PrawfsBlawg

Interdisciplinary Projects

I have enjoyed my time here blogging, and many thanks again to Rick and Howard for having me.  In my last post, I thought I would discuss an interdisciplinary project I have been working on. 

Last year, I applied for a large, internal university grant to try out some interdisciplinary projects.  The goal was to spend a year investigating a significant corporate scandal with colleagues from around the university in an effort to come up with a “super solution.”  When I wrote the grant proposal, I used the General Motors ignition switch scandal as an example of what one might investigate.  The original grant proposal envisioned a three-year project, which would have allowed three areas of study. 

I was instead offered a more modest grant to test out the idea.  By the time the award was provided, the #MeToo movement was in full swing, so I changed the topic of inquiry to sexual harassment within organizations.  Ultimately, we had participants from law, management, economics, philosophy, and journalism.  Each participant wrote a small three to five page paper addressing the sexual harassment crisis within organizations from their scholarly discipline and expertise.  We then had a one-day conference where we presented our solutions, and we had two senior external scholars attend to comment and provide additional input.  Ultimately, we walked away with two potential theses, and a few of us are currently working on a paper. 

One of the proposed uses of the grant award in the original proposal was to provide research funding for contributors as an incentive to participate.  Every department at Notre Dame has its own publication expectations, so I worried that people might need an incentive to participate in interdisciplinary work.  When I received the more modest grant, however, I dropped the attempt to provide the incentive.  As it turned out, each person I approached agreed to participate except for one, and the one person who declined instead provided some additional funding for the project. 

For the those of us working on a writing project together, we have determined that we may be able to publish three articles—one each in a management, law, and economics journal—related to one of the theses we identified.  We would of course emphasize different points in each publication.  I think this is in actuality a better incentive than research funding would have been.  We identified a thesis that hasn’t been written about in our respective disciplines, and we have identified related projects that we can tackle for the purpose of publishing pieces in those disciplines.  This provides us each a publication opportunity that “counts” in our departments, but it also broadens the potential impact of our work.  This is still very much an experiment, but it does seem as if it is an experiment worth attempting as the potential upside is quite high. 

With that, I close my stint here at Prawfs.  I had some more half-written blog posts, but my 1Ls are happy, eager, and love sitting in my office.  Until next time! 

Compliance & Diversity

All of the Supreme Court speculation circulating this week took my mind to places that I suppose are pretty atypical.  When I was a law student, I really wanted to clerk, but the University of Chicago had guidelines requiring each student to limit their clerkship applications to fifty judges or less.  As a result, I poured over my list of judges meticulously and asked many people advice about who should be on the list.  One of the people who looked at my list said quite bluntly – “Most black clerks are hired by black judges; keep all of the black, appellate court judges on your list.”  So I basically did.  As it turns out, I had two judges (a white woman and a black man) call me for interviews, and I did ultimately clerk for a judge who is amazing, kind, smart, organized, generous, and also black.  When I went for the circuit-wide clerkship training, I did note that the only two black people in attendance were one of my co-clerks and me.  And a black classmate emailed me shortly after his circuit-wide clerkship training to comment on the fact that he was the only black clerk in attendance. 

Thus, while all the interests groups are lining up to make their pitches about what the important qualities are in a Supreme Court Justice, my mind has turned to the fact that the small number of black appellate court clerks leads to a paucity of black, Supreme Court clerks (how many black, appellate feeder judges are there?), which narrows the field of those persons of color who might one day be on one of these lists.  Clearly, I digress and in doing so have skipped some pertinent intellectual and factual steps in the interest of writing a short-ish post.

My digression, nonetheless, has some relevance in that it may help to connect my interest in diversity to my interest in compliance.  I think sometimes people read my work and feel like the articles I have written on diversity in the profession are unrelated to my compliance work.  They are not.  Individuals attempting to create diverse organizational cultures and those attempting to create compliant organizational cultures and those attempting to create ethical organizational cultures are all addressing the same basic question. One could state the question in a few ways, but here is one:  How does one create a culture that promotes a particular set of values—diversity, compliance, ethics—and actually get buy-in of the organizational members in an effort to achieve the culture one has set out to create?  The question has no easy or simple answer.  Instead, the question requires step by step consideration of the external and internal forces that contribute to the creation of organizational cultures.  When one considers the questions as related, it opens up a number of scholarly approaches.  For instance, in a forthcoming article discussing antidiscrimination efforts within the bar, I rely on literature about the damaging effects created when an employee feels like s/he must remain silent.  I could just as easily use that same literature when talking about sexual harassment at Fox News or internal whistleblowers at Wells Fargo. 

There are certainly very good reasons to think about diversity, compliance, and ethics on their own, but there are upsides to approaching the concepts as if they are one, although perhaps not in the same law review article.  Happy weekend! 

Happy Family Day Weekend

Mothers don't need to "do it all". We all need to balance it all, families, governments, markets. I am reading Chimamanda Ngozi Adichie (Americanah) newest book, a short love letter to girls and mothers is how I read it, called Dear Ijeawele, or a Feminist Manifesto in Fifteen Suggestions. The first of her 15 suggestions is not to let motherhood define you completely, show your daughters that you are more than just a mother, that you are a person with passions, interests, ideas, ventures. This resonates, especially here in Southern California where often times I feel the pressures of having a career even more acutely in relation to the many many moms around me who (mostly) choose not to work. When my middle daughter was in kindergarten I had to miss the Mother's Day breakfast in her class (I was back on time for the "real mother's day") because I was giving a talk at ALEA, held that year in Princeton. I asked the kindergarten teacher that my dear husband (who thankfully is also an academic and we both have the privilege of flexibility and control over our work schedules, but we also both travel a lot for talks and conferences) take my spot at the breakfast. The teacher adamantly refused, saying no, mother's day is only for mothers. In other words, better that the kid sit there without a loving parent than challenge gender roles. I remember this vividly because it was one of the only times I lost my temper at an otherwise excellent school. I went to the administration and protested loudly about how in the 21st century families come in all forms and shapes - some have two moms, some two dads, some single parents, some, lo-and-behold, are dual-career. I added that around the world progressive places were changing the day to Family Day. My husband was eventually allowed to join the breakfast and my daughter was happy. And now I am happy that their school celebrates Family Day instead of mother's day.

Prenups, Millenials, IP & Gender

Should prenups assigning ideas and inventions not yet born be enforced? In my book Talent Wants to be Free I analyze the vast expansion of pre-innovation assignment agreements in employment relations -- generic employment contracts that assign in advance any idea, whether patentable or not, whether copyrightable or not, whether it was conceived during work hours or not, whether it builds on company R&D or not -- to the employer. In related research, including The New Cognitive Property, Driving Performance, and Enforceability TBD: From Status to Contract in IP, I warn that these developments can have negative effects on innovation as well as problematic distributional effects. 

A related trend is the rise of couples signing prenups which pre-assign ideas and not-yet-developed IP --  films, songs, software, brands and apps - to the partner who plans to develop them. Today in the New York Times I write about this rising trend and in particular raise the question about potential gender inequities. Are millennial-dominated start-up communities prone to the following pattern: The wife holds a steady job while the husband works on his app. They share the risk now, but if they divorce, the husband reaps the rewards of his intellectual property, and the prenup ensures his ex-wife, often wife # 1, gets nothing.

Would love to hear your thoughts - comment here or in the comments section of the NYT.

Misrepresenting the Employment Law Impact of HB 2

One of the most disappointing and infuriating things about the HB2 saga in North Carolina has been the persistent misrepresentation of its impact by Gov. McCrory and its supporters in the General Assembly.  As an employment and civil procedure scholar (and former long time litigator), I take particular umbrage at the gross misrepresentations related to the elimination of the state law claim for employment discrimination (discussed in my last post, here). 

The misrepresentations started in the General Assembly where the Republican sponsors repeatedly asserted that nothing in HB2 would take away existing rights.  Even when directly questioned about the elimination of the state law wrongful discharge claim for employment discrimination, Republican legislators responded that it would have no effect.  [I am basing the foregoing primarily on tweets from reporters on the scene as I was not in Raleigh for the “debate.”] 

The misrepresentations continued when Gov. McCrory issued his statement announcing he had signed HB2 into law.  In that statement, he stated “[a]lthough other items included in this bill should have waited until regular session, this bill does not change existing rights under state or federal law.”  (emphasis added).  Gov. McCrory doubled down on this misrepresentation in a document entitled “Myths vs Facts: What New York Times, Huffington Post and other media outlets aren't saying about common-sense privacy law” (here), which was posted on his official website on Friday, March 25.  In this document, question #2 is “Does this bill take away existing protections for individuals in North Carolina?”  Gov. McCrory’s answer: “No.” 

Put simply, McCrory’s statements are clearly and undeniably false. 

However, the most persistent voice in misrepresenting the impact of this provision of HB 2 has been (perhaps not surprisingly) HB 2’s author and sponsor, Rep. Dan Bishop (R-Mecklenburg).  Rep. Bishop is an attorney.  When pressed by a reporter on whether HB2 eliminated the longstanding state law claim for wrongful discharge, Rep. Bishop acknowledged that it likely did, but said “who cares” because you could get the same remedies under federal law.  In a separate interview, Rep. Bishop said the elimination of the state law claim “is an exceedingly minor procedural difference."  

Rep. Bishop graduated from UNC-CH law with high honors, so I will assume he does actually understand the differences between (1) substantive and procedural law; and (2) federal and state employment discrimination law.  But assuming he understands the distinctions, one must conclude that he is intentionally misrepresenting the impact. 

Whether the elimination of a state law claim is “substantive” or “an exceedingly minor procedural difference” is beyond rational debate.  Having 28 days to respond to a motion instead of 30 days is an exceedingly minor procedural difference.  Eliminating a state law claim that has existed for 34 years, is indisputably substantive and significant. 

I’ll take up the substantive differences between federal employment discrimination claims under Title VII (or the ADEA) versus North Carolina’s now defunct claim for wrongful discharge in violation of public policy premised on EEPA in my next post.

Employment Law Easter Eggs in North Carolina’s HB 2

The vast majority of the commentary around and criticism of N.C.’s HB 2 [see the full text as enacted here] has, perhaps rightly, focused on the elimination of LGBT rights in North Carolina.  The lawsuit filed early this morning by the ACLU, Equality NC, and others (including NC Central Law Professor and Assoc. Dean Angela Gilmore) focuses exclusively on the LGBT rights provisions of HB 2.  [Read the Complaint here]. 

