Jottings By An Employer's Lawyer

Thursday, March 26, 2009

EFCA - Post Specter Announcement

Two days after Senator Specter took to the Senate Floor to announce his opposition to EFCA, the best post I have seen on what exactly this means is from Campaign Diaries, Specter announces opposition to EFCA.

Among the possibilities, some sort of compromise with four Republicans being eyed as potential votes for cloture: Lisa Murkowski (Alaska); Olympia Snowe and Susan Collins (Maine) and George Voinovich (Ohio). Voinovich is not running for re-election. And of course, Specter did leave the door open to change his mind, perhaps after the Republican primary in the Spring of 2010.

Another possibility is for Labor to see if the Democrats can finally broach the 60 seat barrier in 2010 which could result in a non-watered down version.

My guess, there is still likely to be a strong run at some sort of compromise in the current Congress. (Of course I also picked Wake Forest for the Final Four in at least one of my brackets!)

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Gearing Up for Tougher Wage & Hour Enforcement from DOL

Although given all the FLSA collective actions that have been directed at employers, it would be somewhat foolish to argue that the last few years have been easy, it is clear that a new administration, means likely much tougher enforcement by the DOL.

And although Secretary Solis probably did not need anything to jump start that activity, in case she did, the GAO report on enforcement efforts in the recent past no doubt will serve that purpose. The report to Congress, neutrally entitled, is Wage and Hour Division's Complaint Intake and Investigative Processes Leave Low Wage Workers Vulnerable to Wage Theft.

Some high (or more accurately) low lights:
GAO’s overall assessment of the WHD complaint intake, conciliation, and investigation processes found an ineffective system that discourages wage theft complaints. With respect to conciliations, GAO found that WHD does not fully investigate these types of complaints or compel employers to pay. In addition, a WHD policy instructed many offices not to record unsuccessful conciliations in its database, making WHD appear better at resolving conciliations than it actually is. WHD’s investigations were frequently delayed by months or years, but once complaints were recorded in WHD’s database and assigned as a case to an investigator, they were often adequately investigated.
Secretary of Labor Solis' response can be found here. One key point, 250 new wage and hour investigators are on the way.


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Tuesday, March 24, 2009

Specter Won't Be the 60th Vote

As the only Republican Senator to have supported EFCA in the prior Congress, Arlen Specter of Pennsylvania has literally been on the hot seat over the bill since a straight partisan vote would have left it one vote short.

In a Senate floor speech this afternoon, Specter called it "a very emotional issue" which may be one of the very few understatements about this piece of legislation given the heated rhetoric that has been coming from all sides. Politico has Specter's full statement at Specter deals a blow to EFCA.

Although he gives the door a pretty hard slam, Specter leaves a slight opening somewhere down the line:

The problems of the recession make this a particularly bad time to enact Employees Free Choice legislation. Employers understandably complain that adding a burden would result in further job losses. If efforts are unsuccessful to give Labor sufficient bargaining power through amendments to the NLRA, then I would be willing to reconsider Employees’ Free Choice legislation when the economy returns to normalcy.

I am sure organized labor's condemnations will soon start to roll in, but over at the Nation, the headline in the story by Chris Hayes probably sums it up, Specter Stabs Unions in the Back.

Update: Here's a link to Senator Specter's posting about his speech, including a video of him talking, which also includes some proposed changes to the NLRA that he would support. Whether there will be any traction to these proposals remains to be seen. On Sunday, it was Six Principles, today Senator Specter offers Twelve revisions:

  1. Establishing a timetable: (a) Require that an election must be held within 10 days of a filing of a joint petition from the employer and the union (b) In the absence of a joint petition, require the NLRB to resolve issues on the bargaining unit and eligibility to vote within 14 days from the filing of the petition and the election 7 days thereafter. The Board may extend the time for the election to 14 additional days if the Board sets forth specifics on factual or legal issues of exceptional complexity justifying the extension. (c) Challenges to the voting would have to be filed within 5 days with the Board having 15 days to resolve any disputes with an additional 10 days if they find issues of exceptional complexity.

  2. Adding unfair labor practices: (a) an employer or union official visits to an employee at his/her home without prior consent for any purpose related to a representation campaign; (b) an employer holds employees in a “captive audience” speech unless the union has equal time under identical circumstances; (c) an employer or union engages in campaign related activities aimed at employees within 24 hours prior to an election.

