying to reach an independent deal with the striking writers--a possibility that existed because he owned his own show.  Letterman was ultimately successful and his writers will be back to work tomorrow (Wednesday).  Other talk shows are also returning to air soon, including those hosted by Jay Leno, Conan O'Brien, Jimmy Kimmel, Carson Daly, Jon Stewart, and Stephen Colbert.  Yet those shows will be without striking writers.  Some reports have stated that the networks (or at least NBC) told those shows that if they didn't go back on air, many non-writer employees would be fired, thereby placing some of the stars in a difficult position.

Details on the Letterman deal have not emerged, but the show has essentially said that they gave the writers what they were asking for, which wasn't very much.  This fits my understanding of the dispute, which seems not to be about any significant amount of money.  The writers are asking for a percentage of revenue that may come from the Internet and other digital sources, much like they do from more traditional sources.  The studios are objecting, in part because they can't predict what will happen.  But, isn't that what a percentage takes into account?  If there's nothing, the studios don't have to pay anything more.  If significant revenues eventually occur, they would have to pay--but why shouldn't they?  This seems much more of a power play than anything related to studios bottom-line, a story that is quite familiar to those of us who have practiced in this area.


December 31, 2007 in Labor and Employment News | Permalink | Comments (1) | TrackBack (1)

Yet Another ERISA Case Coming to Supreme Court?

4united_states_supreme_court_112904 From SCOTUSblog today:

The federal government has recommended that the Court grant certiorari in No. 06-923, MetLife v. Glenn, limited to the question presented of whether an ERISA plan administrator that both evaluates and pays claims operates under a conflict of interest that must be weighed on judicial review of benefit determinations. The government also recommended the Court direct the parties to address how courts should weigh such conflicts of interest in reviewing the discretionary benefit determination of a dual-role administrator.

The Solicitor General’s brief is available here. Click the following links to read the petition for certiorari, brief in opposition, and cert reply.

We have covered structural conflicts of interest in the denial of benefit ERISA cases previously.


December 31, 2007 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Secunda To Marquette

Secunda Please join me in congratulating our own Paul Secunda, who has just accepted a teaching offer from Marquette University Law School.  Paul will be starting there in fall 2008.  Paul is a  prodigious scholar, a fantastic colleague, and, of course, a master blogger.  Catch him at the Marquette Martini Party at AALS and wish him well.

Paul currently is the Jessie D. Puckett, Jr. Lecturer and Assistant Professor of Law at the University of Mississippi School of Law.  He joined Ole Miss in 2002.  He teaches employment law, employment discrimination law, employee benefits, labor law, civil procedure, school law, higher education law, and special education law.

Paul's recent articles appear in the UCLA Law Review, Wisconsin Law Review, Colorado Law Review, U.C. Davis Law Review, Florida State University Law Review, Villanova Law Review, Kentucky Law Review, Duke Journal of Gender Law & Policy, and the Comparative Labor Law & Policy Journal.   He is also the author, along with yours truly and Jeff Hirsch, of Understanding Employment Law, and, along with Sam Estreicher, of the forthcoming case book, Global Issues in Employee Benefits Law.

His legal scholarship primarily focuses on the civil liberties and civil rights of employees, with a focus on public employee speech, privacy, and associational issues. He has also written on innovative remedial approaches to group employment discrimination claims and the dynamics of administrative agency adjudication in the labor law context. His current project concerns the lack of employee benefit protection for employee participants under ERISA’s remedial and preemption scheme.

Paul is the current national Chair of the AALS Section on Employment Discrimination Law. He co-edits, again with yours truly and Jeffrey Hirsch, the Workplace Prof Blog.  He moderates the empdiscr listserv, the AALS-sponsored email discussion group of employment discrimination law professors in the United States. Professor Secunda is also a Research Fellow at the NYU School of Law's Center for Labor and Employment Law.

Professor Secunda serves as a special education mediator for the State of Mississippi's Office of Special Education and as a public arbitrator for FINRA. He is also a frequent commentator on labor and employment law issues in the national media and has written columns for the National Law Journal and Legal Times.

Congrats, Paul!!!


