Thursday, June 30, 2011
Update (PS): David Doorey (York - Canada) did a post on the NBA lockout from the Toronto Raptors perspective. He suspects the NBA is violating Ontario labour laws when it locks out the Raptors.
It's a hard time to be a professional sports fan. First the NFL lockout, and now the NBA. NBA owners have just decided to lock out the players today. The bottom line, as usual, is money. There's a ton of revenue, but the owners claim that a majority of teams are losing money and therefore need more money from the players. Currently, the first $600 million in revenues goes to the teams, then the remainder is divided so that the players get 57% and the owners 43%. The owners are asking for the first $900 million and a 50-50 split after that. They also want a stronger salary cap.
The players respond that the problem is bad spending by owners and that they shouldn't be penalized. They oppose a stronger salary cap The players have offered to give the owners an extra $100 million a year for five years. But their proposal, at least according to the owners, would have raised the average salary from $5 million to $7 million and prevented team profitability.
The prospect for a settlement coming soon seems low, as the Commissioner describes the "huge philosophical divide" between owners and players. Essentially, the NBA wants fundamental changes to its business structure, but they haven't found a change that the players are willing to go along with. So, this could be a long one.
Wednesday, June 29, 2011
As you may know the National Labor Relations Board recently issued proposed rule changes for representation election processes and is now in the open comment period.
Ellen Dannin (Penn State), EPRN Labor and Employment Law Topic Coordinator, has written a very good introductory blog on the proposed rules and has started the comment process.
Please log on to EPRN, see Ellen's blog by scrolling down the left side of the home page, read the Board's summary of the proposed changes that can be found at http://www.nlrb.gov/node/525 and contribute your analysis.
Ellen and I will summarize the comments received on our site and forward them to the NLRB during the public commentary period so that our collective expertise is reflected in the process.
It is really important for us to show we can respond to these requests for comments in a timely manner (public hearings are scheduled for July 18-19; we need your input well before then) so I hope you will contribute your views and if possible indicate the research base from which your analysis springs.
This is obviously a very important legal issue in front of the NLRB right now, so the more insightful comments, the better.
As we noted, the NLRB is accepting comments on its proposed election rules. Tom Kochan (MIT) and Ellen Dannin (Penn. State) are offering to accept comments and provide a summary of all them to the NLRB--a great way to present academic views on the proposals in a manageable form. They are accepting comments on the Employment Policy Research Network website: just look for Ellen's blog (or click here) to post comments (it's also a good source for more info on the proposals). Tom notes that "It is really important for us to show we can respond to policy/rule proposals in a timely manner (public hearings are scheduled for July 18-19; we need your input well before then) so I hope you will contribute your views and indicate the research base from which your analysis is drawn."
Monday, June 27, 2011
The Volokh Conspiracy reports that the Supreme Court has granted certiorari in a case raising the issue of whether it is constitutional for a state to condition employment on the payment of a special union assessment intended for political purposes without providing notice and an opportunity for an employee to object. The case is Knox v. Service Employees Int’l Union, Local 1000.
Hat tip: Dennis Nolan.
[Update]: I wanted to add something to Rick's quick post. The question cited above is from the petitioner's cert. petition (represented by frequent commentator on this blog, James Young of the National Right To Work Foundation). It may be just me, but I was puzzled at the first read of the excerpt of the question that the SCOTUS blog used (which is what the Volokh Conspiracy also used) because it sounded like a no-brainer given well-established case law clearly prohibits requiring employees to pay dues for political expenditures with no ability to object. But that's not exactly what's going on here. As the Ninth Circuit describes its opinion's intro:
This appeal presents the question of whether a union is required, pursuant to Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986), in addition to an annual fee notice to members, to send a second notice when adopting a temporary, mid-term fee increase.
