Saturday, November 29, 2008
The Labor Department is racing to complete a new rule, strenuously opposed by President-elect Barack Obama, that would make it much harder for the government to regulate toxic substances and hazardous chemicals to which workers are exposed on the job.
The rule, which has strong support from business groups, says that in assessing the risk from a particular substance, federal agencies should gather and analyze “industry-by-industry evidence” of employees’ exposure to it during their working lives. The proposal would, in many cases, add a step to the lengthy process of developing standards to protect workers’ health.
Public health officials and labor unions said the rule would delay needed protections for workers, resulting in additional deaths and illnesses.
I expect and hope that any such rule would be repealed in the Obama administration, but if there was any doubt in anyone's mind, the Bush Administration will go down in history as one of the most anti-labor administrations in the history of this country (Reagan would be proud).
Somewhat interesting that Bush started his first term by destroying the ergonomic standards and now is attempting to give his business allies one last gift on the workplace safety front.
Thursday, November 27, 2008
Here's a European twist on an issue with which American teachers and practitioners of employment law will be familiar: is on-call duty compensable "work time"? Tobias Nowak (U. Groningen) has just posted on SSRN his article The Working Time Directive and the European Court of Justice (forthcoming Maastricht J. European & Comparative L.). Here's the abstract:
This article sheds light on how judgments of the European Court of Justice can influence the legislative process of the European Community by analyzing the legislative process surrounding the Working Time Directive. In 2000 the European Court of Justice interpreted the Working Time Directive in SIMAP and ruled that the time spent on-call by doctors constitutes working time in its entirety. This ruling seems to have come as a surprise to the member states and the Commission alike and plans were made to counter the ruling. Since then the European Court of Justice has confirmed the approach it took in SIMAP to on-call duty in several cases. However, in Dellas the Advocate General called upon the European Court of Justice to change its definition of working time in order to exclude time spent on-call and thus anticipate the will of the legislators. The opinion of the Advocate General in Dellas, but also the reactions to the judgments of the European Court of Justice by other political actors and the fact that the Council of Ministers finally reached a political agreement on a new text for the Directive make the evolution of the Working Time Directive so interesting.
Wednesday, November 26, 2008
As a reminder that the economic crisis is being narrowly characterized from a macroeconomic view--Obama's new economic team has no labor ties. As Politico notes, the absence of any major moves on the labor front is surprising given the high-profile role unions and labor issues took during much of the campaign, but perhaps not as surprising given how serious the problems with the credit markets and other financial institutions are. According to Politico (which also has some insights on the Secretary of Labor):
“You can make the case that Obama wouldn’t have won without the labor movement — troops, money, key states,” said the executive director of the pro-union Labor Research Association, Jonathan Tasini, reflecting a widespread view in the labor ranks. “But when it comes down to it, they don’t have the kind of juice to say, ‘This is how we want the economic team to look.’”
That doesn’t mean labor has no agenda in the transition. They’re expecting a pro-union labor secretary — a shift from Bush’s low-profile Labor Secretary Elaine Chao, who was often at odds with organized labor. . . . Labor is also focused on the job of United States Trade Representative. And they’re debating how hard to push Obama on the Employee Free Choice Act, a bill that would make organizing easier.
Some unions are pushing former House Majority Leader Richard Gephardt for labor secretary, though his lobbying and his staunch skepticism of trade may disqualify him; Bonior is backing a lesser-known union operative, Mary Beth Maxwell. Some unions are pushing Leo Hindery, a left-leaning business executive and donor, as trade representative, though many in labor expect Obama to choose a former Clinton Administration technocrat, Lael Brainard, who has pushed for more enforcement of trade agreements.
In maneuvering for the top job, the labor movement is crippled by its internal split. Though leaders would like a pro-labor figure with national stature in the job — “someone with the stature to get into Larry Summers’ face,” Tasini said — the leading candidates seem to have been disqualified. Bonior and SEIU President Andy Stern have taken themselves out of the running. Other large figures are deeply rooted in the feuding sides — the AFL-CIO and Change to Win. Richard Trumka, who played a key role in selling Obama to AFL unions, is the federation’s secretary-treasurer; SEIU Secretary-Treasurer Anna Burger, who was the face of the service unions’ pro-Obama efforts in the general election, is the chair of Change to Win. . . .