However, HB2 was not just about LGBT individuals.  It also has some rather nasty Easter Eggs for all employees in North Carolina. 

First, and most openly, it prohibits all local governments in North Carolina from enacting a local minimum wage that exceeds the federal minimum wage.  No local government in N.C. had tried, but I guess the General Assembly figured it would rather be safe than sorry – especially when the LGBT provisions would tie up the news cycles. 

Most importantly – and most sneakily – HB 2 eliminated (yes, ELIMINATED) the only state law cause of action available to private employees to redress employment discrimination based on race, national origin, religion, color, age, or biological sex.  The General Assembly accomplished this profound change in North Carolina employment law via a single sentence in middle of page 4 of the five page bill.  That sentence reads:

“This Article does not create, and shall not be construed to create or support, a statutory or common law private right of action, and no person may bring any civil action based upon the public policy expressed herein.” 

To a lay reader (or legislator), this sentence would not seem terribly important.  However, it was inserted into Article 49A of Chapter 143 of the NC General Statutes [here, before being amended].  Article 49A is called the “Equal Employment Practices Act” (“NC EEPA”) and contains the heart of North Carolina’s state law protection from employment discrimination.  NC EEPA, which was enacted in 1977, is merely a statement of public policy.  It declares that it is the public policy of North Carolina “to protect and safeguard the right and opportunity of all persons to seek, obtain and hold employment without discrimination or abridgement on account of race, religion, color, national origin, age, sex or handicap by employers which regularly employ 15 or more employees.”  N.C. Gen. Stat. 143-422.2.  Unfortunately, NC EEPA does not contain a private right of action.  Thus, the only way to enforce it was through a common law tort action for wrongful discharge in violation of public policy. 

Now, of course, you see the problem with the sentence inserted into Article 49A via HB 2.  “[N]o person may bring any civil action based upon the public policy expressed herein.” 

Poof.  With that sentence, 34 years of state law protection for employment discrimination based on race, national origin, color, religion, sex, and age VANISHED.  Millions of working North Carolinians (whether they knew it or not) relied on NC EEPA to help protect them from discrimination.  Thousands – tens of thousands? – of North Carolina workers have asserted wrongful discharge claims premised on NC EEPA since our appellate courts officially recognized the claim in 1982. 

As a management-side employment lawyer for more than 11 years, I never heard a single client complain about the existence of this claim.  But now, it is gone. 

I wonder how many members of North Carolina General Assembly knew it was in HB 2?  I wonder how many of them knew the ramifications of that sentence?

Vermont's All-Payer Claims Database: What Hangs in the Balance.

I have been following Vermont's all-payer claims database litigation, Gobeille v. Liberty Mutual Insurance Co. -- argued at the U.S. Supreme Court on December 2, 2015. Perhaps you have as well. There is absolutely nothing like a good ERISA preemption dispute to to remind me of the force of Bill Sage's observation that is a case like this that reminds you why  you must explain "to every class of Health Law students... that ERISA [is] the most important law affecting private health insurance in the United States."

Strictly as an ERISA preemption case, Gobeille is interesting for how it may force the Court to parse yet again and yet further whether the collection of health care data by a state interferes with a core ERISA function belonging to the U.S. Secretary of Labor or whether state by state variable all-payer claims database reporting requirements are arguably unduly burdensome on the reporting entities and firms.   If you've read this far, I know you are fascinated by preemption, but even more importantly, such a decision would test whether or not the gradual movement of the states to mandating reporting of all-payer claims data has legs.

It is early days, but there is some evidence that the all-payer claims data has begun to influence health care cost to consumers and health care consumer decision making in New Hampshire (under its Comprehensive Healthcare Information System established by state law in 2007). The claim of price transparency triumphant, of course, is also balanced by arguments about adverse affects of health care  price transparency because limited research may also indicate that it causes rates to narrow and average costs to rise.

All of this is based on fairly little experimentation with health care cost transparency in the U.S. of the sort that may be developed from  all payer claim databases.  So just what is it that we would rather not know, rather not test empirically, about the competitive effects of the disclosure of this kind of information?

Baby Mama Esq.

By now we all know that the US is dead last among OECD member countries in the parental leave benefits that are offered to working mothers: in the US, there is no paid parental leave guarantied by law, and only 12 weeks protected unpaid leave (and even then only if employed for 12+ months at a big-enough company). This is, frankly, an embarrassment to the country and speaks volumes with respect to the value our society and government truly places on motherhood and on children. 

Women lawyers who have babies, however, are usually better off than their non-lawyer peers. Most firms offer paid leave (50% - 100% of salary) for anywhere from 6 to 16 weeks. When I had my first baby in 2002, Fried Frank gave me a generous 4 months of fully paid leave. In fact it was a huge selling point for me when I considered their offer of employment (even though I was not pregnant at the time, I expected that I would have a child at some point after joining the firm).  One might therefore think that the real battleground for paid parental leave lies beyond the personal experience of lawyers. But that isn't necessarily true. First of all, as a June 2015 article in the ABA Journal put it, "for many female attorneys, maternity leave can be the equivalent of a poisoned chalice - offered as a benefit, but damaging to a career." The New Republic agrees - generous leave policies can inadvertently reinforce a glass ceiling in a profession. My anecdotal experience (personal and thosee of friends and colleagues), supports this conclusion as well.

Reality here truly does bite: most women who take advantage of generous maternity leave policies and flex-time policies end up sliding off the partner track and settling into the mommy track. A study published by Working Mother magazine found that although flex-hours were offered and widely accepted work arrangements for women with children at top 50 firms, none of the top 50 firms had promoted a flex-time attorney to partner in 2014. And among the 50 top law firms, only 19% of the equity partners are women.

The ABA Journal column noted that some firms (like Minneapolis-based Nilan Johnson Lewis) have bucked the trend and have promoted women to partner shortly after taking maternity leave. But this remains the exception to the general rule that partnership and motherhood are challenging to balance. As a mother of 4 who practiced law for a decade and a half before making the jump to academia, I'm keenly aware of this challenge.  And today's female law students - who constantly approach me as a "role model" of a mother who continually practiced law while having multiple children - are very concerned about this too.  They need to be aware, however, that reality in firms doesn't always match optics.  I've spoken to big-firm interviewers after their on-campus interviewing and heard expressed concern about 2L candidates who mention that one reason that they were attracted to the firm was because of its touted flex time options. This  seems to suggest to the interviewer that the candidate is more interested in family (gasp!) than billable hours. (I think that the fact this point was raised in a first interview also suggests that these 1Ls are both more honest and more naive than one might expect.)

The impact of paternal leave on tenure and promotion in legal academia is unproven. (There was an interesting post in this blog 3 years ago on the topic of delaying going up for tenure because of paternal leave - here, and the AAUP has a paper regarding parental leave for university professors here.) My sense (devoid of any empirical study) is that policies regarding parental leave for female law professors are all over the map - from no paid time off to an entire semester or more of paid leave.  When I was at the new law professor AALS summer program, discussants in the women in law group shared a wide variety of experiences with respect to pregnancy and childbirth and maternity leave on a law school faculty. Policies with respect to paternity leave, I believe, vary even more.

Gentle reader (to borrow the phrase), what are your experiences with parental leave at your law practice and law teaching workplaces? Should the legal profession develop norms and expectations regarding paid leave as a way to increase gender diversity in partnership (and tenured professorship) ranks? Have you seen a generous leave policy backfire into mommy-tracking competent, ambitious female lawyers? And, if so, what is the right solution?

Approximately 50% of law school graduates today are female.  It is likely that a large number of these will at some point in their career have one or more children.  I believe it is time that the legal profession confront this reality and ensure that women in law are not forced to choose one of these three unsatisfactory options:

(a) dropping out of practice,

(b) going into a mommy track limbo, or

(c) sacrificing an unreasonable amount of time with their newborn.  

Yes, this is an issue that faces both mommies and daddies in law, but the biological reality remains that although an uber-dedicated father-to-be big law associate might even miss his child's birth, that option is frankly never possible for even the most overly dedicated expectant lawyer mom.

 

Marriage and Other Favored Unions

So we have a fundamental right to same-sex marriage. In the most obvious way, the Court’s holding was good: if the state is going to privilege a particular association (here, marriage), it should not discriminate against persons who try to take advantage of it. Fair enough. But in another way both the government’s favored treatment of marriage and especially the majority’s decidedly not-postmodern love letter to that particular form of association (Alito’s comment that the majority’s vision of liberty “has a distinctively postmodern meaning” notwithstanding) should give us cause for pause. There is another area where the state has favored a particular type of association over others: labor unions, which have been favored over other types of worker organizations. That preference has not worked out well for workers; we would do well to think more about whether the story of state preference for marriage will turn out the same.

 

Associations of Workers and the NLRA

Congress passed the National Labor Relations Act years ago and, with it, enacted a particular vision of what worker associations should be and how they should operate. That vision included both (1) exclusive representation[1] and (2) a commitment to the view that the interests of workers and employers are fundamentally opposed and antagonistic.  

At first the NLRA benefited workers (if rapidly increasing unionization rates are any indication), but over time that has largely ceased to be the case. The government restricted covered labor organization activity and the Act stifled the ability of covered workers to develop innovative forms of worker organizations that could better help them achieve their particular interest. One example of this stifling (and one that I discuss in a forthcoming article) comes out of the Act’s prohibition on company “support” of labor organizations. This ban has in turn dramatically limited the development of mutually beneficial collaborations between workers and companies looking to sell themselves to consumers as “conscious capitalists.” As a result of the Act’s narrow vision of appropriate worker organization, it is not surprising that innovative forms of worker organization (the Fair Food Council being just one example) have only occurred among workers who are not covered by the NLRA at all.  

 In short, when the government favors a particular vision of worker association – even with good intentions – it also frustrates experimentation with other forms – forms that may in fact be better for at least some workers.   

