Friday, January 27, 2017
Unlikely, but Charlie Morris (SMU emeritus) engages in some thoughtful, self-described wishful thinking. His essay over at onlabor is How President Trump Could Surprise with Improvement for the NLRB and a Boost for the Middle Class. Here's an excerpt:
Considering that [President Trump] won his election with the critical votes of many union men in Michigan, Ohio, Pennsylvania, and Wisconsin, what position will he likely take toward organized labor? Probably no one, including Trump himself, knows the precise answer to that question, or whether he will continue or worsen the GOP’s endemic negative attitude toward unions. My own view of what he might do—which is colored by my hope as to what I think he should do—stems from his previous labor-relations experience and public statements..., plus my tentative consideration and appraisal of his basic nature—which seems to be the same as President Obama’s, who said “I don’t think he is ideological. Ultimately he is pragmatic.” .... I would therefore like to believe that he will apply [such pragmatism] to matters involving labor-relations, especially since he claims to “have great relationships with unions” and has expressed his disdain for so many major policies of the Republican establishment—but in truth I will be totally surprised if that happens. If, however, Trump should prove to be a non-ideological President who will oppose key elements of the establishment—though his announcements of major appointments to date suggest otherwise—he should be amenable to allowing the NLRB to function according to its true statutory policy rather than treating it in the manner of his Republican predecessors, all of whom appointed critical numbers of Board Members and NLRB General Counsels who were opposed to the NLRA’s basic policy of favoring collective bargaining, a practice that contributed substantially to the Board’s failure to adequately enforce the Act.
Wednesday, November 2, 2016
FBI Director James Comey's decision to send a letter to Congress notifying it that he had been informed that emails that might be relevant to the investigation into Hillary Clinton's use of a private server while Secretary of State had been discovered in an unrelated investigation invoked a firestorm. Renewed (and overblown given the content of the letter and the source of the emails) charges of wrongdoing came from Republican candidates. Democrats pitched the issue as a partisan act, and suggestions by people from both parties have been made that Comey's actions may have broken the law or internal agency policies.
So what does this have to do with the workplace, you might ask? Terry Smith (DePaul) has a piece at Huffington Post looking at Comey's actions through an employment lens to explain How Every American Knows what Comey Did Was Wrong. It's a great piece on the unfairness connected with vague negative statements and their effects on hiring decisions that I think many of us can relate to.
Monday, March 21, 2016
March Madness is upon us, and many of our fellow friends and colleagues are participating in the "madness" at varying levels. Some fill out office pools, others sneak out to watch the games, and some stream the action live on their computers or phones. All told, this workplace diversion is costing employers approximately four billion dollars annually, according to a study discussed at Forbes.com. According to the study, the unprecedented access to games provided to workers under current technology has lead to increased losses for employers. It is interesting to see efforts to quantify the workplace costs of the NCAA tournament, but are there any benefits as well? I can think of a few, but feel free to hypothesize in the comments below or to discuss the impact of March Madness in the workplace, as we wait for the Sweet Sixteen games to begin in a few days...
-- Joe Seiner
Tuesday, March 1, 2016
The EEOC issued a press release today, announcing that it has brought two cases alleging that discrimination on the basis of sexual orientation is discrimination on the basis of sex under Title VII. From the press release:
The federal agency's Philadelphia District Office filed suit in U.S. District Court for the Western District of Pennsylvania against Scott Medical Health Center, and, in a separate suit, in U.S. District Court for the District of Maryland, Baltimore Division, against Pallet Companies, dba IFCO Systems NA.
In its suit against Scott Medical Health Center, EEOC charged that a gay male employee was subjected to harassment because of his sexual orientation. The agency said that the male employee's manager repeatedly referred to him using various anti-gay epithets and made other highly offensive comments about his sexuality and sex life. When the employee complained to the clinic director, the director responded that the manager was "just doing his job," and refused to take any action to stop the harassment, according to the suit. After enduring weeks of such comments by his manager, the employee quit rather than endure further harassment.
In its suit against IFCO Systems, EEOC charged that a lesbian employee was harassed by her supervisor because of her sexual orientation. Her supervisor made numerous comments to her regarding her sexual orientation and appearance, such as "I want to turn you back into a woman" and "You would look good in a dress," according to the suit. At one point, the supervisor blew a kiss at her and circled his tongue at her in a suggestive manner, EEOC alleged. The employee complained to management and called the employee hotline about the harassment. IFCO fired the female employee just a few days later in retaliation for making the complaints, EEOC charged.
