Friday, March 15, 2019
Thanks to Aaron Halegua, who has been working on this case, for updating us. Here's an excerpt from the Associated Press story:
Seven Chinese men allege in a lawsuit that they were victims of a forced labor scheme while constructing a Saipan casino.
The casino and its contractors violated U.S. trafficking laws by exploiting the workers, the lawsuit said. Saipan is part of the U.S. Commonwealth of the Northern Mariana Islands.
The lawsuit was filed in December. It was amended Friday to add trafficking claims and to include casino owner Imperial Pacific as a defendant.
According to the lawsuit, the men were subjected to 12-hour workdays, dormitories without showers or air-conditioning and a dangerous construction site.
Thursday, March 14, 2019
First were the adjuncts at Duke. An now, adjunct faculty at Elon joined in the act by voting for union representation--112 to 68 in favor of representation by the SEIU. It's not clear whether the University will file election objections, although they have already noted that this is an option. However, given that some of the issues driving support for the union seem relatively easy to address (e.g., not allowing adjuncts to apply for full-time job openings), one has to wonder if it wouldn't make more sense at this point to simply deal with those issues and move on. But we shall see . . . .
This goes to show that even in a state that regularly vies for the lowest union density in the country, there is still labor activity going on.
Friday, March 8, 2019
Today--International Women's Day--every current player on the U.S. Women's Soccer team filed a sex discrimination suit against the U.S. Soccer Federation. The suit is also seeking class status that would cover players as far back as 2015. This is essentially the next step in an earlier complaint filed by players with the EEOC in 2016. The violations claimed are under the Equal Pay Act (paying women players less than male players for substantially the same work) and sex discrimination under Title VII (based on disparate wages and treatment in comparison to male players). The Washington Post summarizes some of the factual allegations listed:
In the lawsuit, the women claim that in 2016, U.S. Soccer made more than $17 million in unexpected profits thanks largely to the women’s team, while paying the women players substantially less than their male counterparts. According to the lawsuit, a comparison of pay schedules for the two teams shows that if each team played 20 exhibition games in one year, members of the men’s team could earn an average of $263,320 each, while women’s players could earn a maximum of $99,000.
The lawsuit also highlights differences in World Cup bonuses for the two teams. After 2014 World Cup, U.S. Soccer paid out a total of $5.375 million in bonuses to the men’s team, which lost in the round of 16. In 2015, U.S.Soccer paid out $1.725 million in bonuses to the women, who won their World Cup, the lawsuit states.
One interesting element is that many of these conditions are rooted in a 2017 collective-bargaining agreement, which U.S. Soccer is sure to cite. However, traditionally, there was an expectation that unions can't waive Title VII and similar rights. Of course, there also used to be the same expectation when it came to mandatory arbitration clauses covering Title VII and similar claims, which the Court later abandoned. So stay tuned.
Yesterday, the Department of Labor announced its much anticipated proposed new overtime regulation. This goes to whether employees can be considered exempt from overtime as administrative, executive, or professional employees. The only real change is to the minimum salary threshold required to count an employee as exempt from overtime (that is, no matter what employees' duties are, if they don't make the minimum, they must get overtime if they are otherwise qualified). As readers will remember, the Obama DOL increased the salary threshold to about $47,000 a year initially, and added a measure that would have it change automatically based on average wage increases; this rule was then put on hold by a district court, largely based on a holding that the DOL relied to much on salary and not enough on employees' duties.
The new proposed rule increases the minimum salary, but only to $35,308 per year (up from the current, Bush II-era $23,660 per year that is in place after the decision striking down the previous increase). It also raised the "highly-compensated employee" rule, which makes it easier to exempt employees making over a certain amount, from $100,000 a year to $147,414. The DOL did not propose an automatic increase to these salary levels, but committed to reviewing them regularly (I'll believe that when I see it). Moreover, it left the duties test untouched.
As is the usual practice, this announcement kicks off the comment period, after which the DOL will produce a final rule. And, as is also the norm these days, there will be lawsuits. Some will argue that the increase in salary goes to far, while others will argue that the rule still makes it too easy to exempt employees. Expect mixed messages from the district courts, which parties will handpick to try to get more favorable rulings. The key, therefore, will be to wait for the appeals courts to step in. So, we should see something of a final word on the final rule in, I'd guess, a couple of years from now.
Thursday, March 7, 2019
USA Today Sports has an interesting article on minor league baseball players and their low--and, during major league spring training, nonexistent--pay. Major League Baseball classifies minor league players as being involved in "short-term seasonal apprenticeships." The article does a nice job showing why that's a stretch, to put it mildly. How has MLB pulled this off? Lobbying, and lots of it. The article explains some of the special legal maneuvers at play (pun intended):
Minor league players earn salaries that amount to less than minimum wage for up to seven years on their first pro contracts, and the rigorous spring-training schedule doesn’t exactly allow time for moonlighting.
