A new Wall Street Journal article suggests that is what exactly may be happening, but now there is some push back from employees and their advocates:

Big Brother is watching. That is the message corporations routinely send their employees about using email.

But recent cases have shown that employees sometimes have more privacy rights than they might expect when it comes to the corporate email server. Legal experts say that courts in some instances are showing more consideration for employees who feel their employer has violated their privacy electronically . . .

In past years, courts showed sympathy for corporations that monitored personal email accounts accessed over corporate computer networks. Generally, judges treated corporate computers, and anything on them, as company property.

Now, courts are increasingly taking into account whether employers have explicitly described how email is monitored to their employees.

That was what happened in a case earlier this year in New Jersey, when an appeals court ruled that an employee of a home health-care company had a reasonable expectation that email sent on a personal account wouldn’t be read.

To be honest, I don’t think this a new trend at all (though it makes a nice theme in a WSJ story). Since I was practicing management side employment law back in the late 90s, we would advise clients routinely that they had to have clear language in their employee handbooks that employees had no expectation of privacy in their computers, internet browsing, or emails.

Nothing new, but still a good practice for employers to follow if they want to avoid this type of lawsuit.

Hat Tip: Joe Seiner

In the war over hidden and excessive 401(k) fees, investors may have won a battle in Illinois.

Caterpillar, the heavy equipment manufacturer in Peoria, Ill. has agreed to settle a class action alleging that employees and retirees in its 401(k) plans were overcharged by potentially millions of dollars.

If a federal judge and independent fiduciary approve the deal the parties struck, Caterpillar will pay $16.5 million to settle the case. More importantly, it has agreed to make changes to its 401(k) plan that could potentially save employees millions of dollars. More important still, it may set a precedent for other companies to follow . . . .

The Caterpillar plan’s record-keeping fees would be limited, according to the memorandum on file with the court. Record-keeping fees can add substantially to investor costs. The fees are often based on assets under management, so an investor pays more as his or her balance increases. At Caterpillar, such fees will henceforth be calculated on a flat or per-participant basis . . . .

The settlement is a rare victory for investor advocates. In February, in a 401(k) case against Deere & Co., a federal appeals court judge ruled in favor of the employer. Jerome Schlichter, the plaintiffs’ attorney with Schlichter, Bogard & Denton, who handled both the Caterpillar and Deere suits, has sued a dozen other companies over their 401(k) plans, including Exelon, General Dynamics  and International Paper. He says he is appealing the Deere case to the U.S. Supreme Court. The Supreme Court is already hearing a separate case, Jones vs. Harris Associates, which involves the question of whether mutual funds over-charge for their services.

It might be appear to be common sense for companies to engage in these types of disclosures with regard to plan fees, but litigation is proving that such is not the case.

William Birdthistle (Chicago-Kent) and I previously wrote an amicus brief in the Hecker v. Deere case that is referred to above and it discusses some of these very inequities that currently exist in the way participants in 401(k) plans are charged for mutual fund fees.  I have also joined an amicus cert. brief in the Deere case which will be filed this Monday.

Frustrated by court decisions that blocked the suspension of two football players who tested positive for banned substances, NFL commissioner Roger Goodell is asking Congress for help.

“We believe that a specific and tailored amendment to the Labor Management Relations Act is appropriate and necessary to protect collectively bargained steroid policies from attack under state law,” Goodell said in testimony prepared for a House Energy and Commerce subcommittee hearing Tuesday.

Recent court decisions “call into question the continued viability of the steroid policies of the NFL and other national sports organizations,” Goodell said.

I have written previously about the interesting state law questions lurking in the case concerning the suspension of two Minnesota Viking players.

Here is the summary of that case again that started all of this:

In Williams v. NFL (8th Cir. Sept. 11, 2009), the appeals court affirmed three legal conclusions of the district court: 1. the Minnesota statutory claims alleged by Kevin Williams and Pat Williams of the Minnesota Vikings were not preempted by section 301 of the Labor Management Relations Act; 2. their Minnesota common law claims were preempted by section 301; and 3. the arbitrator’s award upholding the player’s suspensions for using banned substances would be upheld.  The NFL Players Association was at least initially successful in getting  its claims heard that they had some statutory defenses to the suspensions under the Minnesota Drug and Alcohol Testing in the Workplace Act and the Minnesota Consumable Products Act.

My colleague Matt Mitten, director of the National Sports Law Institute here at Marquette, thinks the court got it wrong:

The court gives no consideration to a national professional sports league’s need for uniform rules by permitting state law to invalidate the terms of a collectively bargained anti-doping program. It conflicts with other federal appellate cases holding that state labor, antitrust, administrative, and tort laws cannot be used to regulate national sports leagues and governing bodies, which require rules that must be applied and enforced consistently nationwide. It’s almost certain the NFL will petition the Supreme Court for cert., and I think there’s a reasonable chance the Court will grant its petition.

Major league baseball also believes in a legislative fix:

Rob Manfred, Major League Baseball’s executive vice president of labor relations, also discussed a legislative remedy in his testimony, saying “a narrowly drafted statute could solve the problem faced by professional sports” while preserving the role of collective bargaining in drug programs without interfering with states’ prerogatives.

Legislatively or judicially, it would not be surprising if what came out of all of this was some changes in the law which permit professional sports leagues some form of preemptive power to maintain uniformity in their substance abuse policies.

Cross-posted on Workplace Prof Blog.

