Employment and Labor Law Blogs - An Expanding Field

My posting has been light recently. There was a week in Mexico and then a lot of time on the road for the paying part of my job. Four years ago when one of the regular employment law bloggers hit a cold patch it made for a substantial impact, but that is no longer the case.

While many of the "old-timers" like George Lenard, Ross Runkel, Michael Fitzgibbon and the crew at Lynch, Ryan whose Workers Comp' Insider just turned four last week, are still going strong, there fortunately has been a whole new group adding their collective insights. Just to mention a few recent articles from those relatively new, or probably more accurately, new to me (and my apologies to those I miss, although feel free to let me know):

• Alaska Employment Law - has a good post on Resources for Drafting Employment Contracts,

• Connecticut Employment Law - has a local take (for the Nutmeg state that is) on the law of Lactation in the Workplace - What Happens in Connecticut?

• The Union Free Employer - was on top of Congressional action on the RESPECT Act as it was headed for mark-up in the House with this post; and

• Pennsylvania Employment Law - with a cautionary note about reverse discrimination in Strictly Speaking Equal Employment Opportunity Means Neutrality

When I finally get around to updating my blog format and have a better blogroll, I can include all these and the many others that are now getting closer to being old timers as well, that have joined the fun.

FLSA on the Cover of Business Week

Wage Wars is a great title for the October 1st cover story for Business Week, highlighting the surge of collective actions under the venerable wage and hour law, the Fair Labor Standards Act of 1938. The article is a good, not to mention sobering, overview of how these suits are playing out.

What is not mentioned is one of the reasons that the high settlements are being reached -- the structural process. Unlike other class actions governed by Rule 23, which have a relatively high burden for initial class certification, the courts have set a very low standard for the initial quasi-certification for collective actions under § 216(b) of the FLSA, which is sending out notice to potential class members.

Given that low standard, it is not uncommon for an employer to end up facing a class of hundreds or thousands, with very little evidence having been presented and frequently without any sort of hearing. You know it's not a good thing for employers when you read articles indicating that notice should be sought as early as possible in cases for the "settlement leverage" that it provides.

Although there is a procedure for "de-certifying" the class, it comes after the end of a long and potentially very expensive discovery period involving the "class", so there is a great pressure to settle cases rather than slug it out.

Ironically, the Supreme Court recognized the dangers of forcing the settlement of "marginal cases" because of the costs of discovery in anti-trust cases in Bell Atlantic v. Twombly decided just this past May.

In Twombly, the Court was affirming dismissal of a case based on the pleadings, and in explaining its rationale noted, "it is one thing to be cautious before dismissing an antitrust complaint in advance of discovery .... but quite another to forget that proceeding to antitrust discovery can be expensive." An apt description of an FLSA collective action as well.

Justice Souter (the author of the 7-2 decision) went on to perfectly describe the danger of launching the discovery juggernaut when very little is required:

It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through "careful case management," post at 4, given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest side. See, e.g., Easterbrook, Discovery as Abuse, 69 B. U. L. Rev. 635, 638 (1989) ("Judges can do little about impositional discovery when parties control the legal claims to be presented and conduct the discovery themselves"). And it is self-evident that the problem of discovery abuse cannot be solved by "careful scrutiny of evidence at the summary judgment stage," much less "lucid instructions to juries," post, at 4; the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings. (emphasis added).

Another problem is that the first notice is, at least in the circuits that have decided the issue so far, including the 5th Circuit, a non-appealable decision.

In many ways it is a perfect storm -- the current standard is set low and it is difficult to get cases in a position where an appellate court is going to write on changing that standard.

The roots of the easy notice standard lies in another 7-2 Supreme Court decision in an age discrimination case involving a class action based on a 1,200 person lay off by Hoffman La Roche. In a very short opinion, the Court approved the district court's facilitation of notice to the group.

Only Justice Scalia, joined by Chief Justice Rehnquist dissented:

There is more than a little historical irony in the Court's decision today. "Stirring up litigation" was once exclusively the occupation of disreputable lawyers, roundly condemned by this and all American courts. See, e. g., Peck v. Heurich, 167 U.S. 624, 629-630 (1897); Grinnell v. Railroad Company, 103 U.S. 739, 744 (1881). But in the age of the "case managing" judicial bureaucracy, our perceptions have changed. Seeking out and notifying sleeping potential plaintiffs yields such economies of scale that what was once demeaned as a drain on judicial resources is now praised as a cutting-edge tool of efficient judicial administration. Perhaps it is. But that does not justify our taking it in hand when Congress has not authorized it. Even less does it justify our rush to abandon (not only without compulsion but without invitation) what the Court deprecatingly calls the courts' "passive" role in determining which claims come before them, but which I regard as one of the natural components of a system in which courts are not inquisitors of justice but arbiters of adversarial claims.