Associations of Individuals and Marriage

 Something similar might be said about marriage. Like the vision of worker organization demanded by the NLRA, marriage (including same-sex marriage) is but one of the many forms romantic and family associations can take. And like a traditional labor union, a traditional marriage (same-sex marriage included) will work better for some than others. The government, however, does much to encourage traditional marriage. Spousal privilege and military, social security, and immigration benefits being just a few examples. And these benefits, like all incentives, serve to promote marriage over non-matrimonial forms of romantic and family association. Those benefits alone might already have been enough to stifle experimentation with other forms. But the majority opinion in Obergefell, if its love letter to marriage is read and its views adopted, imposes an arguably different and more potent type of cost on would-be experimenters: stigma. As the majority sees it, marriage is of “transcendent importance” and “promise[es] nobility and dignity to all persons”. It is marriage that “embodies the highest ideals of love, fidelity, devotion, sacrifice, and family.” Without it, “children suffer the stigma of knowing their families are somehow lesser.” (emphasis added). Given all this, a reader would think marriage the sole means by which we come to flourish in relationships – that families and romantic relations structured without it truly are lesser. On that view, failure to get on board with the institution really does deserve to be stigmatized.  

For those who think the Court’s substantive view on marriage’s importance right and the government’s subsequent promotion of it good, this all won’t seem bad. But for those who think the highest ideals of love and family might be better achieved – at least for them – through other forms of association, the majority’s reification of the centrality of marriage to the good life will strike them as yet another barrier to a future where those ideals can be realized. As with the story of worker associations, it might take us a long time to realize that the government’s “help” of our association of choice today won’t actually be so helpful tomorrow.

 

 

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[1] A few argue exclusive representation was not required from the start but it certainly was treated as such soon afterward. Either way, my point is the same.  

Bill Simmons and the Duty of Loyalty

ESPN rather publicly announced that it would not be renewing its contract with Bill Simmons, editor-in-chief of its sports and entertainment site Grantland, as well as writer, author, and co-producer of the "30 for 30" sports documentary series.  A lot has been written about the inside details, as well as the larger ramifications for Simmons, Grantland, and sports and entertainment media more generally.  There's also some interesting IP issues -- could ESPN really appoint another host for the "B.S. Report"?  But I'd like to talk about the next four months, in which Simmons is still with ESPN but is essentially a lame duck.  What does employment law say about this awkward interim period?

Having been publicly cut off at the knees by his current company, Simmons will want to focus on his next gig.  But the law may restrict his ability to do so.  Most jurisdictions have recognized that employees owe employers a duty of loyalty.  The contours of this duty are somewhat vague.  At the very least, the duty would prevent Simmons from working for a competitor while he is still under contract with ESPN.  But let's say he agrees to start working for, say, Fox Sports beginning the day after his ESPN contract ends.  Can he tweet out his new employer?  Can he use his ESPN column or podcast to mention his new gig or even promote it?  Can he ask Grantland employees to join him at his new place?  

The duty of loyalty has been generally recognized as prohibiting an employee from using her current employment to solicit for her  future employer.  Employees are also prohibited from disclosing trade secrets to their future employers.  On the other hand, employees are generally allowed to "prepare" to compete by talking with other employers and agreeing to future employment.  The murkiest area involves one's current fellow employees.  Can Simmons solicit Grantland employees for his new venture?  Some courts have found it disloyal for current employees to persuade other employees to break their contracts with the employer.  It doesn't help that Simmons is editor-in-chief, as courts have held supervisory employees to a higher standard.  However, courts have also focused on surprise as particularly problematic, as when a large group of employees suddenly up and leaves with no notice.  ESPN has plenty of notice that Simmons is leaving and may want to take some of his hires with him.  And although not officially a legal factor, the fact that Simmons is being fired (in some sense) will make his efforts to rebound more sympathetic.

Simmons's last days at ESPN could resemble the tenure of another media celebrity in the wake of a high-profile move.  In 2004, Howard Stern announced his upcoming move from CBS Radio to Sirius Radio with great fanfare.  He used his CBS show to make the announcement.  And he proceeded to use the show to bash CBS for its efforts to censor him, and to promote his Sirius move.  In 2006, CBS Radio sued Stern over his promotion efforts for his new show.  CBS claimed that Stern has used his airtime at CBS to promote Sirius and had engaged in other promotional efforts off the job but while still employed.  It asked for $218 million in damages -- the stock compensation Stern received from Sirius based on the huge jump in Sirius subscriptions in the wake of Stern's announcement.  This request for the disgorgement of the compensation Stern received from Sirius is a traditional remedy for the violation of the duty of loyalty.  The disloyal agent is expected to disgorge back to the principal any ill-gotten gains received in the course of the agency relationship.  Reviewing the claims, Stephen Bainbridge concluded that Stern had likely violated the duty of loyalty with his on-the-job solicitations for Sirius.  Ultimately, CBS and Stern settled the suit for an undisclosed amount.

Conan O'Brien's relationship with his employers at NBC was similarly contentious at the end.  When told NBC was moving the Tonight Show to midnight, O'Brien balked, arguing that the Tonight Show could only start at 11:35 after the local news.  He then spent two weeks trashing his employers on the NBC airwaves.  He even had a running segment where he frittered away NBC's money on expensive cars and licensing rights.  The big difference -- O'Brien was tussling with NBC over his contractual rights, and ultimately the two sides settled with Conan's departure.  He had no future show o promote while still at NBC, and in fact his settlement forced him off the air and into radio silence for six months.

Simmons may be tempted to spend his last few months settling the family business -- trashing ESPN, raiding Grantland of its best writers, and setting up shop at his new home.  And legally, he would have a decent case for doing all these things -- although not one without risk.  What seems clear, however, is that he cannot use ESPN properties to promote his new media home while still an employee.  I would expect instead that word of the new location gets out through the media, coming from everywhere but Simmons himself.  

One final note -- I'm assuming that Simmons's contract does not speak specifically to these matters.  He may have a non-compete that kicks in after the contract's expiration, although that seems unlikely.  And if he starts trashing ESPN or the NFL commissioner, ESPN may end up suspending him again or simply firing him before his contract expires.

Eye of the Beholder

Historically, case law has been hesitant to define what constitutes “art.”  However, with respect to what constitutes “pornography,” we all know the infamous Supreme Court line, “I know it when I see it,” as well as the discussion of the topic in this case and Justice Thurgood Marshall’s opinion here.  All of this being said, I am reminded of a painting that I once saw in a law professor’s office.  It was of a nude woman, clearly artistic, and certainly not pornographic.  Yet, I imagine that some students and other visitors were likely uncomfortable with it.  A personal office that is part of a larger professional environment may thus not be the best location for such displays, and courts are weighing in.  Should some art be off limits in the office – even in law schools?

The Dating Game

Dating is a personal issue – unless it involves the workplace or the classroom.  In several law schools where I have worked, there are professors or employees who are happily married to former students, whom they began to date while they were students.  Perhaps schools turn a blind eye because law students are adults – in contrast to undergraduate students – and, in theory, they are thus freer to make decisions about whom to date, much like people who date co-workers.  But what about unwanted attention or a perceived inability to say no?  An increasing number of companies and schools are instituting no-dating policies for these reasons.  Should law schools follow suit? 

The New Cognitive Property & Human Capital Law

Intellectual property is all about the bargain, no absolutes. But below the radar, a patchwork of law and contract is operating to expand the types of knowledge and information that become propertized. My new article, The New Cognitive Property: Human Capital Law and the Reach of Intellectual Property, forthcoming Texas Law Review 2015 is now up on ssrn. Here is the abstract and as always, I would love to get your thoughts and comments:

Contemporary law has become grounded in the conviction that not only the outputs of innovation – artistic expressions, scientific methods, and technological advances – but also the inputs of innovation – skills, experience, know-how, professional relationships, creativity and entrepreneurial energies – are subject to control and propertization. In other words, we now face a reality of not only the expansion of intellectual property but also cognitive property. The new cognitive property has emerged under the radar, commodifying intellectual intangibles which have traditionally been kept outside of the scope of intellectual property law. Regulatory and contractual controls on human capital – post-employment restrictions including non-competition contracts, non-solicitation, non-poaching, and anti-dealing agreements; collusive do-not-hire talent cartels; pre-invention assignment agreements of patents, copyright, as well as non-patentable and non-copyrightable ideas; and non-disclosure agreements, expansion of trade secret laws, and economic espionage prosecution against former insiders – are among the fastest growing frontiers of market battles. This article introduces the growing field of human capital law, at the intersections of IP, contract and employment law, and antitrust law, and cautions against the devastating effects of the growing enclosure of cognitive capacities in contemporary markets.

SEALS

Think about proposing programming for the annual meeting, or participating in a junior scholars workshop. And if you are ever interested in serving on a committee, let Russ Weaver (the executive director) know. The appointments usually happen in the summer, but he keeps track of volunteers all year long.

Law School Centers

Many law schools have centers or institutes, most of which seem to be ways to carve out market niches, to attract students, to help graduates market themselves, and to attract scholars in a particular field. We have three of them at SLU (the Center for Health Law Studies and the Center for International and Comparative Law), and I am the director of one: the William C. Wefel Center for Employment Law. This center has been a part of the law school since 1987, and in that time has served as an institutional home for our employment and labor law concentration and provided a way to coordinate interesting programming and bring in outside speakers. The center has also provided a way to connect faculty who teach, write, or provide legal services in related areas.

For many years, the center was supported by the efforts of one or two faculty members, simply added onto their other full teaching and research responsibilities, with occasional help from one of the faculty support staff. Now, as a result of some new educational programming and shuffling of staff, the center has more support, including a full-time program coordinator. Additionally, we are in the midst of developing metrics and processes to evaluate our programs, as many law schools are, in line with the ABA's learning outcomes standard, a standard that has been required by other educational accreditors for some time. As a result, we are exploring what our center could be.

We are surrounded by some useful examples. Our own Center for Health Law Studies has been very successful in that field, bringing together researchers, advocates, students, and those who work in health law settings. The Institute for Law and the Workplace at Chicago-Kent, which Marty Malin wrote about for a recent symposium we held on teaching labor and employment law, is an example in the labor and employment arena. In addition to being home for a certificate program, the ILW has business, union, and law firm members, which contribute to the center and participate in its programming. There are opportunities for students (experiential and scholarships), a peer edited law journal and Illinois public sector newsletter, and a number of workshops, conferences, and events with outside speakers.

Our main focus is to provide the best educational and experiential program for our students. We already have a solid curriculum, including the opportunity to spend a semester in Washington, DC, working full-time for an agency that works in the area. We also want to be able to focus on the needs of our community, and provide a home for research, both of which we have made some forays into. So what else might we consider for our center? Are there any centers or institutes you know of that are doing interesting and important things? Have there been difficult tradeoffs in centers or institutes you know about? I'd be interested in any thoughts in the comments.