David Ingram of the National Law Journal reports:

Ashcroft v. Iqbal, the 5-month-old U.S. Supreme Court decision that has become a thorn in the side of the plaintiffs bar, will get a Capitol Hill airing on Tuesday.

The House Judiciary Committee is scheduled to hold the first congressional hearing on the far-reaching May ruling, which raised the pleading standard for most civil complaints, making it more difficult to keep cases from being thrown out.

The hearing isn’t likely to be the last time Congress weighs in on the matter. Sen. Arlen Specter, D-Pa., has sponsored legislation to return to an earlier pleading standard, and he wields the gavel in a Senate Judiciary subcommittee.

Because so much is at stake for both trial lawyers and the business community, I would not be surprised if this is the first many salvos on what exactly must be proven to survive a Rule 12(b)(6) motion.  Additionally, because many of the lawsuits involved concern employment discrimination plaintiffs, this goes right to the heart of whether those complaining of discrimination, harassment, or retaliation in the workplace can get their case heard of the merits.

In plaintiff’s race and employment discrimination lawsuit against United Airlines, the trial court’s grant of summary judgment in favor of defendants is reversed as to eight causes of action as they must be decided by the jury.  Furthermore, the trial court’s order sustaining  763 of 764 of defendant’s objections was a manifest abuse of discretion.

I can only do this case justice by stating precisely some of the court’s decision. This is all takes place in the context of a rather ordinary race discrimination in employment claim:

At the same time, the summary judgment procedure has become the target of criticism on a number of fronts.  Some particular criticism is directed to the procedure in employment litigation, including that it is being abused, especially by deep pocket defendants to overwhelm less well‑funded litigants.  More significantly, it has been said that courts are sometimes making determinations properly reserved for the factfinder, sometimes drawing inferences in the employer’s favor, sometimes requiring the employees to essentially prove their case at the summary judgment stage.  Here we confront the poster child for such criticism, in a case involving what may well be the most oppressive motion ever presented to a superior court . . . .

Defendants filed a motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication.  Defendants’ separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants’ own papers conceded.  And the moving papers concluded with a request for judicial notice of 174 pages.  All told, defendants’ moving papers were 1056 pages.

Plaintiff’s opposition was almost three times as long, including an 1894-page separate statement, papers the trial court would later disparage as “mostly verbiage,” a description with which, as will be seen, we disagree.  Curiously, no such criticism was leveled at defendants’ papers, not even those in reply, papers that defy description.

Defendants’ reply included, and properly, their response to plaintiff’s additional disputed facts.  Defendants’ reply also included, not so properly, a 297-page “Reply Separate Statement” and 153 pages of “Exhibits and Evidence in Support of Defendants’ Reply.”  And the reply culminated with 324 pages of evidentiary objections, consisting of 764 specific objections, 325 of which were directed to portions of plaintiff’s declaration, many of which objections were frivolous.  In all, defendants filed 1150 pages of reply.

Five thousand, four hundred, fifteen pages of material were before the trial court which, following argument, issued its order granting summary judgment, the substance of which order began as follows:

“Upon due consideration . . . and having taken the matter under submission,  [¶] The Court finds as follows:  [¶] Despite its girth, Plaintiff’s opposition to the separate statement of material facts is mostly verbiage, and utterly lacking in the identification and presentation of evidence demonstrating a disputed issue of fact.”  There followed several pages of discussion which did not consider the evidence favorably to plaintiff, as the law requires.  Then, after granting summary judgment, the order ends with these two one‑sentence rulings:

“2.    Plaintiff’s 47 evidentiary objections are OVERRULED.
“3.    Defendants’ evidentiary objection No. 27 is OVERRULED, and the remainder of the Defendants’ evidentiary objections are SUSTAINED.” . . . .

We have referred to the misleading picture painted by the mass of paper before the trial court, and to the error that resulted.  And the two are undoubtedly related, as what apparently happened is that the trial court did not read all the papers, shown, for example, by the facts that it sustained “objections” to evidence where no objection was set forth and saw a “physical assault” of Avellan despite all the evidence of “arm wrestling.”  While not reading the papers cannot be condoned, it can perhaps be understood, as we hesitate to speculate how long it would take a trial court to meaningfully digest over 2200 pages of separate statements, analyze and rule on 764 objections set out in 325 pages, review it all in light of the applicable law, and then write a proper order.

The incredible volume of material here simply has no place in a system where overburdened trial courts labor long and hard.  Thus, we conclude with some guidance in the event a trial court is ever again confronted with anything remotely close to that here.

Needless to say, the appellate courts rips the lawyers and the trial court another you-know-what.  This case is an evidence/employment discrimination law professor’s dream and why people like Walter Olson rightly believe in some cases that litigation is just plain overlawyered.

I can’t imagine being the lawyers involved in this case and the shame that will inevitably come with being associated with a name that is just too closely related to the word, “nadir,” as in the nadir of all litigation.

Really, read the whole opinion.

Here’s the abstract:

In Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), the Supreme Court held that the Federal Constitution provides a cause of action in damages for violations of the Fourth Amendment by individual federal officers. The so-called “Bivens” cause of action — initially extended to other constitutional provisions and then sharply curtailed over the past two decades — has been a subject of controversy among academics and judges since its creation. The most common criticism of Bivens — one that has been repeated in different venues for thirty years — is that the Court’s individual liability model, in which the offending officer is personally liable in damages, should be abandoned in favor of a governmental liability model akin to respondeat superior liability.