December 31, 2007 in Faculty Moves | Permalink | Comments (4) | TrackBack (2)

Levitz Withdrawal of Recognition Standard Upheld

Nlrblogo Thanks to Mitch Rubinstein at Adjunct Prof Law Blog for bringing to my attention the fact that the D.C. Circuit has upheld the Board's Levitz  Furniture withdrawal of recognition standard:

In Levitz, the Board held that an employer can lawfully withdraw recognition only if it establishes that the union actually lost its majority status. A good faith doubt will not suffice. What this case adds is that this standard must be met on the day the employer withdrew recognition and not by "after the fact evidence". Thus, the employer was found to have committed a ULP by withdrawing recognition in that the petition it had was signed by less than a majority of unit employees.

The case is Highlands Hospital Corp. v. NLRB, ___F.3d___(D.C. Cir. Nov. 30, 2007).

This is important because before the expiration of his term, Chairman Battista was making sounds that he disfavored the Levitz standard.  Labor law buffs will remember that Levitz was the Clinton Board's response to the Supreme Court's Allentown Mack decision.


December 31, 2007 in Labor Law | Permalink | Comments (2) | TrackBack (0)

FMLA Expansion Hits Snag

Veto President Bush's pocket veto on Friday of the defense spending bill ensnared a bi-partisan proposal to expand FMLA benefits for military families.  Bush objected to a provision in the bill that would have exposed the Iraqi government to lawsuits seeking damages from the Saddam Hussein era.  Daniel Schwartz, over at Connecticut Employment Law Blog, expects the FMLA extension to be worked out in January.


December 31, 2007 | Permalink | Comments (0) | TrackBack (0)

Sternlight Favors Arbitration!

Sternlight_2 Well, sort of.  Jean Sternlight (UNLV), who has spent most of her academic career criticizing employment and consumer arbitration, has just posted on SSRN her article  (forthcoming Nevada L.J.) In Defense of Mandatory Binding Arbitration (If Imposed on the Company).  Here's the abstract:

Having spent much of her academic life battling companies' mandatory imposition of binding arbitration on consumers and employees, the author now switches gears.  This Article contemplates whether mandatory binding arbitration is acceptable if imposed by the government on companies (governmental mandatory arbitration) rather than by companies on their employees and consumers (private mandatory arbitration).  Specifically, the Article considers the possibility of statutes that would provide "little guys" (consumers and employees) with an opportunity to take their disputes to binding arbitration rather than litigation.  If the "little guys" chose arbitration over litigation, post-dispute, companies would have to agree to such arbitration, and the results of the arbitration would then be binding on both "little guy" and company.  If on the other hand the "little guys" preferred to litigate their disputes, they would reserve that right.  After first examining the policy implications of this approach, and finding some reasons to favor the proposal, the Article next considers the constitutional arguments that would likely be raised in opposition to such statutes.  Specifically, it considers the legitimacy of governmentally imposed mandatory arbitration in light of Article III, the Seventh Amendment, and the Due Process Clause.  The Article finds that it may be possible to governmentally impose mandatory arbitration in some situations without violating the Constitution.  Nonetheless, the Article concludes that trying to introduce such legislation is probably unwise, as a matter of realpolitik.  At a minimum, however, the Article should discourage companies and their lobbyists from insisting, as they often do, that privately imposed binding arbitration is the best way to ensure "little guys" get access to arbitration.  Instead, if such companies and lobbyists truly believe arbitration is better for little guys than litigation they should favor the governmental imposition of arbitration on companies, as discussed in this Article.

What's good for the goose is good for the gander.


December 31, 2007 in Arbitration | Permalink | Comments (1) | TrackBack (0)

Sunday, December 30, 2007

2008 Workplace Trends

Graphup Workplace Trends for 2008 as reported by Kansas

Expect any substantive workplace regulatory changes to be put on hold pending the outcome of the presidential election. There’s not likely to be the political will to do anything but possibly a minor adjustment to the Family and Medical Leave Act . . . .

Expect a lot more talk about sustainability, LEED (Leadership in Energy and Environmental Design) construction and “reducing your carbon footprint.” . . . .

Expect more employers to create and push employees to take advantage of healthful lifestyle programs . . . .

Expect health-care insurance costs to continue to increase, and expect more small-business operators to say they can’t afford to subsidize it.

Similarly, expect more small businesses to look for ways to reduce the cost of benefits administration by turning to professional employer organizations. With PEOs, some businesses take advantage of economies of scale and relieve their human-resources staff of some duties.

