Tuesday, April 30, 2013

Youngdahl on Investment Consultants and Institutional Corruption

Jay-pictureJay Yougdahl (Harvard University - Edmond J. Safra Center for Ethics) has recently posted on SSRN his new piece entitled: Investment Consultants and Institutional Corruption.

Here is the abstract:

Analyses of the financial crisis of 2007-2009 and the continuing effects of a difficult investing environment have largely focused on factors such as the roles of failed and complex financial products, inadequate credit rating agencies, and ineffective government regulators. Nearly unexamined, however, is a key group of actors in the financial landscape, investment consultants. Investment consultants stand as gatekeepers between large investors, such as private and public retirement funds, and those from “Wall Street” who design and sell financial products. Investment consultants hired by these asset owners practically control many investment decisions. Yet, as a whole the profession failed to protect asset owners in the recent financial crisis and has yet to engage in serious self-examination. Much of the reason for the failure can be traced to institutional corruption, which takes the form of conflicts of interest, dependencies, and pay-to-play activity. In addition, a claimed ability to accurately predict the financial future, an ambiguous legal landscape, and a tainted financial environment provide a fertile soil for institutional corruption. This institutional corruption erodes the confidence and effectiveness of the retirement and investment systems today. While not proposing a comprehensive system of reform, this article illuminates a way forward for those in the industry who have the desire to address and implement necessary corrective activity.

This is a timely and provocative contribution by Jay. In light of the increased movement from traditional pension to consumer driven defined contribution plans like 401ks, there is a very significant role being played by investment consultants in the pension world today, perhaps more than ever.

This role is largely misunderstood or ignored by many who practice ERISA law, and of course, by many plan participants and beneficiaries. It will be interesting to see what impact this paper may have on the increasing reliance on 401ks on the one hand, and the new trend among larger companies (like GM and Verizon) to derisk their pension obligations by purchasing group annunity contracts from large insurers (like Prudential) on the other.

PS

Investment Consultants and Institutional Corruption


Jay Youngdahl


Harvard University - Edmond J. Safra Center for Ethics

April 25, 2013

Edmond J. Safra Working Papers, No. 7

Abstract:     
Analyses of the financial crisis of 2007-2009 and the continuing effects of a difficult investing environment have largely focused on factors such as the roles of failed and complex financial products, inadequate credit rating agencies, and ineffective government regulators. Nearly unexamined, however, is a key group of actors in the financial landscape, investment consultants. Investment consultants stand as gatekeepers between large investors, such as private and public retirement funds, and those from “Wall Street” who design and sell financial products. Investment consultants hired by these asset owners practically control many investment decisions. Yet, as a whole the profession failed to protect asset owners in the recent financial crisis and has yet to engage in serious self-examination. Much of the reason for the failure can be traced to institutional corruption, which takes the form of conflicts of interest, dependencies, and pay-to-play activity. In addition, a claimed ability to accurately predict the financial future, an ambiguous legal landscape, and a tainted financial environment provide a fertile soil for institutional corruption. This institutional corruption erodes the confidence and effectiveness of the retirement and investment systems today. While not proposing a comprehensive system of reform, this article illuminates a way forward for those in the industry who have the desire to address and implement necessary corrective activity.

April 30, 2013 in Pension and Benefits, Scholarship | Permalink | Comments (0) | TrackBack (0)

Slater on Interest Arbitration

SlaterJoe Slater (Toledo) just posted on SSRN his article (OSJDR) Interest Arbitration as Alternative Dispute Resolution: The History from 1919 to 2011. Here's the abstract:

This paper comes from a February 2012 Symposium, "The Role of ADR Mechanisms in Public Sector Labor Disputes: What Is at Stake, Where We Can Improve & How We Can Learn from the Private Sector." It discusses the history of an important form of alternative dispute resolution: the use of what is called “interest arbitration” to resolve bargaining impasses in public-sector labor relations. This process is used in many states as an alternative to strikes. While interest arbitration has been a crucial part of public-sector labor law and labor relations for decades, it has come under increased scrutiny recently. Indeed, in the wave of laws passed in 2011 restricting the rights of public-sector unions to bargain collectively, interest arbitration was repeatedly attacked, and in several states it was eliminated or restricted.

