Monday, September 22, 2008

Public Responsibility for Stopping the Big Squeeze

It's a pleasure to be part of this discussion of Steven Greenhouse's masterful, though depressing, The Big Squeeze.  The book is impressive in scope, weaving together changes in corporate structure like outsourcing and contingent work, faces of globalization ranging from immigration to offshoring, shifts in management philosophy, and the assault on labor unions.  Greenhouse also tacks effectively between compelling, illustrative stories of individual workers and bigger picture analysis of trends backed up by a wealth of statistics and snippets of expert commentary.

Before raising some questions and concerns, I want to highlight an important piece of Greenhouse's analysis that often is missing from tales of workers' woes and what to do about them:  labor law enforcement.  Again and again, we see workers cheated out of wages by being required to begin work before they clock in, continue while nominally on breaks, finish tasks after they clock out, and even then having their hours deleted from payroll records at the stroke of a key.  Related themes are retaliatory firings for union organizing and workers exiled from employment's benefits or protections through misclassification as independent contractors or shunting into fly-by-night subcontractors.  Against this  backdrop, legal reforms like raising the minimum wage or strengthening union rights may be meaningless unless they can be enforced more effectively, and Greenhouse's policy recommendations helpfully reflect this pragmatic point.

Thinking about enforcement immediately puts the spotlight on the government and, more generally, the citizens and taxpayers.  Enforcing labor law, after all, takes money to hire the inspectors whose ranks, Greenhouse notes, have thinned, and it takes a political commitment to use public power on behalf of workers.  Unfortunately, I worry that the overall thrust of Greenhouse's argument leaves us ill-prepared to make the case for government action.  Almost every story has the same basic structure:  big corporation stomps on noble worker, or in more complex cases, big corporation forces small corporation (or middle manager) to do the stomping.  This way of telling the story lets almost all real people off the hook:  either we are fellow sufferers, or we are innocent bystanders.  That's great for focusing anger on the corporate miscreants, but I fear that it falls short, both morally and politically, when the solutions require all of us to put skin in the game.  I'll leave it there for now, but in subsequent posts I'll suggest a few ways of broadening the frame, both to think more about relationships among workers and to think more about relationships between the labor market and other institutions.

Posted by Account Deleted on September 22, 2008 at 09:15 AM in Books, Employment and Labor Law | Permalink | Comments (1) | TrackBack

Monday, September 08, 2008

losers, and the losers who prey on them

I'm cursed with being a fan of what is now officially the most pathetic team in major sports -- it's sixteen years and counting of losing seasons for the Pittsburgh Pirates. Since being brainwashed by the guy who ran my little league team in New York City, I have variably enjoyed and endured the team's remarkable success in the 1970s, drug scandals in the 1980s, heartbreak in the early '90s (for which I've been mocked!), and irrelevance ever since. Beautiful ballpark, awful team. We did have the incomparable Roberto Clemente, the memory of whom makes lots of hard times bearable and whose visage on a Cheerios box stares down at me each breakfast. But even Roberto can't help me with this.

But now there's a law angle to my pathetic misery, and one that, if tweaked and simplified, could make a sweet contracts or labor law exam question. It's the story of a hapless franchise, a powerful sports agent, and a midnight deadline. Read all about it after the jump.

After finally firing a fantastically incompetent general manager, the Pirates have shifted their resources from mediocre, over-priced free agents to the amateur draft and scouting and player development in Latin America -- the best way for a small market team to compete. So this year we (I hope you don't mind if slip into the third-person plural sometimes) drafted the best player available in the draft, a third baseman named Pedro Alvarez who had just finished his junior year at Vanderbilt, and hailed originally from the Washington Heights neighborhood in NYC. Great kid, fabulous talent. The only catch: Alvarez is represented by Scott Boras, proud graduate of the McGeorge Law School and world reknowned for being the hardest of the hardball negotiators among sports agents. Alvarez and the Pirates -- and, of course, Boras -- are now in a dispute regarding whether they agreed to a contract on or about the night of August 15.

To simplify this sad story: As is Boras's MO, Boras delayed negotiations with the club until the very last minute before the signing deadline -- midnight on August 15. Sometime between 11:58 PM and after midnight, Alvarez agreed to a $6 million signing bonus, a figure that, it turns out, was not the highest bonus of this past signing season. As I understand it, there's no question that Alvarez verbally committed; nor is there any question that the verbal nature of the commitment was sufficient under Major League Baseball (MLB) practice, so long as the contract is ultimately confirmed by the MLB office and signed by the parties. What is contested, however, is whether Alvarez verbally committed before or after midnight, whether the Pirates were granted an extension by MLB to continue negotiating after midnight, and more importantly whether MLB could authorize extensions past midnight, something they've apparently done with one or two other teams this year and last (notably, to enable negotiations with other Boras clients). Soon after verbally committing, Alvarez contested the legality of his commitment and has refused to sign the contract to which he verbally committed, on the grounds (presumably) that the agreement was void for occurring after the deadline.