  3. Authorizing the NLRB to impose treble back pay without reduction for mitigation when an employee is unlawfully fired

  4. Authorizing civil penalties up to $20,000 per violation on an NLRB finding of willful and repeated violations of employees’ statutory rights by an employer or union during an election campaign

  5. Require the parties to begin negotiations within 21 days after a union is certified. If there is no agreement after 120 days from the first meeting, either party may call for mediation by the Federal Mediation and Conciliation Service

  6. On a finding that a party is not negotiating in good faith, an order may be issued establishing a schedule for negotiation and imposing costs and attorney fees.

  7. Broaden the provisions for injunctive relief with reasonable attorneys’ fees on a finding that either party is not acting in good faith

  8. Require a dissent by a member of the Board to be completed 45 days after the majority opinion is filed;

  9. Establish a certiorari-type process where the Board would exercise discretion on reviewing challenges from decisions by an administrative law judge or regional director.

  10. I the Board does not grant review or fails to issue a decision within 180 days after receiving the record, the decision of the administrative judge or regional director would be final.

  11. Authorizing the award of reasonable attorneys’ fees on a finding of harassment, causing unnecessary delay or bad faith

  12. Modify the NLRA to give the court broader discretion to impose a Gissel order on a finding that the environment has deteriorated to the extent that a fair election is not possible.

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Texas Parking Lot Gun Bill Moves a Step Closer

S.B. 730, has been reported out of Committee favorably and placed on the intent calendar for today, which means it can now be considered by the full Texas Senate.

The Committee vote? Guns 7 - Sanity 0.

Update (3/26/09): The bill has now passed the Senate 31 - 0 and been sent to the House. A veteran lobbyist predicts passage at 99%. Hard to be against guns in Texas.

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I am a gun nut. Full fledged right wing AK wielding gun nut. But I DO NOT agree with this bill. I have never seen such a blatant disregard for private property rights before. Business's are owned by people and they have the right to decide what they want on their property and if the people working for them don't like it they have the right to decide to work elsewhere.
Your car is your personal property!
I look at this much like how an easement can be taken by the state for the "greater good".

What we have are law abiding citizens, that:
- have been trained in gun use and safety
- have had background checks
- have had fingerprints registered

The state has approved them to be legal to carry a firearm for self-defense. In this case, they are being effectively disarmed during their travel to/from work. They can't take it into the building, they can't lock it in their car.

The argument that someone will retrieve a gun from the parking lot and blast up the workplace is a strawman. I could not find ONE instance of a concealed carry permit holder shooting ANY innocent person. I really tried though.

Interestingly enough I found several stories where people with valid concealed carry licenses were killed when they and coworkers were attacked. Of course, they had left their lawfully approved self defense firearm at home to comply with company policy.

Randy, you are right that businesses are owned by people and business real estate is private property, but property rights do not extend to the denial of rights guaranteed by the U.S. Constitution. Just imagine if they did.
Not picking on the last commenter, and it probably does not change the sentiment expressed by the author, but it is reflective of a common misperception that constitutional rights are applicable to private sector employers. Constitution is a restraint on the powers of government, including government as an employer, but does not apply to private sector employers. Thus there is no first amendment right to say what you wish on your private sector employer's property, nor no 2nd Amendment rights, regardless of what they may be with respect to actions by the government.
The RTKABA is NOT just a Constitutional right. It is a FUNDAMENTAL right that precedes the Constitution. Property rights are important, but when 2 rights butt together and conflict, the most fundamental right must prevail. Preventing safe gun storage in a car violates the right to defend LIFE, and that cannot stand. Property rights do not come before life itself. I think the parking lot bill is a very good balance of 2 important rights.
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Monday, March 23, 2009

Solicitor of Labor Designee - M. Patricia Smith

Also overlooked during my Las Vegas stay was the announcement late Thursday of the Obama administration pick for Solicitor of Labor, New York Labor Commissioner Is Picked for Federal Job. M. Patricia Harris, is the current New York State Labor Commissioner.

For a little more background, see a bio for a program sponsored by the Center for American Progress Action Fund.

Although it's unlikely anyone would be thinking she would be a soft touch for business, but the following story, including a quote from Ms. Smith should belie anyone who did have such a thought:
New York State officials announced on Tuesday that they had shut down the Arthur Avenue Bakery — a Bronx institution celebrated for its cannoli and crusty bread — because of what they called widespread violations of minimum wage, overtime and workers’ compensation laws.

M. Patricia Smith, the state labor commissioner, said that new employees were often forced to work their first week without pay. She said that paychecks often bounced and that some workers complained about not being paid for 5 to 10 weeks.

“This is the first time I remember that we went in with the object of closing a business down,” Ms. Smith said in a telephone interview. “The employer was so abusive that we actually made the determination that it would be better for workers to lose their jobs than to continue working there.
I don't know anything about the merits of that decision, but it is an interesting quote, that I am assuming would be asked about at the time of confirmation hearings.