Labor leaders on both sides of the divide said they expect Obama to choose a neutral, like Kansas Governor Kathleen Sebelius, who would be a high-profile friend of labor, if an outsider. They’re also hopeful that Obama will pick a trade representative who has committed to introducing enforceable labor standards into trade deals. . . .
Unions are also debating what they will ask of the labor secretary. Some have suggested pushing Obama to institute a long list of rule changes and to push hard for the Employee Free Choice Act, which would change the rules in organizing campaigns to favor unions. In a September memo leaked to Politico, John Wilhelm, a close Obama ally who is co-president of Unite HERE, argued that they should eschew specific demands and instead push Obama for key appointments and his bully pulpit.
I don't have any knowledge of the Obama team's thinking; however, given Obama's pragmatism, it wouldn't surprise me if they're taking the approach of tyring to keep political hot potatoes like union issues from tripping up solutions to the financial crisis. The labor issues won't be forgotten, but may wait until the Spring to be fought in Congress.
Check out the rest of the article. It's one of the more thorough examinations of what labor may seek from the new Obama administration.
In a decision involving the changing news industry and the labor law issues that arise with the use of subcontractors, an NLRB ALJ found that CNN committed numerous ULPs. The ALJ found in CNN America, Inc. that CNN engaged in "widespread and egregious misconduct" that "demonstrat[ed] a flagrant and general disregard for employees' fundamental rights."
At issue where technical workers represented by the National Association of Broadcast Employees and Technicians. According to the ALJ, CNN had used employees provided by Team Video Services, a unionized company. The problems arose when CNN ended its hiring through Team Services, which the ALJ found was motivated by a desire to avoid having a union majority in its D.C. and NY bureaus. The ALJ found that CNN was a successor employer and had failed to comply with the Team Video CBA, among other ULPs
The ALJ recommended reinstatement for 113 workers, backpay, benefits lost by unilateral changes to the CBA, and an affirmative bargaining order. Reports are that CNN will appeal to the NLRB. Stay tuned (pun intended).
Hat Tip: Dennis Walsh
Tuesday, November 25, 2008
John Blevins (South Texas) had an opinion piece supporting the passage of the Employee Free Choice Act (EFCA) in the Houston Chronicle this past Saturday.
Here's a taste:
The EFCA . . . would provide employees with an alternate method of creating a recognized union — the "card check." When a majority of employees signs a card supporting self-organization, a union is formed that the employer is required to recognize. (Card check is allowed under current law, but employers are free to ignore it).
[Joseph] Gagnon's[, who previously against the EFCA in the same paper] critique of the EFCA is a familiar one, and it goes something like this: By permitting card check, the EFCA would undermine the "truly free" choice that secret-ballot elections provide.
Without the secret ballot, union organizers would allegedly be free to coerce their fellow employees.
In fact, this critique featured prominently in a recent (and absurd) employer-sponsored ad campaign featuring a Sopranos actor posing as a mob boss pressuring employees. Fortunately for us all, the New Jersey crime families have yet to make significant inroads into our nation's service industries. Sleep tight America.
In all seriousness, Gagnon's bleak portrait is as imaginary as the Sopranos commercial. The EFCA will not lead to coercion — it will end it.
The most critical point is that current elections are anything but free and fair. They are one-sided affairs dominated by the employer.
Indeed, to call them "elections" is a bit generous given the various forms of coercion that employers can and do apply to influence the vote . . . .
There is also little reason to worry that the EFCA would lead to coercion by fellow employees. Most obviously, unions have strong incentives not to intimidate or alienate employees. If unions lose employees' loyalty, they can be disbanded in a year. In any event, the reality is that employees have far more to fear from employers who control both their paychecks and working conditions than from their fellow employees.
