A "New Spring" in Labor and Employment Law?
Posted
10:40 AM
by Michael Fox
Today's post by Professor Rick Bales at Workplace Prof Blog about Charlie Morris' letter to the NLRB advocating for a rule that would allow members-only minority-union bargaining, a "radical idea" explained more completely in his book, The Blue Eagle At Work: Reclaiming Democratic Rights In The American Work Place, prompted more general thoughts about where we are in the relatively narrow, but very important, world of labor/employment law. And more importantly, where we have been and where we may be going.
My time in this area, which now spans more than 30 years, has been tremendously impacted by two developments that occurred in the first decade after I was licensed — one that happened and one that didn't.
The one that did not happen was passage of the Labor Reform Act of 1977. As a two year lawyer, I knew it was a major battle between organized labor and business, but I can only now appreciate how different my professional life would have been if it had passed.
Notwithstanding Democratic control of the House, Senate and the White House, the Labor Reform Act died on the Senate Floor without ever coming to a vote — it was defeated by a filibuster led by (still) Senator Orrin Hatch (R-Utah). (It did pass the House. If cloture could have been invoked it would have passed the Senate and been signed by then President Carter.)
Amazingly, I can't even find a copy of the full text of the bill online (unheard of in today's internet world), but a summary of H.R. 8410 of the 95th Congress is here.
What was being proposed then may sound very familiar to those following the debate about the Employee Free Choice Act. Among other things the 1977 Labor Reform Act would have:
- Amended the National Labor Relations Act to increase the size of the National Labor Relations Board to seven members and the terms of Board members to seven years.
- Directed the Board to issue rules to protect specified employee and labor organization rights, facilitate the resolution of disputes concerning voter eligibility, and govern elections in cases in which an appeal had not been decided prior to the date of election.
- Created expedited elections where a majority of members of a bargaining unit sought recognition of a union or de-certification of an existing union.
- Specified damages where there was an unlawful refusal to bargain prior to entry into a first bargaining contract.
- Provided for expedited consideration and relief from certain alleged unfair labor practices which resulted in a deprivation of employment.
- Denied, for up to three years public contracts to persons willfully violating final orders regarding unfair labor practices.
Think how all our world's would have changed if it had passed.
The seminal event that did happen was President Reagan's firing of all air traffic controllers in the summer of 1981. Again, even though I was by that time a Board Certified Labor and Employment Lawyer, I had no idea how President Reagan's act would ultimately impact the world of work, which of course was where I worked.
The Wikipedia entry under "Patco Strike", even with a couple of missing supporting citations, has a good summary of the basic events:
On August 3, 1981 the union declared a strike, seeking better working conditions, better pay and a 32-hour workweek. In doing so, the union technically violated an oft-overlooked 1955 law {5 U.S.C. (Supp. III 1956) 118p.} that banned strikes by government unions. However, several government unions (including one representing employees of the Postal Service) had declared strikes in the intervening period without penalties. Ronald Reagan, however, declared the PATCO strike a "peril to national safety" and ordered them back to work under the terms of the Taft-Hartley Act of 1947. Only 1,200 of the more than 12,000 controllers returned to work[citation needed]. PATCO thought it could cause the national air system to grind to a halt and use that as a bargaining tool. Reagan gave union members 48 hours to return, knowing that Transportation Secretary Drew Lewis had secretly trained replacements and the airplanes kept flying at 80% of normal[citation needed].
On August 5, following their refusal, Reagan fired the 11,359 striking air traffic controllers who had ignored the order, and permanently banned them from federal service. They were replaced initially with nonparticipating controllers, supervisors, staff personnel, some nonrated personnel, and in some cases by controllers transferred temporarily from other facilities. Some military controllers were also used until replacements could be trained. It proved the most stunning defeat for unions in 60 years.
Although the real impact of President Reagan's action has been debated (for a good summary of that debate see
Professor Michael J. Hayes 2006 speech,
The PATCO Strike: Assessing Its Impact 25 Years Later) there is no question that it is widely perceived as setting a different tone for management/labor relations over the ensuing years.
A third development, not as clearly connected to labor and employment law has also been significant — President Reagan's approach to appointing federal judges. (For a good description and analysis see
Professor David O'Brien's article,
Why Many Think that Ronald Reagan's Court Appointments May Have Been His Chief Legacy.) In short, President Reagan appointed not only conservative judges matching his political philosophy, but relatively young lawyers, who with lifetime appointments would continue their central role on the bench long after his presidential term expired.