In other words, a Hudson notice and opportunity to object was provided in this case, as it was every June. The twist was a special assessment (equal to 0.25% of salary) imposed by the union in September one year to raise money to fight political anti-union measures. The union argued that some expenses from the assessments would be chargeable and others non-chargeable. The majority in the Ninth Circuit basically held that a Hudson notice does not have to provide an exact determination of what will be spent in the subsequent year--a good prediction is enough, which the assessment in June complied with. So, very basically, what the petitioners are asking for is for unions to have to issue a new Hudson notice for mid-year increases in non-chargeable fees. The full cert. petition does make all of this clear, so this is just a clarification of an edited portion of it.
The other issue presented is an interesting one, as its directed at the overlap between political activity and activity related to collective bargaining. The easiest example is the Wisconsin anti-public collective bargaining bill. If unions spent money fighting its passage, that's undoubtably "political." But that spending is also directly related to their ability to represent workers. It's unclear whether this question or the other one is what piqued the Court's interest--and it might very well not be this one because the Ninth Circuit didn't discuss it--but I think it's a toss-up what the Court will do on the chargeability issue if it addresses it. The Court hasn't always gone against unions on this issue, so it's not clear to me that the grant of cert. here is necessarily a bad sign for these fees. But it couldn't certainly go the other way.
The NLRB has just announced an open meeting on their new proposed election rules. It will also cover other recommendations for other ways to improve representation procedures. The meeting will be on June 18 and possibly extend to July 19. Those interested in attending or speaking at the meeting must contact the Board by 4om on July 1. See the announcement for details.
Word has been circulating that one of the Wisonsin Supreme Court Justices got violent with another during an argument about the collective-bargaining case. Justice David Prosser--who almost lost reelection because of the opposition to the new anti-union measure--is alleged to have grabbed Justice Ann Bradley around the neck. There doesn't seem to be agreement as to exactly what happened and whether it was provoked (one report says that Justice Bradley "charged" Justice Prosser, but either way this is a sad statement about the current state of the Wisconsin Supreme Court. It might also feed into arguments against elected judiciaries. Not that this couldn't happen on any court, but the hyper-politicized nature of many judicial campaigns certainly doesn't help.
Hat Tip: Michael Duff
Friday, June 24, 2011
Great commentary on Wal-Mart continues to be posted. Check out this contribution by Michael Waterstone (Loyola). He has some excellent points, including this one,
an important undercurrent is the divergent views on the role of employment discrimination and the acknowledgement of unconscious bias. Justice Ginsberg explicitly acknowledges unconscious discrimination and stigma as providing the glue to allow widespread discretion to open the door for company-wide bias ("The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects. Managers, like all humankind, may be prey to biases of which they are unaware"). Justice Scalia, on the other hand, seems unwilling to move beyond anything less than a formal policy of discrimination on a group-wide basis, suggesting that managers will generally follow policies and not discriminate ("Surely most managers in a corporation that forbids sex discrimination would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all.").
Read the whole thing for more!
Thursday, June 23, 2011
Students in Colorado sued Westwood College for misrepresenting its tuition costs, accreditation status, and job prospects for graduates. The school, however, had placed an arbitration clause in its enrollment documents. The school moved to dismiss the case and compel arbitration. The court granted the motion, saying:
There is no doubt that Concepcion was a serious blow to consumer class actions and likely foreclosed the possibility of any recovery for many wronged individuals. The dissent in Concepcion recognized the impact of the majority's decision and argued that it would effectively end the ability to prosecute small-dollar claims and that those claims would slip through the legal system. Id. at 1761. Countering this argument, the majority wrote: “States cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons.” Id. at 1753. Thus, the Supreme Court considered the fact that the Concepcions and other class plaintiffs would be denied any recovery by its ruling, and ruled against the class plaintiffs nonetheless. The Court is bound by this ruling and, therefore, cannot be persuaded in this case by the fact that ordering the parties to arbitration may impact Plaintiffs' ability to recover.