After a lobbying effort by MLB, last year’s $1.3 trillion congressional spending bill — signed into law by Donald Trump in March — included an amendment to the Fair Labor Standards Act to exempt minor-league baseball players from federal minimum-wage protection. The so-called Save America’s Pastime Act, originally introduced in 2016 by a pair of congresspersons who received campaign donations from MLB’s PAC, appeared on page 1,967 of the 2,232 omnibus 2018 spending bill.
This winter, the league endorsed a bill in the Arizona House of Representatives to extend the federal exemption into state law in Arizona, the spring-training home for half of Major League teams. Representative T.J. Shope, who sponsored the bill, told the Arizona Capitol Times in January that spring training is “essentially a tryout,” even though all players training in every camp are already under contract with their organizations.
Shope told For The Win by email that the Arizona bill did not pass and “was probably dead before it began.” It didn’t get out of committee, meaning it never reached the statehouse floor for a vote.
That dead bill, like the inclusion of the Save America’s Pastime Act in the 2018 budget, undoubtedly reflects Major League Baseball’s efforts to combat a lawsuit first filed in 2014. Spearheaded by St. Louis-based attorney and former minor-league pitcher Garrett Broshuis, the suit seeks to apply federal minimum-wage laws to the salaries of minor leaguers. Pro players in low minor-league levels make as little as $1100 a month, only get paid during the regular season, and do not receive overtime compensation.
“MLB has signed these players up to seven-season employment contracts,” Broshuis said by phone this week. “They’re enjoying the benefits of controlling these players for seven years. On the contract, it calls them employees. They have a responsibility to treat them as normal employees should be treated. They can’t enjoy the benefits of it and not be required to meet the responsibilities that come with it.
Even if you're not a sports fan, this issue is a good reminder that wage and classifications issues didn't start with Uber. In fact, I see a lot of parallels with other industries that manage to dangle low probability/high reward opportunities in front of individuals who will work for nothing, whether as an apprentice, volunteer, or intern (I'm looking at you, fashion and entertainment industries).
Definitely read the article, as it provides a lot of detail about what's going on and the severe disparities that exist on the same field.
Friday, March 1, 2019
Today, in Kent Hospital, the NLRB ruled that lobbying expenses--even if related to employment terms or indirectly to collective bargaining--are always nonchargeable. The Board also found that the union violated its duty of fair representation by not providing nonmembers a so-called "validation letter," which I'll get to in a moment,
As a reminder, or introduction, unions' ability to require nonmembers to pay dues (where they can require them to pay any dues at all--i.e., private-sector employers in non-right-to-work states) is based on where those dues are going. The Supreme Court (in Beck, among other cases) has divided union activities into two categories: chargeable (which unions can require nonmembers to contribute to) and nonchargeable (nonmembers can choose not to contribute). Some activities are easy to classify. For instance, expenses related to negotiating and implementing a collective-bargaining agreement are clearly chargeable; political activity such as working to elect a candidate is clearly not. Kent Hospital deals with an activity in middle: lobbying. The key line usually used for distinguishing the two classifications is that unions can only require contributions for activities "necessary to ‘performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues.’” (Beck, Ellis).
In Kent Hospital, local nurses unions are part of a regional union (UNAP), and each local contributes a per capita amount of funds to UNAP. In turn, UNAP uses these funds for various activities, including lobbying for certain bills in states in which it operates. The bills at issue in the case were those addressed to: hospital regulation (including mergers), public employee retirement system, hospital funding, safe patient handling programs, mandatory hospital overtime, and mental health care funding. In other words, bills that would obviously impact and be of concern to nurses, albeit not always in a direct way. The ALJ found that the hospital merger, hospital funding, and mental health funding were chargeable because they would affect UNAP's ability to represent its members. The Board disagreed, concluding broadly that lobbying activities are never chargeable, because they are is not part of unions' statutory collective-bargaining obligations. This is true, according to the Board, even if targeted to matters that may be subject to collective bargaining (e.g., workplace changes related to patient safety).
Whatever one thinks about the bills here, the Board seems to have painted with too broad a brush. There is a wide range of legislation, some of which may well be directly related to unions' collective-bargaining obligations. Among many examples she uses in her dissent to criticize the majority's categorical "lobbying is nonchargeable" rule, Member McFerran cites a bill that would change terms in a collective-bargaining agreement. The dissent is well worth the read, as it does a good job undercutting the majority's categorical approach.
Finally, the Board addressed the union's failure to provide objectors an audit verification letter, which the union possessed but didn't provide to nonmember objectors because it didn't think it was legally required to. An audit verification letter is what it sounds like: something from an auditor stating that the union's classification of expenses is appropriate. Following the Ninth Circuit, the Board concluded that unions must provide objectors the audit verification letter, rather than the mere assurance that the auditor agreed to the classification as occurred in Kent Hospital. Member McFerran agreed, although dissented to applying this new rule retroactively.