Expect the long-predicted wave of baby-boomer retirements to gain steam.

These all sound right to me, and I would add that there will be more ERISA class actions by 401(k) account holders, more use of Voluntary Employee Benefit Associations (VEBAs) to deal with the growing problem of retiree health care, and there will be more emphasis on helping employees returning from military service.


December 30, 2007 in Workplace Trends | Permalink | Comments (0) | TrackBack (0)

Saturday, December 29, 2007

Top-5 Employment SSRN Downloads

Top-5 Labor SSRN Downloads

Top-5 International Employment & Labor Law SSRN Downloads

Top-5 Benefits/Compensation/Pension SSRN Downloads

Friday, December 28, 2007

Hoffman Appointed to Institute of Mecidine Research Commottee

Hoffman Congratulations to Sharona Hoffman, who has been appointed by the Institute of Medicine of the National Academies to the Committee on Research Priorities in Emergency Preparedness and Response for the Public Health Systems.  As part of the 16-member ad hoc committee, which was formed in response to a request from the Centers for Disease Control and Prevention’s (CDC) Coordinating Office for Terrorism Preparedness and Emergency Response, Sharona will be responsible for helping identify short-term (3-5 year) research priorities to improve public health systems’ emergency preparedness.  The research is to be conducted primarily by schools of public health.

Sharona is at heart a labor & employment law professor, who apparently has lost her way and now is wandering in the nether reaches of health law.   But I knew her when she was still on track -- even beforehand, when she was an attorney for the EEOC and I was a lowly law firm associate.

Congrats, Sharona!


December 28, 2007 in Faculty News | Permalink | Comments (0) | TrackBack (0)

Hearing Impaired UPS Drivers Lose Batlle En Banc, But War Won?

Upslogo After what appeared to be a rare victory for Americans with Disabilities Act (ADA) plaintiffs in a case concerning hearing-impaired local delivery drivers for UPS, the en banc Ninth Circuit Court of Appeals has reversed a lower court injunction which would have required UPS to hire these drivers and remanded the case for further proceeding based on the wrong evidentiary framework being applied by the district court.

The 13-2 opinion in Bates v. UPS, 04-17295 (9th Cir. Dec. 28, 2007) (en banc) is written by Judge McKeown. Judges Berzon, joined by Reinhardt, concurred in part and dissented in part. Here are some of the more important parts of the decision:

This appeal under the Americans with Disabilities Act (ADA) requires us to consider the intersection of a safety-based qualification standard and the “business necessity”
defense. United Parcel Service (UPS) imposes a Department of Transportation (DOT) hearing standard on all package-car drivers, even though the DOT standard is federally mandated
only for higher-weight vehicles. A class of hearing-impaired UPS employees and applicants who cannot meet the DOT hearing requirement challenges UPS’s policy . . . .

We granted rehearing en banc to consider the contours of a claim that an employer’s safety qualification standard discriminates against otherwise “qualified” persons with disabilities,
see 42 U.S.C. § 12112(a), (b)(6), and the showing required of an employer to successfully assert the business necessity defense to use of such qualification under 42 U.S.C.
§ 12113(a). Because this case involves a facially discriminatory qualification standard, we conclude that the Teamsters’ burden-shifting protocol is inapplicable. In addition, we overrule
Morton to the extent that it imposes a BFOQ standard under the ADA, as the plain language of the ADA does not support such a construction. Because the district court considered this case under the framework of Teamsters and Morton, we vacate and remand for further proceedings . . . .

A burden-shifting protocol is, however, unnecessary in this circumstance. The fact to be uncovered by such a protocol—whether the employer made an employment decision on a proscribed basis (here, disability in the form of hearing impairment)—is not in dispute . . . . The relevant inquiry now is simply whether the evidence presented at trial
supports a finding of liability . . . .

Because UPS has linked hearing with safe driving, UPS bears the burden to prove that nexus as part of its defense to use of the hearing qualification standard. The employees, however, bear the ultimate burden to show that they are qualified to perform the essential function of safely driving a package car. In so doing, Oloyede and Habib need not disprove the validity of the hearing standard, but must demonstrate their safe driving ability vis-a-vis package cars. The inquiry is not whether Oloyede and Habib are capable of safely driving their personal cars, but rather whether they can drive the package cars at issue in this litigation. The district court did not make a finding with respect to plaintiffs’ ability to drive package cars safely. Merely finding an absence of evidence with respect to driving a package car is insufficient. In short, Oloyede and Habib bear the burden of proving that they are qualified individuals with disabilities. They must show that they can perform the essential job function of safely driving package cars. Only if they meet this burden does the question become whether the qualification standard used by the employer satisfies the business necessity defense . . . .