The broader policy debate about the benefits of unions is, of course, a different question. Personally, I believe that strong unions are the best way to lift wages and to restore a vibrant American middle class that enjoys real benefits. Others disagree, and people can have good faith arguments about these issues. But regardless of one's position on unions generally, we should not pretend that the modern election system is free and fair. At the very least, the EFCA deserves an honest debate based on the facts.
I and other supporters of the EFCA have made similar points and I have highlighted the degree of coercion employers have over employees in the workplace in advocating for state passage of Worker Freedom Act legislation which would prohibit employer captive audience meetings.
I similarly don't see WFA laws as against First Amendment values, as the prohibition does not limit speech, but only the conduct of forcing employees to listen to anti-union invective at pain of losing their jobs.
Hat Tip: Steve Nelson
Bender’s Federal Income Taxation of Retirement Plans
Chapter 1 Introduction to Retirement Legislations and Guide to Application: From Erisa to Pension Protection Act
Author(s): Marcia S. Wagner, Barry M. Newman, Alvin D. Lurie
Chapter 2 Intersection of Erisa and Internal Revenue Code: Overlapping Government and Jurisdiction: Preemption
Author(s): Eric D. Chason
Chapter 3 Deferred Compensation Overview
Author(s): Jonathon Barry Forman
Chapter 4 Traditional Defined Benefit and Defined Contribution Plans
Author(s): Norman Stein
Chapter 5 401(k) Plans
Author(s): Robert B. Davis, Stephen LaGarde
Chapter 6 Cash Balance and Other Hybrid Plans: From Rise to Fall to Restoration: Bad History—Good Future
Author(s): Alvin D. Lurie
Chapter 7 Employee Stock Ownership Plans
Author(s): David A. Pratt
Chapter 8 IRA-Based Employer Plans
Author(s): Dorothy Sanders Wells
Chapter 9 Insurance Contract Plans and Other Uses of Insurance in Qualified Plans
Author(s): John J. McFadden
Chapter 10 Funding of Qualified Plans—Requirements, Offsets, and Design Alternatives
Author(s): Gerald M. Levinson
Chapter 11 Controlled Groups and Affiliated Service Groups
Author(s): Marcia S. Wagner, Jon C. Shultze
Chapter 12 Other Eligible “Employees”: Owners, Partners, Independent Contractors, Lease Employees
Author(s): Kathryn L. Moore
Chapter 13 Nonqualified Deferred Compensation and the Prestatutory Limits on Deferral
Author(s): Brant J. Hellwig
Chapter 14 Statutory Standards for Deferral Under IRC Section 409A
Author(s): T. David Cowart, Greta E. Cowart
Chapter 15 The Challenges of Retirement Benefits Issues in Acquisitions, Dispositions, and Mergers
Author(s): Ilene H. Ferenczy
Chapter 16 Discontinuing Plans: Termination and Freezes
Author(s): Dan S. Brandenburg, Lincoln Weed
Chapter 17 Distributions, Rollovers and Loans
Author(s): David Pratt
Chapter 18 Section 403(b) Tax-Sheltered Annuities and Custodial Accounts
Author(s): E. Thomas Veal
Chapter 19 Deferred Compensation for Service Providers of Governmental and Tax-Exempt Entities
Author(s): E. Thomas Veal
Chapter 20 Prohibited Transactions
Author(s): Edward A. Zelinsky
Chapter 21 Plan Sponsors and Fiduciaries: Authority, Duties, and Liability: Legal Exposure (The New Litigation Fields)
Author(s): Jayne Zanglein, Susan J. Stabile
Chapter 22 Legal Exposure Continued: More Prohibited Transactions
Author(s): Jayne Zanglein
New York University Review of Employee Benefits and Compensation—2008 (Alvin D. Lurie ed., 2008)
Chapter 1 Whither LaRue?