Friday, February 22, 2019
New York has been a recent hotbed on labor and employment news. Last week, New York City passed a ban on hair-based discrimination--a serious issue for those who are affected by hairstyle policies, but often not given the attention it deserves. Moreover, last month, the Governor signed the Gender Expression Non-Discrimination Act (GENDA) into law. Bill Herbert (Hunter College) has some other ideas for ways in which the state can lead on labor and employment issues, which he described in a recent Daily News op-ed. Among his recommendations:
- Give domestic workers and farmworkers collective-bargaining rights.
- Give independent contractors collective rights.
- Regulate pre-employment mandatory arbitration agreements.
- Strengthen whistleblower laws.
- Re-establish the State Joint Legislative Committee on Labor and Industrial Conditions.
Friday, February 15, 2019
I normally try to avoid too much self-promotion on the blog, but I wanted to post a new draft article of mine. Hopefully the topic is of interest, but I post it mainly because I'd love comments and thoughts, which you can send me directly (I'm going through the journal submission process now, but still need to work on some things, especially citations). The article is called Future Work and is available on SSRN. The abstract:
The Industrial Revolution. The Digital Age. These revolutions radically altered the workplace and society. We may be on the cusp of a new era—one that will rival or even surpass these historic disruptions. Technology such as artificial intelligence, robotics, virtual reality, and cutting-edge monitoring devices are developing at a rapid pace. These technologies have already begun to infiltrate the workplace and will continue to do so at ever increasing speed and breadth.
This Article addresses the impact of these emerging technologies on the workplace of the present and the future. Drawing upon interviews with leading technologists, the Article explains the basics of these technologies, describes their current applications in the workplace, and predicts how they are likely to develop in the future. It then examines the legal and policy issues implicated by the adoption of technology in the workplace—most notably job losses, employee classification, privacy intrusions, discrimination, safety and health, and impacts on disabled workers. These changes will surely strain a workplace regulatory system that is ill-equipped to handle them. What is unclear is whether the strain will be so great that the system breaks, resulting in a new paradigm of work.
Whether or not we are on the brink of a workplace revolution or a more modest evolution, emerging technology will exacerbate the inadequacies of our current workplace laws. This Article discusses possible legislative and judicial reforms designed to ameliorate these problems and stave off the possibility of a collapse that would leave a critical mass of workers without any meaningful protection, power, or voice. The most far-reaching of these options is a proposed “Law of Work” that would address the wide-ranging and interrelated issues posed by these new technologies via a centralized regulatory scheme. This proposal, as well as other more narrowly focused reforms, highlight the major impacts of technology on our workplace laws, underscore both the current and future shortcomings of those laws, and serve as a foundation for further research and discussion on the future of work.
February 15, 2019 in Employment Discrimination, Labor and Employment News, Pension and Benefits, Public Employment Law, Scholarship, Wage & Hour, Worklife Issues, Workplace Safety, Workplace Trends | Permalink | Comments (0)
Some recent L&E stories that I've been too busy lately to post on (see my follow-up post):
- The Denver teachers strike ends after three days. Looks like the deal will significantly increase salaries and the .parties agree to study the bonus scheme that helped precipitate the strike. As an aside, this year seems to be one of more traditional, union teacher strikes, as opposed to the previous years' non-union teacher protests and strikes. I'm not sure if it's just coincidence or something else (e.g., state politicians did more to pacify teachers prior to the November elections), but it's worth watching.
- The Seventh Circuit just held en banc that the ADEA does not permit disparate impact claims by applicants. This issue has Supreme Court review written all over it. I'm not sure when, as there's some question whether there's an active circuit split (the 7th & 11th have held the same; to the best of my knowledge, all the circuits going the other way did so before the Smith v. Jackson case from the Supreme Court that clarified the ADEA's disparate impact analysis). In the meantime, it's a great teaching case because it's going some good statutory interpretation aspects, weaving a tension of textual factors, past Court precedent, and statutory purpose.
- In other Seventh Circuit news, the court just ruled on Scabby the Rat (who seems to be going out of his way to define the modern labor movement). It held that a town ordinance prohibiting Scabby did not violate the union's First Amendment rights because the ordinance was content neutral and wasn't enforced in a discriminatory fashion. At the same time, the NLRB's General Counsel has indicated a desire to go after the use of Scabby and other inflatables (which employers really hate, thereby showing their effectiveness). So expect Scabby to stay in the news.