This paper gives a historical overview of the development of interest arbitration, discussing how and why it developed as it did. This development was neither inevitable nor “natural” in that many other western democracies generally allow public workers to strike. But only a few states in the U.S. allows any public workers to strike. Thus, the question is: why did U.S. law and policy develop the way it did? This paper traces the relevant history from 1919 through to the new, restrictive laws of 2011. It starts with the Boston Police strike of 1919 — a seminal event in the history of public-sector labor law, that had a profound and lasting impact on how U.S. policymakers felt about dispute resolution in public sector labor law. It then turns to the first public-sector labor law permitting collective bargaining — passed, ironically in view of recent events, in Wisconsin in 1959 — and describes how concerns about dispute resolution were central to debates over that law. The paper continues by explaining how interest arbitration in public-sector labor relations has evolved and how it has worked from the 1960s into the 21st century. Finally, the paper explores the very recent developments in this area in the laws of 2011.

rb

April 30, 2013 in Arbitration, Labor Law, Labor/Employment History, Scholarship | Permalink | Comments (0) | TrackBack (0)

More on Seiner's Post-Dukes Advice

SeinerAnother shout out for Joe Seiner's (SC) recent article, "Weathering Wal-Mart," on post-Dukes class action lawyering.  Thomson-Reuters recently did a story on his article.  Some highlights:

"I do think there is a hunger for what are some of the procedural avenues to overcome the decision," Seiner said in an interview. "How can we achieve a class action? "That's where I'm trying to push the discussion." . . .

He prescribes three broad approaches. First, he writes, the EEOC, as a government plaintiff, is not bound by Dukes and should bring more broad-scale cases involving workplace discrimination. While noting that the EEOC is "historically underfunded," Seiner says the agency can nevertheless achieve meaningful injunctive and monetary relief.

Next, Seiner turns to procedural responses. When trying individual cases, plaintiffs' attorneys should make better use of collateral estoppel, the doctrine that says that a determination in one case should affect a related matter. . . .

Finally, Seiner writes, plaintiffs' lawyers should try to "cabin" Wal-Mart, by which he means making sure the decision applies only to the very, very large class actions such as Dukes. They should also try to take the decision "at its word," by flooding the courts with separate individual lawsuits.

In the article, Joe also notes that his next step maybe to focus more on practioners' ideas.  So I think I can speak for him in saying he'd love to hear from any of you with additional thoughts.

Hat Tip:  Suja Thomas

April 30, 2013 in Employment Discrimination, Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, April 29, 2013

Bagchi Selected As One of New York Law Journal's 2013 Rising Stars

AbagchiFrom Dean Michael Martin at Fordham Law School:

Please join me in congratulating Fordham Law Associate Professor Aditi Bagchi on her selection as one of the New York Law Journal’s 2013 Rising Stars. She is the only law professor among 44 honorees selected from more than 200 nominations of young lawyers who have established a record of accomplishments and demonstrated that they are top contributors to the practice of law and their communities. Read the NYLJ announcement.

Professor Bagchi—Fordham Law’s youngest tenured faculty member—has rapidly established herself as a leading academic in the field of contract law. As the recent recession has caused policymakers to reconsider methods of economic regulation, she has offered ways to reconcile interests in efficiency and equity within existing common law traditions. Her scholarship includes philosophical analysis of the nature of contractual obligation as well as detailed analysis of particular classes of contract, especially employment agreements.

Congratulations, Aditi! Well deserved.

Hat Tip: Mike Zimmer

PS

April 29, 2013 in Faculty News | Permalink | Comments (0) | TrackBack (0)

Conference: Violence, Health, & Labour

SantiagoDaria Chernyaeva (National Reasearch University - Higher School of Economics, Moscow) sends word that our Spanish colleague prof. Lourdes Mendez has asked her to spread the word on an International Conference devoted to the "Violence, health and labour in the time of crisis" that is about to take place in the middle of July this year at the Law Faculty of the University of Santiago de Compostela (Spain).  Proceedings will be held in, or translated to, Spanish, English, French, and Portuguese.  Here's the tentative program; for more information, contact prof. Mendez directly.

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April 29, 2013 in Conferences & Colloquia | Permalink | Comments (0) | TrackBack (0)

Friday, April 26, 2013

NLRB Files For Cert. in Noel Canning

NLRBYesterday, the NLRB filed a cert. petition with the Supreme Court to overturn the D.C. Circuit's decision in Noel Canning.  You can see the petition here.  Lyle Dennison at SCOTUSblog has a nice summary of the issue here, including the fact that it's highly unlikely that the Court will hear the issue this term, leaving the NLRB twisting in the wind for a while longer.