Author(s): Laurence Reich
Chapter 2 Triple Play: from Stevens to Roberts to Thomas—Another View of Larue
Author(s): Alvin D. Lurie
Chapter 3 Spotlight on Foley Square: The Appeal in Hirt v. Equitable
Author(s): Alvin D. Lurie
Chapter 4 Deferred Compensation Plans in Mergers and Acquisitions
Author(s): Bruce J. McNeil
Chapter 5 IRS Targets Abusive 419(e) Welfare Benefit Plans – Revenue Ruling 2007-65; Notice 2007-83; Notice 2007-84
Author(s): John J. McFadden, Stephan R. Leimberg
Chapter 6 The Massachusetts and San Francisco Health Care Experiments: Cost, Coverage and the Defined Contribution Paradigm
Author(s): Edward A. Zelinsky
Chapter 7 The New Retiree Health VEBAs
Author(s): Kathryn L. Moore
Chapter 8 Quantifying the Tax Advantage of Deferred Compensation
Author(s): Eric D. Chason
Chapter 9 Benefit Bargaining in Bankruptcy
Author(s): Frank Cummings
Chapter 10 Regulations and More Regulations: Life Insurance Developments in 2007
Author(s): Thomas F. Commito
Chapter 11 Employer Health Plans and ERISA Preemption: No Clear Decision?
Author(s): Dorothy Sanders Wells
Chapter 12 The New Section 403(b) Landscape: Rough Spots, Pitfalls and Pleasant Vistas
Author(s): E. Thomas Veal
Chapter 13 Benefit Planning: Strategies and Risks in Business Transactions – All’s Well That Ends Well
Author(s): Scott J. Macey , Thomas W. Meagher
Chapter 14 Optimal Retirement Age
Author(s): Jonathan Barry Forman, Yung-Ping (Bing) Chen
Chapter 15 New Challenges in Operating Defined Contribution Plans
Author(s): Gregory K. Brown, Kathleen Sheil Scheidt
Chapter 16 Fixing 409A Foot Faults and Fumbles
Author(s): T. David Cowart, Greta E. Cowart
Chapter 17 Who Are Enumerated Parties?
Author(s): Jayne Zanglein, Susan Stabile
Chapter 18 The Sky Isn’t Falling (Yet): The Impact of LaRue on Employee Stock Ownership Plans
Author(s): Robert E. Brown, David K. Hou, Paul S. Fusco, Tabitha M. Croscut
Chapter 19 Independent Contractor Status: Consequences for Workers; Creating and Defending the Relationship
Author(s): Kurt L.P. Lawson
Chapter 20 Taxation and Retirement Plan Distributions: Some Modest Proposals
Author(s): Davit Pratt
Chapter 21 The Impact of Code Section 409A on Employment Decisions and Policies
Author(s): Catherine L. Creech
Chapter 22 Selected Estate Planning Aspects of 409A: A Work in Progress
Author(s): Kevin Wiggins
Monday, November 24, 2008
Thanks to Bill Herbert (Deputy Chair and Counsel to the NY PERB) for letting us know about a recent NY Court of Appeals ruling concerning whether a nuisance suit under NY law was preempted by the NLRA. Readers will recall that Prof. Hirsch and I debated the relationship between the NLRA and state laws in our recent on-line debate in PENNumbra and it is a topic I recently wrote on separately in the captive audience meeting context.
In this case, Helmsley-Spear, Inc. v. Fishman, 08-164 (Nov. 24, 2008), the New York Court of Appeals (their highest court) found in a 4-2 decision (one Justice not participating) that plaintiffs' private nuisance cause of action is not preempted by the National Labor Relations Act (NLRA). More specifically, the court found that:
[E]ven if one were to assume that the drumming [outside of the building by the union] constituted arguably "protected" conduct under the NLRA, as the Union argues and the Appellate Division implied, it does not necessarily follow that our state courts are foreclosed from adjudicating plaintiffs' claim. This point was made clear in Sears, Roebuck & Co., where the United States Supreme Court held that a state trespass claim lodged by an employer against picketers -- challenging the location of the picketing as opposed to the picketing itself -- was not preempted by the NLRA even though trespass was arguably protected under the Act (436 US at 198-204) . . . .
