Jottings By An Employer's Lawyer

Saturday, March 27, 2004

7th Cir. Articulates Rationale For Judging Employer Conduct In Light of 'Competition for Employees'

Although not remarkable for its ultimate holding (finding a denial of disability benefits is not an abuse of discretion when supported by medical opinion), the 7th Circuit, as it frequently does, uses simple language to articulate a concept often overlooked by other courts and policy makers: employers' conduct should be viewed in light of their economic need to obtain the best employees from the market place. The money quote here:
After all, the Mercantile Exchange has no reason to deceive its employees about the quality of fringe benefits on offer; that would just besmirch its reputation and make it harder to hire good people in competition with other financial institutions.
Leipzig v. AIG Life Insurance Company (7th Cir. 3/25/04) [pdf].

Several years ago, testifying before the Texas legislature on behalf of TAB against, yet another, poorly drafted piece of legislation, I tried to make the point that there was something to be said for not mandating every conceivable positive action by an employer, so that those who voluntarily took progressive steps could distinguish themselves in the marketplace for talent. Clearly, I would have had a more understanding audience with members of the 7th Circuit Court of Appeals.

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