Given the delay in resolving the issue, were largely back to where we were before:  One settled NLRB member, whose term is expiring later this year and who has been renominated; two recess appointments whose status is up in the air and who have been renominated; and two new nominees.  Basically, by the end of the year it's possible the the NLRB will have a full five members, no members, or something in between (how's that for covering all the bases?).  The Senate has scheduled hearings on the pending nominations for May, but I don't know how seriously to take that.  Stay tuned.

Hat Tip:  Patrick Kavanagh

-JH

April 26, 2013 in Labor and Employment News, Labor Law | Permalink | Comments (0) | TrackBack (0)

Thursday, April 25, 2013

McCormick and Sperino Receive Teaching Awards

Sperino2 MmCongratulations to Sandra Sperino (Cincinnati) and Marcia McCormick (SLU), both of whom have just received teaching awards at their respective schools.  Sandra received the Goldman Prize for Teaching Excellence, and Marcia the Student Government Association Faculty Excellence Award.  It's a well-deserved honor, Sandra & Marcia!

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April 25, 2013 in Faculty News | Permalink | Comments (0) | TrackBack (0)

ISO Chapters on Foreign Labor and Employment Laws

GLobeOxford University Press is publishing a book titled "Global Labor and Employment Law: Reports From Law Offices Worldwide," which is being edited by Sam Estreicher (NYU), Michael Gray (Jones Day), and myself.  It is going to be a comprehensive book, both in the topics covered as well as the number of countries we have chapters for.  Thanks to many attorneys at Jones Day and elsewhere, in addition to academics, we've got most of what we need, but there are a few holes.  Below are a list of countries that we'd like to have chapters on--if you're knowledge about the labor and employment laws in any of these countries and would like to join what look to be a great book (I'm only a bit biased), please send me an email: jmhirsch@email.unc.edu.

  • Thailand
  • Cambodia
  • Poland
  • Czech RepubliC
  • HUngary
  • Egypt
  • UAE

-JH

April 25, 2013 in Labor and Employment News, Scholarship | Permalink | Comments (0) | TrackBack (0)

Hooter's Waitress Alleges That Brain Surgery Resulted In Her Losing To Her Job

HootersA waitress at a Missouri Hooter's restaurant alleges that her post-brain surgery appearance cost her her job.  Following the removal of a brain tumor, her bosses at Hooters ordered her to wear a wig to cover up her bald head and surgical scar.  She responded that she couldn't afford a wig (Hooter's didn't offer to pay for it) and when she tried to wear a borrowed one, it hurt her healing wound.  Then, according the the waitress, her hours were reduced so much that she had to quit.  Our own Marcia McCormick was quoted on her ADA suit in the ABC News story:

Marcia McCormick, an associate professor of law at St. Louis University, said Lupo's surgery to remove a brain mass qualifies as a disability, but that Hooters could argue that her appearance was a bona fide qualification for her job.

"In the disability context, if Hooters is to say she's not as attractive now without this wig, if they're selling her attractiveness that might be a real function of her job and mean she isn't qualified by the Americans With Disabilities Act," McCormick said.

"Most companies can't say something like this, but Hooters sells this experience," she said.

There's at least something of a good ending, no matter what happens to the case, as the waitress, who was a nursing student at the time, is now employed as a trauma nurse.

Hat Tip:  Joe Seiner

-JH

April 25, 2013 in Disability, Employment Discrimination, Labor and Employment News | Permalink | Comments (3) | TrackBack (0)

Wednesday, April 24, 2013

Long & Sperino on Diminishing Retaliation Liability

LongAlex Sperino

Alex Long (Tennessee) and Sandra Sperino (Cincinnati) has just had their essay, "Diminishing Retaliation Liability" published in the NYU Law Review Online.  The essay's introduction:

Over the past decade, courts have often construed statutory provisions relating to workplace retaliation liberally, interpreting them to provide protections for employees who complained about discrimination against themselves or others. However, a recent decision by the Fifth Circuit Court of Appeals demonstrates that courts may begin to scale back the gains made by employees in retaliation cases by applying agency principles to limit employer liability for retaliation.

An interesting topic from two folks who know their retaliation law, so check it out.