Ultimately, there is no dispute that the agreement to arbitrate was prominently written in the enrollment documents, including an entirely separate document entitled “Agreement to Binding Arbitration and Waiver of Jury Trial”. (ECF No. 15–2.) There is also no evidence that Plaintiffs were subject to significant external pressure driving them to sign the documents without taking time to review them and/or have someone else review them. The Arbitration Agreements here appear to contain relatively standard terms, which would suggest that they are substantively fair. Plaintiffs had to ability to cancel the contracts and receive a substantial refund. Finally, there is a competitive market for education programs such as those offered by Defendants and Plaintiffs could have chosen to pursue their education elsewhere. All of these factors weigh against a finding of unconscionability. (footnotes omitted)
Will law schools, some of which also have been criticized for misrepresenting tuition costs and jplacement statistics, add arbitration and no-class-action clauses to their enrollment documents?
The case is Bernal v. Burnett (D. Colo., June 06, 2011) 2011 WL 2182903.
Here's an interesting addition. The very first page of the Westwood College webiste contains the following "employment pledge":
We’re so confident that you’ll receive the right skills to launch your career and get your first job that if you haven’t found employment within six months of graduation, we’ll help pay your bills. Simple as that.
Hat tip: Carol Furnish.
Mitchell L. Engler (Cardozo) explains in The Untaxed King of South Beach: Lebron James and the NBA Salary Cap (forthcoming San Diego L. Rev. 2011) the real reason both Miami and Dallas made it to the NBA finals this year: both teams get a competitive advantage by being located in no-income-tax states. Here's the abstract:
In contrast to major league baseball, the National Basketball Association has a salary cap designed to provide every team an equal and fair chance of competing for the championship. The Miami Heat‘s recent incredible success in signing the game‘s three most hotly desired free agents, including mega-stars Lebron James and Dwyane Wade, therefore flies in the face of the NBA‘s attempted level playing field. How could one team so outmaneuver all the others in the sport which tried to eliminate such uncompetitive results via a salary cap?
As discussed in this Essay, the answer lies in the law of unintended consequences and perverse incentives. Some NBA teams are located in more attractive jurisdictions with nicer amenities or lower costs, such as taxes. In particular, Miami provides a highly-favorable climate both as to weather and taxes as Florida does not have a state income tax. In the absence of any salary cap limitations, teams in higher-tax jurisdictions could compete better with Miami for free agent players by offering higher salaries to offset the extra tax. But the NBA salary cap, by its very terms, blocks this usual free-market response.
Having flagged this perverse and unintended benefit to the no-tax clubs, this Essay then proposes an appropriate solution. Rather than scrapping the salary cap and restoring a competitive advantage to the wealthier clubs, a state tax adjustment to the cap amounts would remove the rich clubs‘ advantage without substituting an unintended benefit to the no-tax clubs. The salary cap amounts of no-tax teams simply should be reduced by a percentage equal to the highest state tax rate of any NBA team. After making this simple adjustment, this Essay then refutes more sophisticated arguments as to why the proposed adjustment might go too far. Among other points, this Essay highlights how Miami‘s tax advantage might extend beyond just Lebron‘s salary to include his extensive endorsement income as well. Expanding the analysis to such deeper level therefore highlights an even greater need for a state tax adjustment to the NBA salary cap.
I'm attending, today and tomorrow, the 28th Annual Carl A. Warns, Jr., Labor and Employment Law Institute in Louisville. The title of this year's Institute is Changing Technology and the Impact on Work Law. I'm particularly looking forward to a workshop on evidentiary issues in employment litigation by Christine Cooper (Loyola-Chicago) and Rebecca Pallmeyer (N.D. Ill.), a view from the Board by Criag Becker (NLRB), e-discovery in employment cases by Andrew Peck (SDNY) et al., and the future of disparate impact by Michael Selmi (GWU). I'll be giving the last presentation of the conference (late Friday afternoon!) on ethical issues in grievance processing and labor/employment arbitration.
As Marcia pointed out Tuesday, there's been plenty of online commentary on the Wal-Mart v. Dukes case. Deborah Weiss writes to ask if we know of any conferences, symposia, online events, etc. on the topic of the case. I don't, but if you do, please add a comment to this post. If your school's journal hasn't chosen a fall symposium topic, you might send a suggestion to the eic.