As an example, two judges still on active status on the 5th Circuit,
Chief Judge Edith Jones and
Judge Jerry Smith, were both associates at big firms in Houston when I began practice as one in 1975. They were appointed by President Reagan in 1985 and 1987, at the ages of 36 and 41.
It is difficult to overstate the impact that the federal judiciary, shaped by Reagan and post-Reagan appointments, has had on the interpretation of federal, and by analogy, state employment laws in the last twenty-five years.
As I have commented in this space before, most things in the law are cyclical — with a pendulum effect of correcting and over-correcting. It has been an uncommonly long cycle in labor and employment law where the general overall direction has not changed. But if there is a change in store, and certainly there is change in the wind, it behooves employers and those who represent them, to be aware, now.
There may or may not be a Prague-like spring change in store for employment and labor law. But for the first time in many, many years, it is not unthinkable.
Labels: political
Tuesday, March 20, 2007
HealthSouth on the MDV Employment Law Docket
Posted
5:29 PM
by Michael Fox
Not sure whether I missed this, or it wasn't reported until someone picked it up from an SEC filing last week end. HealthSouth which has seen its share of litigation in the last few years, disclosed one more adverse result, when it reported a $1.9 million dollar verdict last October favoring its former head of security and the body guard of its former CEO, Richard Scrushy.
The Everything Alabama website has the story, Ex-security chief wins suit, which indicates that the basis for the former state trooper James Goodreau's claim was "a lifetime job guarantee." The job, but obviously not the claim, ended when he was terminated, along with Scrushy, after the Board of Directors took control of the company.
According to the report the case is now on appeal to the Alabama Supreme Court. Without seeing more, I can only guess that somehow the statute of frauds is involved somewhere.
Labels: MDV
Discrimination Survives, Retaliation Fails - 5th Circuit
Posted
4:15 PM
by Michael Fox
We have become so use to talking about cases where an employer wins the discrimination claim but loses on retaliation that it is almost shocking to see the reverse. But that's one of the "great things" about employment law — almost anything can happen.
Which is probably what the folks at Dr. Pepper are thinking after reading today's opinion from the 5th Circuit in Burrell v. Dr. Pepper/7 Up Bottling Group (5th Cir. 3/20/07) [pdf].
When Burrell was passed over for the position as Vice President of Purchasing, even though having served well as what the 5th Circuit called the "stopgap vice president" until a new VP was brought on board, he felt as if perhaps the decision was based on his race.
In fact he shared with his superior a copy of the book, Roberts v. Texaco: A True Story of Race and Corporate America, and two articles detailing the class action lawsuit brought against Coca Cola, saying he felt his experiences at Dr. Pepper mirrored those of the plaintiffs in those cases. Still he continued with the job, earning not only a raise, but a bonus and an invitation to an annual meeting of high achieving employees.
But when the new VP arrived, so did problems between the two of them. It culminated in a lengthy review of Burrell's performance, done at his request, to which he wrote a lengthy 3 page rebuttal. According to the 5th Circuit:
The performance evaluation response authored by Burrell begins by characterizing Koester's [the new VP] initial evaluation as an inappropriate and unprofessional attack and questions Koester's ability to give an accurate evaluation. The response goes on to attribute the negative review to Koester’s “biased perception” of Burrell’s on-the-job performance. Throughout his response, Burrell accuses Koester of being ill informed and unqualified to critique his performance.
While the response includes significant supporting facts and examples, Burrell made clear his lack of respect for Koester's authority, asserted no responsibility for their bad relationship, and made no provisions for future changes. Both the evaluation and the response demonstrate the failed working relationship between Burrell and Koester. Notably, neither document contains any mention of a racial or retaliatory basis for their disagreements.
On the same day that rebuttal was delivered,
Burrell was terminated.
In the suit that followed, the district court granted summary judgment for Dr. Pepper on both the discrimination claim for failing to select
Burrell as the new VP of Purchasing and retaliatory termination for his protected activity.
Today's result — summary judgment on retaliation, affirmed; summary judgment on discrimination on the promotion claim, reversed.
Although the result — retaliation losing, while discrimination wins - is unusual, more attention will probably be directed to the discrimination claim as the Court explains what it was that led it to believe that
Burrell had established a
triable issue on pretext. The Court gives its views of how the evidence, including what it believed to be shifting explanations for the hire, gave rise to a
triable issue of fact.