The MLB Players Union has now grieved the issue of MLB's practice of granting signing extensions beyond midnight -- a grievance that clearly will affect Alvarez and the other player for whom an extension may or may not have been granted this year, Eric Hosmer. Hosmer is another Boras client who was drafted by the KC Royals, and who actually signed his contract. He was already playing for a Royals minor league affiliate when the grievance was filed; MLB has now rescinded approval of his contract (thereby keeping him from playing in the minor leagues) while the grievance is awaiting adjudication by an arbitrator. The arbitration is scheduled for September 10.

A preliminary legal issue is the aribtrator's jurisdiction. Draftees are not yet eligible for union membership; accordingly, does an arbitrator limited to settling disputes between the league and its players have the authority to consider this question? There are also reports that some fairly significant facts are in dispute. Apparently, there are records of two phone calls between Boras and the Pirates, one placed at 11:58 and another after midnight. Some conspiracy theorists among Pirate fans -- who, in case you haven't already figured it out, detest Boras -- think Boras purposely disconnected the earlier phone call so that any agreement Alvarez agreed to would take place after midnight so Alvarez could later disavow it. The theory presumes that Alvarez flinched at the last minute and agreed to the Pirates' offer against Boras's advice-- in this narrative, he's a good kid, his dad drives a cab in NYC, and he just wanted a good chunk of money and to start his career. It's also unclear whether Hosmer actually agreed after the deadline; but apparently another Boras client, Julio Borbon, who signed with the Rangers last year after the draft, also agreed to a contract after the deadline. Neither Borbon, Boras, or the players' union challenged that agreement.

Equally interesting are issues with Boras's representation. There's no question that Boras is the preeminent agent in maximizing draftees' contractual value. When an amateur player signs with Scott Boras, he sends a signal to teams that he wants to get paid and is willing to risk the reputational hit that being represented by an extremely hardball negotiator frequently gets. But it's unclear what Boras hopes to achieve here. If the union wins and the arbitrator invalidates Alvarez's contract, Alvarez presumably couldn't squeeze the Pirates for more money because, of course, the signing deadline has passed. Alvarez can't return to play at Vanderbilt. Returning to the draft next year after sitting out the year -- perhaps playing in an independent league, as J.D. Drew (another Boras client) did after refusing to sign for the Phillies a decade ago -- risks not getting the $6 million he would have gotten this year, but also losing a year's interest on the bonus, a year salary and development.

The sad part, though, is watching how Pirates' fans have turned on the kid. All of the franchise's hopes, after all those losing seasons, were invested in Pedro Alvarez. He could turn things around -- after all, a similar issue arose after another Pittsburgh franchise, the Penguins, drafted another highly touted draft pick. That was Mario Lemieux, a future hall of famer who ultimately signed with the Penguins, spent his entire career in Pittsburgh, leading the time to unparalleled success. I don't think anyone begrudges the kid getting paid. It's both the disappointment of watching this spectacle and the idea that this is merely a "technicality" -- a strategic legal trick that an agent appears to be using to squeeze additional leverage and get out of a deal to which the player agreed -- that could lead to another dozen years of losing baseball.

Sources: Dejan Kovacevic of the Pittsburgh Post-Gazette has provided the best day-to-day coverage of this, as have the best Pirate blogs. Baseball Prospectus, as ever, has supposedly offered the most knowledgeable and thoughtful coverage, but it's behind a pay wall, and since the Pirates have been so awful for so long, I've invested more time in my NBA fetish and so dropped my subscription....

Posted by Mark Fenster on September 8, 2008 at 11:22 PM in Employment and Labor Law | Permalink | Comments (6) | TrackBack

Saturday, September 06, 2008

Link to Passive Discrimination Paper

The "Passive Discrimination" paper whose abstract I provided the other day is now available at SSRN.