Balancing the state interest in adjudicating private nuisance claims against the interference with the NLRB's ability to determine matters committed to it by the NLRA and the risk that state courts will prohibit conduct otherwise protected by the Act, we conclude that Congress did not intend to preempt the jurisdiction of state courts to adjudicate the tortious conduct alleged here.
Sounds like a proper application of Garmon preemption. The Court also found Machinists preemption unavailing because "[l]oud drumming is not an 'integral part of the legislative scheme' [like walk-outs and lock outs] of the NLRA."
I would, of course, be interested in hearing my Brother Hirsch's thoughts on this decision.
Congratulations to Deborah Widiss (Visiting Brooklyn) for being chosen as one of two AALS Annual Meeting Scholarly Paper winners. Her paper, Shadow Precedents and the Separation of Powers: Statutory Interpretation of Congressional Overrides, will be presented at the AALS Annual Meeting on Thursday, January 8, from 4:00 until 5:45 pm.
Deborah will speak for 25 minutes with a 15 minute question and answer session that will be moderated by Professor Steven Hobbs (Alabama), a member of the selection committee.
Deborah is also the author of: "Domestic Violence and the Workplace: The Explosion of State Legislation and the Need for a Comprehensive Strategy," and "Exposing Sex Stereotypes in Recent Same-Sex Marriage Jurisprudence," Harvard Journal of Law and Gender, Vol. 30, 2007.
Ellen Dannin (Penn State) writes to tell us that there is an announcement about the LERA annual conference program, due to take place in San Francisco from January 2 to January 5, 2009. Ellen has been attending LERA for years and believes it is a great opportunity to meet people from many disciplines and points of view and hear from great scholars.
Added bonus: this year, LERA does not conflict with AALS, which will take place from January 6 to January 10 in San Diego. You can make a West Coast labor and employment adventure out of it!
Ellen also points out that there are a couple other announcements and calls for proposals for LERA conferences in the coming year which can be found here. It includes a call for panel proposals for the 2010 LERA Annual Conference in Atlanta.
Finally, Ellen brings to our attention a potential stocking stuffer: "LERA and The New Yorker Develop Cartoon Book." LERA, working with The New Yorker, has pulled together a collection of prized cartoons that captures some of the funniest moments of employment relations and work life. This volume, commemorating LERA's 60th anniversary, will surely entertain you and win rave reviews. Check out the LERA site for more details.
BNA's Daily Labor Report(subscription required) has two pieces today on conferences in which two major figures in labor law discussed the future of both public and private sector labor law.
At the American Bar Association Section of Labor and Employment Law Committee on Federal Service Labor and Employment Law, Judge Harry Edwards of the D.C. Circuit talked about labor law in the federal courts. As will come as no surprise to those who listen to Joe Slater and Paul Secunda (if those people exist), Edwards emphasized that federal sector labor law has become a more significant issue to the federal courts than private sector labor law. Noting the decline in NLRA cases before the D.C. Circuit--particularly "big" cases--he stated that the FLRA has now become a viable area of practice (although he describes it as a "strange statute," which means a lot given that he's an expert on the NLRA). I do wonder, however, whether the September Massacre cases will increase the number of big cases a bit. Moreover, if
the NLRA EFCA is actually enacted, things could change significantly on that score. This question ties in to the the next speech.
Speaking at a conference sponsored by the D.C. chapter of the Labor and Employment Relations Association, current NLRB member Wilma Liebman discussed the possibility of future NLRA developments. Liebman provided somewhat of a check on the current enthusiasm of what a new Obama NLRB might accomplish. She stated that any meaningful reform will have to come from Congress, not the NLRB. In looking at past developments during the Clinton and Bush Boards, Liebman is concerned that even progress under one Board is tentative at best, as it's easy to undo by a subsequent Board. Moreover, according to Liebman, any Board is limited in its ability to change things by precedent, judicial review, turnover on the Board, and bureaucratic delay. She also makes the important point that barring the NLRB from engaging in economic analysis makes no sense. Liebman concludes that the NLRA needs fundamental changes, which can only come from Congress. I think that's exactly right. The Obama Board can clearly flip many of the decisions of the Bush Board, but that can only accomplish so much in the long-term. Policymakers haven't taken a broad look at labor law in decades (or a broad look at the entire labor and employment field ever) and it's time is well overdue.