Using GoFundMe for Litigation

Here is a creative way this local news anchor is trying to raise public awareness and money for defending his case against a non-compete he had signed with his former employer. Watch him and his litigation team explain their woes. 

 

Two (more) op-eds on Hobby Lobby

Ann Lipton has nicely captured the zeitgeist with the notion that "there is something of an obligation for all corporate law bloggers to weigh in on Hobby Lobby."  Today, for example, the Conglomerate is starting up on its second Hobby Lobby symposium.  So it is with some trepidation that I highlight for you two additional pieces on that speak to this case once again.  First, Brett McDonnell defends the decision from a progressive perspective in "Ideological Blind Spots: The Left on Hobby Lobby," appearing in the Minneapolis Star-Tribune.  Brett argues that the decision provides space for corporations to have goals outside of shareholder wealth maximization -- something that liberals have promoted in the corporate social responsibility context.  The op-ed also recounts the history of RFRA, which overturned Justice Scalia's Smith opinion, and points out that progressives have traditionally been defenders of religious liberty and toleration.  The op-ed has (at this point in time) 716 comments, which kind of puts us blawgs to shame.

Second, Grant Hayden and I have penned "Who Controls Corporate Culture?", which appears this morning in the St. Louis Post-Dispatch.  Although not written with this intention, it is actually a nice complement/rejoinder to Brett's piece.  It argues that folks are riled up about Hobby Lobby in part because the company's 13,000 employees had no role in making the decision.  If corporations are going to be according political and religious rights, we argue, the employees need a voice in choosing how to exercise them, particularly when the primary impact is on employees.

Two Options for Illinois After Harris v. Quinn

Although the pundits were right that Justice Alito penned the majority decision for Harris v. Quinn, the assumption (that I shared) about a broad opinion was incorrect.  Yes, the opinion attacks Abood, but in a passive-aggressive way: it criticizes the decision for a whole section while ultimately only failing to extend it to "partial" public employees.  My guess is that Abood is largely safe but may be chiseled away at over time.  Of course, Abood is not safe as to the home health care workers, since the Court ruled that the First Amendment prevented the state from agreeing to any form of mandatory dues as to those workers.

The home health care workers will presumably remain unionized; the only change is that workers like the petitioners in this case will choose not to pay any dues.  How many more will join them is an open question.  But the free-rider problem may make it difficult for the union to maintain its level of services to all the employees in the unit.  If Illinois wants to provide an economic model for unionization that is something akin to the now-unconstitutonal system, here are two possibilities:

1. Make all home health care workers into full Illinois state employees.  Despite all the hostility towards Abood, the Court's decision rests solely on the home health care workers status as partial state employees.  And from the outside, it is a strange distinction: the state looked like it was trying to have its cake and eat it too.  Now that the Court is forcing the state to choose, it could choose to make all home health care workers into state employees.  What would change?  The state would have to take away some of the control that the customer currently has and place that with the state.  This move has independent benefits: since the government is paying for the services, the government shoud arguably exercise more control and oversight over those services.  People like the petitioners in this case--people who are paid to care for their own loved ones--will likely not like this move.  But they are in a strange position to begin with: Pamela Harris, for example, is employed by her son, for whom I would imagine she is at least one of his guardians.  If the putative employer--the care-requiring customer--is often not in a position to exercise oversight of the employee, the state should arguably step in and provide more oversight. 
2. Allow for members-only bargaining.  Caregivers like Pamela Harris only receive the benefits of the union-negotiated terms and conditions of employment because the state requires the union to represent all the employees in the bargaining unit.  Illinois could lift this requirement and only apply the collective bargaining agreement to the actual members of the union.  Such an approach to unionization would be a real anomaly in the U.S., which is premised in the public and private sector on exclusive representation.  But if certain workers do not want to bear the costs of organizing, then they should be free from its fruits as well.  Since members-only bargaining fits better with a consumerist, free-to-choose philosophy that runs pretty strongly in this country, you may see more experimentation with that model.  This group of workers would be a logical place to start.

There may be state or federal issues with either of these choices; I do not know, for example, whether the state could legally reimburse the home care workers differently depending on whether they joined the union or not.  But there is a fair amount of flexibility in public-sector labor law, and it will be interesting to see what new approaches states develop in the face of Harris.

Looking Ahead to Harris v. Quinn

Only two Supreme Court cases remain to be decided this term: Hobby Lobby and Harris v. Quinn.  Based on a breakdown of the authors of opinions thus far this term, Amy Howe at SCOTUSblog believes that "Justice Alito, who has not yet written a decision from January, will be writing in Harris."  As kind of a pre-cap to the ruling, here are some quick thoughts on what an Alito opinion in Harris might mean:

• First, check out Charlotte Garden's discussion of Justice Alito's questions in oral argument and his majority opinion in Knox v. SEIU Local 1000 to get a sense of why unions are worried about an Alito opinion.
• Not to be too cynical about the ordering of opinions, but the coverage of Hobby Lobby is likely to hide Harris under its shadow.  If Harris is as revolutionary as some folks fear/hope, it would make sense to give it some political cover.
• The most sweeping version of the opinion would likely prohibit states from signing on to any agreements that require their public employees to pay any level of funds to a union.  Knox clearly hinted at such, saying that mandatory dues were "an anomaly" that the Court had "tolerated" but perhaps for not much longer.  This change would be a big financial blow to unions, as it would allow any employee to opt out of any payments to the union.  But I have not seen many folks talk about the next step if public jurisdictions were required to be "right to work."  Namely: would some states then relax the duty of fair representation requirements on unions, and/or allow for members-only bargaining?  Under our current system, everyone in a "fair share" jurisdiction has to pay at least bargaining costs because they are all represented by the union.  But states could change their own public labor laws and provide that a union need only represent those employees that are members.  The NLRA requires unions to represent everyone in the bargaining unit, but there is no federal "public NLRA" governing state and local employees.  So states could say, "We will only bargain with the union as to those employees who are in the union.  Whatever benefits the union secures will only go to union-member employees."  Will states actually want to do this?  I'm not sure -- it would be messy.  But if states want to provide their employees with the opportunity to unionize, a members-only system would certainly be more economically sustainable than a system allowing employees to free-ride off union negotiations.
• A decision prohibiting agency-fee agreements would be a blow to federalism.  The individual states pursue a variety of different labor-relations regimes based on their own statutory and agency HR approaches.  States should be free to arrange these relationships within historically acceptable models of employee-management relations.  Jutsice Powell's dissent in Garcia v. San Antonio Metropolitan Transit Authority argued that state and local services such as “fire prevention, police protection, sanitation,and public health” are “activities that epitomize the concerns of local, democratic self-government."  Public employees provide these services.  States should be able to provide for a majoritarian system of employee representation that requires some minimal level of payment for the negotiation services that the union provides.  But if they are denied this opportunity, do not be surprised to see a variety of new and different models being proposed and enacted at statehouses across the country -- models that may require employees to actually join the union if they want the benefits that the union provides.  So perhaps the ultimate result of a "right to work" opinion would be that employees will feel more of an economic compulsion to join the union (and pay full dues) than they did when they could refrain from joining the union but still enjoy the fruits of representation.

Who will create an astute marijuana litigation and legal practice blog?

Regular Prawfs readers know that I have done some blogging here about marijuana laws, policies and reform because I see so many interesting general legal issues intersecting with the drug war generally and criminal justice approaches to marijuana specifically.   Indeed, I felt compelled to start a new blog, Marijuana Law, Policy and Reform, in part because I was interested in writing about broad issues of public policy implicated by modern marijuana reform efforts: as I have said in my marijuana seminar course description, "contemporary state-level reforms of marijuana laws have raised significant new constitutional, legal, political and practical issues; policy concerns relating to states' rights, local government law, race, gender, public health, crime, political economy, and bioethics intersect with modern marijuana law reform." 

Now, as the title of this post suggests and largely thanks to some terrific guest blogging by Alex Kreit over at MLP&R, I think the time may be right for an enterprising lawyer and/or law firm to start a blog focused particularly on marijuana-related litigation and emerging legal practice issues surrounding this new industry.  I say this based in part on these four new recent posts over at MLP&R which highlight the array of diverse issues and courts now dealing with  dynamic marijuana-related litigation:

• Colorado's Amendment 64 given retroactive effect by appeals court

• District court rejects challenge to federal gun restrictions on medical marijuana users

• California appeals court on medical marijuana laws and probable cause

• Medical marijuana laws and probable cause: some defense friendly dicta from the 7th Circuit

In this Prawfs post a few months ago, I speculated that green (i.e., young/junior) lawyers may have a uniquely important role to play in the emerging marijuana "green rush" industry: not only may veteran lawyers be cautious and concerned about representing persons actively involved in state marijuana business, but marijuana reform often seems a "young man's game" for which junior lawyers may be uniquely positioned to be of service to persons needing legal help in this arena.  Now I am thinking, based in part on the posts above, that an especially effective way for a young lawyer or law firm to make a name in this arena (and to learn a whole lot) would be to start blogging astutely about the emerging challenges and opportunities that surround marijuana litigation and legal practice.

Nate Silver and the Hidden Genius of Capitalist Crowdfunding

After a long and difficult year personally, it gives me some quiet joy to announce that I've just uploaded a "shitty" first draft of Catalyzing Fans to SSRN. Actually, it's somewhat polished as a draft, but it's pre-submission, blissfully short (13,000 words) and, um, really interesting. Bonus: it has nothing to do with retributive justice.  So, my co-authors, Mike McCann and Howard Wasserman, and I hope you'll read a draft and send along comments. Here's an overview:

Should Nate Silver have stayed at the New York Times, or instead go to ESPN?  Where should Cass Sunstein teach? What team should Lebron James play on? In this paper, we have a proposal for how to think about the trilateral relationships among "talent" (Silver, Sunstein, James), teams (the NYT, the Miami Heat, Harvard), and fans. For some reason, the answers to where that talent should work are  often only indirectly connected to the desires of third-party fans. We think this could be different.

Specifically, we propose the development of Fan Action Committees (FACs).