[W]hen an employer asserts a blanket safety-based qualification standard—beyond the essential job function— that is not mandated by law and that qualification standard screens out or tends to screen out an individual with a disability, the employer—not the employee—bears the burden of showing that the higher qualification standard is job-related and consistent with business necessity, and that performance cannot be achieved through reasonable accommodation.

We most recently addressed the ADA’s business necessity defense in Morton, 272 F.3d 1249. There, we held that the ADA’s version of the business necessity defense incorporates concepts from both the traditional Title VII business necessity defense to disparate impact claims and the BFOQ defense in Title VII and Age Discrimination in Employment Act (ADEA) disparate treatment challenges to a proscribed classification. Id. at 1260-63. Today, we revisit our conception of the business necessity defense under the ADA and overrule Morton to the extent that it conflicts with this opinion. Specifically, we reject Morton’s adaptation of the Title VII and ADEA BFOQ safety standard requirement in the ADA context.

Wow, there is a lot to chew on here. On the one hand, plaintiffs may prevail if they can show they meet the essential functions of the job and defendant cannot show business necessity, which seems something less than bfoq. Berzon takes issue with what seems to be an increased burden to show that a plaintiff meets the essential functions of the job. She instead writes:

Practically speaking, under the approach I suggest, once a deaf applicant shows that he meets the normal threshold qualifications for eligibility — that he is at least twenty-one years
of age, possesses a valid driver’s license, and has a clean driving record by UPS’s local standards — he has met his burden of proof in this regard. It is then UPS’s burden to show, if it desires to adopt as a threshold requirement a minimum hearing level such as the DOT standard, that it can establish under the business necessity test that deaf applicants as a group who do not meet that requirement cannot drive package cars safely. Unless UPS can establish a business necessity supporting such a blanket requirement, either by validating the application of the DOT standard to deaf drivers or by adopting some other validated standard for such drivers, it must allow hearing impaired applicants to take the same initial driving test, benefit from the same training program, and be subject to the same final test as all other applicants, all with reasonable accommodations if necessary.

My overall initial take, and there are far better minds on ADA issues than me (Sam? Michael? Michael?), is that although plaintiffs may still end up winning this case, more obstacles have been placed in the way of ADA plaintiffs going forward and less obstacles have been placed on defendants.

So bounces the employment civil rights ball in these bleak, Rovian times.

Hat Tip: How Appealing


December 28, 2007 in Disability | Permalink | Comments (0) | TrackBack (0)

Gies on Ensuring Retirement Security

GeisTom Gies of Crowell & Moring, who argued for DeWolff, Boberg in the pending ERISA 401(k) mega-case, has this opinion piece in the December 14th issue of the Los Angeles Daily Journal.

As I read it, Tom's basic point is that fiduciaries make mistakes all the time and we should not allow litigation expense in this area to make affordable 401(k) plans less available to other employees because of these innocent mistakes.

My counter is that these mistakes are also called breaches of fiduciary duty under ERISA and Section 502(a)(2) clearly provides a remedy. If Congress believes that this will cause less employers to offer 401(k)'s, they can change the law.  Isn't that the textualist argument that less progressive Members of the Court usually rely on?

Somehow, if ERISA is amended at all in the next decade, my guess is that it won't be in the direction of making ERISA even harder to sue under.

I also still think that Tom's client is likely to lose this ERISA case as discussed in my previous analysis of the oral argument.


December 28, 2007 in Commentary | Permalink | Comments (0) | TrackBack (0)

City of San Francisco Seeks Emergency Injunction Against ERISA Preemption Ruling

California Told ya this one was only starting to get juicy (via San Fran. Chronicle):

San Francisco asked a federal appeals court on Thursday to let the city extend its groundbreaking universal health coverage plan to thousands more uninsured adult residents next week, despite a federal judge's ruling striking down a key provision requiring employers to pay part of the cost.