The Department of Labor today released revised final regulations under the FMLA, which will take effect January 19, 2009. The DOL's webpage on the new regs can be found here and we've mentioned them previously here and here.
Here are some highlights of the new regs:
1. Military family leave, including caregiver leave, which allows eligible employees of covered servicemembers up to 26 work weeks of leave to care for that servicemember's serious illness or injury incurred in the line of duty on active duty, and exigency leave, which allows family members of National Guard and Reserves servicemembers manage their affairs while that member is on active duty.
2. Removal of categorical penalties for employers who fail to appropriately designate FMLA leave and allowing penalties only when the employee suffers individualized harm from that failure to follow the notification rules.
3. Clarification that "light duty" assignments should not count as FMLA leave.
4. Clarification that employees may voluntarily settle or release FMLA claims without court or DOL approval.
5. Clarification of the definition of serious health condition and requirement that for long incapacities, a first visit to a health care provider (under one definition) must occur within seven days of the first day of incapacity, and the second must occur within thirty days of the first day of incapacity--additionally periodic visits must be at least two visits per year.
6. Clarification that all paid leave the employee elects to take as a substitute for unpaid FMLA leave should be treated the same and that the employee must use the same terms and conditions for that paid leave that every employee must use when taking it.
7. Requiring that an employee needing FMLA leave follow the employer's usual call-in procedures for reporting an absence in the vast majority of circumstances.
8. Reconciling with HIPAA the medical certification process, limiting what employer representatives may be told by health care providers to what is on the certification form and limiting which representatives may be told.
9. Allowing employers to request a new medical certification in each leave year.
10. Allowing employers to require that fitness-for-duty certifications specifically address the employee's ability to perform the essential functions of the employee's job and that they be provided before an employee return to work from intermittent leave when the employer has reasonable safety concerns.
Overall, the changes seem to offer important clarifications, make leave practices and requirements more uniform, and expand employee rights only in the context of servicemembers. It seems a very balanced result. There's lots of good background info on the DOL's webpage, so check it out.
Saturday, November 22, 2008
- John R. Graham, Si Li, & Jiaping Qiu, Managerial Ability and Executive Compensation (127).
- James A. Wooten, A Legislative and Political History of ERISA Preemption, Part 3 (94).
- Danielle Keats Citron, Cyber Civil Rights (93).
- Jeffrey N. Gordon, 'Say on Pay': Cautionary Notes on the UK Experience and the Case for Muddling Through (90).
- Joseph Seiner, The Trouble with Twombly: A Proposed Pleading Standard for Employment Discrimination Cases (90).
- Ariana R. Levinson (right), Industrial Justice: Privacy Protection for the Employed (74).
- Mark N. Mercer, Roth Retirement Accounts: A Practitioner's Approach (74).
- David J. Doorey (left), Union Access to Workers During Union Organizing Campaigns: A New Look through the Lens of Health Services (71).
- Patrick Macklem (right), Indigenous Recognition in International Law: Theoretical Observations (66).
- Amy C. McCormick & Robert A. McCormick, The Emperor's New Clothes: Lifting the NCAA's Veil of Amateurism (63).
Friday, November 21, 2008
• The company drops its suit, and the union drops its boycott and public pressure campaign. The Justice@Smithfield website, for example, was quickly dismantled. Funding for the environmental justice group will end. (The group had been told at the outset funding was probably temporary, because UFCW’s priority was starting a local. Community-initiated lawsuits against hog farm pollution will continue.)
• In the run-up to the election, neither party may attack the other. If one party objects to the other side’s literature, a monitor rules on any violations and can order changes before the piece is circulated.
• The union has a regular schedule for access to workers inside the plant.
