Thursday, April 30, 2009
Despite the back and forth recent days over Chrysler filing for bankruptcy, it now appears that it's going to happen. Apparently, a couple of creditor hedge funds are responsible (where have we heard that before), as they refused to sign off on the deal that all other interested parties had agreed to. Now those hedge funds look like they'll be able to see if they're right that they can get more in bankruptcy. There are indications that Chrysler may not look significantly different in bankruptcy as it would have under the proposed deal, but that remains to be seen.
Edward Zelinsky (Cardozo) has just posted on SSRN his essay (forthcoming State Tax Notes) Golden Gate III, ERISA Preemption, and the San Francisco Health Care Security Ordinance. Here's the abstract:
This first premise indicates that a San Francisco employer which regularly contributes to San Francisco pursuant to that City’s health ordinance thereby creates a “plan” for ERISA purposes. The ERISA status of this plan purchasing municipally-administered medical services is the same as the ERISA status of an analogous employer-financed plan paying a private administrator for comparable health care: As to all of these plans, ERISA Section 514(a) preempts state and local regulation.
Moreover, it is not persuasive for purposes of ERISA Section 514 to say (as does the Ninth Circuit) that San Francisco, by its health care ordinance, regulates employers’ health care contributions, but not employers’ health care plans. Contributions are central features of employers’ health care plans for their employees. By regulating employers’ contributions, San Francisco regulates employers’ plans.
Hat tip to Mitch Rubinstein at Adjunct Prof Blog for pointing out that the New York State Assembly has passed the Gender Expression Non-Discrimination Act, which would ban discrimination on the basis of transgender in housing, employment, credit, and public accommodations. Here's a descriptive press release. The bill is pending in the state senate.
Wednesday, April 29, 2009
The New York Times has an article examining whether the possible government bailouts of the U.S. automakers will strengthen the UAW. Given all of the cuts that UAW workers are facing, the question itself seems odd at first glance. However, the article makes the case for a UAW upswing:
According to restructuring plans proposed this week, the union will have more than half the stock in Chrysler and a third of General Motors, meaning it will have tremendous influence, with the government, in determining the future of the companies. The United Automobile Workers union said Wednesday that its members ratified a cost-cutting deal with Chrysler by a 4-to-1 margin. . . .
The U.A.W. members at both automakers stand to lose some of their pay and benefits, but the cuts are not as deep as those faced by airline and steel workers when their companies went bankrupt. Under proposed deals devised by the Treasury Department, U.A.W. pensions and retiree health care benefits would largely be protected.
The U.A.W. has derived its leverage in part from the support of a Democratic president and Congress. But it also results from a long-term strategy to build support in Washington that stretches back more than 60 years. . . .
Mr. Gettelfinger, the current president, has also been an effective, steel-nerved leader, and has managed to maintain the union’s importance in recent negotiations, even though the U.A.W. has lost nearly 200,000 members since he took office in 2003. Mr. Gettelfinger’s influence stems in part from the fact that the U.A.W. represents nearly all the auto workers at the Detroit companies. (Workers at a few plants are represented by the I.U.E.) By contrast, airline workers are represented by multiple unions.
The point about the UAW possessing additional power because it's the 800 pound gorilla for workers in the auto industry is an important one. However, I'm not sure that I'd call the UAW (or anyone save the foreign automakers) a "winner" in this situation. It may be true that the union comes through in OK shape, but it's going to lose a lot of members and those members are going to lose a lot of money and benefits. Any way you slice it, that's still not a good thing.
The American Law Institute has proposed a Restatement (Third) of Employment Law. In late 2008, concerned with the adequacy of the Restatement draft, the Labor Law Group formed working committees to examine each of the draft chapters. On February 7, 2009, those committees presented their findings at a conference sponsored by the LLG and U.C.-Hastings. Here is a summary of the committees' findings, written by LLG Chair Ken Dau-Schmidt:
Here are links to the committees' downloadable findings, as well as links to other articles/essays presented at the LLG/Hastings conference. Special thanks to Paul Secunda for uploading all of these onto SSRN.
- Dau Schmidt, A Conference on the American Law Institute’s Proposed Restatement of Employment Law.
- Schiller, “It is Not Wisdom, But Authority that Makes a Law:” a Historical Perspective on the Problem of Creating a Restatement of Employment Law.
- Nolan et al., Working Group on Chapter 1 of the Proposed Restatement of Employment Law: Existence of Employment Relationship.
- Hyde, Response to Working Group on Chapter 1 of the Proposed Restatement of Employment Law: On Purposeless Restatement.