Analogous to, but distinct from, Political Action Committees (PACs), these FACs would coordinate, aggregate, and monetize the intensity of fan preferences and would thus serve to either enrich "talent" directly, or, in a wrinkle we prefer, make contributions to charities favored by talent.  If we're right about how fans could introduce crowdfunding as a way to re-configure that triangular relationship, well, it's a potential game-changer, if you'll pardon the pun.  Once our paper lays out the architecture of the direct compensation and charitable models, we anticipate how to overcome obstacles to the development of FACs that may exist under current rules or laws. We also address a variety of policy concerns and objections ranging from considerations of competitive balance to distributive justice.  Advancing and illuminating the possibility of FACs across pro team sports and commercial entertainment, journalists and academics, we show how crowdfunding options produce the potential for more efficient valuations of talent by registering not only the number of fans but also the intensity of their preferences. This insight, which stresses the upside of price discrimination, has relevance to a wide range of human endeavor. In short, the introduction of FACs can basically change the dynamic of any area where bilateral contracts have third party externalities that are not currently calibrated or adequately valued.  

Btw, Howard, Mike and I began kicking this idea around last summer after I floated on FB something like the notion of  fan interference, wondering why fans couldn't affect the Knicks' incentives to hire or retain Jeremy Lin in the midst of Linsanity. To transition this into a proper paper, however, I encountered the slight problem that I could not care less about sports or sports law, and knew zero about the area. So I enlisted my pals Mike and Howard -- two of the leading sports law guys in the country -- to write a paper with me about the law, policy and economics about fandom. The paper's come a long way from a facebook thread (which itself is a sort of crowd wisdom opportunity), and some of its most interesting moves and extensions come from conversations with prior readers at FSU and more recently the 10,000 Feet Legal Theory Workshop--so thanks to those folks! (The latter, btw, is a workshop that spontaneously emerged among the group of profs who went hiking with me in the afternoons while in the Rockies two weeks ago for the LEC's annual law and econ boot camp.)  Anyway, we'll be sending it out soon, and, now that it's been gently road-tested, I'm sure any of us would be excited about the prospect of talking about it at your law school this coming year. 

 

Did Justice Powell Know He Had A Gay Clerk?

If you just looked at the front page of today's New York Times, you might not know from headline ("Exhibit A for a Major Shift: Justices' Gay Clerks") that it contains what seems to be a major historical revelation.  Most people familiar with the Court's progression from Bowers v. Hardwick to Lawrence v. Texas are also familiar with a sad and ironic statement attributed to Justice Powell: In the course of changing his vote to uphold the law, he was reported to have said "I don't believe I've ever met a homosexual," even as he had a gay clerk at the time.

Well, according to today's story, Justice Powell may have said that, but he knew that it was not true:

C. Cabell Chinnis, a gay lawyer who practices law in Palo Alto, Calif., was one of Justice Powell’s clerks as the justice was struggling with how to vote in the Hardwick case. In an interview, Mr. Chinnis said his boss must have known about his sexual orientation. “He had met my boyfriend,” Mr. Chinnis said.

Indeed, the justice sought him out for advice precisely because he wanted to learn about the mechanics of gay sex, Mr. Chinnis said, recalling an uncomfortable exchange on the subject. “This 78-year-old man is asking me about erections at the Supreme Court,” he said. ...

“It’s more important to me to make love to the person I love,” Mr. Chinnis remembered saying, “than to vote for a judge in a local election.”

Now maybe this is common knowledge to those who've been following the history of the Court more closely than I have.  But Powell's Wikipedia page says he didn't know, his 2002 obituary in the New York Times suggests he didn't, as do many other stories.  So correct me if I'm wrong, but if true, this seems like big news.

[Of course it's also possible that Mr. Chinnis's comments have been mis-reported or taken out of context.  Courting Justice, by Joyce Murdoch and Deborah Price reports that none of Powell's clerks ever came out to him, and includes quotations from Mr. Chinnis that suggest a slightly different account.  But it's hard to tell for sure.]

Oddball SCOTUS Cases

The purpose of this post is to crowdsource an issue that Suja Thomas has identified.

I got the idea from seeing Suja’s presentation at AALS this year, in which she argued that Twombly, Wal-Mart, and Ricci are oddball cases—cases with atypical facts in which the Court made broad changes to the law in a way that significantly affects cases with more typical facts.  She has written an article entitled The Oddball Doctrine: How Atypical Cases Make Bad Law in which she argues that the Court should exercise restraint by not making  legal changes in these types of cases.  During Suja’s presentation, it occurred to me that the Oddball Doctrine could apply to many of the Court’s recent arbitration decisions.

An example is ATT Mobility v. Concepción, in which the Court enforced a class-action waiver in a consumer arbitration agreement.  The arbitration agreement at issue in Concepción strongly favored the consumer – for example, it included a provision (added by AT&T after the Concepcións had filed suit) requiring AT&T to pay $7500 to a consumer if an arbitrator awarded the consumer an amount greater than AT&T’s largest settlement offer at the time of arbitrator selection.  Anyone even vaguely familiar with consumer arbitration knows that 99.99% of the time they skew very strongly in favor of the company – not the consumer. 

Had the Court enforced a class-action waiver in the far-more-typical consumer-arbitration factual scenario in which the prohibition of a class action makes it impossible for consumers to individually advance their low-dollar claims, the Court would have invited a political (perhaps Congressional) backlash.  But by choosing for certiorari that one-in-a-million case in which the class-action waiver favored the consumer, the Court was able to create a broadly applicable legal rule permitting companies to prohibit class actions in all arbitration agreements.

My new article argues that the Supreme Court recently has chosen for its arbitration docket a set of cases with wholly atypical fact patterns in what appears to be a deliberate effort – successful so far – to advance its pro-arbitration policy agenda without provoking a political backlash.  See Oddball Arbitration.  My question for Prawfsblawg readers is: do you see Thomas’s Oddball Doctrine in other areas of the law?

Rick Bales

The Religious Freedom Rights of Corporations and Shareholders

A late and grateful hat tip to Charlotte Garden, who posted last week about the Seventh Circuit's decision in Korte v. Sebelius.  The court granted a preliminary injunction against the enforcement of provisions of the Patient Protection and Affordable Care Act (“ACA”) and related regulations requiring that K & L Contractors purchase health care coverage for employees that included abortifacient, contraception, and sterilization coverage.  Accourding to the majority, the plaintiffs had some likelihood of success on their Religious Freedom Restoration Act (RFRA) claim that the required health care coverage put a substantial burden on their free exercise of religion.

Although the case raises a number of interesting issues, I want to focus on the religious freedom rights of corporations and shareholders.  It is the corporation that has the obligations to provide health care coverage with certain coverages.  However, the court seems to find that the corporation's obligations infringe on the religious liberties of the shareholders.  As the court states:

[T]he government’s primary argument is that because K & L Contractors is a secular, for‐profit enterprise, no rights under RFRA are implicated at all. This ignores that Cyril and Jane Korte are also plaintiffs. Together they own nearly 88% of K & L Contractors. It is a family‐run business, and they manage the company in accordance with their religious beliefs. This includes the health plan that the company sponsors and funds for the benefit of its nonunion workforce. That the Kortes operate their business in the corporate form is not dispositive of their claim. See generally Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876 (2010). The contraception mandate applies to K & L Contractors as an employer of more than 50 employees, and the Kortes would have to violate their religious beliefs to operate their company in compliance with it.

In dissent, Judge Rovner took issue with this, but in a somewhat indirect fashion:

Although the Kortes contend that complying with the Patient Protection and Affordable Care Act’s insurance mandate violates their religious liberties, they are removed by multiple steps from the contraceptive services to which they object. First, it is the corporation rather than the Kortes individually which will pay for the insurance coverage. The corporate form may not be dispositive of the claims raised in this litigation, but neither is it meaningless: it does separate the Kortes, in some real measure, from the actions of their company.

Charlotte Garden takes on the issue of whose religious freedom rights are at issue in her post:

This analysis raises an interesting question about the interplay among the rights of majority shareholders, managers, and corporations after Citizens United. The Seventh Circuit seems to treat them as essentially overlapping, so that government regulation of corporations would be unlawful if it violates the rights of one, two, or all three of the above.  But it seems to me that Citizens United could also support the contrary result. For example, if the funds of dissenting shareholders can be used for political speech without violating the First Amendment, then why can’t the Kortes’ funds be used for K&L’s contraception coverage without violating their RFRA rights? The Seventh Circuit doesn’t answer this question, though it seems its answer would have to turn on whether or not the shareholders in question were in the majority—a result that seems both counterintuitive and at odds with the Supreme Court’s approach to dissenters’ rights in other context, including the union dues context.

I agree with Charlotte's thinking here.  It is the corporation that is being forced to provide a certain level of health insurance to employees.  When does a corporation have rights of religious freedom?  The court characterizes the company as "secular," and it is clearly not a religious organization. And if it is the Kortes, rather than the corporation, whose rights are being infringed, when do actions taken with respect to a business entity impinge upon the rights of stakeholders?  The court mentions that the Kortes are 88% shareholders and that the business is run by the family according to their religious beliefs.  Are these material facts?  What if they owned 51% of the company, but it was run by someone else?  What if they owned 33% but had de facto control?  What if they owned a single share?

This case reminds me in part of Thinket Ink Information Systems v. Sun Microsoft, 368 F.3d 1053 (9th Cir. 2004).  In that case, the court held that a corporation had a right to bring suit under 42 U.S.C. Sec. 1981 for discrimination based on race.  Although noting that a corporation generally does not have a racial identity, the court found that in the particular case, Thinket had "acquired an imputed racial identity" sufficient to bring a claim.  The court stated that: "[t]o receive certain governmental benefits, Thinket was required to be certified as a corporation with a racial identity; further, it alleges that it suffered discrimination because all of its shareholders were African–American."  This was enough to give the corporation itself standing under Sec. 1981.

At the time, Stephen Bainbridge characterized the Thinket decision as "just nuts" because the corporation was just a legal fiction and instead represented a nexus of contracts.  However, he did allow that "[i]t may be useful to invoke that fiction here, so as to promote administrative convenience by allowing the entity rather than its individual constituents to sue, but it doesn't  change the basic theory."  A similar problem may be presented here.  But at the least, a court should establish whether it is the corporation or the shareholders who have standing to sue for actions required of the corporation.  And if it's the shareholders who have standing to sue, it seems unclear when they would be sufficiently entwined with the corporation to get that standing.