Update (3/27/09): According to the NYT article, Bronx Bakery Owner Is Charged With Cheating Workers, the owner of the bakery mentioned above has now been arrested. According to the article, he has pled not guilty.


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EFCA - Six Principles

While I was in Las Vegas for the LEAP Conference and watching the precarious status of my brackets (thanks a lot Wake Forest!), I was monitoring EFCA developments, but not posting. Fortunately, that saved me from posting "breaking news" on a new proposal by the CSW (Costco, Starbucks and Whole Foods, sometimes known as the Seattle to Austin connection) about their 70/50/30 proposal and the reaction to that as traitorous to the cause by many business groups who are active in the fight against EFCA.

Instead, as with most things about this proposed legislation, the story was more nuanced (or at least that is the latest spin). CSW are now identified as the founding members of a new ad hoc group, the “Committee for a Level Playing Field for Union Elections” and have put forth a proposal outlining certain principles that it thinks should guide EFCA. The spokesperson is Lanny Davis, late of the Clinton (Hillary) campaign and before that the Clinton Administration, and now a partner at Orrick, Herrington.

The Statement of Principles of Reform "Third Way" Legislation are:
(1) Secret Ballot. Guarantee the right of management and unions to require a secret ballot under all circumstances.

(2) Certification and Decertification Treated Equally. Permit management to initiate a decertification campaign through a secret ballot election just as employees and unions are presently able to initiate certification and decertification campaigns.

(3) Date Certain for Elections. Guarantee a fixed time period for the secret-ballot election—i.e., do not permit delays of an established day for a secret ballot to certify or decertify a union.

(4) Equal Access to Employees for Campaign Purposes. Level playing field for unions and management to access employees during non-working hours during the campaign period, e.g., permitting each to make presentations to employees at a neutral location concerning the issue of whether to form a union.

(5) Expedited Enforcement and Stricter Penalties. Expedited enforcement for serious and pervasive violations of law by labor and management and stricter penalties for serious and pervasive violations (e.g., unlawful discharges), including the penalty of mandatory injunctions when appropriate.

(6) Preserve Private Collective Bargaining. No mandatory arbitration that dictates contract terms, but stricter penalties and expedited enforcement for violations of good faith bargaining rules, including an expedited timetable to begin bargaining after union certification.
So far, the proposal has been met with a resounding "no" by both organized labor and the organized business opposition.

Still, Davis is quoted in the EarthTimes reprint (which seems the appropriate cite for the CSW coalition) of the Orrick Herrington press release as saying that he was met with support from the 20+ Senators he met with about the new principles.

Clearly this is going to be a difficult vote for the Senators and they are looking for ways out.

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Wednesday, March 18, 2009

The 60th Vote for EFCA

Assuming that all Democrats vote for cloture, which at this point is very far from certain, the 60th and determining vote could be from Republican Senator Specter who already has crossed party lines to vote with the Obama administration to support the stimulus package. Because of internal Pennsylvania Republican politics, there has been tremendous speculation about his political future and how it may impact his vote. The latest from Daily Kos, PA-Sen: Specter inches closer to leaving the GOP.

Although saying he won't leave the Republican party, Specter now is openly raising the possibility of running as an Independent, a la Lieberman, but caucusing with the Republican party. He can't do it exactly as Lieberman did, since Pennsylvania has a sore loser law, so he would have to run as an independent rather than first trying (and losing) the Republican primary.

While the politics is fascinating, more important his how it will impact his vote on EFCA. To me, nothing about his situation makes it look more likely that he will change his position from last Congress and now vote against cloture.


A colleague of mine who met with Republican Senators on Tuesday and Wednesday as part a lobbying effort by a trade association tells me that they believe they have 40 votes to filibuster and block EFCA. Now they are trying to get some Dems on board to prevent the EFCA bill from coming up again and again (Landrieu is targeted, among others)

Specter is not, nor ever was, the 60th vote. At best, he's 59—and that assumes Franken is seated. The party line vote you got in the last Congress was only because it wasn't close. Look at the cosponsors of both the current and the last session's version—about 10 less cosponsors, and Lincoln and Pryor are absent from both lists.

Jon-Erik G. Storm


Although I don't believe there are 60 votes FOR the EFCA, I don't believe there are 40 committed votes against CLOTURE, either. (And you need 41 if Franken is seated when the roll is called.) There is a good chance that the actual vote will get substantially less, perhaps even 50+Biden. So, some may be committing to no on the actual bill, but at least a handful are waiting to see what's what before they commit on cloture.