- The NLRB has invited briefs regarding whether it should decline jurisdiction over charter schools. Note this would be a decision to voluntarily decline jurisdiction, not a ruling that the Board lacks jurisdiction (like the Northwestern college football case). I'm not a huge fan of this tactic, especially in a case like charter schools where you lack the conflict in public and private teams playing each other. But note that if the NLRB follows through, they're not going to be able to totally avoid the issue because employees could still bring individual complaints alleging ULPs.
Thursday, February 14, 2019
Thanks to Michael Oswalt (NIU) for sending word, and getting permission to post, about the adjuncts at Elon voting next week in an SEIU organizing drive. Here's Michael's description of what's happening:
I'm writing to ask if you might consider signing a legal academic letter of support for non-tenure-track faculty who are organizing a union at Elon University. Throughout the process, administrators have argued that the adjuncts are managers excluded from the NLRA. While the Region recently rejected this claim and scheduled an election for next week, the local (Workers United Southern Region) and the International (SEIU) fear that the University will appeal to the Board. This would not only delay the process at Elon, it would endanger one of the most successful and inspiring unionization trends of the past few years.
The campaign is hoping to finalize the letter by COB Saturday; here's the sign-on page.
Saturday, January 26, 2019
Yesterday, the NLRB issued a decision in the SuperShuttle DFW case, providing yet another analysis to determine whether an individual is an employee or independent contractor under the NLRA. The Board's new approach is basically just to adopt the D.C. Circuit's test from the 2011 FedEx case, which I've examined (and criticized) elsewhere. That test relies most heavily on whether the worker has "entrepreneurial opportunity."
As a preliminary matter, it is important to remember that the Supreme Court has held multiple times that when a statute lacks a meaningful definition of "employee," the common-law "right-to-control" test for determining whether someone is an employee or independent contractor should apply. The Court, in Roadway Systems, explicitly held that the NLRA is one of those statutes. So the question for the NLRB is to determine what the common-law test requires.
Note that the analysis is not referred to as the "common-law 'entrepreneurial opportunity'" test. That's because, for its long history, that test has stressed that the most important factor is the purported employer's right to control the manner and means of work of the purported employees. Entrepreneurial opportunity may be relevant, along are numerous other factors, but the right to control is the focal point of the test (I'm actually being generous here because entrepreneurial opportunity isn't explicitly a factor in the common-law test, although other factors hint at a similar concern). In fact, in an ironic twist, the D.C. Circuit just last month stressed this exact point with regard to the NLRB's joint-employer test. In that case, the D.C. Circuit gave a pretty strong warning that the Board needs to be careful not to stray too far from the common-law's focus on right-to-control.
Despite all of this, in SuperShuttle, the NLRB adopted a D.C. Circuit test that makes entrepreneurial opportunity the overriding concern in the analysis. The NLRB downplayed that that's what the D.C. Circuit did, but that interpretation is just wrong. The court held, among other things, that it was "shift[ing the] emphasis’ away from the unwieldy control inquiry in favor of a more accurate proxy: whether the ‘putative independent contractors have significant entrepreneurial opportunity for gain or loss.’" And that shift, to my mind, is indefensible.
You'll note that SuperShuttle has exactly zero citations showing judicial support for the notion that entrepreneurial opportunity is an "important animating principle" of the common-law test other than the D.C. Circuit's decisions. Those decisions, in turn, elevated entrepreneurial opportunity based on an erroneous (one might even say disingenuous) interpretation of the common law. There is simply no reasonable way to say both that the NLRB uses the common law test and that the test's primary focus is entrepreneurial opportunity. The first proposition, as the Board majority itself acknowledges, is undoubtably true; the second is just as clearly untrue. (Member McFerran makes the same point in her dissent.) The common-law test simply does not consider entrepreneurial opportunity as a key principle. Indeed, a closer question is whether it considers it at all. Thus, the Board could reasonably argue that entrepreneurial opportunity should be the animating factor, but it can't make that happen without defying the Supreme Court's clear mandate that when Congress doesn't provide a meaningful definition of "employee," the common-law test applies.
As bad as the NLRB's and D.C. Circuit's manipulation of the common-law test's history is, if that's all that was going on, this might not have too big of an impact. But it's not. What I view as the biggest practical effect of the D.C. Circuit's standard is how it define entrepreneurial opportunity. In particular, the court would allow a business to classify a worker as an independent contractor based simply on theoretical entrepreneurial opportunity, even if it is virtually impossible to take advantage of in practice. This means that businesses can manipulate their agreements with workers to give the appearance of entrepreneurial opportunity, while ensuring that workers lack any genuine opportunity to act like anything but employees. In SuperShuttle, the Board didn't explicitly get into this question, so it's not entirely clear how close they're going to hew to that aspect of the D.C. Circuit's approach, although the Board implied that they were doing the same thing, particularly by failing look into whether drivers had any real ability to use their vans for other work. But the reason why they didn't address this issue may be more disturbing. The Board failed to consider whether the drivers had the option to sell their services to other business--something that is a key characteristic of an independent contractor. Instead, the Board merely stressed that the drivers had control over how much they would work for SuperShuttle and, therefore, how much they earn. You know who else controls how much they earn by determining how much they work? Virtually every hourly and piece-rate employee (albeit with varying ability to control their hours).
