Jottings By An Employer's Lawyer

Friday, August 30, 2002

Labor Day Hype or A True Shift?

A poll commissioned by the AFL-CIO has shown that for the first time ever (or at least, 1984, the first year employees were asked by the AFL-CIO) half the workers who don't already have a union say they would join one now if they had a chance. This is an 8% increase over last year's 42%. Not surprisingly, and probably linked, the same poll also reflected an increase in the negative view of those surveyed of corporations, with 39% having a negative view opposed to 30% who have a positive view. A 'whopping' (AFL CIO's word choice) 58% have a negative view of CEO's. For more see the AFL-CIO's press release. If those facts are really what people are believing, and there is certainly an anecdotal basis for them, then it seems that much more attention will need to be paid to traditional labor issues than in the near past.

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Tuesday, August 27, 2002

Merger on the horizon?

For a short, simple list of practical suggestions on how to make a merger of two entities work, see Workforce's Best Practices of Mergers and Acquisitions..

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Wednesday, August 14, 2002

No Waffles at the DOL?

Eugene Scalia, the Solicitor of Labor and son of Justice Scalia of the United States Supreme Court, has issued an interesting directive on how the DOL will handle cases where an employee has agreed to arbitrate disputes with their employer. In commenting on the Supreme Court's Waffle House decision at the ABA convention, Scalia noted "saying that the government need not defer to arbitration is not the same as saying the government must not defer."

In his August 9th directive, Scalia makes it clear that in many cases the DOL should in fact defer to such arbitration agreements. One area most appropriate for deferral is matters involving individual claims for relief in the form of back pay and reinstatement, such as various whistle blower statutes. He does single out wage and hour claims as likely to not be good subjects for deferral.

It will be interesting to see how the directive will interact with the new whistle-blower claim created by Sarbanes-0xley.

Obviously, this is very much a pro-arbitration position. It will be interesting to see what sort of reaction it gets, if any, from the anti-arbitration element in Congress. My guess is that particularly given who it is coming from, it will definitely get some attention.

Just as an example of some who might harbor such feelings, Senator Leahy from Vermont, the current chair of the Senate Judiciary Committee offered a version of a whistle-blower bill, that fortunately was ultimately not accepted in Sarbanes-Oxley, which would have prohibited the new whistle blower claims from being arbitrated, unless consent were given after the claim arose.

Probably not likely to see much more than rhetoric in the remainder of this Congressional session, although who knows what will happen as election time gets nearer. However, I think those interested in arbitration as a viable method for dispute resolution should keep their eyes carefully tuned to what is going on in Congress in the future.


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Tuesday, August 13, 2002

A distinction with a difference: using words that have legal significance in their every day sense

There was recently a discussion on one of the boards I occasionally peruse (the group of SHRM) about whether or not a person who was yelled at regularly by their supervisor was a victim of a hostile environment. The original poster of the question, had replied, I think correctly, not necessarily.

My response, which didn't get posted due to a technical glitch was as follows:

I think part of the problem with this issue is the use of a term in its every day sense, without being sensitive to its legal meaning. Certainly working in an environment where a supervisor yells at you daily is clearly a hostile environment as defined in a dictionary (not offering a pleasant or sustaining environment). However, if the question is: is it a hostile work environment as prohibited by Title VII of the Civil Rights Act of 1964 and similar statutes?. The answer is no; unless it can be shown that the reason the supervisor is yelling is because of the employee's sex, race, age, disability or some other protected category.

Just because it is not actionable under a specific statute, does not necessarily mean that there may not be some way to bring a successful law suit. For example, if the conduct is severe enough, it might rise to the level of intentional infliction of emotional distress, or the tort of outrage as it is known in some states. A classic example is the case of the retired drill sergeant who should have been permanently retired. GTE Southwest, Inc. v. Bruce (Tex. 1998).

The confusion of every day words and legal terms would not normally make a difference as employers should make it clear that unpleasant working conditions, legal or not, will not be tolerated. However, it does make a difference when you are being sued and you wish to make the legal distinction.

One way that employers frequently hurt themselves is by using the legal term "sexual harassment" when the conduct, no doubt inappropriate, may not rise to a level that meets the legal standard, or at least the employer wants to make that argument. If in their documentation, the employer had used the term 'inappropriate conduct' or something similar, it would still clearly connotes that it was not acceptable, without passing judgment on whether it is legal or not. Without a flat statement that the conduct was sexual harassment, the employer would be in a much better position to argue that the conduct while not acceptable under the company's standards, was nevertheless not conduct for which it should be liable in damages.

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Wednesday, August 07, 2002

Paid family leave, let's let California try it....

Even when first passed, those who supported the Family Medical Leave Act, the Clinton administration's only employment legislative legacy, admitted it was only the first step. What was really desired, and needed, to be equal to most other industrial nations, was to have paid leave. The attempt to use the national unemployment compensation system for partial payment seems to have fizzled, but now a major battle is underway in California. The Paid Family and Medical Leave Act is working its way through the California legislative process.