These cases are an outgrowth of the agency's decision in the federal sector case Baldwin v. Dep't of Transp., Appeal No. 0120133080 (July 15, 2015). In that case, EEOC held that Title VII's prohibition of sex discrimination includes discrimination because of sexual orientation because:
(1) sexual orientation discrimination necessarily involves treating workers less favorably because of their sex because sexual orientation as a concept cannot be understood without reference to sex; (2) sexual orientation discrimination is rooted in non-compliance with sex stereotypes and gender norms, and employment decisions based in such stereotypes and norms have long been found to be prohibited sex discrimination under Title VII; and (3) sexual orientation discrimination punishes workers because of their close personal association with members of a particular sex, such as marital and other personal relationships.
The EEOC has also been filing amicus briefs in private cases urging the courts to accept this argument, most recently in Burrows v. The College of Central Florida and Evans v. Georgia Regional Hospital, both in the 11th Circuit. Accepting it would mean that the courts could stop struggling with trying to distinguish between sex stereotyping cases that are cognizable because they are really about sex and sex stereotyping cases that are not cognizable because they are about sex but also sexual orientation.
Thursday, May 21, 2015
The winner of the 2015 Marco Biagi Award is Uladzislau Belavusau (Vrije Universiteit Amsterdam, the Netherlands) for a paper entitled A Penalty Card for Homophobia from EU Labor Law: Comment on Asociaţia ACCEPT (C-81/12). In the paper, the author provides a detailed analysis of Asociaţia ACCEPT, an important case from the Court of Justice of the European Union on sexual orientation discrimination. The Court held (1) that an employer could be found liable for the discriminatory statement of a person who is publicly perceived as playing a leading role for the employer, even though the person does not have the legal capacity to bind the employer and (2) that national rules prohibiting such discrimination must be effective, proportionate, and dissuasive. Professor Belavusau evaluates the case as an example of cause lawyering that could be used as a model of legal mobilization for LGBT advocates and for other social movements.
The International Association of Labor Law Journals sponsors the Marco Biagi Award in honor of one of the founders of the Association: Marco Biagi, a distinguished labor lawyer and a victim of terrorism because of his commitment to social justice. A list of the member journals of the International Association can be found at http://www.labourlawjournals.com.
This year’s winner was chosen by an academic jury composed of Frank Hendrickx (Belgium), Alan Neal (UK), and György Kiss (Hungary).
Prior winners of the Marco Biagi Award were:
2014 Lilach Lurie (Bar-Ilan University, Israel), Do Unions Promote Gender Equality?
Specially Noted ̶ Isabelle Martin (University of Montreal, Canada), Corporate Social Rsponsibility as Work Law? A Critical Assessment in the Light of the Principle of Human Dignity
2013 Aline Van Bever (University of Leuven, Belgium), The Fiduciary Nature of the Employment Relationship
2012 Diego Marcelo Ledesma Iturbide (Buenos Aires University, Argentina), Una propuesta para la reformulación de la conceptualización tradicional de la relación de trabajo a partir del relevamiento de su especificidad jurídica
Specially Noted ̶ Apoorva Sharma (National Law University, India), Towards an Effective Definition of Forced Labor
2011 Beryl Ter Haar (Universiteit Leiden, the Netherlands), Attila Kun (Károli Gáspár University, Hungary) & Manuel Antonio Garcia-Muñoz Alhambra (University of Castilla-La Mancha, Spain), Soft On The Inside; Hard For the Outside.An Analysis of the Legal Nature of New Forms of International Labour Law
Specially Noted ̶ Mimi Zou (Oxford University, Great Britain), Labour Relations With “Chinese Characteristics”? Chinese Labour Law at an Historic Crossroad
2010 Virginie Yanpelda, (Université de Douala, Cameroun), Travail décent et diversité des rapports de travail
Specially Noted ̶ Marco Peruzzi (University of Verona, Italy), Autonomy in the European social dialogue.
2009 Orsola Razzolini (Bocconi University, Italy), The Need to Go Beyond the Contract: “Economic” and “Bureaucratic” Dependence in Personal Work Relations
Tuesday, January 13, 2015
The Supreme Court heard oral argument today in Mach Mining v. EEOC, which you might remember from some of our prior posts (also here) and a guest post by Commissioner Feldblum. The transcript has been posted on the Supreme Court's website, and you can read it here. The case was about the EEOC's concilation process and whether that process is judicially reviewable.
I've read through and have some initial impressions. Even though the EEOC is the respondent here, I'm going to start with its arguments because there was significantly more back and forth with the Justices and the EEOC than with the Justices and counsel for the employer, Tom Goldstein. The EEOC has taken an understandable but difficult position, that it cannot file suit unless it has tried and been unable to conciliate on terms it desires. The EEOC asserted that it had a duty to attempt to conciliate, but that essentially, as long as it sent a letter to the employer notifying it that the EEOC had found cause to believe discrimination had occurred in connection with the charge and asking the employer to get in touch, that duty was satisfied. Counsel for the EEOC conceded that this did not seem to be much for judicial review, but argued that even in courts that used a minimal good faith standard, those courts were getting bogged down in mini-trials attempting to assess the quality of the conciliation efforts, something the statute provides no sort of standards for, since the statutory language gives the EEOC has the sole discretion to decide whether any potential terms of resolution are acceptable to it. Counsel for the EEOC was pressed repeatedly to articulate what should be required to ensure that the EEOC actually attempted to conciliate. Chief Justice Roberts, especially was wary of trusting the word of the agency that it had acted in good faith, and Justice Breyer was as well, although to a lesser degree.