Landrieu is a possibility, but it's much more likely that one or both of the Arkansas senators will vote against EFCA in its current form. Landrieu was a cosponsor of the bill in the last Congress.

I would be surprised if you get 40 public commitments to vote against cloture right now, especially while the Beltway is talking about a compromise. An altered version could get as many as 5 GOP votes.

Jon-Erik G. Storm
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My Obligatory AIG Post

Feeling left out of the hottest topic in not only the blogosphere, but the world, the payment of AIG bonuses, I ran across this employment law related post from TPM that is ironic: 2003 Lawsuit Suggests AIG Wasn't Always So Careful To Honor Bonus Deals.

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Tuesday, March 17, 2009

Others Agree -- It's the Arbitration That's Important (But Can't We Get the Facts Right On the Card Check Portion?)

Politico has an article by Jeanne Cummings today cautioning business about taking its initial surge in raising issues about EFCA too much to heart, Premature partying over 'card check'?

The money quote:
The suits seem nearly giddy over their apparent first-round public relations win against Big Labor over legislation expanding union organizing powers.
Instead as if channeling my earlier post, Cummings points out the real problem for business may well be the binding arbitration provision:

Under the legislation, if a contract isn’t reached within 120 days, the parties would be subjected to binding arbitration in which a federally appointed mediator would hammer out a two-year contract that both sides must accept.

For all the hoopla and advertising by businesses about protecting workers’ secret ballots, it’s this provision that worries many of them the most.

Their fear: a federal mediator with little knowledge of their business having the power to impose costly wage and benefit rules for years.

So far, though, business has only just begun to focus its public campaign on that section of the bill, and that delay could become a critical opening for labor.

Compromises are already floating on Capitol Hill — most of them focused on reworking the organizing provision, not the arbitration requirement.

Rather than either of us channeling the other, I think we were both just reporting on what anyone who is knowledgeable about the bill knows.

What I don't get is Cummings', or numerous other journalists, willingness to repeat a statement about the card check aspect of the bill that I think is just inaccurate. Here is what she says:

The legislation doesn’t prohibit the traditional process of elections and secret ballots. If a majority of workers want to proceed that way, they still could.
I know something about this, I have read the Act, and I think that statement is just wrong. I would appreciate Cummings, or anyone else for that mattter, explaining to me why it is a true statement.

As resource material, here is the complete text of S. 560 EFCA as introduced in the Senate.

This is the card check section, Streamlining Union Certification:

Notwithstanding any other provision of this section, whenever a petition shall have been filed by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a majority of employees in a unit appropriate for the purposes of collective bargaining wish to be represented by an individual or labor organization for such purposes, the Board shall investigate the petition. If the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative and that no other individual or labor organization is currently certified or recognized as the exclusive representative of any of the employees in the unit, the Board shall not direct an election but shall certify the individual or labor organization as the representative described in subsection (a).(emphasis added)

Clearly, if a majority sign authorization cards, EFCA as now drafted says -- NO ELECTION.

Now, if Cummings' argument is the nuanced one that an election will be held if more than 30, but less than 50% have signed authorization cards at the time the petition is filed, I would agree that would be a true statement, but although as set out in this post, likely still misleading.

I actually have written Cummings at Politico asking her to explain why her statement in her article is an accurate statement and hopefully she or others will respond.

I think the debate about EFCA is a very important, and clearly one on which people of good faith will have different view points, but it would be nice if we could at least agree on what the law as drafted provides when it is straightforward and not open to interpretation (at least as I read it.) And anyone (certainly including me) writing on this issue should get the basic facts straight.

On a slightly different (and certainly a less ranting) note, for those interested in the horse race aspects, check out this in depth review of where 23 key Senators might stand on not only supporting EFCA itself, but more importantly on the issue which will really determine its fate, whether to vote to invoke cloture. See EFCA: Counting the votes at Campaign Diaries.

Update: Ivan Osorio at was ahead of me on calling Cummings out on the above paragraph. See, With news coverage like this ...

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I think you're making a mistake.

She doesn't say if a majority have signed cards there can still be a secret ballot. Just says any majority.

I see what you're saying, but I think you're adding on that clause and it's not there.

And if you oppose EFCA, you should just ignore this card check stuff like you suggest above.
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Monday, March 16, 2009

Might Want to Ask Your Judge for a "Non-Twittering" Instruction

Amazing how technology changes life, including the life of a trial lawyer: Juror’s Twitter use in court may cause mistrial.