The Unappreciated Link between Health Insurance and Job Creation

Thanks to Prawfs for having me back. I hope to blog about a variety of things this time around, mostly in my primary areas of interest. But first, I've got a post that I've been thinking about for a while, and while I've got the bully pulpit, I'll try it out.

After two presidential debates (three if you count the “foreign policy” debate), a vice-presidential debate, and eighteen months of campaigning, the candidates seem to be missing a critical link between health care reform and job creation. This link undermines Governor Romney’s plan to create jobs through tax cuts as much as it represents a missed opportunity by President Obama to defend his signature legislation. I have views about the best way to bring affordable health insurance to everyone, but I won’t express those here. I don't want my main point to get bogged down in the details of how you get there. Instead, I’ll only point out the importance of widespread availability of such insurance.

More than tax cuts, and more than abandoned regulation, small businesses need customers. Health insurance is a critical but unappreciated link to provide these customers. I’ll give a personal example. In May of this year, my wife and I committed to a modest renovation of a part of our home. A couple months later, just before work was to start, I was diagnosed with an extremely rare condition that took two surgeons about six hours to repair . The bill for my five day stay at the hospital was about $133,000, and the doctor’s bills, CAT scans, and MRIs will easily put the total over $150,000. But I was insured. We had to pay for a chunk of the operation – about $2000 after all copays.

Coincidentally, work started on the house the day I came home from the hospital. We could continue with the plan, and our contractor and his employees, subcontractors, and supply houses will all see business. Our contractor may make over $250,000 per year, but I doubt it based on what we are paying for this work and what we are getting in return. He’s just a decent guy doing good work, but he needs customers – especially in a tough economy – and we would have been one less job. Our project isn’t the biggest one in the world; indeed, it’s a fraction of what I would have owed the hospital if I were uninsured. My insurance created jobs, and I am sure my insurance is not alone in that respect.

Insurance not only creates customers, it can help directly create jobs. Just last month, my sister—a podiatrist—seriously considered selling her practice for almost zero equity to become an employee at a large practice. This would have likely cut her lifetime earnings in half and forced her to lay off her three staff, one of whom is our mother! Why would she do such a thing? To get health insurance, of course. She has been denied several times due to a “preexisting condition” that is related to her sex, essentially healed, and never life threatening. In other words, she cannot get insurance at any price. Her staff is all insured by other means, so she can’t form a group, and even if she did her coverage would likely be limited by preexisting conditions. She is holding on for the ability to buy insurance under the new law, and we are all hoping it will come soon. She is surely not alone.

My sister’s story ties to a bigger job creation issue. Without the ability to obtain affordable healthcare, people will simply not form businesses and hire other people. They will remain employees. This is a much bigger implication of insurance cost reduction. I know how much small group insurance plans can cost; I used to negotiate them for my law firm. We wound up having to purchase major medical insurance while self-insuring the first $5,000 of medical expenses because our premiums rose at astronomical rates. My partners and our employees were not happy with the bureaucracy this created, but the alternatives were daunting. This is not an incentive to form a business, and shaving some percentage points of my top tax rate won't get me to create a business if I think I can't get insurance at any price. That's me, by the way. Not that I would ever quit being a professor (the greatest job in the world), but because of my condition I won't be able to get insurance without. I would be an employee for the rest of my life, without even the ability to take a year off that isn't a sabbatical that includes coverage. So much for harnessing bright ideas to hire others.

Maybe it would be better to have more expensive insurance available to fewer people like we do now, but justifying the status quo should take into account all the effects of insurance. Accessible, affordable health insurance creates jobs in ways no one is talking about, but they should be.

 

Political Spending = Business Spending (by Unions as well as Corporations)

Earlier this week, the WSJ touted a new Manhattan Institute study showing that political contributions by corporations have a positive effect on the bottom line.  The study found that "most firms, like most individuals, behave rationally and strategically in their spending decisions on campaigns and lobbying, devoting resources in ways that, they have reason to expect, will benefit the corporations themselves and their shareholders."  And benefits do come, in the form of lower taxes, more favorable regulation, and earmarks that help the business. The authors calculate that these political benefits improve returns for shareholders by 2% to 5% a year.

It should not be a surprise that corporate political spending helps corporations.  This recent study follows upon research by Jill Fisch on FedEx's political spending, which found that "FedEx has successfully used its political influence to shape legislation, and FedEx's political success has, in turn, shaped its overall business strategy."  The WSJ uses the Manhattan Institute report to beat back critics of Citizens United who are looking to get corporations out of politics.  The Journal opines:

Liberals have been trying to persuade CEOs and corporate boards to stop spending money on politics by claiming that it doesn't pay. But according to a new study by the cofounder of the Democratic-leaning Progressive Policy Institute, corporate participation in politics works for the companies and their shareholders. * * * 

In a better world, corporations wouldn't have to devote money and time to politics. . . . But politicians have created a gargantuan state that is so intrusive that businesses have no alternative than to spend money to defend themselves and their shareholders from such arbitrary looting as the medical device tax in ObamaCare. Liberals want business to disarm unilaterally.

Oddly, neither the Journal nor the Supreme Court seem to understand these principles when it comes to unions.

In today's Knox v. SEIU, the Court again privileges the rights of represented employees to opt out--or rather, not to have to opt-out in the first place--from union political spending.  The Court clings to the trope that the union's political spending is somehow extraneous to the core services provided by the union to the represented employees.  But political spending is perhaps even more important to unions than it is to corporations.  I have posted before about SEIU's electoral activity, but it bears repeating--SEIU spent an estimated $85 million to help elect Barack Obama in 2008.  Although the Obama administration failed to get the Employee Free Choice Act passed, it did pass healthcare reform -- which was arguably more of a SEIU priority.  (See Chapter 9 of this book by Steve Early, entitled "How EFCA Died for Obamacare").  Former SEIU President Andy Stern had the highest number of oval office visits of any outsider--22--during the president's first six months in office.  Stern was not in there based on his individual perspicacity about the nation's various problems.  He was in there as president of the fastest-growing union in the U.S. -- one whose members largely worked in the health care field and would benefit from an expansion of health care benefits.

Knox v. SEIU concerns a "Political Fight-Back Fund" levied against represented employees, including nonmembers, to fund political activities in California. Two propositions were on the California ballot: Proposition 75, which would have required an opt-in system for charging members fees to be used for political purposes, and Proposition 76, which would have given the Governor the ability to reduce state appropriations for public-employee compensation.  In response to the petitioner's objection to the special assessment, an SEIU employee said, "we are in the fight of our lives," and it's easy to see the urgency.  If you accede to the principles that (1) employees can choose as a majority whether to have union representation, and (2) all represented employees need to pay for their representation, then political spending should not be excluded.  In an era where state governments are reconsidering collective bargaining rights for public sector unions, political spending is critical to the unions' very existence as businesses.  Unions need to have collective bargaining rights in order to bargain collectively on behalf of represented employees.

The majority's opinion in Knox v. SEIU assumes the distinction between collective bargaining expenses and political expenses without much discussion, other than an interesting block-quote from a Clyde Summers's book review.  (I would argue that all of Summers' examples don't really prove his or the Court's point.)  And at this point, not even the dissent questions the Hudson framework.  But it makes no sense.  Unions and academics should start fighting the framework: unions are businesses, and political spending is business spending.

I did see one glimmer in the Court's opinion, in the following passage:

Public-sector unions have the right under the First Amendment to express their views on political and social issues without government interference.  See, e.g., Citizens United  v. Federal Election Comm’n, 558 U. S. ___ (2010). But employees who choose not to join a union have the same rights.

The Manhattan Institute report, like the Wall Street Journal, recognizes that corporations are not merely "express[ing] their views on political and social issues" when they make political contributions.  They are fighting for their businesses.  The Court should not continue to disarm unions unilaterally in a post-Citizens United world.

Employees with Religious Attire and the "Back of the Bus"

As a fellow at the Pluralism Project, a Harvard-based research center that explores the state of religious liberty in the United States, I examined an employment discrimination case involving Kevin Harrington -- a native New Yorker of Irish descent who converted to Sikhism as a youth and who has worked for the New York Metropolitan Transportation Authority since the 1980's. Harrington started working for the MTA as a bus cleaner, and for the last two decades has been an MTA train operator.  On 9/11, Harrington was able to reverse his Number 4 train, which was headed to the World Trade Center station, and safely discharge his passengers.  For this, Harrington was honored by the MTA.

Shortly after 9/11, however, Harrington claimed that the MTA discriminated against him on the basis of his religion.  Harrington specifically stated that the MTA informed him that he had two choices: that he could continue working as a train operator only if he wore a cap with MTA's logo, or that he could wear his religiously-mandated turban in the railyard, away from customers.  The MTA then told Harrington that he could wear a turban as a train operator only if he attached an MTA logo to it.  The MTA apparently explained that the logo was necessary to alert customers and passengers that the person at the helm of the train was indeed an MTA employee -- not, as some would say, a "runaway terrorist."  Newsday ran an editorial arguing that "perhaps [the logo] will ward off any biased fears that outsiders have commandeered the system."

The MTA was eventually sued by the Department of Justice, the Center for Constitutional Rights, and the Sikh Coalition, on the theories that the employer's generally applicable uniform policy was being selectively enforced against Sikhs and Muslims, including Harrington, and that the out-of-customer-view option was impermissible under Title VII.  A CCR attorney, for example, stated that the MTA engaged in "a calculated attempt" to hide certain workers "on the grounds that they 'look Muslim' and might alarm the public for that reason."  Yesterday, the MTA settled the case, agreeing to permit employees to wear religious headgear without the logo and to pay $184,500 to eight current and former MTA employees. 

As I noted in this forthcoming article, some may assume understandably that Title VII does not tolerate employers' attempts to place employees with conspicuous religious attire in the back areas, where these attempts are tied to actual or perceived customer preferences.  But federal courts have sided with employers in this context.  This settlement may help undercut the view that employers can place employees with distinct religious appearances out of sight without running afoul of Title VII's protections.

This case also lends support to the suggestion that the Department of Justice has taken great interest in religious liberty issues.  (Though, in fairness, I should note that an astute reader has expressed to me the concern that the Department may be conflicted or divided as to the extent to which it is willing to robustly enforce statutes safeguarding religous liberty, including RLUIPA.  The reader points specifically to the Solicitor General's position recommending that cert in a case involving a RLUIPA circuit split be denied or granted and summarily reversed. )

The title of  this post is taken from a Sikh Coalition attorney's comment that the MTA's initial choice to Harrington was a "back-of-the-bus solution."