Wednesday, June 22, 2011
Perhaps the Department of Labor doesn't want to be left behind the NLRB and its rulemaking, because the Department has recently proposed a new rule that would make employers disclose more information about their use of union consultants. Under current regulations, employers only have to report consultants who directly attempt to influence employees, but not those who only give "advice" to employers. The new rule would limit this advice exception by require disclosure of consultants who give communications to influence employees, even if their is no direct contact between the consultants and employees. According to the Department's news release:
The U.S. Department of Labor today announced a proposed rule to revise the interpretation of "advice" as it pertains to the employer and labor relations consultant persuader reporting requirements of Section 203 of the Labor-Management Reporting and Disclosure Act. The proposal adopts the plain meaning of the term "advice" as "an oral or written recommendation regarding a decision or course of conduct."
Section 203 of the LMRDA requires the disclosure of agreements or arrangements between employers and labor relations consultants when a consultant undertakes or agrees to undertake activities that seek to directly or indirectly persuade workers concerning whether or not to exercise, or the manner of exercising, their rights to organize and bargain collectively. Neither an employer nor a consultant is required to file a report with the Department of Labor covering the services of a consultant if the consultant is merely giving or agreeing to give advice to the employer.
Under the proposal, an agreement would be reportable in any case where the consultant engages in persuader activities that go beyond the plain meaning of "advice." Reportable persuader activities would include those in which a consultant engages in any actions, conduct or communications on behalf of an employer that would directly or indirectly persuade workers concerning their rights to organize and bargain collectively, regardless of whether or not the consultant has direct contact with workers. An agreement also would be reportable in any case in which a consultant engages in specific persuader actions, conduct or communications regardless of whether advice is given, such as when a consultant plans or orchestrates a campaign or program to avoid or counter a union organizing or collective bargaining effort.
The LMRDA does not regulate the actual persuader activities or statements, and the proposed rule only focuses on whether the activities would have to be publicly disclosed. The current interpretation of "advice" has resulted in significant underreporting of employer and consultant persuader agreements. Better disclosure is critical to helping workers make informed decisions about their right to organize and bargain collectively.
You can see the full proposal here.
The Supreme Court may have constructed a kind of black hole for some law suits with last month’s Schindler Elevator Corp v. U.S. Ex Rel Kirk. Put together with FRCP Rule 11, Schindler may result in an attorney's act of exploring the viability of a potential claim (which Rule 11 would seem to require) simultaneously destroying that claim.
In brief, the False Claims Act allows employees (among others) to bring suit as "relators" against firms that submit false claims to the government. In Schindler itself, the employer’s contract with the US required it to file reports about its employment of veterans. Kirk, a former employee, brought an FCA suit alleging that Schindler's claims for payment were false because it had not filed those reports or its filings misrepresented its employment of veterans. But prior to bringing suit, Kirk had his wife request information from the Department of Labor under the Freedom of Information Act. The responses revealed noncompliance and were one of the bases of Kirk's claim.
This is where an FCA exception enters the picture: A false claims suit can't be based on certain publicly-disclosed information. The relevant language bars suit "based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation." The question before the Court, then, was whether a suit based on an FOIA response would be based on a "administrative . . . report." And a majority of the Court held yes. Stressing a broad reading consistent with ordinary meaning of “reports” and no textual basis for a narrower interpretation, the majority held that an FOIA response qualifies; thus, a transaction disclosed in a record attached to an FOIA response is disclosed “in” that response and therefore is disclosed “in” a report for purposes of the public disclosure bar.
So what’s an attorney to do when considering whether to file an FCA case? Schindler says don’t submit an FOIA request. But Rule 11 would seem to necessitate one where the employee doesn’t have sufficient information to file a complaint. Look at (a)(3), which requires an attorney to certify that “the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery….” Is a pre-suit investigation “reasonable” if easily available information was not requested because it would destroy the case?