- Finkin et al., Working Group on Chapter 2 of the Proposed Restatement of Employment Law: Employment Contracts: Termination.
- Arnow-Richman, Response to Working Group on Chapter 2 of the Proposed Restatement of Employment Law: Putting the Restatement in its Place.
- Grodin et al., Working Group on Chapter 4 of the Proposed Restatement of Employment Law: The Tort of Wrongful Discipline in Violation of Public Policy.
- Zimmer, The Restatement of Employment Law is the Wrong Project.
The Supreme Court heard its last oral argument of the term today in Northwest Austin Municipal Utility District Number One v. Eric Holder, Jr, Attorney General, known to those who follow it as the "NAMUDNO" case. The case concerned Congress' extension in 2006 of Section 5 of the Voting Rights Act, which requires some jurisdictions to get advance approval (preclearance) of changes to election laws. The preclearance is designed to prevent discrimination in the ability to vote on the basis of race. What, you may ask, does this have to do with workplace law? A lot, as it turns out, if you happen to be a state employer or state employee.
The primary challenge to this Section 5 is that it exceeds Congress' power under that other Section 5--Section 5 of the Fourteenth Amendment. To be validly enacted under Section 5 of the 14th Amendment, a statute must be congruent and proportional to remedy a documented constitutional harm, as the Court held in City of Boerne v. Flores. The remedies of the Voting Rights Act were held to be valid enactments in their original incarnation in Katzenbach v. Morgan and South Carolina v. Katzenbach. However, because of the passage of time since most of the original constitutional violations, it's no longer as clear that the remedies which go beyond what the constitution itself would provide remain within Congress' powers. (I have written on the passage of time issue--here is a link to it on SSRN).
The way this issue impacts workplace law is that it relates to how Congress can subject states as employers to suits for money damages brought by injured employees--think Title VII in particular. The state is ordinarily immune from suits for damages brought by individuals either in federal court (11th amendment) or their own courts (state sovereign immunity). Congress can abrogate that immunity, but only under its Section 5 of the 14th Amendment powers. We had a series of cases right around the turn of the century at the Supreme Court and the lower federal courts holding that a number of federal statutory provisions couldn't be used by state employees to sue their employers.
If the Supreme Court holds that the extension of Section 5 of the Voting Rights Act is unconstitutional, look out for renewed litigation on the employment statutes, particularly the disparate impact provisions of Title VII, which are also under at least a veiled attack (by some amici) in Ricci v. DeStefano. According to SCOTUSblog, the Court seems evenly divided on this constitutional question with Kennedy being the swing vote. Rick Hasen (Loyola LA) at Election Law blog thinks that the Court will find this unconstitutional. We'll have to wait and see what the Court does.
Tuesday, April 28, 2009
Bloggers emeritii Joe Slater and Paul Secunda sent us this Onion News Network clip: Autoworkers Compete to Keep Jobs, Livelihoods on New Reality Show. It's painfully amusing and not the only job-related video currently up. Another good one is More American Workers Outsourcing own Jobs Overseas. You might have a look around. And in print news, I especially like, What the Hell Am I Supposed to Do with All of these Constitutional Rights. I love the Onion . . .
Arlen Specter has just announced that he will switch to the Democratic party. No doubt motivated by yet another conservative primary challenge, this switch has huge implications for labor and employment law. The first question is whether Specter will switch back to supporting EFCA [hat tip to a reader who sent a link suggesting that he won't]. Even if he doesn't, many other labor and employment bills could benefit from a Democratic filibuster-proof majority (which would exist if Franken is seated). Moreover, the federal bench could look significantly different, which has an obvious impact on litigation.
Today is the day of the year when women’s aggregate wages catch up to men’s aggregate wages from the previous year, and many groups are blogging for fair pay today and speaking out about pay equity. Here is an example from Business and Professional Women/USA:
Over a lifetime of work this loss adds up. On average, the families of working women lose out on $9,575 per year because of the earnings gap. Women may lose $434,000 in income, on average, due to the career wage gap. Women at all education levels lose significant amounts of income due to the career wage gap, but women with the most education lose the most in earnings. Women with a college degree or higher lose $713,000 over a 40-year period versus a $270,000 loss for women who did not finish high school. Women lose hundreds of thousands of dollars from the career wage gap no matter where they live.
Forty-six years after President John F. Kennedy signed the Equal Pay Act ensuring “equal pay for equal work,” women working full time earn on average 22% less than their male counterparts. This is a marked improvement over the 59 cents a woman was paid on the dollar in 1963, when the Equal Pay Act was passed. But it is clearly still too far from true economic and social equality. The Lilly Ledbetter Fair Pay Act, signed into law on January 23, 2009, ensures that victims of discrimination have fair access to the courts, but additional legislation is needed to close the persistent gap between men’s and women’s wages.