City Attorney Dennis Herrera's office and a group of labor unions are seeking an emergency stay from the Ninth U.S. Circuit Court of Appeals in San Francisco that would allow the expanded health care ordinance, including the challenged employer fee, to take effect Wednesday as scheduled while the city appeals the ruling.

Meanwhile, city officials and labor groups continued to flatly reject calls from business leaders to come up with another way to pay for the plan such as instituting a quarter-cent sales tax . . . .

The city attorney's office has asked for a ruling on the emergency stay request by Monday and hopes to have the appeal process complete by the middle of next year, said Deputy City Attorney Vince Chhabria.

Chhabria argued the case meets the court's test for an emergency order, which can be granted only if it would prevent more hardship than it caused. Chhabria said San Francisco and its residents would suffer far greater hardships from the denial of a stay - in withheld health coverage and increased costs - than employers would suffer from having to pay the fees during the city's appeal.

More surely to follow after the weekend.


December 28, 2007 in Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

NLRB Delegates Litigation Authority to General Counsel; Declares It Will Issue 2-Member Decisions

Nlrb Former Chair Robert Battista's term expired December 16; Board Members Peter Kirsanow and Dennis Walsh are serving recess appointments that will expire imminently.  That will leave two Members sitting on a five-person Board, and Congress had made it clear that there will be no more recess appointments to this politically charged Board.

In response, the Board today announced two things.  First, it will temporarily delegate to the General Counsel authority on all court litigation matters that otherwise would require Board authorization. This delegation will give the General Counsel full and final authority on behalf of the Board to initiate and prosecute injunction proceedings under Section 10(j), or Section 10(e) and (f), of the National Labor Relations Act.

Second, and this one seems to me more-than-a-little suspect, the Board announced that it will delegate its powers to Members Liebman, Schaumber, and Kirsanow.  This action will permit Members Liebman and Schaumber, as a quorum of the three-member group, to issue decisions and orders in unfair labor practice and representation cases. The temporary delegations, decided on December 20, 2007 and announced today, will be effective as of midnight tonight. They will be revoked when the Board returns to at least three members.

The Board's authority for the delegation is Section  3(b), which provides:

[t]he Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise.  ...  A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.

The Board also cites a March 4, 2003 opinion issued by the Office of Legal Counsel of the U.S. Department of Justice, which concluded that "if the Board delegated all of its powers to a group of three members, that group could continue to issue decisions and orders as long as a quorum of two members remained."

Perhaps I'm missing something here, but the cited authority does not seem to be on point.  The statute, for example, answers the question of what happens when there are three members of the Board but one is absent or disqualified.  Same with the OLC opinion.  Here, however, once Congress goes into recess, there will be only two members of the Board.  Kirsanow can't count as one of the three members who can appoint a two-person quorum because he is not (as of Congressional recess) a member.

If I'm right, then everything the Board does between midnight tonight and January 2009 (the earliest that the new president's nominees will be confirmed) may well meaningless.

Here's the Board's press release explaining today's actions.


December 28, 2007 in Labor Law | Permalink | Comments (1) | TrackBack (1)

Third Annual Colloquium on Current Scholarship in Labor & Employment Law

Sd_2 Ruben Garcia writes to tell us, fresh on the heals of the very successful Second Annual Colloquium, that the dates and location of the Third Annual Colloquium have been set:

The dates have been set for the Third Annual Colloquium on Current Scholarship in Labor & Employment Law.  Next year's colloquium will be co-hosted by California Western School of Law, Thomas Jefferson School of Law, and the University of San Diego Law School on October 23 to October 25, 2008.  Details are still to be worked out, but those who wish to be updated on colloquium news or developments should send an email to Ruben Garcia.  Start thinking about papers to present in the San Diego next year!

Tentative Schedule:

  • Thursday evening 10/23:  Welcome Reception and possible keynote speaker at Thomas Jefferson School of Law
  • Friday 10/24: Full day program at the University of San Diego School of Law
  • Saturday 10/25:  Full day program at California Western School of Law

A web site to accept registration and abstracts will be set up in the weeks to come.  In the meantime, if you could give Ruben a preliminary indication of your interest in attending, as well as your interest in presenting a paper, that would be helpful.

Thanks Ruben!