-JH

April 24, 2013 in Scholarship | Permalink | Comments (1) | TrackBack (0)

Tuesday, April 23, 2013

The Peggy Browning Fund's Take on the Academic Future of Labor and Employment Law

PeggybrowningContinuing a conversation that was started on this blog a couple of weeks, Joe Lurie of the Peggy Browning Fund writes to provide his take on the academic future of labor and employment law in the greater legal academy and what his group, the Peggy Browning Fund, is doing to help to ensure the future of labor law in particular:

As most of you know, the Peggy Browning Fund’s core mission is educating law students as to the rights and needs of workers.  As recently as 20 years ago, law schools across the country recognized this educational goal as an important part of their curriculum.  Unfortunately, today this is no longer the case.  On April 11, 2013, Reuters reported that Professor Paul Secunda, who teaches labor and employment law at Marquette University School of Law, stated that “law schools give labor and employment law short shrift.”  Professsor Secunda went on to say that “hiring among law school professors specializing in labor and employment dropped this year, and the field is overlooked at many law schools.”

Thanks to your help, we have made, and continue to make, an impact in the education and recruitment of young lawyers for the labor movement.  Our 10-week summer fellowship program and our annual National Law Students Workers’ Rights Conference provide the training and education many law students want but do not receive in law school.  We offer law students wide-ranging opportunities to work for social and economic justice.  Building on these opportunities, many of our alumni have gone on to work for unions, the National Labor Relations Board, the U.S. Department of Labor, worker centers and union-side law firms.

Law schools have created a vacuum in labor law and employment law legal education. Even though we are proud of increasing the number of fellows we placed to 70 positions, we cannot begin to fill this vacuum.  This year we received well over 500 applications for the 70 fellowship positions we can afford to offer.  The waiting list for unions and worker centers wanting our students is long and continues to grow.  With your help, we can continue to strengthen the labor movement by educating the next generation of lawyers committed to working for economic and social justice.

Thanks to Joe and the Peggy Browning Fund for penning this piece and I can state from personal experience that my students over the years have very much enjoyed participating in the group's national conference and fellowship programs.  

Just another avenue (albeit on the union side of things) for providing the labor and employment law skills and education students need to be successful attorneys in this vital area of study.

PS

April 23, 2013 in Commentary, Conferences & Colloquia | Permalink | Comments (0) | TrackBack (0)

Labor Law Makes an Appearance on The Good Wife

ThegoodwifeFrom Harris Freeman (Western New England), a lighter entry on pedagogy and popular culture. Harris writes:

A rare cultural phenomena – labor issues driving the plot of a prime-time TV show. This week’s episode of The Good Wife (#21), a legal drama on CBS starring Julianna Marguiles, featured a plot devoted to labor law:  Attorney Alicia Florick (Marguiles) was ‘tricked/coaxed’ into representing a group of computer coders at a software company who sought to form a union. 

Much to my surprise, a series of hearings before an administrative law judge at the NLRB provided the adjudicatory framework.  Legal issues included whether: workers were employees; engaged in concerted activity; suffered from discrimination because they chose to form a union, and; whether employer electronic surveillance was lawful. What’s more, the firm’s representation of these employees proved a catalyst for the law firm’s administrative staff to complain about their own workplace conditions and a justifiably cynical take on how employers “lawfully” handle employee dissatisfaction. 

If you can get a hold of the episode, excerpts would make for some effective use of popular TV culture for classroom teaching and conversation.   A summary of the episode is available at Entertainment Weekly here.  

Does all this also mean that labor law is again bubbling up in Americans' consciousness? Have the events of Wisconsin, Michigan, and the NLRB finally got some in Hollywood to take notice of the importance of these issues to the future of our country?

OK, probably not. But one can dream.

PS

April 23, 2013 in Commentary, Teaching | Permalink | Comments (1) | TrackBack (0)

Monday, April 22, 2013

Bisom-Rapp on Cert in Another ATC Case

BrThanks to Susan Bisom-Rapp (Thomas Jefferson) for sending us this:

This morning the Supreme Court agreed to hear another Alien Tort Statute case, DaimlerChrysler AG v. Bauman.  The defendant is a German corporation sued for human rights violations allegedly perpetrated by its Argentine subsidiary.  The plaintiffs are former employees and family members of former employees from an auto plant in Argentina, and they allege that during the Argentine dirty war the subsidiary labeled the former employees as subversives.  Those employees were subsequently detained by security forces and some “disappeared.”  The connection to the U.S. is that DaimlerChrysler sells automobiles in the U.S. via its U.S. subsidiary.  Whether that connection will be enough to supply jurisdiction under the ATS is the open question after last week’s decision in Kiobel.  Here is a link to a post about the case on SCOTUSblog.