Commentators base their criticism of the individual liability model on two empirical assumptions: (1) Bivens suits are almost never successful; and (2) the defense of qualified immunity, available only to individuals, is a nearly insuperable barrier to plaintiffs’ prevailing in Bivens claims. On this account, a move to the governmental liability model will ensure adequate compensation and deterrence while removing a substantial barrier to plaintiffs’ success. These empirical claims about the general failure of Bivens suits and the explanation for that failure have never been tested. This Article corrects that oversight by offering the results of the first detailed empirical study of the determinants and outcomes of Bivens litigation. Based on data collected from cases filed in five district courts from 2001-2003, this Article concludes that the truths that scholars and judges have taken as a given are unsupported. Bivens claims succeed at a much higher rate than previously thought, especially compared to other civil rights litigation, and the defense of qualified immunity rarely plays a role in the outcome of Bivens litigation. These data call into question the given wisdom about the characteristics of Bivens litigation, and undermine the policy proposals that have occupied the field in Bivens scholarship.

So why do I bring this interesting article to the labor and employment law readers of this blog?  In an article I published last year, Whither the Pickering Rights of Federal Employees?, I pointed out that as a result of the Supreme Court’s 1983 decision in Bush v. Lucas, federal employees are not permitted to bring Bivens constitutional tort claims directly to federal court to vindicate their First Amendment rights to free speech under Pickering v. Bd. of Education. Instead, the Bush Court found that Congress had established an effective, alternative statutory scheme for vindication of such claims under the Civil Service Reform Act of 1978.

Because my empirical analysis of all First Amendment Pickering cases involving federal employees found that there had not been one successful employee claim of this type under that administrative scheme, I argued that Bush should be revisited and overturned, and a Bivens claim implied to vindicate the First Amendment interests of federal employees.

Some had argued that by going back to Bivens that these federal employees would face insurmountable odds because of the difficulties associated with winning these claims. Reinert’s new study demonstrates, however, that federal employees given a Bivens claim will likely find a more meaningful remedy for their First Amendment claims in federal trial courts.

Now, I can only hope that more people will pay attention to this study and see its importance for federal employees’ constitutional rights in the workplace.

A trio of top Democrats from both chambers plan legislation aimed at rolling back a Supreme Court ruling they say makes it harder for plaintiffs to win age discrimination suits.

Tom Harkin , D-Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee, and Patrick J. Leahy , D-Vt., chairman of the Senate Judiciary Committee, said Tuesday they will introduce a bill to restore a less-demanding burden of proof for plaintiffs in age discrimination suits. Rep. George Miller , D-Calif., chairman of the House Education and Labor Committee, said he intends to introduce a similar measure.

The proposed legislation is a response to the Supreme Court’s June 2009 ruling in Gross v. FBL Financial Services that plaintiffs claiming disparate treatment under the Age Discrimination in Employment Act must show that age was the determining factor in the alleged discrimination, rather than just one of several factors . . . .

Under the proposed legislation, the burden would be on the employer to show it complied with the law once a plaintiff shows age discrimination was a “motivating factor” behind an employment decision.

What I particularly like about the Congressional response is that in announcing the legislation, Sen. Leahy quite rightly referred to the Supreme Court’s decision as an activist decision by conservative justices.

Of courses when I say that “Gross Goes Ledbetter,” I refer to the fact that President Obama signed into law the Lilly Ledbetter Fair Pay Act making it easier for workers to challenge wage discrimination, responding to the restrictive 2007 Supreme Court ruling in Ledbetter.

It is so rare that I actually get to write a post about traditional labor law that I usually jump at the chance.   Especially when the labor law concerns a local Milwaukee institution that most of us are aware of.

What you might not have know is that Hilton food and beverage employees are represented by a union.  Recently, the Starbucks located inside the Hilton became unionized as well. The question became whether the Starbucks employees could just join the Hilton union.

Even though the local regional director in Milwaukee ruled that such a combination was lawful, the National Labor Relations Board (in a 2-0 decision) reversed because (according to BNA) (subscription required):

Chairman Wilma B. Liebman and Member Peter C. Schaumber found that the baristas, who are employed by Milwaukee City Center LLC, have a separate identity from the bargaining unit and constitute a separate appropriate unit and that the two groups do not share an overwhelming community of interest.

The board emphasized the lack of interchange between Starbucks baristas and food/beverage employees in the bargaining unit and the absence of common supervision of the two groups.

Actually, not much controversy here. Just wanted the Marquette Faculty Law Blog readers to have a taste of what goes on in labor law once in a while.

Although there are many interesting provisions in the Baucus Bill, including a requirement that individuals have health insurance coverage, the establishment of a health care exchange, proposed reforms for the private insurance system including not allowing exclusions for preexisting coverage, and expansion of the Medicaid program for the poor, I want to focus on three parts that trouble me that directly deal with current employee benefits law. 

First, the plan does not adopt a public option for health care.  Instead, it establishes state-based cooperatives to compete with private health plans.  I think this a huge mistake and such coops will be a failure from the start.  For the best explanation as to why, here is former Labor Secretary Robert Reich explaining why the public option is so superior to co-ops.