One thing that caught my eye is the importance the court attributed to consistency of the company's explanation:
While Dr. Pepper offers an explanation for the difference between the reason for promoting Koester over Burrell it offered to the EEOC (“purchasing experience”) and the one offered to this court (“purchasing experience in the bottling industry”), its brief does not attempt to explain how either explanation is consistent with its arguments to the district court which were framed in terms of Burrell’s insufficient “bottling” experience.
Although you can see the difference, there is also a lot of similarity in those three phrases:
- purchasing experience,
- purchasing experience in the bottling industry,
- Burrell’s insufficient “bottling” experience
While the Court gives additional reasons for its holding, when you consider the number of times that you could be potentially be called upon to explain the reason for a termination -
- to the employee,
- unemployment proceedings,
- EEOC or state agency,
- district court pleadings and discovery
- and appellate briefing
the potential chance of damage caused by a lack of precision or a subtle change of emphasis are enough to get an employer's attention.
While
Burrell's discrimination claim may still be alive, it is not to say it didn't take a hit as well. Given a now legitimized termination, it would seem at a minimum that even assuming that liability could be established, which of course is by no means certain, a large element of economic damages, would seem to have gone disappeared along with the retaliation claim.
Labels: discrimination, retaliation
Monday, March 19, 2007
"Labor lawyers see gray storm gathering" — Great Headline, Not Much More
Posted
8:53 AM
by Michael Fox
The Dallas Business Journal has one of the better headlines I have seen recently, unfortunately, the story doesn't add much. The article describes the coming "perfect storm" (a now well overused cliché) as follows:
- Baby boomers, whose ages range from about 42 to 60, make up the largest group in the workplace, with 77 million men and women in the United States, nearly double the population of Gen X, which makes up 44 million and whose members are just beginning to hit their 40s.
- As baby boomers climb the corporate ladder, they become more expensive to employ.
- As employers look at ways to keep costs down, they'll look at reducing their biggest expense: people.
And an obligatory quote that juries are sympathetic to older workers because they can identify with people who look like them. Yawn.
But just because there is not a lot of substance to the story, doesn't mean there is not a lot of truth to it. And you have to agree, it is a great headline.
Labels: age
Tuesday, March 13, 2007
Some Lessons to Be Learned from the Brits on a Minimum Wage Law
Posted
10:49 AM
by Michael Fox
As talk of a new minimum wage continues to rumble through Congress, the Brits have acted. See the BBC News story, Minimum wage up to £5.52 an hour. While there is no talk of raising the U.S. rate that high, there is at least one way we should emulate the British.
Namely — lower rates tied to age. Although the new top British rate is the equivalent of $10.60 an hour, there are separate rates for those aged 18-21 ($8.80) and 16-17 ($6.57). That bright line makes much more sense than the half-hearted attempts to achieve something similar under the FLSA.
One thing the Brits don't do that we should — tie the rate to a reasonable index to avoid these periodic lurches that don't do anyone any good except for politicians who get have a partisan issue to rally around and an opportunity to "look good" in the eyes of their constitutents by "giving them" a raise.
The Brits at least remove it from the political process by a half step, putting it in the hands of the government's "Low Pay Commission," a name that you have to admire regardless of your point of view.
Labels: FLSA, political
Tuesday, March 06, 2007
The Case of A Different Decision Maker — A Lesson Reinforced
Posted
8:11 PM
by Michael Fox
Even after a court adopts a new standard it takes awhile for the nuances to play out. Late in 2005, the 4th Circuit found that there were certain times when a discrimination plaintiff would be excused from meeting the standard 4th element of a prima facie case, that he or she was replaced by someone outside the protected category. This "exception" exists when there are different decision makers. See 4th Circuit Alters 4th Prong of Prima Facie Case . There, even though a female plaintiff was replaced by a female, the exception came into play because it was a different management team.
18 months later, the 4th Circuit had a different variation. Female plaintiff was replaced by a male, however the replacement choice was made by a new management team. The court noted the district judge, who had granted summary judgment because of the plaintiff's failure to establish a prima facie case, was correct in finding in its earlier decision the
"implicit understanding that the sex (here, male) of the person chosen by a second decisionmaker to fill the female plaintiff’s vacant position does not assist in creating a presumption of gender bias on the part of the first decisionmaker, who fired the plaintiff."
But, and here it was a decisive
but, the district court erred in not recognizing that the different decision maker
completely relieved the plaintiff from the obligation of meeting the 4th element of the prima facie case.