An off the cuff instruction:
Jurors are instructed not to blog, twitter, comment on facebook, myspace or any other social media concerning this litigation until 30 days after you are released. If you do not know what blog, twitter, facebook, myspace or social media mean, where have you been?
Probably not what you should submit, although it might be a good voir dire question!

Hat tip to Mike Ferro at Tech-Blorge. Have to love their mission statement:
We serve the global IT community.

Our mission is to provide gutsy, honest and informed coverage and comment on key technology news and issues, without fear or favor.

We want to inform, stimulate and entertain our readers. We want to provide you with a fresh, independentperspective.

Our motto is “technology with attitude”


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Friday, March 13, 2009

Two Member NLRB Legal, At Least in the First Circuit

The NLRB has been working with only two members (out of five) for over a year now. The two members (one Democrat and one Republican) have only issued decisions when they could agree, which for the most part means the outcome was not particularly controversial.

However, the legitimacy of those decisions is of great importance to the parties to the ruling and challenges have been pending in both the DC and First Circuits. For some background see Authority of 2 Member NLRB To Issue Decisions Is Being Litigated at the Adjunct Law Prof Blog.

Today, in Northeastern Land Services, Ltd. v. NLRB (1st Cir. 3/13/09) held that the two member Board had the power to act. The Court based its decision in part on Chevron deference to the Board's view of its powers and also agreed with a 1982 decision of the 9th Circuit.

The case pending in the DC Circuit is Laurel Baye v. NLRB.


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Individual Claim in Large Scale RIF Leads to MDV

Many employers, and their lawyer's including this one, sometimes feel that there is less exposure to individual claims when there are large, economy driven layoffs. If nothing else it feels less "personal," at least in terms of being singled out. Still as this Newsday story from earlier in the week, Ex-Nassau worker 'delighted' with $1M verdict shows, that is not always the case.

Roberta Miller was one of 2,600 employees of Nassau County who was laid off during a "budget crisis" in 1992. However, she argued that she was selected because she was a "token Democrat" in a Republican department and that her termination was because of her political views and activity. This week, a New York State Supreme Court jury agreed.

Besides a good reminder that individual claims can be filtered out of large scale, economic based layoffs, it's also a reminder of how long employment law cases can take. Miller is now 72, and as we all know, a jury verdict which was just now obtained 17 years after her termination, is by no means the end of the road.


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What a Great Time to Be a Labor/Employment Lawyer!

All of us who work in the labor/employment law arena know that for most of the time our niche of the world is very important to those who are focused on it, but generally pretty much an unknown to the larger public. Well that hasn't changed, it's still pretty much an unknown, but with the introduction of the Employee Free Choice Act into Congress and the ensuing media blitz, we are certainly getting our day(s) in the spotlight.

The media coverage refreshes a lesson I first learned as a young lawyer about how news coverage works. I was involved in a well publicized trial in Laredo in 1980. At the time, even that small town had two daily newspapers. Both papers staked out positions on the trial and reported at length on each day's court room activities in lengthy front page stories.

Not too surprisingly given their viewpoints, what was reported in the two stories often sounded like very different trials. What was surprising was how neither even came close to accurately capturing what was actually happening. It was not really the reporters fault, it is is very hard for someone who is not an expert on a particular case, or a particular subject matter, to really appreciate the nuances of a situation. And almost by definition any trial, or any legal matter such as EFCA is a very nuanced subject matter.

The truth of that lesson has been repeated every time I have had a case that got news media attention and is now being re-enforced as I listen/read much of the reporting/commenting on EFCA.

Yesterday I was in Houston and as a channel flipper, caught an early morning segment on Fox News with an interview with a representative of Change to Win. On my drive back to Austin, I caught a conservative radio talk show,, which was devoted for the entire afternoon to EFCA. This morning on my drive in to work, it was an NPR story with another Change to Win advocate.

Unfortunately, much of the rhetoric on both sides was often not quite accurate and too quickly jumped to ad hominem attacks, which is never an encouraging signal that intellectual exchange is going to follow.

Although I would be shocked if the current level of discussion of EFCA will be sustained much beyond the current news cycle, clearly it is going to remain an important topic until is finally addressed by Congress. When that date will be is a moving target, but seems to be sliding further away rather than closer.

A few more random thoughts as we move ahead on this issue --
  • I think that the proponents of EFCA are making a mistake in not taking on a much bigger issue -- should our national labor policy continue to be that having employees represented by unions for the purpose of collective bargaining is the preferred and government encouraged means for employer/employee relations? I understand why proponents of EFCA want to accept that as a given; however, with most American's lack of familiarity with unions, understandable given the decades long decline of union membership, I think that is the underlying debate that is really going on, even if many of those opposing EFCA give lip service to their agreement. I understand why even conceding that this is an issue is problematic; but if I am right and there is truly not a consensus on this point, ignoring it as opposed to showing why it should be the agreed starting point, is not designed to lead to a good result.