With counsel for the employer, the Justices focused primarily on how to frame the issue as a matter of administrative law, since the statute contains no standards for review, nor does it define this conduct as a final agency action. Additionally, the statute requires that the EEOC keep conciliation matters secret and prohibits information about the conciliation process to be used as evidence at trial.
In terms of Supreme Court bingo, predicting how the Justices will vote, I feel fairly confident that Chief Justice Roberts would vote to overturn the Seventh Circuit. I also feel fairly confident that Justices Ginsburg, Sotomayor, and Kagan are more sympathetic to the EEOC's position but might be willing to create some kind of standard more than what the Seventh Circuit required. Justice Kennedy questioned the employer's counsel pretty heavily, and Justice Breyer and Justice Scalia did the same for both sides.
One last observation. Developing a specialty in Supreme Court litigation will make you one smooth advocate. As a former appellate advocate, I have to say that Tom Goldstein (of Goldstein & Russell also founder of SCOTUSblog)'s argument was incredible to read.
Wednesday, December 3, 2014
The Court heard oral argument in Young v. UPS (argued in part by Sam Bagenstos (Michigan)) this morning, and the transcript is now available on the Court's website. I've read it and am not entirely sure what to conclude. One analogy made by Justice Scalia, and used throughout the argument was "most favored nation" status. Does the second clause in the PDA, which requires that pregnant workers be treated the same as other workers similar in their ability or inability to work, require that pregnant workers be treated the same as the best treated of those others? Or can they be treated as least favored nations -- as long as there is a group of workers similar in their ability or inability to work that is treated poorly, pregnant workers can be treated poorly too? The policy at issue allowed light duty accommodations for workers injured on the job, but required those injured off the job who couldn't lift heavy things to take unpaid leave. So there was a distinction within the group of workers similar in their ability or inability to work that was not related to pregnancy. At the same time, the policy weeded out all pregnancy limitations. Moreover, there were two exceptions to the off-the-job part. If the off-the-job injury resulted in a disability under the ADA, or a DOT decertification, the injury was accommodated.
There was a significant amount of back and forth about what that second clause means, since it's not a full fledged accommodation requirement like the religious accommodations in Title VII or the accommodation requirement of the ADA. At the same time, it has to mean something more than simply that discrimination on the basis of pregnancy is discrimination on the basis of sex, since that's what the first clause says. And clearly the effect of the PDA on the Court's decision in General Electric Co. v. Gilbert is still under debate. I'm making no predictions, but I'd be interested in your insights in the comments.
Wednesday, October 8, 2014
As Jason previewed yesterday, the Supreme Court heard oral arguments this morning in Integrity Staffing Solutions v. Busk, a case about whether end-of-shift security screenings are compensable or non-compensable as postliminary activities under the Portal to Portal Act. The oral argument transcript is now up on the Supreme Court's website for your reading pleasure.
I've skimmed it and have just a few observations. The questions for the employer's counsel and the Solicitor General pushed them to distinguish this security process from things like closing out a cash register or showering after working with chemicals (compensable). The questions for the employees' counsel pushed for a distinction between this and the process to clock out (not compensable). The one main takeaway for me is that the concepts in this area are especially slippery. What does it mean for something to be a principal activity of one's work, for example. Is it the central thing a person is hired to do, or might it be more task focused? Does the location of the conduct matter? Does it help to think about whether the person is waiting to be engaged or engaged to wait? Everyone at the argument tried to come up with a definition, but words failed them, and examples seemed the only way to talk about the rules. Those examples were hard to generalize from, though, leading the argument in circles several times.
Ultimately, I think the decision will ultimately rest on whether a majority of the justices see this as more like clocking out or like showering off chemicals at shift's end.
Thursday, October 2, 2014
The Supreme Court granted cert in a number of cases today as a result of its long conference, including EEOC v. Abercrombie & Fitch. The cert question is this:
Whether an employer can be liable under Title VII of the Civil Rights Act of 1964 for refusing to hire an applicant or discharging an employee based on a “religious observance and practice” only if the employer has actual knowledge that a religious accommodation was required and the employer's actual knowledge resulted from direct, explicit notice from the applicant or employee.