Posted by Jonah Gelbach on September 6, 2008 at 04:54 PM in Employment and Labor Law | Permalink | Comments (0) | TrackBack

Wednesday, August 13, 2008

Approaching Deadline: Current Scholarship in Labor and Employment Law, San Diego, October 2008

Even if you are not a hardcore employment, labor, discrimnation or benefits scholar, you can benefit from this lively and enriching program coming up soon in lovely San Diego. The deadline is quickly approach to submit your paper topics and abstracts to Third Annual Colloquium on Current Scholarship in Labor & Employment Law.  The Colloquium will be held October 23-25 in San Diego. The deadline for submission is August 31.

The organizers, Ruben Garcia,  Susan Bisom-Rapp and myself have begun putting together the panels based on the several dozens of submissions already in. As an insider, I can tell you that the topics are terrific, ranging from empirical analysis of discrimination to debates about constitutional law and the scope of public sector speech rights; from cognitive and behavioral studies to theoretical analysis of private and public law; from new frontiers in identity-based civil rights litigation to new developments in international and comparative law.

Harry Arthur is the keynote speaker and events will take place in all three law schools in town: University of San Diego, Thomas Jefferson and California Western.

Posted by Orly Lobel on August 13, 2008 at 10:48 PM in Employment and Labor Law | Permalink | Comments (0) | TrackBack

Tuesday, March 18, 2008

The Future of Labor Law: The Public Sector; and States as Laboratories of Democracy

Labor law, some conventional wisdom says, is dead. True, union density in the private sector has taken a long slide from around 35% in the 1950s to under 10% today. In reaction, a number of schools do not even regularly offer a labor law class.  This, I suggest, is a mistake. There are still over sixteen million workers in unions today, and last year overall union density actually increased a bit. And while labor law under the National Labor Relations Act (NLRA) has been increasingly hostile to unions, did you know, e.g. that despite the failure of the Employee Free Choice Act (EFCA), many unions have recently won the legal right to be recognized by showing majority support through a "card check"? There is a strong present and future in labor law – just not entirely as we traditionally conceived of it.

The key is the public sector. In the past fifty years, union density in the public sector has risen from under 10% to nearly 40%. Indeed, today of all union members in the U.S., around 40% are government employees. Thus the practice of labor law is increasingly in the public sector. Yet few schools teach public sector labor. This is a shame, and not just for students who want to represent unions or management in labor relations or ponder the legal and practical issues involved.

Public sector labor law also a wonderful opportunity to consider the states as laboratories of democracy, and to consider questions of democracy as well as workers’ rights. Public sector labor law varies tremendously. They are typically modeled in part on the private sector law, the NLRA, but they can vary significantly. For example, public employees in most states cannot legally strike, but about eleven states (including Ohio) allow most public employees to strike. A majority of states allow at least some public employees to bargain collectively, but some limit bargaining to a few types of employees (e.g., police, fire, and/or teachers), and a significant minority bar all public sector collective bargaining. In states which allow bargaining, some allow unions to bargain over basically the same subjects private sector unions can; but a number of states significantly limit the subjects over which they can bargain; and significant minority of states do not permit any public employees to bargain. This "scope of bargaining" issue raises interesting policy debates about democracy and workers rights: what issues should be beyond the scope of bargaining and rather be in the hands of elected officials? The public sector also features interesting Constitutional doctrines, since the state-as-employer is a state actor.

The public sector also is an opportunity to try out rules different from those in the private sector. Last year, in the EFCA, unions unsuccessfully sought to amend the NLRA to, among other things, provide that employers must recognize a union with a "card check" majority. The law then was that employers could voluntarily recognize unions with such a majority, but were not obliged to do so. Later in 2007, the NLRB in its decision in Dana Corp. made the use of card-check recognition even more difficult (for details, see an interesting new piece by Raja Raghunath). 

Meanwhile, in the public sector several states have recently passed card-check recognition bills (New York has such a rule; recently Illinois, New Jersey, and New Hampshire passed this rule; and Massachusetts is coming). Also, the NLRB recently reversed a Clinton Board precedent and held that graduate assistants generally were not "employees" covered by the Act; the majority of public sector jurisdictions disagree. Indeed, many public sector jurisdictions allow supervisors to form unions and bargaining collectively; the NLRA categorically excludes supervisors. Of course, as noted above, many states have laws which are grant employees and their unions much more limited rights than those in the NLRA. While the traditional question has been, "how much of the private sector law should public sector jurisdictions adopt," a new question is, "should the federal private sector law be informed by developments in state public sector law?"

The future of labor law is in both the public and private sectors. Course offerings should acknowledge this, and scholars should check it out. There is much to chew on.

Posted by JosephSlater on March 18, 2008 at 11:58 AM in Employment and Labor Law, Teaching Law | Permalink | Comments (3) | TrackBack