Perhaps even more disappointing from my perspective is that the Baucus Bill does not require employers to provide coverage to workers, like some of the House counterpart bills.  Instead, employers with more than 50 workers who do not offer coverage will have to reimburse the government for each full-time employee receiving a health care affordability tax credit in the exchange starting in 2013.

Two thoughts on this one. One, there is no reason to limit this to employers with 50 employers with more. That is the cutoff currently for the Family and Medical Leave Act, and it has left a huge number of workers without leave protection.  Similarly, this arbitrary cut-off will continue to leave millions of workers at smaller employers without health coverage. As long as we are going to stick with our unique employer-provided coverage, we should make sure all employees can get coverage through their employers.  The only other options is for these people to qualify through some other government program like Medicare, Medicaid, or Social Security.  Yet, those programs do not provide the necessary and timely health treatment that many employees need.

Second, why does this not start until 2013?  Assuming the bill passes in 2010, why should a vast number of workers suffer at these larger companies without healthcare?  Or put at little more forcefully, how many employees will die in those three years from that delay in providing coverage.

Needless to say, I sure hope that these two provisions are not in the health care reform bill that President Obama eventually signs into law.

The text of the bill, America’s Healthy Future Act of 2009, is available here.

A taste:

At the Rockwell Automation factory [in Mequon], something encouraging happened recently that might be a portent of national economic recovery: managers reinstated a shift, hiring a dozen workers.

After months of layoffs, diminished production and anxiety about the depths of the Great Recession, the company — a bellwether because most of its customers are manufacturers themselves — saw enough new orders to justify adding people.

Given the panicked retreat that has characterized life on the American factory floor for many months, any expansion registers as a hopeful sign for the economy. Last week, the Federal Reserve found signs of “modest improvement” in manufacturing. That reinforced the direction of a widely watched manufacturing index tracked by the Institute for Supply Management, which surged into positive territory last month for the first time in a year and a half.

But for sure: we aren’t quite there yet.  The article goes on to warn that, “these indications, while welcome, promise no vigorous expansion: For now, factory overseers remain uncertain that a lasting resurgence is at hand, making them reluctant to hire workers aggressively and invest in new equipment.”  That type of expansion might be some time off.

But here’s hoping that we are at least heading up from the bottom of the Great Recession.

PS

Gallup recently found sympathy toward labor unions is at an all-time low, at 48 percent. but then again, unemployment is close to its post-WWII highs. Gallup did not happen to ask this question in late 1982 or early 1983, when unemployment exceeded 10 percent. They did ask in August 1981, when unemployment was up to 7.4 percent and rising rapidly, and at that point support for labor was at 55 percent, which was the lowest figure it had achieved before this year’s survey.

The regression line finds that, for every point’s worth of increase in the unemployment rate, approval of labor unions goes down by 2.6 points. Alternatively, we can add a time trend to the regression model, to account for the fact that participation in labor unions has been declining over time. This softens the relationship slightly, but still implies a decrease in approval of 2.1 points for unions for every point increase in unemployment. Both relationships are highly statistically significant.

So why does support for labor unions go down when unemployment rates rise? Here are some possibility, but would love to hear other thoughts from the reader:

1. The Blame Game:  “It is because of unions and their unreasonable demands for higher wages and benefits that American companies are losing jobs to global competition.”

2. We Need More Unions: “The decrease is union support has actually caused higher unemployment rates, not vice versa. If there were more supports for union, we would have a large middle class, greater consumer spending, and more jobs for everyone.”

3. Need More Safety Nets: “Unions have shot themselves in the foot. Rather than working for saftey net legislation like their European peers, unemployment means that those unemployed blame the unions for not helping them negotiate this difficult economic climate.”

4. Resentment of Unions: “When unemployment is high, the non-unionized working class resent unions for giving their members greater job security while they’re left out in the cold.”

There are many more explanations/theories obviously, so please provide your own in the comments.

Low-wage workers are routinely denied proper overtime pay and are often paid less than the minimum wage, according to a new study based on a survey of workers in New York, Los Angeles and Chicago.

The study, the most comprehensive examination of wage-law violations in a decade, also found that 68 percent of the workers interviewed had experienced at least one pay-related violation in the previous work week.

“We were all surprised by the high prevalence rate,” said Ruth Milkman, one of the study’s authors and a sociology professor at the University of California, Los Angeles, and the City University of New York. The study, to be released on Wednesday, was financed by the Ford, Joyce, Haynes and Russell Sage Foundations.

In surveying 4,387 workers in various low-wage industries, including apparel manufacturing, child care and discount retailing, the researchers found that the typical worker had lost $51 the previous week through wage violations, out of average weekly earnings of $339. That translates into a 15 percent loss in pay.

Part of the study’s findings were that employers of low-income workers were successful in intimidating them not to bring workplace claims, including worker compensation claims.

I actually think this study resonates with the current fight between unions and companies over the Employee Free Choice Act and the need for voluntary recognition of unions versus the need to keep secret ballot elections.

Really what this argument is all about is whether you are more concerned about union intimidation or management intimidation in the workplace.  I think, at least in the low income world, this study is further proof that employer intimidation is much more prevalent and impactful.  As someone recently put it to me: there is just something about an employer having the ultimate power of hiring and firing workers.

WHAT COULD BE MORE ANNOYING THAN THIS? MAYBE IF IT WAS BOLD? AND RED? . . . .

And if you worked for New Zealand’s ProCare Health, it could even get you fired.