December 28, 2007 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, December 27, 2007

California Shopping Malls are Public Forums

Fashion_valley_mall Keeping up our theme of employer property rights versus union solicitation, the California Supreme Court just weighed in on an issue that has been vexing the NLRB and, particularly, the D.C. Circuit for several years.  Under the Board's interpretation of the Supreme Court's Lechmere doctrine, an employer's ability to exclude nonemployee solicitations relies almost exclusively on state law; that is, an employer has a right to exclude union organizers if state property law gives them the right to exclude solicitors from the property in question. I've argued against this framework, but not surprisingly, no one listens to me.  This issue has had a lot of play in California because of a long-standing rule equating shopping malls and other areas with a similar level of openness as constitutional public forums--meaning that these are areas in which individuals enjoy constitutional free speech protection against private property owners' attempt to limit speech.  The upshot of this rule in the labor context is that, to the extent that this rule was still valid, California does not give employers free reign to exclude speech and unions, therefore, have a much broader right to solicit on employers' property.

The problem is that this rule (Pruneyard) was cast into doubt because of an intervening U.S. Supreme Court case and some lower California court decisions.  In the decision at issue here (boy, that took a while), the D.C. Circuit noted the uncertainty and certified the question to the California Supreme Court.  Incidentally, this is the second time the D.C. Circuit has certified the same question to the same court--both cases argued by former NLRB attorney and current Professor Anne Marie Lofaso (WVU).  The first time the California court refused to answer, but this time they have.  In Fashion Valley Mall v. NLRB, the California Supreme Court (4-3) reaffirmed its earlier Pruneyard rule. As described by BNA's Daily Labor Report (subscription required):

[The Court, in an opinion written by Justice Moreno,] said that the state constitution provides that any person may "speak, write and publish his or her sentiments on all subjects," and that "[a] law may not restrain or abridge liberty of speech or press." In Robins v. Pruneyard Shopping Center, 23 Cal. 3d 899 (Cal. 1979), Moreno said, California's high court held that the state constitution provided broader protection for free expression than the First Amendment to the U.S. Constitution and that the state constitution protected speech and petitioning in shopping centers even when they were privately owned. . . . 

Courts have noted that reasonable limitations on the time, manner, and place of speech may not be unconstitutional, but Moreno said that "[p]rohibiting speech that advocates a boycott is not a time, place, or manner restriction because it is not content neutral." 

Fashion Valley argued that its anti-boycott rule was "content-neutral," because it applied to all boycotts, without discrimination. But the court said the argument was "mistaken." "The Mall's rule prohibiting all boycotts may be viewpoint neutral, because it treats all requests for a boycott the same way, but it is not content neutral, because it prohibits speech that urges a boycott while permitting speech that does not," Moreno wrote. Stating that "[t]he Mall seeks to prohibit speech advocating a boycott solely because it disagrees with the message of such speech, which might persuade some potential customers not to patronize the stores in the Mall," the California court said that "[u]rging customers to boycott a store lies at the core of the right to free speech." 

Fashion Valley failed to show a compelling interest in prohibiting the union members' exercise of "this traditional form of free speech," the court said."A shopping mall is a public forum in which persons may reasonably exercise their right to free speech guaranteed by article I, section 2 of the California Constitution," Moreno wrote. "Shopping malls may enact and enforce reasonable regulations of the time, place and manner of such free expression to assure that these activities do not interfere with the normal business operations of the mall, but they may not prohibit certain types of speech based upon its content, such as prohibiting speech that urges a boycott of one or more of the stores in the mall," he added. 

Answering the D.C. Circuit's certified question, the California high court said that Fashion Valley could not maintain and enforce its anti-boycott rule against the GCIU local and its members.

This decision is diametrically opposed to the Board's recent email case and perhaps more controversial.  It may come as a surprise to those who flamed me for my criticism of the email case, but I have mixed feelings on this issue.  I'm a bit reticent about relying on constitutional free speech protections and think a better approach would be a more direct balance between the property and labor rights at issue.  I'll admit, however, that it's nice to see the unions get a rare win.  I wouldn't count on it lasting forever though.  A different court or possibly a federal constitutional challenge could change things. 


December 27, 2007 in Labor Law | Permalink | Comments (0) | TrackBack (1)

San Francisco Health Law Falls to ERISA Preemption

California This development can hardly be considered surprising given the outcome of the Walmart Bill in the 4th Circuit, but I thought that perhaps the North District of California would be more receptive to a municipality's claims that its health reform efforts survive ERISA preemption.  I was mistaken.