It is difficult to imagine another situation where diligent investigation simultaneously extinguishes that claim. Perhaps the singularity of this outcome suggests the majority got its interpretation of the FCA wrong. Or maybe Rule 11 should be read not to view an (otherwise reasonable) investigation as reasonable when doing so would negate the claim.
Or maybe the word “based” provides an out. To the extent that Kirk’s FOIA request merely confirmed his previous suspicions, maybe his FCA suit was not so much “based on” the responses as confirmed by them. In other words, when a realtor has his own information without an FOIA request but invokes the statute to further investigate, we could treat his case as not “based upon” his FOIA request and so bypass Schindler.
However, attempts to define when a claim is or is not “based upon” a request are hazardous at best and the applicable standard troublingly unclear. Reasonable suspicion? Probable cause? Of course, a plaintiff may satisfy Rule 11’s reasonable investigation standard by virtue of his knowledge as an employee or by virtue of investigations outside FOIA requests. Yet, if he couldn’t bring suit without the information revealed by an FOIA request, wouldn’t it be fair to describe his suit as “based upon” the FOIA response?
Sure, if Schindler came out the other way, cases based on nothing more than FOIA requests could be a viable FCA claims, and, yes, the purpose of the FCA public disclosure bar – stressed in Schindler – is to discourage entrepreneurial litigation. But one wonders whether this particular game is worth the candle since Schindler seems destined to result either in more ill-founded suits or more litigation over what a particular suit is based on. Or maybe a third possibility – fewer suits to vindicate the public’s interest in deterring false claims.
Thanks to Kate Stone for helping me on this.
Deborah Weiss (McCombs - Business) has just posted on SSRN her article Entrepreneurial Employees. She argues that there's not necessarily a binary answer to the question "Are noncompetes good or bad?" -- the answer is nuanced. Here's the abstract:
Several states including California restrict the ability of employers and employees to agree to post-employment covenants not to compete. Economic theory generally disfavors such restrictions, which may serve to protect various employer investments, However a number of observers have argued that such restrictions have served to create a climate of innovation in California. This paper examines this claim, arguing that most industries benefit from allowing covenants but there are positive effects to barring covenants in a select few industries where small firms innovate. In a federal system, the efficient legal regime is to have most states allow covenants and a few states restrict them. A clientele effect draws industries where small firms innovate to states that bar non-competes. Preliminary data analysis supports this view of the distribution of industries within the United States.
- Stephen F. Befort, Unilateral Alteration of PUblic Sector Collective Bargaining Agreements and the Contract Clause, 59 Buffalo L. Rev. 1 (2011).
- Andrew Stumpff, Darkness at Noon: Judicial Interpretation May Have Made Things Worse for Benefit Plan Participants Under ERISA Than Had the Statute Never Been Enacted, 23 St. Thomas L. Rev. 221 (2011).
- Debra Burke, Stephen Miller, & Joseph Long, Minimum Wage and Unemployment Rates: A Study of Contiguous Counties, 46 Gonzaga L. Rev. 661 (2010/11).
- Harry G. Hutchison, Employee "Free" Choice in the Mirror of Liberty, Fairness, and Social Welfare, 60 Catholic U. L. Rev. 575 (2011).
Tuesday, June 21, 2011
Given traditional unions' inability to organize Wal-Mart stores (not to mention the recent failure at Target), it's perhaps no surprise that worker advocates are seeking a new avenue to press for change. As described by Steven Greenhouse, Organization United for Respect at Walmart ("OUR Walmart") is signing up workers to push for better working conditions at Wal-Mart. The group claims to have thousands of members thus far and will soon have a web site and Facebook page.
Although OUR Walmart will not attempt to bargain on behalf of wokers, it's not a competitor to traditional unionism, however, as UFCW have provided a lot of financial support for the group and gotten members to drum up support among Wal-Mart workers. Low wages has been the key issue, in addition to benefits and respect at work.