Many states rights enthusiasts, George Will comes to mind, believe that the states are great testing grounds for initiatives, offering a way to see if the ideas work, before inflicting them on the nation as a whole. (Obviously, that is posed in the most negative fashion, as such initiatives could prove to be a good idea. On this one I have my doubts.)

The arguments are being formulated, but I am game to let California have a go at it. Let's see if it benefits workers as a whole, as opposed to those individuals who may, at least in the short term, get the paid leave. For views pro and con, see E. Kay Trimberger's piece in the Mercury News and the the California Chamber of Commerce's position paper.

The impact of employment legislation is widespread and often brings into play the law of unintended consequences. I think particular care should be given when it is entitlement employment legislation. Even if it has no other effect (and it will), at a minimum it diminishes the abilities of a superior employer who wishes to distinguish itself for the purposes of retention and competition for talent from setting itself apart from other employers by being unique in providing such benefits.

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Monday, August 05, 2002

Day to day violence, on whose nickel?

There seem to be an increasing number of cases that deal with an employer's responsibility when employees are injured on the job by the intentional acts of others, including fellow employees. Although Texas law is fairly clear, that an employee who claims such an injury but elects to receive workers compensation is barred from any other action against the employer, it is not so clear in other states. Medina v. Herrera, 927 S.W.2d 597 (Tex. 1996).

Most recently, the Mississippi intermediate court addressed a case with these allegations:

On or about the 10th day of October, 1997, Defendant Oye, in his office on the premises of Defendant Pioneer, Inc. wilfully assaulted and battered Plaintiff Robert Davis by lunging across his desk, grabbing the Plaintiff at his throat and slinging Plaintiff against a wall.

Plaintiff was the Manager of Information Systems and the 'flinger' was the Company Comptroller. Just as an aside, isn't it fairly ludicrous to say "on or about October 10th"? No matter how many of us have been frustrated with the IT department, surely it is still rare enough that one will remember precisely the date they were flung "against said wall." (Said with tongue in cheek.)

In any event, the Mississippi court held that even though the injured employee had received workers comp benefits, he could proceed with his suit against the employer. It may be the correct ruling under Mississippi precedent, but it seems indicative of a growing trend to hold employers liable for the intentional acts of others. There may be cases where a good argument can be made for that, although I think the whole area of employer responsibility for such conduct, the interactions of various theories of liability such as vice-principal, and the reach of the workers compensation exclusivity bar is ripe for review.

I did note that, although not writing the opinion, a law school classmate, Leslie Southwick was on the panel that heard the case.

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Sunday, August 04, 2002

It's Not Just About Money

Although frequently having made this point in union prevention training (mainly on the basis of a study quoted by a former partner, but personally never seen), it is good to see that some one actually did a study to show that when it comes to what is really important to employees, it is not all about money. As Andrew Sullivan is fond of saying in his blog, this is the money paragraph:

Myth No. 5: It’s all about money.

Fact: When employees ranked what was most important, money finished out of the money - it was only the fifth most important value. The most important values were, in order, the ability to balance work and outside life, the meaningfulness of work, trust among employees and the employees’ relationship with their supervisor or manager

The survey is by DDI, a human resource consulting firm and here's the rest of the story about employee retention and the data behind the survey.

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Friday, August 02, 2002

Firestone does make a difference!

Although straying into the area of employee benefits and ERISA is something that seems to happen more frequently to employment lawyers these days, one of the most critical issues has to occur at the drafting of the plan, long before we generally are allowed to meddle. Any first year law student knows that there is considerable difference whether or not a decision is reviewed for an abuse of discretion vs. a de novo review. The difference -- between winning and losing. If you are the decision maker, you clearly favor the the former which will cut you some slack; if you are the one whose claim has been denied, you want a fresh, independent look.

The Supreme Court clearly set out the rules for ERISA plans in Firestone Tire Rubber v. Bruch, 489 US 101 (1989), with the basic rule being de novo, but allowing any drafter to avoid the rule by using appropriate language. A concept ERISA lawyer Michael McKuin discusses in his cleverly titled, When the Exception Becomes the Rule and the Rule Becomes the Exception, of What Value Is the Rule?

In any event, the 9th Circuit, the favorite of every employee in employment related matters, recently showed the difference those few words can make. Discussing a practice which has drawn more judicial attention than one might think, the court in a 2-1 decision awarded life insurance benefits because it found that death by autoerotic asphyxiation was barred neither by the suicide or intentionally inflicted self-injury clauses. Padfield v. AIG, decided May 17, 2002.

The benefits had been denied by the plan administrator and the district court. Unfortunately, the plan lacked the magic Firestone words. Thus rather than being required to give the administrator's decision deference, the 9th Circuit was free to supply its own rationale. Finding the cases applying these two clauses to deaths of autoerotic asphyxiation split, the court noted that reasonable men could disagree, which would meet the standard for upholding the administrator's decision under Firestone. But alas, for the lack of a few words ....

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