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April 22, 2013 in Labor and Employment News | Permalink | Comments (0) | TrackBack (0)

King and Spalding's Surprising New Email Policy

ComputerOne of the areas that I have recently been researching regards the impact of technology of employees' expectations of privacy while at work or engaged in work outside of the workplace.  Though not completely related, now comes word that a large law firm, King & Spalding, has put into place a very aggressive email policy.  Here are some excerpts of that policy:

KING & SPALDING — FIRM-WIDE-ANNOUNCEMENT — EMAIL ACCESS

New Policy Prohibiting Access to Non-King & Spalding Email Accounts (“Personal Email Accounts”) from Firm Computers

The firm’s internal security experts, as well as our outside security experts, have advised us that accessing Personal Email Accounts from firm computers creates a significant security risk. Therefore, effective May 1, 2013, access to Personal Email Accounts (i.e., anything other than your kslaw.com email, including, but not limited, to personal email accounts like Gmail, Yahoo, Hotmail, cable company, etc.) from King & Spalding computers will no longer be permitted.

Most personal email sites will be blocked while you are on the firm’s network. However, you should not access Personal Email Accounts from a firm computer, even if you are not automatically blocked when trying to do so. For example, you should not access Personal Email Accounts from a firm laptop, even when the laptop is not connected to the firm’s network (i.e., from your home network, a hotel internet, etc.). The firm’s computer systems hold confidential information about our clients and the firm and, as you know from reading articles in the press, individual users who innocently click on malicious e-mails are often the cause of security breaches. We need your help in protecting our systems by following this and other security related policies, even when you can do things that you are not supposed to do . . . .

Permissible Ways of Accessing Personal Email Accounts

The prohibition against accessing Personal Email Accounts from firm computers does not impact your ability to access Personal Email Accounts such as Gmail, Yahoo or Hotmail from your own personal devices (e.g., smartphones, iPads, tablets, personal laptops, etc.) while at the firm . . . .

Clearly, K&S has acted decisively to protect against leaks of confidential information and perhaps against compromosing their system through viruses and other malware. Although this policy would appear to diminsih whatever expectations of privacy individuals have in personal email use during work, other cases, under the Electroic Communication Privacy Act (EPCA) stand for the proposition that whereas an employer has the ability to monitor work emails and other computer use for company violations, they do not have the same ability to monitor personal email accounts. 

Perhaps because of the inability to monitor personal email accounts, the firm decided to just prohibit all access to such email period.  I wonder whether there will be pushback from employees, or under current law, do employers like K&S have carte blanche when making these types of decisions in the workplace concerning email and use of technology?

PS

April 22, 2013 in Workplace Trends | Permalink | Comments (3) | TrackBack (0)

Monahan Receives ALI Young Scholars Medal

MonahanCongratulations to Amy Monahan (Minnesota), who is one of two law professors receiving American Law Institute's Young Scholar's Medal. Here are some excerpts from ALI's press release:

Justice Goodwin Liu of the California Supreme Court who chaired the Young Scholars Medal Selection Committee, said "Professor Monahan's work on public pension reform and employee benefits has contributed significantly to some of the most important debates now playing out at the local, state, and federal levels."

Professor Monahan's scholarship centers on the intersection of health care reform and public sector pensions. Her teaching and research focuses primarily on the topics of taxation and employee benefits. She has written 17 articles or book chapters since the beginning of her law teaching career. Professor Monahan holds a J.D. from Duke University School of Law and a B.A. in international studies from Johns Hopkins University.

"Amy has rapidly established herself as one of the country's top scholars in health policy and employee benefits law," said David Wippman, the dean of the University of Minnesota Law School. "She's also a terrific teacher and colleague and richly deserves the Young Scholars Medal."

rb

April 22, 2013 in Faculty News, Pension and Benefits, Public Employment Law | Permalink | Comments (0) | TrackBack (0)

An ERISA Update: Some Thoughts on McCutchen and Heimeshoff

GavelLast week was a momentous week for those of us who teach and practice employee benefits law under ERISA. 