One wonders if the Supreme Court really meant to start us down the path outlined in the BW article. Given the views expressed in Twombly, it seems highly unlikely that it did, or would do so again. The question now is how to get off that path.

The ENDA May Be in Sight

When the U.S. Chamber of Commerce says:

"We're cautiously optimistic that we can be neutral on it when it goes to the House floor,"

employers who thought that legislation which would prohibit discrimination on the basis of sexual orientation would be a long time coming, should start shortening their time horizon. The bill in question is known as the Employment Non-Discrimination or ENDA (H.R. 2015).

One reason for the change, more than 40 large companies including Coca-Cola and Marriott International are behind the bill. See Odds good for workplace protections for gays in the Atlanta Business Chronicle.

There are still some negotiations going on -- primarily over the specifics of the protection for transgendered employees and the scope of the religious employer exemption. This would seem a certainty for 2009 if it doesn't make it before then.

Discrimination Damages and Remedies in the 5th Circuit - the Palasota Story Continues

Today, a 5th Circuit panel issued the second substantive decision in the case of Palasota v. Haggar Clothing Co. (5th Cir. 9/7/07). Its first decision almost 4 years to the day earlier, overturned the trial court's granting of a judgment notwithstanding the verdict.

On remand after the first decision, the trial court entered a judgment in favor of Palasota for

• $840,000 in economic damages,
• a like amount as liquidated damages,
• ordered reinstatement,
• with interim pay of $14,500 a month until he was offered a position,
• and awarded a lump sum of back pay in the amount of $525,000 for the period of time from the end of trial to the date of the second judgment

The Court found that the issue of liability was foreclosed by its first decision and that there was sufficient evidence (detailed in the opinion) to support a willful finding, and the accompanying $840,000 liquidated damage award.

In what appears to be a throw-away comment and without any citation, the Court added this unhelpful language:

Haggar’s unsuccessful efforts to have Palasota release it from ADEA claims upon his termination tended to show that Haggar had knowingly violated the ADEA or recklessly disregarded whether its conduct toward Palasota was prohibited by the statute.

Given that requesting a release is a standard practice when a severance package is being given, such evidence standing alone is unlikely to be sufficient to sustain a finding of willfulness. It's the sort of thing that if the Court is asked to revisit its opinion should be eliminated as being unnecessary, but not necessary harmless, dicta.

Given the size of the judgment and that liability was already decided, the opinion is the rare case where the Court talks at length about damages and remedies. Among the holdings --

• affirmed the jury's finding of compensatory damages as supported by the evidence, even though it took into account the effect of improper discriminatory actions occurring before the limitations period;
• discussed the shifting burdens of proof on the issue of mitigation, outlining the burden on the defendant when challenging an adverse jury finding;
• reversed the court's order on reinstatement, finding that it would not be the same position he had before, would either displace or harm the income of existing employees and that there likely existed ill will among the parties that made reinstatement not a satisfactory remedy;
• sent the $525,000 front pay award back to the trial court to re-consider, with a strong hint that perhaps the liquidated damages would negate the need for such an award since it might well result in a windfall for Palasota and "ADEA damages are not meant to be punitive."

Although they may not be intended to be "punitive" given that the trial court did not believe that discrimination was proved, my guess is it would be hard to convince the employer of that.

Blogging for Good, and Now Evil

This post from Working Life, Jonathan Tasini's website, Unions and Bloggers Unite to Organize might lead some potential union targets to think that -- blogging for evil -- is just what is happening. The post written by Natasha Winegar, Jonathan's assistant is a quick update on a new, joint effort between the Teamsters and activist bloggers to organize workers, in this case workers at First Student, a transportation company in the education sector.

Quoting from another blogger, Shockwave, Winegar offers this insight into the bigger idea behind this one campaign:

In the next few years about 2000 consultants and lawyers with $billions from 10,000 corporations who are doing everything they can to prevent 100,000,000 American workers from exercising their right to form a union will have to deal with 10,000 union organizers, 300,000 progressive political bloggers and 15,000,000 union members. I bet on us.

We have complementary strengths. Unions have boots on the ground, bloggers have keyboards on the Web (the most powerful and democratic form of communication and organization.) Unions have deep knowledge of union-busting and union organizing tactics, bloggers can help craft Internet based strategies that are effective and cannot be duplicated by the union busting forces.

Disseminating information, winning the war of ideas, digesting mountains of data, facilitating communications between all pro-worker stakeholders, educating union rank and file and workers on how to use the Internet to organize under the radar of union busters. We can do all this.

I am not quite sure where the numbers in the first paragraph come from, but there is no doubting the missionary zeal with which they are spoken.