That’s exactly what hapened to Vicki Walker, who was abruptly kicked out of her job for sending “confrontational emails” with text formatted in a variety of red, bold, and all caps fonts. Walker had sent the emails to fellow workers within the company, usually with stern and detailed instructions on how forms should be properly filled out.

Someone at ProCare didn’t like her approach, suggesting she caused “disharmony in the workplace” and was being too confrontational via email, eventually firing her without warning.

Walker, however, got the last laugh. She sued for wrongful termination and won the case, pocketing $17,000 in lost wages and for other unspecified harm caused due to the firing.

OK, so Null brings up some good questions about this unusual workplace situation, including: “Is it OK to fire someone for misuse of their caps lock button?”  I love his witty repartee about those responding in caps being fired!

What would happen in the United States?  Well, with our vaunted employment at will system, probably not much, unless you could make the argument that this type of firing causes intentional infliction of emotional distress (hard to see how this would qualify as utterly intolerable in a civilized society, no?).

Just cause for firing in a union or civil service environment – here, I have to agree with the Tribunal in New Zealand, I DON’T THINK SO!!!

Hat Tip:  MIKE ZIMMER!!!!

While reflecting on the theme of work, it is appropriate to recall how important it is that labour unions — which have always been encouraged and supported by the Church — should be open to the new perspectives that are emerging in the world of work. Looking to wider concerns than the specific category of labour for which they were formed, union organizations are called to address some of the new questions arising in our society: I am thinking, for example, of the complex of issues that social scientists describe in terms of a conflict between worker and consumer. Without necessarily endorsing the thesis that the central focus on the worker has given way to a central focus on the consumer, this would still appear to constitute new ground for unions to explore creatively. The global context in which work takes place also demands that national labour unions, which tend to limit themselves to defending the interests of their registered members, should turn their attention to those outside their membership, and in particular to workers in developing countries where social rights are often violated. The protection of these workers, partly achieved through appropriate initiatives aimed at their countries of origin, will enable trade unions to demonstrate the authentic ethical and cultural motivations that made it possible for them, in a different social and labour context, to play a decisive role in development. The Church’s traditional teaching makes a valid distinction between the respective roles and functions of trade unions and politics. This distinction allows unions to identify civil society as the proper setting for their necessary activity of defending and promoting labour, especially on behalf of exploited and unrepresented workers, whose woeful condition is often ignored by the distracted eye of society.

As a member of a Jesuit law school faculty, I am very proud that the Catholic Church has continued to take such a view on the value of unions and the need to protect historically exploited workers.  I checked with my favorite Jesuit and he tells me this at least the fifth in a series of encyclicals commentating on the importance of labor unions starting with Pope Leo XIII in the late 1800s.

Female managers are 137 percent more likely to experience sexual harassment than their rank-and-file counterparts, according to a recently released study.

Even Heather McLaughlin, a sociologist at the University of Minnesota and the primary investigator on the study, was surprised by the findings.

“It’s sort of a paradox,” she says. “You would expect that having that status and power over other employees would protect you from that behavior.”

Turns out it doesn’t, and McLaughlin’s conclusion is that “because of gender norms, people are still not accepting women in power positions.”

The report, “A Longitudinal Analysis of Gender, Power and Sexual Harassment in Young Adulthood,” looked at data that tracked nearly 600 individuals from adolescents into their 30s.

Perhaps men are further aroused by women in power or more likely, enjoy the thrill of bringing a women in power down to their own base level. In any event, sexual harassment training, which traditionally separates out rank-and-file workers from supervisors, probably should be modified to take this new phenomenon into account.

Here’s a taste:

TWO burning questions are at the center of America’s health care debate. First, should employers be required to pay for their employees’ health insurance? And second, should there be a “public option” that competes with private insurance?

Answers might be found in San Francisco, where ambitious health care legislation went into effect early last year. San Francisco and Massachusetts now offer the only near-universal health care programs in the United States . . . .

[W]e have seen how concern over employer costs can be a sticking point in the health care debate, even in the absence of persuasive evidence that increased costs would seriously harm businesses. San Francisco’s example should put some of those fears to rest. Many businesses there had to raise their health spending substantially to meet the new requirements, but so far the plan has not hurt jobs . . . .

So how have employers adjusted to the higher costs, if not by cutting jobs? More than 25 percent of restaurants, for example, have instituted a “surcharge” — about 4 percent of the bill for most establishments — to pay for the additional costs. Local service businesses can add this surcharge (or raise prices) without risking their competitive position, since their competitors will be required to take similar measures. Furthermore, some of the costs may be passed on to employees in the form of smaller pay raises, which could help ward off the possibility of job losses. Over the longer term, if more widespread coverage allows people to choose jobs based on their skills and not out of fear of losing health insurance from one specific employer, increased productivity will help pay for some of the costs of the mandate.

In case you think this is all a bunch of liberal, Democratic mishigosh, one of the authors of this op-ed happens to be non-other than William Dow, a senior economist who worked for President George W. Bush’s Council of Economic Advisers.

In other words, increasing evidence is out there that health care reform with a public option and an employer pay or play mandate might be just what our system needs to rein in health care costs while at the same time providing health insurance to a much larger segment of American society.