We've seen similar efforts at other companies in the past (including labor-backed groups that have gone after Wal-Mart), and I think we'll continue to see more such efforts given the difficulties in formally organizing workforces. As I've argued in the past, that's not necessarily a bad thing, as the traditional collective bargaining isn't always the best fit for modern workplaces.
Hat TIp: Matthew Dimick
After yesterday's decision, there have been a bunch of great editorials and commentary by Workplace Profs. Among them, this piece by Nancy Levit (UMKC) and Naomi Cahn (George Washington) in the Huffington Post. The NY Times Room for Debate hosted several great short pieces too. Suzette Malveaux (Catholic) on the backpay issue; Matt Bodie (SLU) on the Court's desire to get employment cases out of the courts; Ralph Richard Banks (Stanford) on group equality; John Elwood (advisor to the SCOTUS Litigation Clinic, Virginia) on why the decision was not surprising; Tanya Hernandez (Fordham) on Wal-Mart being too big to sue; Richard Primus (Michigan) on the Court's push away from a structural view of discrimination; and Melissa Hart (Colorado) on the Court's hostility to discrimination cases.
Nice work and congratulations to all!
Fischl on “Running the Government Like a Business”: Wisconsin and the Assault on Workplace Democracy
Michael Fischl (UConn has published in the Yale Law Review Online a timely and must-read piece: “Running the Government Like a Business”: Wisconsin and the Assault on Workplace Democracy.
(Michael helpfully points out to those with middle-aged eyes that the downloadable pdf version is infinitely easier to read, though the footnote formatting is not nearly so nifty.)
Michael's fundamental point, with which I wholeheartedly agree, is that, "the stakes in Wisconsin have less to do with the bona fides of budget crises and benefits packages than with something a great deal more fundamental: the struggle between democratic governance and authoritarian control in the American workplace."
Read the whole piece. Well worth the time. I guarantee this: Michael will challenge the way you think about this issue.
Michael Waterstone (Loyola-LA), one of the organizers for the Sixth Annual Colloquium on Labor and Employment Law in Los Angeles this year, writes to remind law profs and other interested individuals to register for this year's colloquium.
I would think that with the Wisconsin and Midwest public-sector labor protests, Wal-Mart v. Dukes, new NLRB proposed rules, the new Restatement on Employment Law, and the ever-crazy ERISA landscape, there would be PLENTY for labor and employment law profs to talk/write about this year.
The deadline to register is August 11, 2011, and the reservations deadline for the conference hotel is August 25, 2011.
The NLRB just announced today that it is published several proposed election rules. They're potentially a big deal. The NLRB announcement provides links to the full proposed rules and Chairwoman Leibman's statement (you can also see Steven Greenhouse's take on them in the New York Times here). The proposals would, according to the Board:
- Allow for electronic filing of election petitions and other documents.
- Ensure that employees, employers and unions receive and exchange timely information they need to understand and participate in the representation case process.
- Standardize timeframes for parties to resolve or litigate issues before and after elections.
- Require parties to identify issues and describe evidence soon after an election petition is filed to facilitate resolution and eliminate unnecessary litigation.
- Defer litigation of most voter eligibility issues until after the election.
- Require employers to provide a final voter list in electronic form soon after the scheduling of an election, including voters’ telephone numbers and email addresses when available.
- Consolidate all election-related appeals to the Board into a single post-election appeals process and thereby eliminate delay in holding elections currently attributable to the possibility of pre-election appeals.
- Make Board review of post-election decisions discretionary rather than mandatory.
As I've argued before, some of these--like providing email address for the Excelsior list--are no-brainers and shouldn't be controversial (that's "should be" not "won't be"). Others are likely to create more of a fuss, especially given the Boeing case. The attempt to streamline the election process--pushing challenges to the post-election period is particularly significant--could significantly reduce the critical period after an election petition is filed and the election is held. This, of course, is the time where employers can aggressively fight the union campaign, often with success. What's interesting is that the rules could move the Board closer to the "quick election" proposals that came out of the EFCA debate and are used in some provinces in Canada.
Stay tuned . . . .
Hat tip: Dennis Walsh