Finally, one other significant impact of SuperShuttle was to reject the Obama Board's test in another FedEx decision (see a trend here?), in particular its use of economic dependency. On this point, I'm in agreement with the current Board. While I prefer a more expansive test that considers economic dependency, that's not what the Board should be using. Again, the Court has said that statutes like the NLRA with no real definition of "employee" should use the common-law test. That test doesn't stress economic dependency, unlike the test under the FLSA and FLRA, which have statutory language that suggest a broader classification. So while as a policy matter I prefer using economic dependency, that's not what the NLRB should be doing. The way to fix this is for Congress to better define "employee" or for the Supreme Court to move away from its common-law default.
In sum, SuperShuttle is a a vey poorly reasoned decision, no matter what you think the best test should be from a policy perspective. What will be interesting is to see how the SuperShuttle test fares in the circuit courts. I suspect some circuits are going to squarely reject the new rule, while some may approve. Even more interesting will be the D.C. Circuit's take. The court will have to grapple with its equally bad FedEx decision, which seems to run directly counter to its recent holding on the joint-employer issue, not to mention explicit Supreme Court precedent.
Friday, January 18, 2019
The Wall Street Journal reports today that data from the Department of Labor show union density continuing to fall. Total density in 2018 was 10.5%, down from 10.7% in 2017. Density in the public sector fell from 34.4% to 33.9%). Here's a link to the DOL BLS press release with links to the relevant tables; below is an excerpt from the WSJ article:
The overall rate of union membership in the U.S. fell last year, largely reflecting a decline in the rate of state employees’ unionization, according to the latest Labor Department data.
The union membership rate, or the percent of wage and salary workers who were members of unions, dropped to 10.5% in 2018 from 10.7% a year earlier, the Labor Department said Friday.
The decline stems mainly from a decrease in union membership among state employees, whose membership rates fell to 28.6% in 2018 from 30.3% a year earlier.
Tuesday, January 15, 2019
Among the many NLRB doctrines that have swung in various directions is the one in which an individual employee's actions or words may be concerted activity protected by Section 7 of the NLRA. The Meyers I and Meyers II cases are the foundation for this doctrine, but we've seen many subsequent Board decisions applying the doctrine in different ways depending on the Board members involved. This week's decision in Alstate Maintenance continues that trend, as the full Board (well, the current four members at least) purports to "begin the process of restoring the Meyers standard." Maybe I'm missing something, but it seems to me that, purely from a doctrinal perspective, that statement is an overreach and the decision is a bit of tempest in a teapot.
Under the Meyers standard and related cases, the General Counsel can show that an individual employee is engaging in concerted activity if the employee was attempting to initiate or to prepare for group action, or if the employee was engaging with or on behalf of a group of employees (there are other ways as well, such as enforcing rights under a collective-bargaining agreement). The Board doesn't attempt to alter these underlying rules, but instead goes all in for a stingy interpretation of individual-concerted activity. In essence, the Board distinguished cases where it felt it could do so, and overruled the one case that it believed to be too much of an impediment (WorldMark by Wyndham). In particular, the Board rejected statements in that case that an employee who protests in a group meeting in engaging in concerted activity by attempting to intimate group action and that complaining in a group setting is necessarily concerted activity (the dissent disputes this characterization of WorldMark). Instead, the Board in Alstate reiterated the need to engage in a fact-specific inquiry under Meyers II. The money quote is:
Rather, to be concerted activity, an individual employee’s statement to a supervisor or manager must either bring a truly group complaint regarding a workplace issue to management’s attention, or the totality of the circumstances must support a reasonable inference that in making the statement, the employee was seeking to initiate, induce or prepare for group action. Consistent with Whittaker and Chromalloy Gas Turbine, relevant factors that could tend to support drawing such an inference include that (1) the statement was made in an employee meeting called by the employer to announce a decision affecting wages, hours, or some other term or condition of employment; (2) the decision affects multiple employees attending the meeting; (3) the employee who speaks up in response to the announcement did so to protest or complain about the decision, not merely (as in WorldMark) to ask questions about how the decision has been or will be implemented; (4) the speaker protested or complained about the decision’s effect on the work force generally or some portion of the work force, not solely about its effect on the speaker him- or herself; and (5) the meeting presented the first opportunity employees had to address the decision, so that the speaker had no opportunity to discuss it with other employees beforehand.
 We do not hold that all these factors must be present to support a reasonable inference that an employee is seeking to initiate or induce group action. In keeping with Meyers II, the determination of whether an individual employee has engaged in concerted activity remains a factual one based on the totality of the record evidence. . . .