• The two parties will jointly establish a “Feed the Hungry” campaign. (The union sees this move as Smithfield’s attempt to repair its image.)
It's not technically a neutrality agreement, as Smithfield (just like the UFCW) can say positive things about itself, which obviously may affect employees' take on the need for a union. The increase in access is also an important feature. We'll see how it comes out.
Incidentally, Labor Notes also posits that Smithfield may have been motivated to settle because of the difficulty in establishing malice and because the union hadn't stopped its corporate campaign despite the RICO suit.
David Doorey (York Univ.) sends along word that there was a big decision this week from the Ontario Court of Appeal that ruled unconstitutional a statute that did not require employers to bargain collectively with unions selected by a majority of employees, and that provides for no dispute resolution mechanism to deal with bargaining impasses.
Although the statute in question applied only to agricultural workers, David points out that it is an interesting case in the development of the constitutional right to collective bargaining that they have had in Canada since the a decision of the Supreme Court in 2007.
Here's David's blog blog entry on it, which links to the decision in Fraser v. Ontario, so that readers from other countries can keep up on these important labor developments.
Here is additional commentary from Albert Feuer on the Supplemental Briefs requested after oral argument in the ERISA case of Kennedy v. Dupont Savings Plan Administrator. As the title of the piece suggests, it is Albert's view that this case has even become more confused with the filing of these briefs.
Albert points out that what he has written takes a different approach than a piece written by the SCOTUSBlog.
He concludes that:
The Supreme Court may still be able to discern three ERISA core principles from all the briefs that have been filed in this case and from the oral argument. First, ERISA benefit entitlements are determined by Plan terms. Second, ERISA protects benefit entitlement after the plan has paid the benefits. Third, the QDRO Provisions apply to all DROs pertaining to pension plans. The Court may reinforce each principle by using them explicitly in a decision on behalf of the Plan administrator.
It would be great if the parties and the Court would take under advisement the considered views of an ERISA practitioner who practices in this complex on a daily basis. Here's hoping.
Thursday, November 20, 2008
United Airlines has just gotten a preliminary injunction against the Air Line Pilots Association in response to the union's alleged sick outs. ALPA has been seeking reversal of some of the bankruptcy-era concessions they gave to United, without success. According to United, ALPA encouraged sick-outs that resulted in over 300 flight cancellations and the lost of approximately $8 million in revenue and $4 in profits. ALPA denied the encouragement, but a federal district judge agree with United. From Newsday/AP:
[In addition to the sick-outs, United] also argued that some pilots were carrying more fuel than needed and taking so-called work-to-rule actions, such as refusing to take off in planes with minor mechanical issues that did not require immediate attention under federal rules. . . .
The case required [the judge[ to parse carefully-worded union statements to pilots to figure out whether ALPA leaders were trying to discourage unnecessary use of sick time, as they claimed, or whether they were really sending coded signals to pilots that they should maximize the use of sick time.
It didn't help that beginning in February the union began including in every update a quote from Sun Tzu's "The Art of War," — that you can fight with a small army as well as a large one, "it is merely a question of instituting signs and signals." "This quote plainly suggests that ALPA's 'army' — the pilots — should look for 'signs and signals' from ALPA as to what actions they should be taking in the 'fight' against United," Lefkow wrote. That included phone calls to pilots to encourage them to call in "fatigued" instead of sick, because a fatigue call gets a pilot out of a flight no-questions-asked. The airline said fatigue calls more than doubled beginning in June, from one a day to more than 2.5 per day.
She also cited language from union publications saying pilots should "fly the contract," ''know the contract," ''honor the contract," saying they were understood in the business to mean "work-to-rule," an attempt to interfere with the airline's operations. She placed the blame for this with Master Executive Council Chairman Stephen Wallach, saying he "personally intended these phrases to signal ALPA's direction to engage in a job action." . . .
I don't think I've ever seen a labor dispute turn on a party's use of Sun Tzu before. Probably not the best move by the union in hindsight.