First, the United States Supreme Court decided the reimbursement case of U.S. Airways v. McCutchen.  The syllabus is provided here in a post by Jeff from last week, but the long and the short is that U.S. Airways, a self-insured health plan provider, had provided medical benefits (some $67,000) to a participant (McCutchen) of their plan injured in a car accident.  Although U.S. Airways paid for the medicial expenses arising from the accident, when McCutchen received a settlement of his claim against the third-party tortfeasor (about $110,000), U.S. Airways exercised its rights under the plan's reimbursement clause to recover the amount it had already paid to McCutchen.  This would be mean that McCutchen would lose his full recovery because in addition to paying back U.S. Airways for the medical expenses, he owed a 40% contingency fee to his attorneys. He sought the use of two equitable doctrines - unjust enrichement based on double recovery and the common fund doctrine - to mitigate this harsh result.

The Court in McCutchen found that this was a contractual matter and that the plan terms overrode any possible equitable principles, as long as the terms of the plan were clear.  Although the reimbursement clause was clear with regard to U.S. Airways being able to collect the full amount it previously payed out in medical expenses and therefore equitable theories of unjust enrichment were unavailable, the plan was silent on how attorney fees should be split be McCuthchen and the company. Thus, the majorty five Justices applied the common fund doctrine to require U.S. Airways to ratably play its share of McCutchen's attorney fees.

Few take away points from McCutchen:

1) It would seem, a la Firestone, that plans henceforth could write their reimbursement clauses in their plans to make clear that the common fund doctrine does not apply and companies are not responsible for attorney fees. That would mean, without equitable principles available, participants like McCutchen could actually end up coming out behind after suing the third-party for their injures. As other have pointed out, however, companies may think twice before adding such language to their plans for fear that attorneys will not take such cases and/or participants will just not decide to sue the third-party since they would be worse off if they did.

2. It is strange that the Court that has gone previously out of its way to say that ERISA is imbued with trust law, would treat this issue as a purely contractual matter.  The Court, in deciding the standard of review in denial of benefit claim cases in Firestone and Glenn, came to the exactly opposite result and found that trust law principles applied.  Although Firestone was a 502(a)(1)(B) denial of benefit plan case and McCutchen is a 502(a)(3) claim for appropriate equitable relief under the terms of the pan, both provisions have been historically construed with trust law in mind, not contract law. Of course, trust law would have more likely provided the equitable remedies that McCutchen was seeking.

3. Applying contract principles seems particularly unfair in this context because employee benefit plans are essentially adhesion contracts.  Not only are participants unlikely to understand and know about such reimbursement clause provisions in their benefit plans, but even if they do, they would not be able to negotiate in any meaningful way with their employer over changing the terms of the plan. This is a true take-it-or-leave-it proposition.  This is why contract law is unsuited to 502(a)(3) for appropriate equitable relief and why trust law, given that the funds are placed in trust for the benefit of participants and beneficiaries, is the far better and appropriate model.

So, McCutchen seems wrong to me on many levels. What is depressing is not only that the usual Justices are aligned against ERISA plaintiffs, but normal allies of plaintiffs on the Court just don't seem to understand the consequence of their decision in a case like this.  In short, ERISA continues to baffles the Supreme Court. 

All this does not bode well for ERISA plaintiffs in the case the Supreme Court granted cert in last week, Heimeshoff v. Hartford.  This case concerns when the statute of limitations should begin to run in a case where a participant seeks disability benefits under an employer's welfare benefit plan.  ERISA only has a statutory SOL provision for breach of fiduciary claims, and courts usually look to state law analogs to find SOLs for denial of benefit claims like this one. However, the issue is not what the appropriate SOL is, but rather, when does that SOL begin to run?

Here is a summary of the case and the question presented from Proskauer's ERISA Practice Center Blog:

Heimeshoff had been a Wal-Mart employee for nearly twenty years. In 2005, she filed a claim for long term disability benefits as a result of various ailments caused by fibromyalgia. Hartford’s plan provided that its three-year limitations period ran from the time that proof of loss was due under the plan. Here, even accepting Heimeshoff’s arguments, the latest she could have filed a proof of loss was in September 2007, and she did not commence her lawsuit until November 2010.

The Second Circuit concluded that Connecticut law permits parties to an insurance contract to shorten the state-prescribed statute of limitations, and also permits the statute of limitations under an ERISA plan to begin before a claimant can bring a legal action. Accordingly, it held that the district court had properly dismissed Heimeshoff’s claim as untimely since she had filed her lawsuit several months after the three year period had expired.

The Supreme Court agreed to address the following question: “When should a statute of limitations accrue for judicial review of an ERISA disability adverse benefit determination?” According to the petition, the Circuits have not uniformly answered this question. 