The district court had denied A & F's motion for summary judgment and granted the EEOC's, holding that, as a matter of law, A & F had failed to reasonably accommodate the religious practices of an applicant for employment. The Tenth Circuit reversed, remanding and ordering the district court to enter summary judgment for A & F. The applicant, a young Muslim woman, wore a hijab, a head covering, and although the store manager recommended she be hired, a district manager decided that because she wore the hijab, she should not. He determined that the hijab would not comply with the company's "Look Policy."
The Tenth Circuit held that summary judgment for A & F was proper because the applicant "never informed Abercrombie prior to its hiring decision that she wore her headscarf or 'hijab' for religious reasons and that she needed an accommodation for that practice, due to a conflict between the practice and Abercrombie’s clothing policy." Interestingly, the store manager assumed that the applicant wore her hijab for religious reasons and never raised the issue during the interview. She also did not suggest that there might be a conflict between that practice and the "Look Policy," which the applicant otherwise could easily comply with.
The Court also granted cert in another case that might have implications for employment discrimination. The question in Texas Dep't of Housing and Community Affairs v. The Inclusiveness Project is whether disparate impact claims are cognizable under the Fair Housing Act. The Fifth Circuit did not consider that question in the case. Instead, it followed its prior precedent that they were cognizable, and held that the legal standard to be used should be the regulations adopted by the Department of Housing and Urban Development.
So, overall, this term is shaping up to be another blockbuster for employment and labor. Here is a roundup.
Cases that directly deal with employment and labor questions:
- Department of Homeland Security v. MacLean, a whistleblower/retaliation case
- Integrity Staffing Solutions, Inc. v. Busk, whether time spent in security screenings is compensable under the FLSA as amended by the Portal to Portal Act.
- M&G Polymers v. Tackett, a case about presumptions related to interpretation of CBAs on retiree health benefits under the LMRA.
- Mach Mining v. EEOC, whether and to what extent the courts can enforce the EEOC's duty to conciliate before filing suit.
- Tibble v. Edison, Int'l, an ERISA case involving the duty of prudence and the limitations period for bringing claims.
- Young v. UPS, whether light duty accommodations only for on-the-job injuries violates Title VII as amended by the Pregnancy Discrimination Act.
And there is one additional case that might have implications for religious accommodations in the workplace. Holt v. Hobbs, which concerns whether a department of corrections policy that prohibits beards violates the Religious Land Use and Institutionalized Persons Act insofar as it prohibits a man from growing a one-half-inch beard in accordance with his religious beliefs.
October 2, 2014 in Beltway Developments, Employment Discrimination, Labor and Employment News, Labor Law, Labor/Employment History, Pension and Benefits, Public Employment Law, Religion, Wage & Hour, Worklife Issues | Permalink | Comments (0) | TrackBack (0)
Wednesday, September 17, 2014
Susan Cancelosi & Charlotte Garden write to say they are working on an amicus brief in M&G Polymers v. Tackett, a case concerning the ongoing validity of the Yard-Man presumption in interpreting collective bargaining agreement clauses that promise retiree health benefits. The brief focuses on the initial negotiation of many retiree health benefits clauses during the 1960s and 1970s, offering context that explains why employers may have agreed to lifetime retiree health benefits during that key period of time.
If you would like to see the brief so that you can decide whether you would like to sign on, please contact Charlotte at firstname.lastname@example.org by Saturday, Sept. 20; the brief is due to be filed on Monday, Sept. 22.
Thursday, September 4, 2014
Thursday, July 3, 2014
Post-Hobby Lobby, Court Says Religious Non-Profit Need Not Notify Insurer that It Objects to Coverage
The Court has taken a number of actions already since issuing its decision in Hobby Lobby that suggest future directions on the issue in that case. First, the Court acted on six cert. petitions. As Lyle Denniston notes on ScotusBlog, the court remanded three cases to the courts of appeal, and denied cert in three. All six cases involved employers who objected to coverage for all forms of contraception, as well as sterilization for women, and pregnancy counselling. In the three won by employers, the Court denied cert. In the three won by the government, the Court ordered the courts of appeal to reconsider in light of the Hobby Lobby decision.
And today, the Court issued an additional order. In Wheaton College v. Burwell, the Court granted an injunction to this religious educational institution against enforcement of the women's preventive care provisions objected to, absolving the College from filling out the government's form and delivering notice to its insurer. The government's brief in opposition is here.
Particularly notable was a dissent by Justice Sotomayor, joined by Justices Ginsburg and Kagan. In it, the three justices note that the Court had indicated in Hobby Lobby that the accommodation which required an employer to notify its insurer that it objected to certain coverage was less restrictive, implying that it would satisfy RFRA. As Justice Sotomoayor noted,
After expressly relying on the availability of thereligious-nonprofit accommodation to hold that the contraceptive coverage requirement violates RFRA as applied to closely held for-profit corporations, the Court now, as the dissent in Hobby Lobby feared it might . . . , retreats from that position. That action evinces disregard for even the newest of this Court’s precedents and undermines confidence in this institution.