[Cross-posted on Workplace Prof Blog]

Two points. With the automatic enrollment features of the Pension Protection Act of 2006, this is not a surprise. The PPA automatically opts workers into their employers’ 401(k) plans. If a worker does not want to contribute to their individual pension account, they have to affirmatively opt out.  The laws of inertia and the laws-of-not-knowing-what-in-the-world-is-going-on, tell us that not only will more workers be enrolled in these 401(k) plans, but they will be putting more money in also. Why? Because Qualified Default Investment Alternatives (QDIA) that their employers put them into for 401(k) purposes assure that people who would otherwise not participate or participate at a low level will do so at a higher level if they don’t indicate any preference. This is because these QDIA default investments not only diversify their investments, but also contribute a higher perecentage of income into these accounts.

Second point. 401(k)s are here and here to stay, and that is not necessarily a good thing. Unlike defined benefit accounts, which have the ability to weather recessionary storms because of their formulaic, actuarial nature, defined contribution plans, like 401(k)s, even when properly diversified, can be walloped in an economy like this one. Any one notice that the older workers down the hall who told you they were retiring are not retiring so fast?  I have heard some people have lost 30% to 50% of the value of their 401(k)s in the last two to three years.  What will happen when almost everyone has these accounts? Social security does not make up the difference, people, even if solvent.

Solution: the government insurance program, Pension Guaranty Benefit Corporation, set up to insure defined benefit plans, should be expanded to provide some safety net for these omnipresent 401(k)s. If some action like this is not taken soon, the future for retirement security in this country is bleak.

[Cross-posted on Workplace Prof Blog]

In a fairly significant ruling in state employment law, the Wisconsin Supreme Court expanded the circumstances under which an employee covenant not  to compete will be enforced in Wisconsin.

Previously,covenants had to not only be reasonable and necessary to be enforced (under Wis. Stat. § 103.465, non-compete agreements are lawful only if the restriction is “reasonably necessary for the protection of the employer”), but all provisions of the covenant had to meet those requirements.  In other words, Wisconsin judges could not “blue pencil” out the offending, unreasonable part of the covenant, and had to hold the entire document unenforceable.   Now, after the decision in Star Direct v. Dal Pra, 2009 WI 76 (WI. July 14, 2009), the blue pencil exists for judges to save otherwise unenforceable covenants not to compete.

Here is an excerpt on the case from the State Bar of Wisconsin website:

The Wisconsin Supreme Court adopted on July 14 new standards that tend to save contracts aimed at preventing ex-employees from competing with their former employers.

In Star Direct v. Dal Pra, 2009 WI 76, the court announced that portions of a restrictive covenant may be enforced even after another section is deemed unenforceable, so long as the surviving provisions remain understandable and capable of independent enforcement.

Dissenting justices criticized part of the majority’s analysis for assuming that a court signals approval of issues it could have addressed, but did not. The dissent warned that this new interpretative tool defies precedent and judicial restraint.

So, ladies and gentlemen of the Wisconsin judiciary, blue pencils out!

LABOR LAW

Record-high jobless rates and pro-union federal legislation may be negative news to some, but they add up to positive trends for America’s labor lawyers.

Firms specializing in labor and employment law say they’re growing busier as job losses result in cases related to wrongful termination, severance, un­em­ployment disputes and discrimination, as well as work relating to how companies deal with labor unions.

“We’re not in hiring mode yet, but we’re taking on much more of a caseload,” says Matthew D. Austin, of counsel for Dublin, Ohio-based Mason Law Firm Co., a small shop representing privately held companies in the manufacturing, construction and grocery industries.

If passed, the Employee Free Choice Act could benefit his business, Austin says. The act would eliminate the veto power employers hold over the card-signing method of obtaining majority votes for unionizing. The push toward increased representation would bring a host of legal work.

The act “is going to pass in some form,” Austin says, adding that it will be “a major boon for what we do.”

Have to agree with Austin that EFCA is coming to us in some form soon and then there will be at least more legal work for labor and employment law attorneys.

The one thing this article fails to mention is that employee benefits/ERISA is also very hot, what with all the health insurance and pension issues out there.

Cross posted at Workplace Prof Blog.

From the New York Times:

BlackRock, one of the world’s largest money-management firms, assigned a high school classmate of Mr. Millard’s to stay in close contact with him, and it made sure to place him next to its legendary founder, Laurence D. Fink, at a charity dinner at Chelsea Piers. A top executive at Goldman Sachs frequently called and sent e-mail messages, inviting Mr. Millard out to the Mandarin Oriental and the Ritz-Carlton in Washington, even helping him hunt for his next Wall Street job.

Both firms were hoping to win contracts to manage a chunk of that $50 billion. The extensive wooing paid off when a selection committee of three, including Mr. Millard, picked BlackRock and Goldman from among 16 bidders to manage nearly $1.6 billion and to advise the agency, which Mr. Millard ran until January.

But on July 20, the agency permanently revoked the contracts with BlackRock, Goldman and JPMorgan Chase, the third winner, nullifying the process. The decision was based on questions surrounding Mr. Millard’s actions during the formal bidding process. His actions have also drawn the scrutiny of Congressional investigators and the agency’s inspector general.

I know, I know. This is Washington D.C. and unethical, if not illegal, practices like this should be expected. But I can’t help believing that a situation like this (if true) could have been avoided by simply putting into place some balance and checks on how the PGBC retirement funds are invested.