This is really an interesting question from a number of different stand-points:

1.  From a preemption standpoint, it would appear that state law would apply, and override Hartford's insurance language to the contrary, since this is insured disability plan subject to state law insurance regulations since it is a law regulating insurance under ERISA Section 514(a)(2)(A) and saved from ERISA preemption.  In fact, it reminds one of the California notice-prejudice rule in the Court's UNUM v. Ward case from 1999 where the state law was found to be saved from preemption.  Yet, the Second Circuit concludes that under Connecticut insurance law, an insurer can shorten the statute of limitations in an insurance contract; but the Second Circuit then says the question of when a statute of limitations begins to run is a matter of federal law.

2. If federal applies, as the Second Circuit suggests, the federal law would appear to be based on the ERISA principles that generally written terms of the plan should be enforced as written. Of course, this is why the Court ends up deciding that Heimeshoff's disability claim must be dismissed under the applicable SOL. This conclusion also resonates with the contract-based analysis in McCutchen which says equitable principles cannot override a clearly written benefit plan provision.

3. On the other hand, if state law applied under the preemption analysis above, it could be possible that different insurance laws from different states might provide that such provisions like Hartford's violate laws that require insurance companies to explain to participants when their claims need to be filed in court to challenge the plan administrator's decision. No such law seems to exist in Connecticut, but of course there would be a host of different regimes that would then apply, seemingly inconsistent with the uniformity which is desired for such plans under ERISA. Perhaps a DOL regulation on this issue would helpful.

The Court could certainly go in a number of different directions here, but given recent precedent, a contract-based approach may seem the mostly likely scenario, which means the Second Circuit's decision would be upheld.

Also, as friend of the blog Don Bogan (Oklahoma) pointed out to me: "I have never heard of a contract, which requires internal appeals/exhaustion of administrative remedies, to also declare that the SOL begins to run even before internals appeals are exhausted—if Connecticut has no statute or case law on that issue, then perhaps the Supreme Court should certify the case to Connecticut Supreme Court for resolution of what Conn. insurance law is or would be on that question."

Perhaps so. Stay tuned.

PS

April 22, 2013 in Commentary, Pension and Benefits | Permalink | Comments (0) | TrackBack (0)

Conference Announcement & Call for Papers: Loyola-Chicago Con Law Colloquium

Signing_constitutionMike Zimmer (Loyola-Chicago) sends word of the Fourth Annual Constitutional Law Colloquium at Loyola-Chicago, to be held November 1 & 2, 2013.  As Mike points out,

Each year a lot of us worklaw people write about constitutional issues and a number of regulars at the Labor & Employment Law Colloquium have also presented at the Con Law one.

Complete details after the break.


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Continue reading

April 22, 2013 in Conferences & Colloquia, Public Employment Law | Permalink | Comments (0) | TrackBack (0)

Sunday, April 21, 2013

Recently Published Scholarship

Gap

  • Marcia L. McCormick, Workplace Reform in a Jobless Recovery, 81 UMKC L. Rev. 347 (2012).
  • Michael J. Zimmer, Inequality, Individualized Risk, and Insecurity, 2013 Wisc. L. Rev. 1.
  • Teressa L. Elliott, The Path to the Americans with Disabilites Act Amendments Act: U.S. Supreme Court Cases, Congressional Intent, and Substantial Change, 48 Gonzaga L. Rev. 395 (2012/13).
  • Sandra Simpson, The Elusive Quest for Equality: Women, Work, and the Next Wave of Humanism, 48 Gonzaga L. Rev. 279 (2012/13).
  • Jasmine A. Williams, "Unemployed (and Black) Need Not Apply": A Discussion of Uneployment Discrimination, Its Disparate Impact on the Black Community, and Proposed Legal Remedies, 56 Howard L.J. 629 (2013).
  • Jason E. Shapiro, Employee Benefits Law: The Hidden Gap Enabling Sexual Orientation Discrimination in Employment, 19 Casrdozo J. L. & Gender 511 (2013).
  • Nicholas H. Meza, A New Approach for Clarity in the Determination of Protected Concerted Activity Online, 45 Ariz. St. L.J. 329 (2013).