The whole dissent is worth a read.
Tuesday, July 1, 2014
The analyses here of yesterday's decisions, Jeff's in Harris v. Quinn and Charlie's in Burwell v. Hobby Lobby were spot-on and highlighted many of the legal implications of the cases going forward. There were some interesting facets that they did not discuss that I would like to think through a bit more.
One of the things that struck me about both decisions is their effect on women and particularly women of color. The workforce at issue in Harris is primarily female and heavily women of color. Similarly, lack of contraceptive access affects women most directly, and has larger impacts on women of color. Nearly half of the pregnancies in this country are unintended (a higher rate than other developed nations), and result in a large number of abortions and poorer health and economic, workplace-related consequences for the women who choose to continue their pregnancies and the children they deliver. The rates of unintended pregnancies among African American and Hispanic women are significantly higher than for white women because of lack of access to low cost, highly reliable contraception. And the health risks of pregnancy are significantly greater for women of color -- African American women are four times more likely to die in childbirth than are white women. Easy access (financially and logistically), reduces these effects significantly.
Unionization has been good, in general, for the home health care workers in Illinois. These are workers not covered by safety net statutes like the Fair Labor Standards Act and the Occupational Safety and Health Act, nor are most covered by anti-discrimination statutes like Title VII. They are not covered by the National Labor Relations Act, either, which is one reason that these workers have had little luck bargaining for better wages or working conditions. These workers who were allowed to organize in Illinois and to bargain with the state have seen their wages increase significantly, nearly tripling for some (from as low as $3.35 to now over $11 and set to reach $13 by the end of the year). They also have health insurance and other workplace benefits. The result has been good for the majority of those women, although the named plaintiff, a woman who cared for her own son at home, perceived the deduction from her paycheck as a reduction in medicaid benefits for her son. Overall, most people who need in home care, like the elderly -- who again, are disproportionately women, although white women, based on aggregate life expectancy data -- and people with disabilities, also benefitted by being able to retain workers long-term who can be reliable (able to rely on this as their primary income and not look for other or better paying work) and better trained. Those people who need care could remain in their homes and not have to live in institutional settings.
To the extent that the gender pay gap and the racial pay gap (and the racialized gender pay gap) are driven by horizontal labor force segregation, organization seemed the most promising force for change. The decision in Harris seems to minimize the effects of that progress. To the extent that these pay gaps are driven by either horizontal or vertical workplace segregation that results from pregnancy and caregiving responsibilities, or by the higher cost of health care for one sex, easy access to contraception seems a way to reduce those indirect and direct effects. The decision in Hobby Lobby seems to threaten that. If insurers do not continue to agree to absorb the costs of contraceptives, who will? And finally, aside from the effects on individuals (workers, those who need home health care, and the families of both), to the extent that these pay gaps lead to wealth disparities, health outcomes disparities, and an inability to live independently, the states face greater expenses in supporting those who need help.
The Court's opinion in Hobby Lobby contained some additional food for thought on the interaction of RFRA and other federal laws. The Court stated in the early part of its opinion that the decision was confined in a number of ways, including that it was confined to the contraceptive mandate of the ACA. But the logic of the opinion and the language in the bulk of it has few bounds. As Justice Ginsburg's dissent pointed out, the logic of the opinion would allow any corporation, regardless of it's organization or corporate purposes, to challenge any federal law of general applicability, including, for example, Title VII. While the majority explained that Title VII's prohibition on racial discrimination in hiring was the least restrictive means to ensure equal opportunity in employment on the basis of race, the court left its analysis at that. Title VII also prohibits classifying and segregating employees in any way that would tend to deprive them of opportunities based on race. Is that narrowly tailored enough? Is the way that language has been interpreted to include disparate impact narrowly tailored enough?
Moreover, what about the other classes protected by Title VII? Sex is notably absent from that language. Is the Court anticipating the Title VII action brought by Hobby Lobby's female employees or the EEOC itself challenging a lack of access to contraception as sex discrimination? Such a suit could be a ways off if insurers will go along with the accommodation worked out for nonprofit religious entities and religious organizations in this context. However the process to take advantage of that opt-out is also currently being challenged. And based on the Court's decision, the Eleventh Circuit has suggested that it thinks that process will definitely fail. Yesterday, just hours after the Court's decision, the Eleventh Circuit granted the Eternal Word Television Network an injunction against complying with the opt-out because signing or indicating to an insurer or the government in any way that the Network would refuse to comply with the mandate would trigger that coverage to be provided in another way, thus facilitating the Network's employees in possibly engaging in acts the Network finds immoral--including having sex for any reason other than for procreation. Judge Pryor's concurrence quoted the majority's language at length, stating that it was clear the requirement would violate RFRA. It is no real stretch to extend that to for-profit corporations as well.