Lettieri v. Equant, Inc. (4th Cir. 3/5/07)[pdf].
Labels: discrimination
Monday, March 05, 2007
An Unbiased Academic Look at Mandatory Arbitration
Posted
2:01 PM
by Michael Fox
Well maybe not — given that the topic for presenters to the January 2008 Section to Contracts of the Association of American Law Schools is entitled: How Bad Are Mandatory Arbitration Terms?”. Check out the full details at the ContractsProf Blog if you are interested in presenting.
I would never say that there are not two sides to the question of mandatory arbitration, but it does seem that the ivory tower types are not being asked to approach the issue with an open mind.
A hat tip to the good Professor Ross Runkel at his Ross' Arbitration blog which is, as usual, up to the minute on the latest developments in arbitration.
Labels: arbitration
Sunday, March 04, 2007
MDV in Oklahoma - $61 Million Worth
Posted
12:14 PM
by Michael Fox
A hat tip to the Daily Labor Report which alerted me to a substantial Oklahoma City verdict in February. A claims manager for Progressive Halcryon Insurance brought a claim for hostile environment, gender discrimination and retaliation. The jury must have viewed them equally — finding $350,000 in compensatory for each of the three claims, which alone would have qualified it as an MDV. But the jury wasn't through — topping it with a $60 million punitive damage award. The reports I found, see Jury says a Tulsa deserves millions [sic]from the Tulsa News World and Tulsan Wins Gender Discrimination Lawsuit from KOTV, don't have the sort of facts that sometimes jump out in these cases, although it was clear that there were some credibility questions such as whether she declined a lower position that was offered to her.
There may well have been some other factors that inflamed the jury, but it's a good reminder that when you lose on liability in an employment case, that means you have lost the credibility battle, and too often that in at least one jury's eyes you stand doubly condemned — not only are you a discriminator, but a liar. And that's a volatile combination.
The stories make the good point that the maximum that can be awarded out of that $61 million of damage is $300,000 because of the caps on Title VII recovery. However, counsel for plaintiff is optimistic that there is $200,000 in back pay, $600,000 in front pay to go with the $300,000 and of course attorneys fees. As we have seen it also could be that it will ultimately end up to be nothing, which still still doesn't remove the lesson.
Labels: MDV
Thursday, March 01, 2007
What's At Stake in Today's Vote on the Employee Free Choice Act
Posted
10:28 AM
by Michael Fox
Today the House of Representatives will take up, and according to all predictions, pass the so-called Employee Free Choice Act. As reported in my earlier post, Deceptive Advertising - The Employee Free Choice Act, one but not the only aspect of the change to existing labor laws is to remove secret ballot elections as the mechanism for determining whether or not a union will represent employees in bargaining with their employer.
Although I don't normally read unpublished cases from the appellate courts, I did so by accident on one that was just handed down today by the 6th Circuit, Angel v. International Paperworkers (6th Cir. 3/1/07) [pdf]. The irony of the opinion in conjunction with today's vote by the House of Representatives was too much to pass up.
It seems that 115 employees of the Paperworkers Union sued claiming that they had not received severance pay because of the Union's failure to honor its own constitutions that called for a vote on collective bargaining agreements. As the Court summed up their argument:
Despite the requirement in the international union’s constitution and the local union’s bylaws that members ratify labor agreements negotiated by the Union, the EBP was never ratified by the membership. Rather, the international union’s bargaining representative and the local union’s president signed the EBP and it went into effect.
To be fair, the Court concluded that they were wrong in feeling that they were ultimately damaged by the failure of the union to follow its constitution, but it is clear that the employees felt differently — enough so to have pursued litigation to a federal court of appeals. And there did not appear to be any dispute that the Union did not follow its own constitution in failing to have the vote.
The point insofar as the EFCA debate goes is the impact on individual employees when a union becomes their legally designated representative. Actions which impact them in their pocket book, can be taken by a majority, and sometimes by a much smaller group as apparent in the case decided today. The selection of the entity with that power, should be based on what is best for employees, not what makes it easier for labor unions.
While there may well be problems with the current system, the abandonment of meaningful secret elections is not the solution. Meaningful is a key word because look for unions to offer a grand compromise in the Senate of allowing secret ballot elections that must be held within a few days of a petition being presented.
What would be nice is to have a considered view of the problems with the system and and a serious revision of the labor laws based on reason, rather than one side imposing a solution because they currently have the political upper hand. Nice, but not likely.
Labels: political, traditional