The North District of California in Golden Gate Restaurant Assoc. v. City and County of San Francisco, No. 06-06997 (N.D. Cal. Dec. 26, 2007) squarely held, on a summary judgment motion, that the San Francisco health care ordinance (written about here) was preempted under both the "connection with" and "reference to" prong of Section 514(a) of ERISA.

Here are some of the more important quotes from the opinion:

In 2006, the San Francisco Board of Supervisors unanimously passed, and the Mayor signed into law, the San Francisco Health Care Security Ordinance (the “Ordinance”). The Ordinance contains two key components related to the regulation of health care in San Francisco. The first is an employer health spending requirement and the second, is a government health care program, funded in part by those employer contributions . . . .

The Ordinance’s health care expenditure requirements are preempted because they have an impermissible connection with employee welfare benefit plans. By mandating employee health benefit structures and administration, those requirements interfere with preserving employer autonomy over whether and how to provide employee health coverage, and ensuring uniform national regulation of such coverage.  The Ordinance’s provisions also make unlawful reference to benefit plans because they refer to, are designed to act immediately upon, and cannot operate successfully without the existence of employee welfare benefit plans . . . .

Although the City contends that the Ordinance’s health care expenditure requirements do not necessarily affect the levels contributed to any specific private employer’s ERISA plan, the Court finds that the Ordinance affects plan administration, a core area of ERISA concern . . .

Without wading into the legislative dominion, the Court can envision such a tax program that takes existing health care expenditures by private employers into account in the form of tax credits. Further, as the parties allude, there are alternatives such as funding a public health care system by requiring a hourly rate paid to the City. (See Intervenors’ Motion at 6-7; Opp. Br. at 10 n.8.) Whatever the legislative solution to the problem facing our nation of providing adequate health care, the Court must nevertheless conclude that the San Francisco Ordinance fails to withstand the expansive test of ERISA preemption.

It still boggles the mind that the court comes to these conclusions, while still recognizing that, "[t]he Supreme Court has also emphasized more generally that the 'principal object of the statute [ERISA] is to protect plan participants and beneficiaries,'" Boggs v. Boggs, 520 U.S. 833, 845 (1997), not to ensure national uniformity or lower costs for employers to run such plans.

In any event, I expect an appeal to the Ninth Circuit where all bets are off and panel composition will be key.


December 27, 2007 in Pension and Benefits | Permalink | Comments (1) | TrackBack (2)

EEOC Publishes Final ADEA Exemption Rules for Retiree Medical Benefits

Aarplogo_2 Back in September, we wrote in the on-going case between the AARP and the EEOC concerning retirement benefits for Medicare-eligible workers:

The AARP has decided to ask the U.S. Supreme Court to review a Third Circuit Court of Appeals decision permitting the Equal Employment Opportunity Commission to issue an Age Discrimination in Employment Act exemption for retiree medical benefit plans that coordinate with Medicare . . . .

This  a complex question at the intersection of employment discrimination and employee benefits law. Although there is nothing like a circuit split in this area, it is a highly important issue for millions of Americans who are dealing with retiree health issues. Look for the Supreme Court to grant cert. and to uphold the EEOC exemption as reasonable under the circumstances.

The saga continues today with the New York Times reporting that the EEOC has published the final rule the AARP is challenging:

The Equal Employment Opportunity Commission said Wednesday that employers could reduce or eliminate health benefits for retirees when they turn 65 and become eligible for Medicare.

The policy, set forth in a new regulation, allows employers to establish two classes of retirees, with more comprehensive benefits for those under 65 and more limited benefits — or none at all — for those older.

More than 10 million retirees rely on employer-sponsored health plans as a primary source of coverage or as a supplement to Medicare, and Naomi C. Earp, the commission’s chairwoman, said, “This rule will help employers continue to voluntarily provide and maintain these critically important health benefits.”

The new rules, published in today's Federal Register, are available here, and the EEOC's press release about the rules is here.

I guess the only thing left now to see is if the Supreme Court grants cert. Stay tuned.


December 27, 2007 in Employment Discrimination | Permalink | Comments (1) | TrackBack (0)