Moreover, what of the burgeoning case law on sex as including gender identity and sexual orientation at least when what is at issue is gender nonconforming behavior by the employee? Is that cut off at the knees for any company asserting that it finds gender nonconformity immoral for religious reasons?
These are just some preliminary thoughts of the additional effects of the two cases--and I didn't even get into the government efficiency, corporate law, corporate personhood, or issues of religion also running through the one or the other decisions I'd love to hear thoughts on any of this in the comments or follow-up posts.
Thursday, June 26, 2014
The issue is whether courts should apply a presumption of prudence or reasonableness (sometimes called the Moench presumption based on a similar case by that name in another circuit court) when a company, like Fifth Third, decides to retain investments in its own securities for its ESOP (employee stock ownership plan) when the stock's price dropped 74 percent because of the company's involvement in subprime mortgage lending. The employees in the retirement plan claim they were never alerted to the company's new riskier investment course.
Participants in Fifth Third's ESOP filed an ERISA class action, asserting that the company's actions violated their fiduciary responsibilities to plan participants and beneficiaries by imprudently investing in company stock. Initially, the U.S. District Court for the Southern District of Ohio had determined that Fifth Third did not violate ERISA because plan fiduciaries are entitled to a “presumption of prudence” permitting investment in their own stock and the plaintiffs had not overcome that presumption by showing that the company had plausibly abused their discretion in investing the ESOP money in the company stock.
A unanimous Court reversed the Sixth Circuit and remanded for further proceedings. Justice Breyer wrote the opinion. From the Supreme Court's syllabus:
1. ESOP fiduciaries are not entitled to any special presumption of prudence. Rather, they are subject to the same duty of prudence that applies to ERISA fiduciaries in general, §1104(a)(1)(B), except that they need not diversify the fund’s assets, §1104(a)(2). This conclusion follows from the relevant provisions of ERISA. Section 1104(a)(1)(B) “imposes a ‘prudent person’ standard by which to measure fiduciaries’ investment decisions and disposition of assets.” Massachusetts Mut. Life Ins. Co. v. Russell, 473 U. S. 134, 143, n. 10. Section 1104(a)(1)(C) requires ERISA fiduciaries to diversify plan assets. And §1104(a)(2) establishes the extent to which those duties are loosened in the ESOP context by providing that “the diversification requirement of [§1104(a)(1)(C)] and the prudence requirement (only to the extent that it requires diversification) of [§1104(a)(1)(B)] [are] not violated by acquisition or holding of [employer stock].” Section1104(a)(2) makes no reference to a special “presumption” in favor of ESOP fiduciaries and does not require plaintiffs to allege that the employer was, e.g., on the “brink of collapse.” It simply modifies the duties imposed by §1104(a)(1) in a precisely delineated way. Thus, aside from the fact that ESOP fiduciaries are not liable for losses that result from a failure to diversify, they are subject to the duty of prudence like other ERISA fiduciaries. Pp. 4–15.
2. On remand, the Sixth Circuit should reconsider whether the complaint states a claim by applying the pleading standard as discussed in Ashcroft v. Iqbal, 556 U. S. 662, 677–680, and Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 554–563, in light of the following considerations. Pp. 15–20.
(a) Where a stock is publicly traded, allegations that a fiduciary should have recognized on the basis of publicly available information that the market was overvaluing or undervaluing the stock are generally implausible and thus insufficient to state a claim under Twombly and Iqbal. Pp. 16–18.
(b) To state a claim for breach of the duty of prudence, a complaint must plausibly allege an alternative action that the defendant could have taken, that would have been legal, and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it. Where the complaint alleges that a fiduciary was imprudent in failing to act on the basis of inside information, the analysis is informed by the following points. First, ERISA’s duty of prudence never requires a fiduciary to break the law, and so a fiduciary cannot be imprudent for failing to buy or sell stock in violation of the insider trading laws. Second, where a complaint faults fiduciaries for failing to decide, based on negative inside information, to refrain from making additional stock purchases or for failing to publicly disclose that information so that the stock would no longer be overvalued, courts should consider the extent to which imposing an ERISA-based obligation either to refrain from making a planned trade or to disclose inside information to the public could conflict with the complex insider trading and corporate disclosure requirements set forth by the federal securities laws or with the objectives of those laws. Third, courts confronted with such claims should consider whether the complaint has plausibly alleged that a prudent fiduciary in the defendant’s position could not have concluded that stopping purchases or publicly disclosing negative information would do more harm than good to the fund by causing a drop in the stock price and a concomitant drop in the value of the stock already held by the fund. Pp. 18–20.
692 F. 3d 410, vacated and remanded.
Thursday, June 19, 2014
The Supreme Court issued its decision in Lane v. Franks, today, holding unanimously that a public employee is entitled to First Amendment protection for testifying in court where testifying is not a part of that employee's regular job duties. The Court further held that the individual defendant had qualified immunity because circuit court precedent was not clear enough. Here is the syllabus:
1. Lane’s sworn testimony outside the scope of his ordinary job duties is entitled to First Amendment protection. Pp. 6–13.