  • I think the opponents of EFCA are making a mistake focusing so much on card check. How a union is formed is important, and my belief is that the secret ballot is far superior to card check. However, in my view the most radical change contained in EFCA is binding arbitration for the first contract. The current national policy, which as mentioned above, is that collective bargaining is the preferred way of organizing the workplace, also is founded on the principle that an employer while required to bargain in good faith, was never forced to concede or agree to any point. To "force" concessions, unions have the economic power to withhold their labor, strike. If EFCA is passed as introduced, for first contracts this would no longer be true. If agreement is not reached, a solution will be imposed, which will require an employer (and employees) to be bound for two years. It represents a total reversal of the current policy, and so far is getting relatively little attention. If that continues, what will happen is that a "compromise" will be reached that retains secret ballot elections (albeit it with major changes designed to make it easier for unions to organize) but keeping binding arbitration for first contract. That would mean that one of the underlying principles of our current system will have been changed, with little discussion or my guess, is little understanding that it is even happening.

  • Those who claim to have some specific knowledge in this area have a special duty to engage in discussions that are more than just the easy sound bites, so that if anyone really wants to get a more nuanced view, it is available. Obviously, I write with a viewpoint, but hopefully in the months ahead as I write on the subject, I will adhere to what I have recommended for others and not resort to sound bites nor ad hominem attacks. This is only the second time in my 30 + year career in this area that there has been a serious discussion on these issues. The first time in 1977, I was way too junior to understand what was at stake, much less contribute. My hope, this time, is that I can offer more to a meaningful debate.

Although for the first couple of years of this blog's life, there were only a handful of others focused on labor and employment law, there are now more than fifty. I think our community can bring a lot to the debate and I would encourage others to join in with their own viewpoints. I would particularly encourage comments to my thoughts, particularly those who might disagree with my viewpoints.

Update: 3.16.09 - Rick Bales at Workplace Prof Blog, was kind enough to link to this post, and his post has some interesting comments which I would suggest others check out. One by Professor Dennis Nolan of USC has heard other rumors about what might happen, and offers his own thoughts:

Fox's speculation about a compromise is the exact opposite of a rumor I heard, that unions would be willing to sacrifice the compulsory arbitration provisions in order to get card check through. Of the two possibilities, that one makes much more sense. Without card check, unions won't have any significant number of new first-contract disputes that might need arbitration. The fact that the sponsors haven't fleshed out the bill's arbitration provisions also suggests that they don't expect it to pass. If they did expect compulsory arbitration to be in the final law, they would surely have provided more guidance about arbitrators, procedures, and standards. Without any standards to control arbitral decisions, the law would be begging for a constitutional challenge.

I wonder, though, if both rumors could be wrong and if unions are willing to put the whole package to an up or down vote. The provisions are complementary --- arbitration is useless without new bargaining units, and new bargaining units wouldn't be able to get contracts out of anti-union employers without either a credible strike threat (unlikely in this economy) or compulsory arbitration.

Thanks to Professor Bales for calling these comments to my attention and to Professor Nolan for his thoughts.

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Monday, March 09, 2009

The Future of Employment Law Activity, Part II.

From MSNBC's web site, a visual depiction of things to come based on the following:

Job discrimination claims rise to record levels

In wake of recent layoffs, complaints for 2008 up 15 percent

Just for the record, it was over 95,000 in the EEOC's fiscal year which ended September 30, 2008. See the EEOC's press release here. Since the economic crises was just getting warmed up, it's quite possible that next year's numbers will be even more impacted.

Here was my earlier post, The Future of Employment Law Activity , based on record levels of new unemployment claims. This week, the DOL reported another increase in new unemployment claims, up to 654,000.

What this means -- several months out, employers can anticipate a wave of new employment litigation.

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"Manifest Disregard of Law " Now History in 5th Circuit

Although it is not an employment case, last week's decision in Citigroup Global v. Bacon (5th Cir. 3/5/09) [pdf] is important because it makes clear that the 5th Circuit will no longer reverse an arbitrator's decision on the basis of manifest disregard of the law. Judge Jolly's decision for a panel consisting of one of the most senior and the most junior of 5th Circuit judges, Judge Catharina Haynes, held that Hall Street Associates LLC v. Mattel, Inc. (Supreme Court 2008) makes clear that the exclusive grounds for vacating a decision must be found in the Federal Arbitration Act.