BPW and other women's groups like the National Women's Law Center are advocating passage of the Paycheck Fairness Act, (HR 12, S 182), which passed the house on January 9, 2009 as part of the House version of the Lilly Ledbetter Fair Pay Act, and which is on the Senate calendar.
Despite a couple of recent posts on an imminent bankruptcy filing by Chrysler (see here and here), it's now appearing that the carmaker may be able to avoid bankruptcy. The proposed restructuring is quite interesting and poses some good labor law issues. According to the Washington Post:
Chrysler also reached a deal over the weekend with the United Auto Workers, in which the union would own a majority stake in the automaker. A source familiar with the matter said if the restructuring of the storied American automaker is completed according to the tentative deal, the union would have a 55 percent stake in the company, the Italian automaker Fiat would eventually hold a 35 percent stake, and the government and Chrysler's lenders would share a 10 percent stake in the company. The source spoke on condition of anonymity because he was not authorized to comment publicly on the talks.
The agreement with the UAW, which must be ratified by union members, and the deal with the automaker's lenders are milestones in the effort to keep Chrysler and its 54,000 employees out of bankruptcy. . . . The agreement with the union essentially relieves Chrysler of a portion of the $10 billion it owes to the union's retiree health fund. In exchange for giving up its claims to some of that $10 billion, the union is getting the significant equity stake in the company.
Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass., said that if the union winds up with a majority stake in its employer, that "puts the UAW in a strange position." "If it takes company stock as a part owner in the company, it would be bargaining against itself," he said. "It can never act as adversarial in that relationship. Also it's in a position that to make the company more stable, it has to reduce health-care benefits of its own retirees."
As Chaison notes, the union's potential majority ownership raises some conflict of interest concerns. I wrote an article a while back on employee stock ownership plans with significant ownership stakes and the problems such plans may have under the NLRA (this was way back when employees actually wanted stock). The bottom line is that these issues are something that UAW needs to be careful about, but there are well-worn strategies that other employee-owned companies have used (e.g., United and its Board of Directors that was structured to prevent majority union control and put up a firewall around the companies labor-relations team) that can make everything lawful as far as labor law is concerned.
Joseph Gastwirth (Statistics, George Washington) and Weiwen Miao (Math, Haverford College) have posted on SSRN their recent article on statistical analysis of small samples in disparate impact cases: Formal Statistical Analysis of the Data in Disparate Impact Cases Provides Sounder Inferences than the Government’s “Four-Fifths” Rule: Examining the Statistical Evidence in Ricci v. DeStephano.
From the abstract:
This is a very interesting explanation of the difficulties of determining whether an outcome is likely a product of chance when very low numbers are involved and an important caution to the EEOC's 4/5ths rule.
Thanks to Jerry Kalish (National Benefit Services & Retirement Plan Blog) for sending us a link to this map of the anticipated staggered recovery for the various U.S. metropolitan areas. Major Texas cities should return to pre-recession employment levels by the end of this year or next; most of California by 2012; New York and southern Michigan, not until 2015 or later. The map comes from yesterday's Chicago Sun Times. It's the perfect flip-side to the interactive map we described last week on Vanishng Employment.
Monday, April 27, 2009
The Associated Press is reporting that the Department of Labor will announce on Tuesday new rules limiting workers exposure to diacetyl, the artificial butter flavoring that causes "popcorn lung." Rick's post last week noted the recent litigation resulting from workers being harmed by diacetyl, but the previous DOL had not issued any regulations on the chemical.
There are no details yet, but they're expected tomorrow from Secretary Solis.
In an unpublished decision (only Westlaw link available), the Ninth Circuit has reversed the NLRB's Badlands Golf Course case--the Board split 3-2; you know the lineup. At issue was whether the employer bargained with the union for a reasonable period of time before withdrawing recognition, as required by Lee Lumber. As the NLRB dissent emphasized, the parties were seeking an initial contract, although they had been negotiating off and on for several years. The central question was whether the parties started bargaining "from scratch." The Board majority found that they had not started from scratch because of negotiations two years earlier--a finding that led the majority to discount the fact that the parties were negotiating an initial contract.
The court's holding was based a straightforward complaint about a lack of substantial evidence:
It's odd to have a 3-2 NLRB decision flipped by an unpublished decision, but given that holding, it's not a big surprise. It's also a good reminder that the NLRB, like other agencies, have to be very careful about making sure that the record supports where the agency wants to go.