(a) Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U. S. 563, 568, requires balancing “the interests of the[employee], as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.” Under the first step of the Pickering analysis, if the speech is made pursuant to the employee’s ordinary job duties, then the employee is not speaking as a citizen for First Amendment purposes, and the inquiry ends. Garcetti v. Ceballos, 547 U. S. 410, 421. But if the “employee spoke as a citizen on a matter of public concern,” the inquiry turns to “whether the relevant government entity had an adequate justification for treating the employee differently from any other member of the general public.” Id., at 418. Pp. 6–8.
(b) Lane’s testimony is speech as a citizen on a matter of public concern. Pp. 8–12.
(1) Sworn testimony in judicial proceedings is a quintessential example of citizen speech for the simple reason that anyone who testifies in court bears an obligation, to the court and society at large, to tell the truth. That obligation is distinct and independent from any separate obligations a testifying public employee might have to his employer. The Eleventh Circuit read Garcetti far too broadly in holding that Lane did not speak as a citizen when he testified simply because he learned of the subject matter of that testimony in the course of his employment. Garcetti said nothing about speech that relates to public employment or concerns information learned in the course of that employment. The critical question under Garcetti is whether the speech at issue is itself ordinarily within the scope of an employee’s duties, not whether it merely concerns those duties. Indeed, speech by public employees on subject matter related to their employment holds special value precisely because those employees gain knowledge of matters of public concern through their employment. Pp. 9–11.
(2) Whether speech is a matter of public concern turns on the “content, form, and context” of the speech. Connick v. Myers, 461 U.S. 138, 147–148. Here, corruption in a public program and misuse of state funds obviously involve matters of significant public concern. See Garcetti, 547 U. S., at 425. And the form and context of the speech—sworn testimony in a judicial proceeding—fortify that conclusion. See United States v. Alvarez, 567 U. S. ___, ___. Pp. 11–12.
(c) Turning to Pickering’s second step, the employer’s side of the scale is entirely empty. Respondents do not assert, and cannot demonstrate, any government interest that tips the balance in their favor—for instance, evidence that Lane’s testimony was false or erroneous or that Lane unnecessarily disclosed sensitive, confidential, or privileged information while testifying. Pp. 12–13.
2. Franks is entitled to qualified immunity for the claims against him in his individual capacity. The question here is whether Franks reasonably could have believed that, when he fired Lane, a government employer could fire an employee because of testimony the employee gave, under oath and outside the scope of his ordinary job responsibilities. See Ashcroft v. al-Kidd, 563 U. S. ___, ___. At the relevant time, Eleventh Circuit precedent did not preclude Franks from holding that belief, and no decision of this Court was sufficiently clear to cast doubt on controlling Circuit precedent. Any discrepancies in Eleventh Circuit precedent only serve to highlight the dispositive point that the question was not beyond debate at the time Franks acted. Pp. 13–17.
3. The Eleventh Circuit declined to consider the District Court’s dismissal of the claims against respondent Burrow in her official capacity as CACC’s acting president, and the parties have not asked this Court to consider them here. The judgment of the Eleventh Circuit as to those claims is reversed, and the case is remanded for further proceedings. P. 17.
523 Fed. Appx. 709, affirmed in part, reversed in part, and remanded
Justice Sotomayor wrote the opinion. Justice Thomas wrote a short concurrence that Justices Scalia and Alito concurred in, explaining that because Lane was not testifying as part of his job duties, the case was a straightforward application of Garcetti v. Ceballos, 547 U.S. 410 (2006). Justice Thomas further wrote,
We accordingly have no occasion to address the quite different question whether a public employee speaks “as a citizen” when he testifies in the course of his ordinary job responsibilities. See ante, at 8, n. 4. For some public employees—such as police officers, crime scene technicians, and laboratory analysts—testifying is a routine and critical part of their employment duties. Others may be called to testify in the context of particular litigation as the designated representatives of their employers. See Fed. Rule Civ. Proc. 30(b)(6). The Court properly leaves the constitutional questions raised by these scenarios for another day.
I'll admit that I'm a bit relieved by the decision, and I'm not alone--Paul expressed concern when cert was granted. The decision seemed to track my impressions from the oral argument, but that's not always the way it turns out, and the Court has not ruled in favor of public employees lately on this issue.
It will be interesting to see what the Eleventh Circuit does with the claims against the office of the President of the Community College on remand.