It makes prescient a comment on Workplace Prof's post on the Hall Street decision, Hall Street v. Mattel and the Future of Arbitration, just after it was handed down last March:

I'm no labor and employment lawyer, but another important facet of the case is whether it does away with all non-statutory grounds for vacatur, including "manifest disregard of the law" and "violation of public policy," the latter of which has been used to vacate arbitration awards in the employment context. The sweeping language used in the majority opinion arguably throws those babies out with the bathwater.

The Court's conclusion is pretty blunt:

The question before us now is whether, under the FAA, manifest disregard of the law remains valid, as an independent ground for vacatur, after Hall Street. The answer seems clear. Hall Street unequivocally held that the statutory grounds are the exclusive means for vacatur under the FAA. Our case law defines manifest disregard of the law as a nonstatutory ground for vacatur. [cites omitted] Thus, to the extent that manifest disregard of the law constitutes a nonstatutory ground for vacatur, it is no longer a basis for vacating awards under the FAA.

In reaching its decision the Court surveyed what its sister circuits had done post-Hall Street and seemed to agree that a very limited version of "manifest disregard" as adopted by the 2nd Circuit might survive.

In Stolt-Nielsen SA v. AnimalFeeds Int’l Corp, (2d Cir. 2008) that Court wriote:

We must therefore continue to bear the responsibility to vacate arbitration awards in the rare instances in which “the arbitrator knew of the relevant [legal] principle, appreciated that this principle controlled the outcome of the disputed issue, and nonetheless willfully flouted the governing law by refusing to apply it.” Westerbeke, 304 F.3d at 217. At that point the arbitrators have “failed to interpret the contract at all,” Wise, 450 F.3d at 269, for parties do not agree in advance to submit to arbitration that is carried out in manifest disregard of the law. Put another way, the arbitrators have thereby “exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” 9 U.S.C § 10(a)(4).

But the 5th Circuit emphasized how narrow that holding was and also made clear that even the phrase "manifest disregard" as a term of "legal art, is no longer useful in actions to vacate arbitration awards." Translation --- don't use it.


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Turning Up the Heat on the Immigration Issue in the Texas Legislature

Those who follow Texas legislature know it is not really until April and May that the legislative process really kicks into high gear. Although it meets in regular session only five months every 2 years, most voting on substantive legislation occurs in that two month period. Highly contentious matters that take a lot of legislative time can block others from consideration.

My guess is that the legislative calendar just got a lot "tighter" as the state attorney general, Greg Abbott issued an opinion that two controversial measures that would crack down on employer's for hiring illegal aliens would not be pre-empted by the federal immigration law.

The question presented was:

"If Texas legislation (1) provided for the suspension or revocation of the business licensure of employers of unauthorized aliens; (2) relied solely upon a federal determination of immigration status; and (3) did not impose civil or criminal sanctions, would the law be permissible under the U.S. Constitution?"

Attorney-General Abbott was not having to go too far out on a limb since he only opined that if the closely followed an Arizona law that did the same and the 5th Circuit Court of Appeals followed the 9th Circuit's holding in Arizona Contractors Association, Inc. v. Candelaria the law would be permissible. (GA-0695).

The Texas legislature has a host of bills dealing with immigration. Among them are:

  • HB 48, Relating to the suspension of certain licenses held by employers for the knowing employment of persons not lawfully present in the United States;
  • HB 254, Relating to restricting illegal immigrants to certain geographic regions;
  • HB 261, Relating to the enforcement of state and federal laws by certain governmental entities;
  • HB 266, Relating to regulating the provision of benefits and services to, and the verification of the employment status of, immigrants and to enforcing laws relating to immigrants; providing civil and criminal penalties;
  • HB 276, Relating to the requirement that state agencies report the cost of services and benefits provided to unlawful immigrants;
  • HB 404, Relating to the enforcement of state and federal laws governing immigration by certain governmental entities;
  • HB 416, Relating to a requirement that a recipient of money from the Texas Enterprise Fund participate in a federal work eligibility verification program;
  • HB 622, Relating to the suspension of certain licenses held by employers for the knowing employment of persons not lawfully present in the United States;
  • HB 658, Relating to requiring governmental entities to participate in the federal electronic verification of work authorization program;
  • HB 1061, Relating to the requirement of citizenship or lawful presence in the United States for issuance or renewal of certain occupational licenses, driver's licenses, and identification certificates;
  • HB 1278, Relating to the proof of identity and residency required of an applicant for a driver's license or personal identification certificate;
  • HB 2222, Relating to a prohibition on law enforcement inquiries regarding the nationality or immigration status of a victim of or witness to a criminal offense;
  • SB 357, Relating to a prohibition against the knowing employment of persons not lawfully present in the United States and the suspension of licenses held by certain employers for the knowing employment of those persons;
  • SB 358, Relating to the enforcement of state and federal laws governing immigration by certain governmental entities.