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April 21, 2013 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Saturday, April 20, 2013

A Dau-Schmidt Duo

DsKen Dau-Schmidt (Indiana-Bloomington) has just posted on SSRN a couple of new articles:

Promises to Keep: Ensuring the Payment of Americans’ Pension Benefits in the Wake of the Great Recession (forthcoming Washburn  L.J.):

In this essay, I examine the problem of designing a pension plan within the context of our larger public policy of encouraging workers to save for retirement. I discuss the various problems and risks inherent in encouraging workers to adequately save for retirement, invest those assets efficiently, and ensure the planned level of retirement consumption for the remainder of their lives. I also discuss the three major types of pension plans in the American retirement system, defined benefit, defined contribution, and hybrid, and assess how well each of these types of plans deals with the problems encountered in designing a pension plan. I then examine the particular problems that have arisen because of our relatively recent transition from defined benefit to defined contribution plans, and the funding problems caused by the Great Recession. I close with a section discussing policy changes that might be made to improve our pension system and help ensure that workers receive not only the pension benefits they were promised, but also adequate benefits to sustain them comfortably during their retirement.

The Employment and Economic Advancement of African Americans in the Twentieth Century (with Ryland Sherman, IU-Bloomington Dep't Telecomm.):

The African American experience in the American economy in the Twentieth Century has been a story of many successes, and more than a few unfulfilled promises. Brought in chains to the poorest region of the United States to do the least desirable work, and purposely denied education in order to preserve their subjugation, African Americans began the Twentieth Century on the lowest rung of the American economic ladder doing predominantly low-skilled, low-wage agricultural labor in the poorest region of our country. However, over the course of the century, African Americans were able to overcome express and implicit discrimination to climb the economic ladder and achieve success in new regions and new occupations and professions. African Americans still suffer many disadvantages that diminish their economic success, particularly males and particularly in education, but certainly in comparison with the previous three centuries, the Twentieth Century marked important advancements in African American economic opportunity and success.

In this essay, we will examine how African Americans achieved the economic progress they made during the Twentieth Century. We do this by examining their progress along four vectors of economic opportunity - geographical distribution, labor force participation, occupational distribution, and educational attainment - and then examine the resulting improvement in relative economic rewards. We will also examine the impact that the Civil Rights Movement, the Civil Rights Act and affirmative action policies have had on this progress. We will see that, from an economic perspective, the story of African American success in the Twentieth Century is one of overcoming discrimination by moving from a situation of relatively constrained economic opportunities, to gain access to, and success in, an ever larger and more rewarding set of opportunities across the country. It is hoped that the recounting of the success of African Americans in achieving greater economic success by using the law and their own initiative to gain access to new geographic, occupational, and educational opportunities will serve as an inspirational and educational lesson for India’s Dalits in their own struggle for equal opportunities.

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April 20, 2013 in Employment Discrimination, Labor/Employment History, Pension and Benefits, Scholarship, Workplace Trends | Permalink | Comments (0) | TrackBack (0)

Duff on Labor and the NFL Antitrust Exemption

DuffMichael Duff (Wyoming, visiting Denver) has just posted on SSRN his essay What Brady v. N.F.L. Teaches About the Devolution of Labor Law.  Here's the abstract:

In this essay I argue that the Eight Circuit got things very wrong when it found, in Brady v. National Football League, that a district court’s injunctions issued against the NFL in connection with player-filed antitrust suits were barred by the Norris LaGuardia Act of 1932 (NLGA).  I argue that the Court’s misreading of the NLGA strikes at the “statutory music” of labor law so dramatically as to represent a judicial unmooring from it.  I chronicle other recent important, but relatively minor, judicial departures from the music.  I also discuss a major but less recent departure – the employer lockout.  I distinguish Brady from these departures, concluding that invocation of the NLGA—the original and arguably the foundational American labor law statute—to protect wealthy NFL owners from player-filed antitrust suits is a bridge too far.  That the NFL wants to be exempted from antitrust law, I understand.  We should be honest, however, and modify antitrust law to affirmatively grant the exemption (or not).  We should not contort and abuse labor law in a manner that makes a mockery of it.  On the other hand, I consider whether cases like Brady are inevitable when judges are propping up a labor law regime originally meant to maintain industrial peace throughout an era in which there is little industrial strife.  Perhaps it is natural that a labor law regime that cannot do what it was supposed to do because of a shift in the zeitgeist (whatever caused the shift), coupled with legislative ossification preventing the regime’s innovation, will be vulnerable to bad faith manipulation.  In Brady, the manipulation consisted of the court’s misapplication of the NLGA and its putting on of blinders as all parties advanced positions difficult to characterize as having been made in good faith.  I question in light of the debacle why anyone would want the labor law we now have.

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April 20, 2013 in Labor Law, Scholarship | Permalink | Comments (0) | TrackBack (0)