Workplace Fairness Blog has been nominated for Best Law Blog in the 13th Annual Webbies. Workplace Fairness "is a non-profit organization working to preserve and promote employee rights. The site provides comprehensive information about job rights and employment issues nationally and in all 50 states. It is for workers, employers, advocates, policymakers, journalists, and anyone else who wants to understand, protect, and strengthen workers' rights."
- Captain Daniel J. Bugbee, Employers Beware: Violating USERRA Through Improper Pre-Employment Inquiries, 12 Chapman L. Rev. 279 (2009).
- Lisa Blomgren Bingham, Designing Justice: Legal Institutions and Other Systems for Managing Conflict, 24 Ohio St. J. Disp. Resol. 1 (2008).
- David B. Lipsky & Ariel C. Avgar, Toward a Strategic Theory of Workplace Conflict Management, 24 Ohio St. J. Disp. Resol. 143 (2008).
Sunday, April 26, 2009
We posted recently on the possibility of an impending bankruptcy filing by Chrysler. That is still very much a possibility, but the automaker has cleared one major hurdle to receiving more federal aid by coming to a cost-cutting agreement with the UAW. According to the New York Times:
Neither the United Automobile Workers union nor the company released details of the tentative agreement, which would modify the union’s 2007 contract and reduce the amount of money Chrysler must pay into a new health fund for retirees. The union plans to have its 26,000 Chrysler workers vote on the deal by Wednesday.
Chrysler said the agreement, reached during marathon negotiations over the weekend, satisfied the requirements laid out by the Obama administration for a deal by an April 30 deadline. . . .
Last week, the union reached an agreement in principle with the administration and Chrysler that would protect workers’ pensions in the event of a bankruptcy filing and provide for a change in the financing of a health care trust set up in 2007. Under that pension deal, workers would lose some benefits after the bankruptcy filing but would receive more protection than they would with a Chapter 11 filing that lacked government direction, people with knowledge of the agreement said. . . .
Meanwhile, the Canadian Automobile Workers union said Sunday that its members had ratified a cost-cutting deal covering 8,000 Chrysler workers in that country. The deal, which is expected to lead to similar cuts for Canadian workers at General Motors and Ford Motor, cuts workers’ benefits, reduces time off and creates a health care trust for retirees. The union said 87 percent of its members voted in favor of the deal, even though the union’s president, Ken Lewenza, described the negotiation process as “torturous and unfair.”
I'm guessing is that ratification will happen, but stay tuned.
Saturday, April 25, 2009
The Arbitration Fairness Act, a.k.a. H.R. 1020, would make predispute arbitration agreements covering employment and consumer disputes unenforceable. Michael Fox points us to Public Citizen's Fair Arbitration Now (FAN) Coalition and Blog, and suggests that odds favor passage. Does anyone have any feel for the likelihood of passage? If you do, please add a comment.
Craig Becker currently serves as Associate General Counsel to both the Service Employees International Union and the American Federation of Labor & Congress of Industrial Organizations. He graduated summa cum laude from Yale College in 1978 and received his J.D. in 1981 from Yale Law School where he was an Editor of the Yale Law Journal. After law school he clerked for the Honorable Donald P. Lay, Chief Judge of the United States Court of Appeals for the Eighth Circuit. For the past 27 years, he has practiced and taught labor law. He was a Professor of Law at the UCLA School of Law between 1989 and 1994 and has also taught at the University of Chicago and Georgetown Law Schools. He has published numerous articles on labor and employment law in scholarly journals, including the Harvard Law Review and Chicago Law Review, and has argued labor and employment cases in virtually every federal court of appeals and before the United States Supreme Court.
Mark Gaston Pearce (photo above) has been a labor lawyer for his entire career. He is one of the founding partners of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux where he practices union side labor and employment law before state and federal courts and agencies including the N.Y.S. Public Employment Relations Board, Equal Employment Opportunity Commission, the U.S. Department of Labor, and the National Labor Relations Board. Pearce in 2008 was appointed by the NYS Governor to serve as a Board Member on the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the NYS Department of Labor in matters including wage and hour law. Pearce has taught several courses in the labor studies program at Cornell University’s School of Industrial Labor Relations Extension. He is a Fellow in the College of Labor and Employment Lawyers. Prior to 2002, Pearce practiced union side labor law and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP. From 1979 to 1994, he was an attorney and District Trial Specialist for the NLRB in Buffalo, NY. Pearce received his J.D. from State University of New York, and his B.A. from Cornell University.