Winegar adds her own thoughts:

The past few decades have seen labor laws weakened, an increase in union-busting tactics, and the proliferation of vast multi-national corporations, and now many unions are looking for new, creative ways to organize. A partnership between unions and the netroots is a very powerful organizing tool that can help unions deal with these challenges.

How successful this partnership will be in changing the decline in union membership remains to be seen. However, there is little debate that the internet and the communities it spawns have and will continue to make a significant cultural impact. Anyone dismissing out of hand the idea that they could be a force in union organizing, should probably think again.

Although it seems highly ironic to do so, I will tag this post "traditional", my nomenclature for that area of employment law which deals with unions and their relationships with employers.

Is the Blue Eagle Set to Fly? Minority Bargaining for Unions

Sometime ago I reported on Charlie Morris', formerly of Dedman SMU Law School, book attempting to resurrect a practice he argued had been common at one time in American labor law. I first mentioned Morris proposal in a comment about his book, The Blue Eagle at Work, more than two years ago here. Earlier this spring, in the context of a broader view of potential developments in labor and employment law (here) I noted Professor Rick Bales of the Workplace Prof blog's post that Morris was soliciting support for his view from other labor law professors.

A simplified view of the practice Morris is advocating, minority bargaining, would work this way. If there were a bargaining unit of 100 and twenty-five joined a union and then requested that the employer bargain with them, the employer would have to. Any resulting agreement would cover only those 25 employees.

Obviously that would be a major change from the status quo where it is all or nothing. Currently using the 100 employee bargaining unit, if 51 want to be represented by the union, the employer must bargain and any agreement covers all 100 employees. On the other hand, if 49 employees want to be represented by a union, the employer has no obligation to bargain with the union.

Professor Emeritus Morris' first attempt to move beyond theory was to support an unfair labor practice charge when an employer refused to engage in such minority bargaining. That effort ran aground when the NLRB General Counsel refused to issue an unfair labor practice charge, thus ending the matter.

Undeterred, seven unions led by the Steelworkers have now petitioned the NLRB for rule-making procedures that would authorize such bargaining. In support of that effort, 25 labor law professors have indicated their support. Professor Morris is the contact person for that group. He did not get any of his fellow Texas professors to sign in support. (Actually Professor Morris now lives in San Diego.) He did get George Schatzski, formerly at University of Texas and now at Arizona State University school of law.

None of the three professors who blog at the Workplace Prof blog are on the list either, nor is the other blogging professor, Ross Runkel. (Just because they are not on the list of course does not mean that they do not agree with the position.) However, they and others are blogging about it.

For some other views and links to the documents that have been filed with the Board see:

Minority bargaining required? Professor Ross Runkel

Minority Unions Professor Jeff Hirsch

Minority Unions, Part Two - Professor Rick Bales

Other non-professors are interested as well, from what may have been the first story to break the latest developments by Steven Greenhouse in Wednesday's New York Times, Seven Unions Ask Labor Board to Order Employers to Bargain to the blog of the National Association of Manufacturers, ShopFloor, Minority Bargaining: Unions Make the Big Play and an earlier post.

The folks at Kilpatrick, Stockton who started a blog (EFCA Updates) during the Congressional fight over the Employee Free Choice Act have been following the story in depth, complete with the first links to the petition, the professor's letter and other background documents, here and here.

The general consensus, which I share, is that this is a non-starter with the current NLRB, but is another agenda item if the political winds in Washington should shift. That agenda is beginning to grow, so much so that it probably merits its own category, the 2009 agenda.

An EEOC Charge and the Local Congressman

Although not making new law, the 5th Circuit's holding this week that a trial judge had not abused his discretion in keeping out an EEOC determination, did give some insight into how political power sometimes comes into play in EEOC investigations. It also added an additional argument for keeping them out that would be applicable in all cases.

About the political issue the Court said:

The EEOC letter was created under questionable conditions—the EEOC investigators initially determined that NEISD had not discriminated against Guerra but later, following complaints by Guerra to a member of Congress, reopened the file and reversed their decision without any new evidence. The district judge did not allow NEISD to subpoena the EEOC investigators to explain this matter.

Not exactly designed to assure employers about the decision making process. Guerra v. North East Independent School District (5th Cir. 8/14/07) [pdf].

For the more general comment applicable in every case, the Court said a second reason for upholding the trial court's discretionary decision to keep the determination out was that "the EEOC evidence spoke directly to the ultimate issue in the case. It would likely have prejudiced the jury since the EEOC made its own factual determination that age discrimination occurred."

Reminds me of the objection that doesn't seem to be used quite as much any more, maybe because there are relatively few trials, that an answer "would be invading the province of the jury."