One thing that's odd about this case is that it involved not only an employee's comment (a skycap who initially stated that a group of skycaps had helped a similar group arriving at the airport previous and didn't receive a tip) but also a partial work stoppage (the employee and others refused to help the new group). Alas, the GC only focused on the comment, although one might wonder why the fact that group action actually occurred did play a bigger role in the Board's analysis. Nevertheless, I don't see Alstate as making any major, substantive changes to the Meyers standard. Rather, it seems to be an example of a restrictive reading of Section 7 that we'd except from a Republican Board, announced in a way to send a message to parties about what it's doing. That said, as Michael Duff emphasized to me, even if the doctrine isn't effected much, this can have real impacts on employees who are protesting conditions at work.
Wednesday, January 2, 2019
The American Federation of Government Employees has initiated a suit on behalf on of two federal corrections officers who have not received earned overtime pay. The class is likely to grow substantially if the shutdown continues past Jan. 5, as that's the next regularly scheduled payday. Indeed, it is estimated that over 400,000 employees have been deemed essential and are required to continue working during the shutdown.
Like a similar suit brought during the 2013 shutdown by the same law firm--Kalijarvi, Chuzi, Newman & Fitch--the employees are claiming FLSA violations. What I hadn't realized is that despite a win in the 2013 suit, 25,000 employees still haven't received damages (they were awarded liquidated/double damages). If anyone knows why, I'd love to hear it. In any event, the prospect of double damages for over 400,000 employees for heaven knows how many hours of work would, I hope, give politicians extra incentive to get this resolved. That said, no matter how big an FLSA award might be, it still pales in comparison to a $5 billion wall . . . .
Monday, December 31, 2018
The D.C. Circuit has just ruled on the NLRB's Browning-Ferris joint-employer test, largely approving the standard that made many on the employer-side of things apoplectic. In Browning-Ferris v. NLRB, the court approved of the joint-employer rule, but remanded because it held that the Board didn't apply part of the rule correctly. This issue is becoming increasingly convoluted, so let me break down some of what's going on.
- Why did the court decide this case in the first place? As we've been following, the Board has already reversed the Browning-Ferris test once, which they had to vacate because of a recusal issue. They are now in the process of reversing course via rulemaking. Despite that, the Board asked the court to decide the case, which the majority readily agreed to do, over a dissent. The reason the court did this brings me to the second point.
- De novo review for the joint-employer test. The court emphasized that determination of the Board's joint-employer rule is reviewed de novo. Because the joint-employer standard is based in common law, according to the court, no deference to the agency is required (as opposed to application of the standard, which is a mixed question of law and fact). And because the court wasn't giving the Board any deference, the court determined that there was no need to wait for the Board's new rule. Note that this is not good news for the Board's draft joint-employer rule, although may be good news for those who prefer a more consistent rule over the long-term.
- Reserved and indirect control is relevant to joint employment. As a reminder, the big argument is whether and to what extent the joint-employer test should consider reserved and indirect control. Browning Ferris said that actual and direct control is not required; the current Board disagrees. In this case, the court was crystal clear that the argument made by the employer and dissenters in Browning-Ferris that joint employment can be based only on exercised control and direct and immediate control are wrong. Full stop. As the court noted, the common law is riddled with examples and statements that reserved control and indirect control are relevant to joint employer determinations. So this extreme view--that joint employers must have actual and direct control--is currently dead in the D.C. Circuit. But there's a middle ground that may still available, which I'll get to in a moment. But first . . .
- Remand. Despite uphold the Browning-Ferris test, the court held that the Board mis-stepped in this case. In particular, when applying the new rule in this case, the Board didn't make clear whether it relied on evidence on indirect control over essential terms and conditions of work (which is relevant) versus indirect control over "routine parameters of company-to-company contracting," like a cost-plus contract or advance description of tasks (which is not relevant). Thus, the court remanded to the Board to clarify whether there is enough relevant evidence to support a joint-employment finding.
- Meaningful collective bargaining. The court also tacitly approved the Board's inquiry into whether a putative joint employer controls enough essential terms and conditions of employment to permit meaningful collective bargaining, but wanted the Board to define terms of that inquiry more in a case, unlike here, when the Board actually applies invokes that question. That's good news for folks, like yours truly, who have argued for a more collective-bargaining focused joint employer test.