Three proposals: (1) Do not make the head of the PGBC an investment manager. The head of the PGBC should be a person well familiar with employee benefit plans and the law surrounding the management and operation of such funds. (2) Do not place the head of the PGBC on a committee that selects the investment firms.  Conflicts of interest need to be stomped out from the get go. (3) Obviously, an investment manager-type will be needed for advice on who to invest the money with.  However, such a person should completely disclose all personal and professional relationships and should be recused from dealing with those firms.

Is that really so hard?

[Cross Posted on Workplace Prof Blog]

In Coulee Catholic Schools, the Court was asked whether a first grade teacher in a Catholic school was subject to the “ministerial exception,” meaning that the school’s religious freedom to select its own ministers and leaders barred her age discrimination claim. Half the courts in the country that have considered this question concluded that a religious school teacher is engaged in sufficient ministry to be included, while half have said that such a teacher is not. The Wisconsin Supreme Court decided that the religious school teacher in this case did engage in and lead sufficient religious activities to fall within the exception.

As the product of seven years of Catholic primary school, and the son of a longtime Catholic schools teacher, I’m convinced the Court got this determination right. Catholic school teachers lead prayer, organize Mass, teach the Catholic faith, model a moral and devout life, and incorporate religious principles into the “secular subjects” they teach as well. A religious organization should have the religious freedom to select those who communicate its faith to the rising generation free from state interference.

In addition to Professor Esenberg’s observations, let me highlight three other key points from the case:

1. Robust Religious Liberty Protection in Wisconsin. The majority’s discussion of the Wisconsin Constitution, Art. 1, Sec. 18 in paragraphs 58-66 describes a very strong protection for the free exercise of religion and conscience in Wisconsi, following the Court’s precedent in State v. Miller. Looking at the text of the clauses, the Court concludes, “It is difficult to conceive of language being stronger than this.”

This language could be important in future cases.  For instance, if future challenges were filed in the health care conscience context after the Compassionate Care for Rape Victims Act or the Madison Surgery Center decision.

2. An emphasis on constitutional text. Since the mid-1970s, the Wisconsin Supreme Court has relied heavily on legislative and popular history when interpreting the Wisconsin Constitution. In this case, the majority cited the standard three-factor test from Beno, but emphasized the importance of text as the first and foremost source. I have been working on a law review article regarding interpretation of the Wisconsin Constitution (more on that soon), and this decision definitely represents a positive step towards a more text-based interpretive method.

3. Elections matter. Justice Gableman wrote the majority opinion in this 4 to 3 decision. It’s quite probable that if Justice Butler were still on the Court, the decision would have gone the other way. As the Wisconsin Family Council noted on its blog, the closing paragraphs of the majority opinion contained an important line: “As a court, our job is to interpret and apply the law the people adopt, not to make it up in accord with ours or society’s current policy preferences.”  This rings especially true when placed alongside Justice Ziegler’s concurrence last week in VFW Post 2874.

Plaintiff Gary Mitchell had a job filming the meetings of his local Board of Commissioners and he also volunteered at the local public access television station. Due to a brouhaha over indecent programming, the Board of Commissioners had proposed to cut public access funding. Commissioner Rhonda Storms was leading the morality crusade, so Mitchell decided to have some fun at her expense. During the open comment period of a supervisors’ meeting, Mitchell took to the podium wearing a beret with a thunderbolt on top and announced that he was a member of a fictitious political support group called the Thunderheads. He then gave a speech praising Storms and concluded with a question: given her preoccupation with women’s body parts, did she prefer the nickname “Vagi” or “Gina”?

I perhaps can understand the efficiency argument in this case (though it is certainly not a slam dunk), but I don’t agree at all that this is not speech on a matter of public concern.  As Robert [Loblaw] points out, that would be like saying Jonathan Swift’s Modest Proposal was really about cannibalism.

The 11th Circuit found that Mitchell’s speech was not a matter of public concern, and even if it was, the efficiency concerns of the employer in ensuring co-worker harmony outweighed any First Amendment rights Mitchell would have had.

Well, the humor of the federal courts has not improved in three years.  Not even in my hometown. 

Witness Milwaukee Deputy Sheriff’s Association v. Clarke, No. 08-3298 (7th Cir., July 21, 2009).  The case also concerns sarcastic remarks by a public employee:

The dispute in this case is what one’s mother might have in mind when she imparts the classic phrase, “Sticks and stones may break my bones, but words will never hurt me.” Apparently, Milwaukee County Sheriff David A. Clarke, Jr., did not take this childhood lesson to heart. In the summer of 2005, Sheriff Clarke posted on a roll-call bulletin board a quote that at least one deputy, Michael Schuh, considered an offensive challenge to his and his fellow officers’ courage. Schuh fired back by publishing a two-sentence statement challenging Sheriff Clarke’s courage. Sheriff Clarke, apparently afraid that words would hurt him, quickly responded by reassigning Schuh to a newly created mission in one of Milwaukee’s most crime-ridden neighborhoods . . . .

We are sympathetic to Schuh’s position, and we consider Sheriff Clarke’s response against Schuh to be excessive. But there are limits to the First Amendment’s protections when a public employee speaks, and because we find that Schuh was speaking on a matter of purely private concern, we agree with the district court that summary judgment in Sheriff Clarke’s favor was appropriate.

The statement, you wonder?

Deputy Schuh’s article mirrored Sheriff Clarke’s quote from Deuteronomy, with a few additions that Moses never uttered while outside of the Promised Land:

Union Member’s Response:

If you are afraid or you have lost your courage and need two deputies and a sergeant to escort you every time you fly in and out of the airport and patrol deputies to drive by your house when you’re out of town you should resign and go home! Then you would lift the morale of this whole department (a.k.a. office).