Potentially Important Law Faculty Hiring Decision...

I'm not a First Amendment scholar, nor am I an employment discrimination scholar. I did, however, go through a hiring process twice, and this decision by the Eighth Circuit surprised the heck out of me. The gist of the opinion is that a jury must decide if a professor who was not hired at a public law school was discriminated against in violation of Section 1983. The allegation, quite simply, is that she was conservative and a liberal faculty (or more specifically, the dean following the recommendation of the faculty) refused to hire her.

The court held that this is a legally cognizable injury, and that a jury has to decide whether she wouldn't have been hired anyway.

For those of you on the market this year (or thinking about it), the case is also an insightful view into the black box of academic hiring. It shows how mixed signals can occur, and how uniformly positive feedback can still not lead to getting hired for all sorts of reasons outside of the candidates' control. I won't comment on the reasoning or facts in this case, because I just don't know them. That is, as they say, up to the jury now.

One final point - there is a key faculty governance nugget buried in this case. One factual question was whether the dean always followed faculty recommendations, and/or whether the dean must. While most deans follow almost all faculty hiring recommendations, they usually (technically) don't have to. One issue in this case is that no such policy was in writing. After this case, deans might want to put such a policy in writing for self protection, but maybe the deans (or university provosts and presidents) won't want discretion so limited.

 

H/T How Appealing

The Gap

According to a survey recently released by the National Association of Women Lawyers, only 47 percent of first and second year law firm associates are women; this shows a drop by one percent from past surveys. Moreover, 55 percent of staff attorneys are women, making staff attorney the attorney position with the highest percentage of female lawyers. Both female partners and female associates lag behind their male counterparts in pay, and the difference largely shows up in the respective bonuses paid to each. Finally, "[t]he majority of large firms have, at most, two women members on their highest governing committee.  A substantial number have either no women (11 percent of firms) or only one woman (35 percent of firms) on their highest governing committee." 

We know that nearly half of law students are women, so we must question why women are not faring nearly as well in private practice as are their male counterparts. Is actionable discrimination in law firms operating so rampantly and unchecked? Is something more subtle than actionable discrimination at work? Several European countries, aware of the dearth of women at the helm of leadership in industry and other places, have decided that to the extent that the culture of corporate leadership is somehow not welcoming to women or conducive to their success, large scale forced integration is the best way to alter it.

The internet and newspapers are abuzz with recent word of quota requirements implemented in many European countries that are designed to place more women on corporate boards and in other leadership positions. The idea had its genesis in Norway, but Spain, France, Iceland, the Netherlands, Belgium, and Italy are now adopting it, according to reports.

Some are saying that these countries have the right idea-that imposing these quotas and forcing integration to a point where the law and educational and professional pipelines have been unable to take it is a necessary step in the right direction for these countries. Others, opposed to quotas of any kind, feel that the forced nature of the integration will breed more backlash and strife than progress when it comes to equality of opportunity. Quotas are inimical to American attempts-legal and otherwise-to foster equality, integration, and increased access to whom it has historically been denied. Even court mandated or court approved affirmative action plans shy away from the notion of imposing flat out quotas.

So what is to be done here at home? The fact of the matter is that the recently released statistics here in the U.S. are grim, and a more searching look into this widening disparity of opportunity and achievement is clearly warranted, in one way or another. Quotas surely aren't the answer, but the widening rift is growing too big to ignore. We should be looking into why it persists and thinking about what can be done to stem it. Is there a role that law schools and legal education can play?

Perfect Makes Practice?

 I wanted to revisit a comment that I posted on a really thoughtful post by Robin Effron about students' lack of professionalism and when the duty to seize a so-called teachable moment kicks in. I wrote that

----

...[F]riends from law school, who unlike me, do not teach law students, but supervise junior attorneys in practice... have confirmed that to the extent that students are thoughtless in their approach and interactions with professors, they're not necessarily polishing up and putting in the effort to be more diligent, considerate, and prepared for their supervisors and clients. So, for example, a student who asks me questions about what the reading is for that day because he can't be bothered to consult the syllabus is likely to be the same student who wastes a partner's time by asking certain basic things about an assignment that are clearly knowable without resort to the partner. A student who expects me to keep track of, look up, and report to her about her absences likely is the same junior associate who, a few years later, is seen by the senior associates for whom she works as having unrealistic expectations that they will keep track of her work, deadlines, and responsibilities and that they exist to make her life easier instead of vice versa. A student who shows that he cannot be bothered to consolidate questions or proofread assignments or correspondence is likely the same associate who yanks things out of the printer and drops them on a senior associate’s desk as he strolls out of the office, or shoots careless correspondence off to a client or judge without regard for who is going to catch his careless mistakes. These associates quickly tarnish their reputations internally, externally, and permanently. They don't last in jobs, and they don't last in practice.

Today's cost-conscious client does not want to pay 3/4 of a senior person's hourly rate to employ a junior person and have shoddy work, wasted hours, and an unreliable person who cannot be bothered to exhibit professionalism as counsel. They'd rather pay full price for the real thing, because it's cheaper and better for their case and for their overall representation. I have long thought that we as law professors owe our students more in terms of their complete professional training, but I, too, have struggled with how to address certain of these issues without alienating students or seeming less approachable; I pride myself on being very accessible to students. I won't even get into scenarios where a student is disrespectful, but clearly doesn't realize that she is being rude at all. I fear we may do our students the greatest disservice when we remain silent as we strive to build their confidence and facilitate their ability to speak freely to us. We graduate them, but then the real world must (and invariably does) correct what we have not deemed to be our place to address. It's a topic worthy of further discussion, and I am glad that you brought it up.  who employ and supervise junior attorneys.

--

Fast forward to this year, and I have found myself chairing our school's Faculty Placement Committee.

This committee works alongside the Career Development Office to plan and staff programming geared toward helping students find and land jobs in this competitive market. I also find myself  surrounded by friends in several major cities including Miami, New York, and Washington DC who employ and supervise junior attorneys. I have geared much of the advice that I dispense at panels called things like "How to Find and Keep a Job" or "How to be a Good Summer Associate" toward addressing the pet peeves and sought-after traits that I hear about.

 

This year, as well, I joined several junior faculty members in creating what we are calling a "working group" on classroom culture. With the goal of identifying and heading off behavioral and other problems in the classroom that seem to be engendered by students' lack of accountability and/or professionalism, we started off the school year by addressing students at Orientation. Although most of our students do not exhibit a lack of professionalism in the classroom, our goal was to identify what we considered unprofessional behavior before anyone engaged in it so that the discussion could be thoughtful, rather than antagonistic or accusatory. We identified behavior that had the potential to harm others' experiences, like a student's not doing the reading and then coming to class with a series of questions designed to catch her up at the expense of her classmates' time (and patience).  Aiming to create a culture of professionalism and civility from the outset, we talked about the connection between the habits and mindsets that our students would form and those that they would engage in or subscribe to as working professionals. We talked about the state of the profession and about how many leaders of the bench and bar bemoan what they term a loss of civility and professionalism in the practice of law.

 

I wanted to see if any of you or your schools had attempted anything similar and what the results had been. We were very careful to make clear that students could act and approach their studies as they wished, but the impressions that they made on their professors and one another could have long-lasting and far-reaching ramifications. I would like to think that we aided some students who hadn't given much thought to these issues with self-awareness, law school protocol, and accountability that will give them a competitive edge in the profession.

Where does it start? Where does it end?

This week, the American Association of University Women released information from a study that said that almost half of students in grades 7-12 have experienced sexual harassment in the last school year. Although more girls than boys reported being the target of sexual harassment at school, defined by the nonprofit research organization as “unwelcome sexual behavior that takes place in person or electronically,” boys and girls alike were identified across the board as harassers and victims. Rumors and jabs about students’ promiscuity and sexual orientation looked to be a significant part of the reported behavior, and victimized students reported deleterious tangible effects of the harassment that resulted in physical ailments and missed school days.

It is very interesting that most of the concentration of awareness, prevention efforts, and campaigns around schools has dealt primarily with the problem of bullying, when, in fact, the nature of the bullying has apparently been so overwhelmingly sexualized and gendered. This is especially ironic when one notes the fact that in the workplace, bullying is wholly lawful, while sexual harassment may result in corporate liability. Even more ironic and unfortunate, because sexual orientation is not a protected class status under federal law, many courts have rejected harassment claims made by homosexuals because although in many cases, they are being abused because of their failure to conform to gender norms, the courts see them as trying to advance claims that are ultimately not cognizable. Referring to someone’s sexual orientation (actual or perceived) as the reason for an adverse employment action is similarly seen as lawful under federal law. Moreover, in all but a few courts, “generalized vulgarity,” even that of a somewhat sexual nature, so long as it is not directly targeted at one sex, is seen as lawful as well.  

Yes; 56 percent of girls, as opposed to only 40 percent of boys reported being harassed in school, but these are still relatively large numbers that reveal the pervasiveness of sexualized verbal and physical abuse aimed at children of both sexes by children of both sexes. Has society become too preoccupied with the notion of students being bullied to notice how much of this bullying is sexualized?  Have those who set forth the law of the workplace been too preoccupied with the idea that actionable workplace abuse be “because of sex” as per title VII for lawmakers to pass the anti-bullying statutes that have come to their attention, but have not been passed, in 21 States since 2003? There are currently 16 anti-bullying bills active in 11 states, but proponents of the Healthy Workplace Bill, a model statute that has yet to be passed, cannot seem to convince lawmakers that employees’ dignity and sense of well-being at work need to be protected when threatened outside of a “because of sex” context, or some other context that would implicate currently cognizable harassment.

Of course, there is the argument that children are fragile and should be spared the indignities of sexual harassment and bullying, whereas adults in the workplace are just that—adults. When workplace bullying, even gendered workplace bullying comes up in my class, many of my students (male and female alike) take the position that people generally need to “toughen up” and “move along” if workplace bullying (even gendered bullying) becomes too much for them to bear. With so many people leaving school and “graduating” to the workplace each year, however, I wonder how much longer it will behoove us as a society to fail to call attention to both the sexual harassment that goes on in schools and the generalized bullying that goes on in the workplace. 