Some of these will no doubt be among the heated issues being fought at the end of the session.

Hat tip to DLR ($) for the story on the AG's opinion.


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Tuesday, March 03, 2009

EFCA - Strongarm Majority Leader Reid?

Last week I spent Thursday and Friday at a seminar sponsored by my firm and a number of trade associations in DC about the Obama administration and Congress as it impacts labor and employment law. Obviously, one of the key topics addressed by a number of speakers and panelists was the Employee Free Choice Act, affectionately known as EFCA. The seminar was unique in that it had representatives from both sides of the aisle, government officials like Wilma Liebman, now the chair of the NLRB (who did not take a position on EFCA), congressional staffers and journalists.

Clearly everyone at the conference sees EFCA as a major issue that will be a major fight between organized labor and the business community when it is brought to the floor. Caught in the middle are the Obama administration, which supports EFCA but has plenty on its plate and really would like to avoid a huge, bitter fight with the business community if it could avoid it, and certain Democratic senators who are beginning to feel the squeeze put on them between their conservative constituents and organized labor. Another Senator on the spot is Arlen Spector (R - PA) who is faced with a threat from the Republican right if he votes for cloture as he did in the last Congress. See David Yglesias suggestion for a novel way out, Specter’s Dilemma.

The consensus, and that probably is too strong a word, seems to be that the business community has done a better job than expected of organizing opposition to EFCA and that right now is probably ahead, but it's a long term fight and still could go either way. A compromise bill remains a distinct possibility and something that the Administration, at least, would likely welcome. But I don't think anyone is betting their share of TARP money, or even lesser sums, on what may ultimately happen.

Since returning to Texas the stories I have read, albeit in the blogosphere, have re-enforced those views, with an article in the Huffington Post quoting Andy Stern:

"In the end, we have to pass this bill in the House and the Senate. I'm not a congressional strategist," he said, "[but] I would say that in the end both houses are going to get to vote. And whatever way makes sense -- where it starts and where it ends is really not that important, as long as in the end everybody understands the importance of getting this job done. Which I believe they do."

in what some viewed as an indication he is settling in for a longer term fight. Several other stories about labor fearing it is losing some of the Democratic senate votes it will need, added to that view. See Worry Grows Over Dem Defections on EFCA and Boulder Democrats. (Everyone agrees that the fight is over cloture in the Senate, which will take 60 votes. The bill will pass the House, will pass the Senate if you can get over cloture, and will be signed by Obama if it passes both Houses of Congress.)

Then in today's Huffington Post is an article by David Sirota which advocates labor giving Senator Harry Reid an ultimatum: either schedule a vote and corral the 59 Democratic votes for cloture, or face a labor funded candidate that would ensure his defeat in his 2010 re-election bid, even though it meant allowing a Republican Senator to win. Threatening to End Reid's Career in 2010: The Best Chance to Pass EFCA.

Although I don't know where Sirota ranks in the supporters of EFCA, to even see such an idea floated makes me think that there really is some truth to the softness of support for the bill on the Democratic side.


After having attended the conference, which was great by the way, and listening to a panel discussion including Patrick Szymanski General Counsel for Change To Win, it seemed pretty clear that in the minds of CTW there is little to compromise upon. It will be interesting to see how this all progresses.
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MDV in the Garden State

It's been a long time since I commented on a million dollar verdict (MDV). But some things never change: retaliation is still the claim that seems to crop up most frequently and more often than not, the employer is a public agency. That was the case in last week's award of 1.5 Million to the NJ Transit Police's first female lieutenant, who claimed that after she complained of sex discrimination she was retaliated against by the Police Chief Joseph Bober.

The award was $449,000 in lost wages and benefits, although it is not clear from the news story that Theresa Frizalone lost her job. The jury tacked on a cool $1 million in punitive damages. The attorneys' fees, not yet awarded may be another $500,000.

According to the newspaper article this suit was only the first of a series of retaliation cases brought against the agency based on the conduct of Bober.

Even though the jury's verdict has a long way to go before it turns into a payment to Frizalone, it definitely has had an impact. One day after the verdict Chief Bober, became a former Chief and employee of the NJ Transit Police. NJ Transit ousts police chief accused in discrimination case


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