Hat Tip: Paul Secunda
I have just finished editing the 2008 AALS Newsletter for the Section on Employee Benefits.(There are separate newsletters for the Sections on Employment Discrimination Law and Labor Relations and Employment Law).
The newsletter is chock full of interesting tidbits, including sections on the 2008 AALS Annual Meeting in San Diego this coming January, Members News to Know, Information on the 2009 Midwinter Meeting of the ABA Employee Benefit Committee, and Case Law Developments.
Thanks for all of you who responded to my information request. I look forward to seeing many of you at the AALS Annual Meeting.
If a member of the Obama transition team has not yet tapped you on the shoulder ... Rachel Levinson, Senior Counsel for the American Association of University Professors, writes to say that she's looking for an associate counsel in her two-person in-house legal department, The job description is below. If interested, peruse the detailed job description and send a cover letter and resume to email@example.com.
Associate Counsel, American Association of University Professors. Three years or more experience preferred. The position, in a department of 2.5 lawyers, involves substantial in-house work for the Association; appellate brief writing, articles, and presentations on issues of academic freedom and the First Amendment; and consultation with faculty members, attorneys, and administrators on higher education issues and litigation. Experience strongly desired in union-side labor matters; experience preferred in one or more of the following legal areas: employment, higher education, non-profit organizations or associations, or civil liberties; experience with a range of legal issues desirable.
David Yamada (Suffolk) has been busy. We posted last week on his Human Dignity article; fresh on its heels is the new article Workplace Bullying and Ethical Leadership (forthcoming J. Values Based Leadership). Here's the abstract:
Workplace bullying presents serious challenges to organizations, but it remains one of the most neglected problems in the realm of employment relations. This article addresses the implications of workplace bullying for organizational leaders and suggests measures that can be undertaken to respond to it. In addition, it considers workplace bullying in the context of individual dignity and the practice of values-based leadership.
Wednesday, November 19, 2008
My labor and employment law colleague, Phoebe Williams, who also teaches business associations, brings to my attention the roles unions, as shareholderes, are seeking to play in the current government bailout scheme.
The Laborers’ International Union of North America and the International Brotherhood of Teamsters are filing new proposals that seek compensation reforms at companies that participate in the U.S. Treasury Department’s bailout program.
In the supporting statement for these 2009 resolutions, the labor funds argue that the pay restrictions in the Treasury’s Troubled Asset Relief Program (TARP) “fail to adequately address the serious shortcomings of many executive compensation plans.” Instead, the unions urge directors to adopt “more rigorous executive compensation reforms that we believe will significantly improve the pay-for-performance features of the Company’s plan and help restore investor confidence.”
According to the Associated Press, more than 110 financial firms have indicated that they likely will participate in the TARP’s Capital Purchase Program, under which the government has so far committed up to $250 billion to buy preferred stock. The labor funds have filed this resolution at JPMorgan Chase, KeyCorp, Bank of America, American Express, and SunTrust Banks, and plan to submit the proposal at more than 45 other firms.
The proposal calls for directors to adopt the following reforms:
* Limit annual incentive compensation to an amount not exceeding one times the senior executive’s annual salary;
* Require that a majority of long-term compensation be awarded in the form of performance-vested equity instruments;
* Freeze new stock option awards to senior executives, unless the options are indexed to peer group performance so that relative, not absolute, future stock price improvements are rewarded;
* Require senior executives to hold for the full term of their employment at least 75 percent of the shares of stock obtained through equity awards;
* Prohibit accelerated vesting for all unvested equity awards held by senior executives;
* Limit all senior executive severance payments to an amount no greater than one times the executive’s annual salary; and
* Freeze the accrual of retirement benefits under any supplemental executive retirement plan (SERP) for senior executives.
The labor unions urge directors to adopt all of these reforms unless barred by existing executive employment agreements.
In short, the bailout has presented an opportunity for unions to actively challenge excessive executive compensation. This is an example of how unions through their roles as shareholders are seeking to influence executive pay, voting for boards of directors, and other corporate governance issues.