Tuesday, May 13, 2014
The NLRB is asking for amicus briefs on the issues in the Northwestern football players election case by June 26. It would be a great opportunity for those interested to weigh in.
h/t Charlotte Garden
Sunday, March 16, 2014
Paul Secunda (Marquette), Scott Bauries (Kentucky), and Sheldon Nahmod (Chicago-Kent) have posted on SSRN their amicus brief in Lane v. Franks. Joshua Branson of Kellogg, Huber, Hanson, Todd, Evans & Figel also is an attorney of record on the brief, and more than sixty additional law professors signed on.
The case involves a public employee who was subpoenaed to testify in a fraud prosecution, and who alleged he was fired for truthfully testifying. The matter he testified about was information he had because of his work. The district court granted the defendant summary judgment, reasoning,
Mr. Lane’s testimony did not occur in the workplace, but he learned of the information that he testified about while working as Director at C.I.T.Y. Because he learned the information while performing in his official capacity as Director at C.I.T.Y., the speech can still be considered as part of his official job duties and not made as a citizen on a matter of public concern.
The Eleventh Circuit affirmed. The questions the Court granted cert on are: (1) Whether the government is categorically free under the First Amendment to retaliate against a public employee for truthful sworn testimony that was compelled by subpoena and was not a part of the employee’s ordinary job responsibilities; and (2) whether qualified immunity precludes a claim for damages in such an action.
For more on the case, see ScotusBlog here.
Wednesday, February 26, 2014
The EEOC has asked for public comments to its proposed revised management directive in federal sector proceedings. The EEOC acts as an adjudicator for federal sector claims. From the press release,
The U.S. Equal Employment Opportunity Commission (EEOC) has announced that it is seeking public comment on significant revisions to Management Directive 110 (MD-110), which provides federal agencies with EEO policies, procedures and guidance related to the newly revised 29 C.F.R. Part 1614 (federal sector EEO regulations). The full text of the proposed revisions is available on the Regulation.gov website at http://www.regulations.gov/#!docketDetail;D=EEOC-2014-0001.
These revisions represent the first major changes to MD-110 since 1999; they can be categorized into three areas:
- Implementation of Revised Regulations:
- new procedures for agencies to submit, and the EEOC to approve, requests to conduct pilot projects for processing complaints in ways other than those prescribed in Part 1614;
- revised procedure making an administrative judge's decision on the merits of a class complaint a final decision;
- a new compliance section;
- updated retaliation language in the dismissal section;
- notice to complainant when an agency is untimely in completing an investigation; and
- information on digital filings of appeals and complaint files.
- Conflict of Interest:
- addressing EEO director reporting relationship;
- EEO and HR conflicts;
- complaint processing of matters involving EEO officials or high-level agency officials; and
- conflicts between agency legal and EEO programs.
- General Updates & Clarification:
- revisions to the remainder of MD-110 to reflect current policies, procedures, laws and case precedents.
These revisions are a part of the EEOC's ongoing efforts to improve the federal sector process. The agency encourages interested parties to review these proposed changes and provide feedback for EEOC consideration. The agency specifically urges stakeholders to provide feedback on the conflict-of-interest section, as this is the EEOC's first attempt to provide clarity in this area, and stakeholder input will be valuable in determining the final approach.
Public comments on revisions to MD-110 should be provided through Regulation.gov (http://www.regulations.gov/#!docketDetail;D=EEOC-2014-0001) no later than April 25, 2014 for appropriate consideration.
Further information about EEOC is available on its website www.eeoc.gov. The EEOC's Office of Federal Operations also maintains a Twitter handle @EEOC_OFO for general news and information updates.
Thursday, February 20, 2014
The Departments of Labor, Treasury, and Health and Human Services have announced the publication of final regulations implementing a 90-day limit on waiting periods for employer provided health coverage.
The final regulations require that no group health plan or group health insurance issuer impose a waiting period longer than 90 days after an employee is otherwise eligible for coverage. The rules do not require coverage be offered to any particular individual or class of individuals, and it doesn't affect non-time-period conditions for eligibility, such as meeting certain sales goals, earning a certain level of commission, or successfully completing an orientation period. Requiring employees to complete a certain number of hours before becoming eligible for coverage is generally allowed as long as the requirement is capped at 1200 hours. The rules also address situations in which it cannot be determined that a new employee will be working full-time.
The departments are issuing a companion proposed rule for comment. That rule would limit the maximum duration of an otherwise permissible orientation period to one month. This proposal will be open for public comment. Comments must be filed by April 25, 2014.
Both the final and proposed rule are scheduled to be published on Monday, February 24, 2014.
Monday, December 16, 2013
According to Fedscoop, Seth Harris, Deputy Secretary of Labor for the last four-and-a-half years is stepping down to return to teaching, writing, and practice. Seth had been at NYLS before his appointment, but according to BNA's Daily Labor Report (241 DLR A-5), he will be remaining in the DC area. Thank you for your great work, Seth, I hope the DOL continues to benefit from your voice, and keep us all posted on your plans.
h/t Susan Bisom-Rapp (Thomas Jefferson)