- Finally, the money question: What next? I was talking this morning to Robert Iofalla at Bloomberg News (I will link to his article when it comes out), who is exploring this question. One option is that the Board will press an extreme position during its rulemaking and thumb its nose at the court's admonition that reserved and indirect control is relevant (which could then lead to the Board's nonacquiescence policy, possible circuit split, and cert. petition). But my guess--and I stress guess--is that the Republican majority of the Board will go as far as it can without directly conflicting with the court's decision. In other words, as it did in Hy-Brand, the Board could acknowledge that evidence of reserved or indirect control can be relevant. And, then, it can answer the questions that the court expressly left open: whether only indirect and/or reserved control is enough to find joint employment. The current Board will obviously say "no," which will leave us with basically the same test we had before Bronwing-Ferris. The Board could still lose when the D.C. Circuit or another court takes up that question, but this seems to be a lower risk strategy than going the extreme route. The "relevant-but-not-sufficient" strategy still leaves plenty of room for a narrow joint employer test, especially when a Trump Board is applying it, while avoiding the time-consuming litigation that would result from defying the D.C. Circuit and seeking a circuit split. Avoiding these types of risks are especially important when the Board is doing something it rarely does by engaging in substantive, formal rulemaking.
Still plenty more to come, so stay tuned.
Friday, November 30, 2018
One of the questions that followed the Supreme Court's Janus decision was whether unions had to give back dues that unions had already collected. Several employees, backed by anti-union groups, sued based on the theory that unions shouldn't be able to keep funds that the Court has announced were unconstitutionally required under collective-bargaining agreements with their public employers. Unions, on the other hand, responded that although the Court had long made clear its intention to overrule Abood and rule this way, clear precedent states that until the Court makes such a change, current caselaw applies. This isn't just an interesting legal question; there is a ton of money at stake for unions.
Yesterday, we got the first judicial decision on this question, in favor of unions. In Danielson v. AFSCME, the Western District of Washington dismissed a lawsuit seeking a declaratory judgment that past-paid fees were unconstitutional and seeking a return of those funds. At the heart of the dismissal was the court's holding that the union involved enjoyed a good faith defense against the Section 1983 claim because when they collected the fees, they were legal under both state and federal law. There's a general understanding among many courts that Section 1983 includes a good faith defense and the court held that it applied here. That's not surprising given that the Supreme Court has been very clear that lower courts should not try to predict what the Court will do--the law is what it is until the Court says it isn't.
This is a significant win for public-sector unions, but this issue isn't over. There are several other identical suits which could well come out differently, and I'm sure this case will be appealed. So stay tuned.
Tuesday, November 6, 2018
The Supreme Court issued its first decision of the term today, and it was the age discrimination Mount Lemmon Fire District v. Guido case. I'll claim credit for predicting a win for the public-sector plaintiffs--minus the fact that I was wrong about saying it wouldn't be unanimous. So, the outcome wasn't a surprise, but the unanimous support for both a group of employees and the Ninth Circuit was. You can read the full opinion here. For lazy readers, here's the syllabus:
John Guido and Dennis Rankin filed suit, alleging that the Mount Lemmon Fire District, a political subdivision in Arizona, terminated their employment as firefighters in violation of the Age Discrimina- tion in Employment Act of 1967 (ADEA). The Fire District responded that it was too small to qualify as an “employer” under the ADEA, which provides: “The term ‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees . . . . The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State . . . .” 29 U. S. C. §630(b).
Initially, both Title VII of the Civil Rights Act of 1964 and the ADEA applied solely to private sector employers. In 1974, Congress amended the ADEA to cover state and local governments. A previ- ous, 1972, amendment to Title VII added States and their subdivi- sions to the definition of “person[s],” specifying that those entities are engaged in an industry affecting commerce. The Title VII amend- ment thus subjected States and their subdivisions to liability only if they employ a threshold number of workers, currently 15. By con- trast, the 1974 ADEA amendment added state and local governments directly to the definition of “employer.” The same 1974 enactment al- so amended the Fair Labor Standards Act (FLSA), on which many aspects of the ADEA are based, to reach all government employers regardless of their size. 29 U. S. C. §203(d), (x).
Held: The definitional provision’s two-sentence delineation, set out in §630(b), and the expression “also means” at the start of §630(b)’s second sentence, combine to establish separate categories: persons engaged in an industry affecting commerce with 20 or more employees; and States or political subdivisions with no attendant numerosity limitation.
The words “also means” in §630(b) add new categories of employers to the ADEA’s reach. First and foremost, the ordinary meaning of “also means” is additive rather than clarifying. See 859 F. 3d 1168, 1171 (case below) (quoting Webster’s New Collegiate Dictionary 34). The words “also means” occur dozens of times throughout the U. S. Code, typically carrying an additive meaning. E.g., 12 U. S. C. §1715z–1(i)(4). Furthermore, the second sentence of the ADEA’s definitional provision, §630(b), pairs States and their political subdivi- sions with agents, a discrete category that carries no numerical limitation.