Now, the comment was clearly made to criticize the Sheriff’s use of police personnel for his own personal business — what could be more about public concern than how the taxpayers money is being used by the Sheriff?  Was the mere sarcastic nature of the remark dispositive in suggesting that the interaction between the Sheriff and his deputy was purely personal?

If the court had allowed this dispute to survive the Connick matter of public concern test, the next step would have been the Pickering balance of the public employee’s right to free speech against the efficiency concerns of the police department.

My own take on this is that it is unlikely that this episode caused that much upheaval in the department since the Sheriff’s practices were already well known. I would have been inclined to find the balance for the employee and held the Department at least liable for the Sheriff’s conduct (whether the Sheriff could qualify for qualified immunity might be a closer question as far as individual liability).

In any event, and as I said three years ago, “One does not need to speak seriously in order to make one’s publicly important point.  Sometime satire is much more powerful and makes that point much more effectively.”

Hat Tip: Victor Forberger

Cross-Posted on Workplace Prof Blog.

But there is one up there as we speak from the Lehighton (Pa.) Time-News reporting my comment on the Supreme Court’s decision in Ricci v. DeStafano. I did issue some comments on Ricci through the Heartland Institute where I am a Policy Advisor.

But I didn’t say what was quoted in the article.

The quoted statement actually came from Chris Hage who is the President of the Chicago Lawyers’ Chapter of the Federalist Society of Law and Public Policy. I said this:

“Today’s decision in Ricci v. DeStefano makes clear that employers may not use fear of litigation to justify hiring decisions based on race. If fear of a disparate impact claim under Title VII would permit employers to abandon nondiscriminatory hiring methods whenever those methods failed to produce an ‘acceptable’ number of minority hires, then the distinction between disparate treatment claims and mandatory quotas would be blurry at best. To allow the fear of litigation to justify racially based hiring in order to ‘get the numbers right’ would undermine the principle of racial evenhandedness that both Title VII and the Fourteenth Amendment are intended to guarantee.”

I don’t know if they wanted Mr. Hage’s statement and attributed it to me or wanted my statement and took Mr. Hage. I am sure, in any event, that Professor Secunda probably disagrees with my real remarks as much as what I didn’t say. But accuracy — both here and in Lehighton — is important.

As it happens, I included an analysis of this case at the district court level in my recent paper, Blogging While (Publicly) Employed: Some First Amendment Implications, 47 U. Louisville L. Rev. (forthcoming 2009).  There, I wrote in part:

In Richerson, the Central Kitsap School District initially employed Tara Richerson as the Director of Curriculum. She then was in line for a voluntary transfer to a new position that would permit her to work half time as a curriculum specialist and half time with a new instructional coaching model. Importantly, the instructional coach component of her prospective job required her to follow a model which emphasizes the sensitive and confidential relationship between her coaching position and the teachers that she would be mentoring.

Before being transferred, the school district became aware that Richerson was using a personal blog to be critical of her replacement in the Director position. Language is everything in these public employee free speech cases, so here is the entire blog posting in question:

Save us White Boy!

I met with the new me today: the person who will take my summer work and make it a full-time            year-round position. I was on the interview committee for this job and this guy was my third choice … and a reluctant one at that. I truly hope that I have to eat my words about this guy…. But after spending time with this guy today, I think Boss Lady 2.0 made the wrong call in hiring him … He comes  across as a smug know-it-all creep. And that’s probably the nicest way I can describe him…. He has a reputation of crapping on secretaries and not being able to finish tasks on his own…. And he’s white. And male. I know he can’t help that, but I think the District would have done well to recruit someone who has other connections to the community…. Mighty White Boy looks like he’s going to crash and burn.

Although the school district did not terminate Richerson for this conduct, she was officially reprimanded for violating the professional standards associated with the interview process. Richerson, however, did not appear to learn her lesson and later commented about a co-employee and chief union negotiator on her blog: “What I wouldn’t give to draw a little Hitler mustache on the chief negotiator.” After receiving a complaint from this co-employee, the district involuntarily reassigned Richerson to the position of classroom teacher, though they did not ask her to stop blogging.

Based on this record, the court granted summary judgment to the school district on the claim that Richerson’s blogging deserved First Amendment protection. Specifically, the court found that the language did not qualify as speech on a matter of public concern under Connick.

The Ninth Circuit agreed, concluding that the Richerson blog containd “several highly personal and vituperative comments” that justified the demotion.  In short, under the Pickering balancing test for First Amendment speech protection for public employees, her disruptive speech eroded work relationships and thus, the school district employer won the balancing test as far as the various interests involved.

I want to suggest that the Ninth Circuit is right on the current state of public employee speech law, but also want to point out that the most disruptive public employee speech gets the least amount of protection under the Pickering framework.  It is almost like we have constitutionalized the heckler’s veto in this area of the law and that doesn’t make a whole lot of sense.

So what would I do instead, you ask.  I would prefer a test which places a heavier thumb on the balance on the side of the employee, as long as the employee is talking upon a matter of public concern, which involves the heart of the First Amendment’s protection in the first place.   Under this balance, I would let Richerson yap away and let other employees drown her out with their own more sensible counter-arguments.

In the meantime, “vituperative comments” on employee blogs concerning the workplace will have to be muted.