Reading the ADEA’s definitional provision, §630(b), as written to apply to States and political subdivisions regardless of size may give the ADEA a broader reach than Title VII, but this disparity is a consequence of the different language Congress chose to employ. The better comparator for the ADEA is the FLSA, which also ranks States and political subdivisions as employers regardless of the num- ber of employees they have. The Equal Employment Opportunity Commission has, for 30 years, interpreted the ADEA to cover political subdivisions regardless of size, and a majority of the States impose age discrimination proscriptions on political subdivisions with no numerical threshold. Pp. 4–6.
In short, if you're an employee plaintiff, it really helps to have a strong textual argument.
Wednesday, October 31, 2018
Thanks to Paul Harpur (U. Queensland - Beirne Law) for sending word that today, the Australian State of Queensland introduced a new Human Rights Bill 2018 (Qld) before Parliament. As Queensland has only one House of Parliament, where the government currently has a majority, it is almost certain this bill will soon become law.
The Human Rights Bill 2018 (Qld) declares that Queenslanders have 21 Civil and political rights and two Economic, social, and cultural rights. Many of these rights are relevant to university students and workers/labour in Queensland. On the labor side, thee rights include:
- Freedom of thought, conscience, religion and belief,
- Freedom from forced work,
- Freedom of expression, and
- Peaceful assembly and freedom of association
On the education side, the right is extended, beyond K-12, to a right to “have access, based on the person’s abilities, to further vocational education and training that is equally accessible to all.” Ability equality is a concept that disability rights scholars across the globe have been arguing for. In Queensland, for example, Paul testified in 2018 to a Queensland Parliamentary Committee, arguing that the United Nations Convention on the Rights of Persons with Disabilities is the declaration of ability equality.
Some recent labor and employment news:
- Wages look like they're finally rising in a significant way. A DOL report showed an almost 3% increase in wages for this time last year, which outpaces inflation and is the highest increase in a decade.
- A couple of joint-employer items. First, the NLRB has extended the time to comment on a proposed new rule to Dec. 13. Also, the tussle between Congressional Democrats and the Board over the proposed change continues. As this Bloomberg Law (subscription required) article details, the Democrats want evidence supporting the claim that the current, broader joint-employer test is causing the problems that critics claim. This touches on a broader area--the NLRB is really bad at using actual evidence to support its policy views. Some of this is the legacy of the ban on economic analysis (which is so stupid--why in the name of all that is rational can't we have a bipartisan agreement that analysis is useful for labor law, like, say, the rest of the government?). But some of this, frankly, is just lazy. There's nothing stopping the Board from citing others' studies, which it does far less that it could. And this is an equal-opportunity offense. Although some members have been better on this, Board from both parties tend to be woefully inadequate on this score.
- As is the case when the White House changes parties, the DOL has been adjusting how it regulates union finance requirements. Unsurprisingly, they're ratcheting up the requirements by increasing the number of entities covered and expanding what covered entities need to provide. This is shades of the Bush II administration, where the changes were challenged in court. Expect the same here.
- The General Counsel has announced that it's changing its approach to allegations of union negligence. In contrast to the long-standing deferential approach the Board has taken, the GC says he will now prosecute unions for negligence under Section 8(b)(1)(A) (for failure of the duty of fair representation) when it does things like lose a complaint or fails to return a call.
Tuesday, October 16, 2018
Amazon has long been known as a high-tech Moneyball employer, striving to make data-driven decision when possible. But this week shows that there are limits to that approach. After working since 2014 to develop AI-driven hiring algorithms, Amazon recently abandoned that approach. The reason? The algorithms were biased against women. This is an issue that several folks, including Rick Bales, have been talking about (and is a small part of a larger tech project I'm working on), and isn't a surprise given the dearth of women in the tech industry. This is the classic garbage-in-garbage-out issue. Amazon was training its algorithms based on resumes it has received, and because men disproportionally applied to the company, the algorithms were spitting out decisions that undervalued women; indeed, they were specifically penalizing resumes that included references to women. If Amazon or other companies want to use AI (really Machine Learning) for hiring, they should first use the technology to analyze its current hiring practices to try to root out pre-existing bias. Only once that's addressed does AI have even the hope of being effective.
To be clear: Amazon says that it never actually used the algorithms for actual hiring decisions. It wasn't for a lack of trying though. Amazon realized what was going on in 2015, but didn't disband the program until the start of last year. In other words, despite working for quite a while to eliminate the bias, they couldn't do it to their satisfaction. That a company like Amazon couldn't pull this off should serve as a strong warning to everyone about the limits of AI. I'm actually more optimistic on AI's eventual potential to reduce employment discrimination than many, but I am still extremely cautious about the technology. There's definitely a right way and wrong way to use it and, as Amazon shows, the right way can be really hard. As a result, I think the greatest risk of AI in personnel decisions is its misuse by companies that are too lazy, cheap, or blinded by the shiny object that is AI to realize that is is only a tool and, like other tools, can be used the wrong way.