I have written and will continue to write about the connection between this attitude and the professional status gap that exists with respect to women and minorities, and I continue to think that this connection is worthy of consideration.  We can only look at skewed statistics as to who is assuming leadership roles in every arena from politics to law, to industry, to the academy, and tell ourselves that some people just “don’t have what it takes” or “can’t tough it out,” for so long before we stop and reconsider whether “what it takes” is aligned with the traits and values we want to see reflected at the top of organizations from Wall Street to Washington.

We might want to rethink everything we thought we had decided about what is going on and what is being permitted at every stage of the education, training, evaluation, and promotion of American employees and decide whether the cultures that we’ve permitted to take hold might be weeding out  hardworking and talented people and ultimately thwarting the goals of equal access, equal opportunity, and the eradication of discrimination held out by Title VII.

A welcome back to . . .

Sam Bagenstos and his Disability Law blog.  He reports:

Well, since Arrested Development is coming back I figured I should return to blogging as well. Actually, I've never seen that show and don't really intend to. But I did think this would be an opportune time to fire up the old blog, as lots is going on in the world of disability law.

Greetings.

I'm grateful to Dan Markel for inviting me to be an October guest blogger on PrawsBlawg. I am primarily interested in talking about my new book, BREAKING THE DEVIL'S PACT (NYU Press 2011), but your responses and breaking news may well take me in other directions as well.

Breaking the Devil's Pact is a case study of DOJ's effort, by means of Civil RICO, to purge the International Brotherhood of Teamsters (IBT) of organized crime's presence and influence in the union. U.S. Attorney Rudy Giuliani brought the lawsuit in 1988 against the president (Jackie Presser) and general executive board (GEB) memberts of the IBT and some two dozen Cosa Nostra bosses. The complaint alleged a "devil's pact" between the union and organized crime defendants to exploit the union and its pension and welfare funds and to violate the rights of rank and file members. The massive complaint cited scores of past criminal prosecutions for theft, embezzlement, fraud and violence. None of these allegations came as a shock.

Labor racketeering in the IBT had been notorious for decades. Indeed, in 1957 the AFL-CIO expelled the IBT from the labor federation on account of corruption and racketeering. However, there was no positive change in the next 30 years. In 1986, the President's Commission on Organized Crime (PCOC) called the Teamsters (then the nation's most populous labor union) the most "mobbed-up" union in the country and called for a civil RICO lawsuit to impose court monitorship.

You'll recall that in 1988, Ronald Reagan was president. You may not recall that the IBT was the only major labor union that had endorsed his presidential candidacy (twice). Shortly before the lawsuit was filed, 300 members of Congress delivered a petition to Attorney Gneral Meese, exhorting the DOJ not to file the rumored civil RICO lawsuit because it would be harmful to a "free and independent labor movement." (How's that for cynicism?) All the candidates, Democrats and Republicans, except George H.W. Bush, promised not to file the lawsuit. Nevertheless, the DOJ (via Giuliani) did file it, an impressive statement about DOJ's political independence at that time.

U.S. v. IBT was settled in 1989 on the eve of trial. The consent decree stated that there should be no organized crime presence in the union, that association with organized crime would constitute a disciplinary offense, that for the next 5 IBT elections, the president and GEB members would be selected via one person one vote secret balloting by the rank and file supervised by a court appointed elections officer, and that the IBT disciplinary machinery would be wielded by court appointed investigators and adjudicators. The lawsuit in its remedial phase is now in its 22nd year, with no end in sight. The disciplinary prong of the remediation has expelled 500 IBT officers, including some of the most powerful figures in the union. The election prong has produced the most democratic union elections in American history. I argue that by any standard of assessment, U.S. v. IBT must be regarded as one of, if not, the most important organized crime case in American history. A case could also be made that it is the most important labor litigation of the last 50 years. Nevertheless, it has attracted little if any attention from criminal law or labor law scholars. Students are likely to finish a course in federal criminal law without having heard about the case. Similarly, labor law casebook authors apparently do not see it worthy of much, if any attention. Perhaps you have some thoughts about why this is the case?

James B. Jacobs
NYU School of Law

 

NFL Agreement? Don't Count Your Chickens

The theme of my NFL blogging, which you can see here (post-Eighth Circuit hearing) and here (post-Eighth Circuit decision) is that the players' antitrust litigation strategy was really much more effective than the owners anticipated.  It totally reversed the usual roles you see in a lockout.  Generally, when an employer locks out its employees, it has time on its side.  The company closes its gates and waits for the workers to start missing paychecks.  (That's what's happening in the NBA.)  Ever since the district court enjoined the lockout, however, it's been the NFL owners who can't wait to get an agreement.  Check out this remarkable paragraph from ESPN's "Owners approve proposed lockout deal":

In their proposal, the owners told players that they must re-establish their union quickly for the proposed CBA to stand. The NFL also said it wanted evidence by Tuesday that a majority of players have signed union authorization cards.

In the history of labor relations, I don't think I've ever seen employers so eager for employees to (re) join a union.  In fact, the point of a lockout is generally to break a union -- or at least, a hoped-for side effect.  But the NFL owners can't wait to get the union back in place and, in effect, put back together the Humpty Dumpty CBA they foolishly pushed off the wall.

But wait -- maybe the players aren't all that eager to agree!  There's this ominous paragraph:

However, Smith wrote in an email to the 32 player representatives shortly after the owners' decision: "Issues that need to be collectively bargained remain open; other issues, such as workers' compensation, economic issues and end of deal terms, remain unresolved. There is no agreement between the NFL and the players at this time."

So what's going on?  The players' representatives are still working things through, but the NFL is using its vote to pressure the players into agreeing to the proposed CBA.  Otherwise, why would the lead owner in the negotiations say this?

"That's baffling to me," Panthers owner Jerry Richardson told ESPN's Sal Paolantonio [in response to Smith's email]. "We believe we have handshake agreement with the players."

Although details are somewhat spotty, the deal looks like a decent one for the players.  At the very least, it's a much better deal than the owners were talking about when they first went to the negotiating table.  It's also a ten-year deal -- much longer than the standard 3 to 5 year agreement.  Why?  So the players can't bring another antitrust challenge for ten years.

But I think the players have smelled the owners' fear.  That's what this is about:

A high-ranking NFLPA executive committee member told Mortensen that the owners' approval "puts the onus on players to make a decision to agree -- paints us into a corner with fans. We'll discuss tonight but the idea of reconstituting as a union has never been a slam dunk as the owners have already assumed."

Said another high-ranking NFLPA official: "We are not happy here. We had to honor to not vote on an agreement that was not final (Wednesday). This is not over. This actually takes away incentives from players to vote yes tonight."

We'll see what happens with the eventual CBA details.  But the players have already won.

Injunction Ruling Against NFL Lockout Overturned

The opinion is here.  The Eighth Circuit rescinded the district court's lockout based solely on the Norris-LaGuardia Act.  As to the other arguments, the majority said:

Given our conclusion that the preliminary injunction did not conform to the provisions of the Norris-LaGuardia Act, we need not reach the other points raised by the League on appeal. In particular, we express no view on whether the League’s nonstatutory labor exemption from the antitrust laws continues after the union’s disclaimer. The parties agree that the Act’s restrictions on equitable relief are not necessarily coextensive with the substantive rules of antitrust law, and we reach our decision on that understanding. 

I think this narrow holding preserves the players' longer-term arguments, as I discussed in this earlier post.  This decision only dissolves the injunction.  As I said at the time:

Let's say the court holds that Norris-LaGuardia prohibits the injunction.  Well, that only removes the injunction against the lockout; it does not mean that the NFL won't ultimately be liable for antitrust violations.  In fact, Judge Benton seemed to indicate that antitrust damages would continue to accrue even if the lockout could not be enjoined under the NLA. 

Perhaps these still-open possibilities are pushing the parties to settle.  The named players in the suit may want to blow up the existing system, but it's not clear to me that the lower-paid players want that.  And it would likely take at least a year, and likely two or three, for the antitrust case to render the league crippled from a massive antitrust award.  So the two sides seem to be stepping away from the precipice. 

The fact that the NFL is negotiating at all, however, indicates to me that its lockout strategy was not as effective as predicted.  The typical lockout strategy is to lock out and then wait until workers to come crawling back, after they've missed a big chunk of their salaries.  I don't know how things will end up, but a deal should come soon.  And I expect that the final deal will be much more favorable to the players than most folks would have predicted six months ago.

One final question: why isn't the NBPA pursuing this strategy as well?

Wal-Mart Stores, Inc. v. Dukes is out

The opinion is here.  Footnote 8 might be of particular interests to academics who have been following the debate between Monahan, Walker & Mitchell and Hart & Secunda:

Bielby’s conclusions in this case have elicited criticism from the very scholars on whose conclusions he relies for his social-framework analysis. See Monahan, Walker, & Mitchell, Contextual Evidence of Gender Discrimination: The Ascendance  of “Social Frameworks,” 94 Va. L. Rev. 1715,  1747 (2008) (“[Bielby’s] research into conditions and behavior at Wal-Mart did not meet  the standards expected of social scientific research into stereotyping and  discrimination”);  id., at 1745, 1747 (“[A] social framework necessarily contains only general statements about reliable patterns of relations among variables . . . and goes no further. . . .  Dr. Bielby claimed to present a social framework, but he testified about social facts  specific to Wal-Mart”);  id., at 1747–1748 (“Dr. Bielby’s  report provides no verifiable method for  measuring and testing any of the variables that were crucial to his conclusions and reflects nothing more than Dr. Bielby’s ‘expert judgment’ about how general stereotyping research applied to all managers across all of WalMart’s stores nationwide for the multi-year class period”)

The late Richard Nagareda's work is also given extensive treatment in the majority and dissenting opinions.

The End of the NFL as We Know It

 

Greetings from the Thomas F. Eagleton Courthouse.  I was fortunate enough to attend the oral arguments for Brady v. National Football League this morning at the Eighth Circuit.  As you can tell from this notice, the Eighth Circuit was expecting quite a crowd; congrats to Clerk of the Court Michael Gans and his staff for their excellent handling of the event.  Since this is a football case, I feel free to use sports metaphors, so this morning's argument was like an all-star game -- nay, a heavyweight bout -- between two of the country's top attorneys. Paul Clement represented the League, and Theodore Olson represented the players.  It was a terrific show.  But more importantly, I was really struck by how huge this case is to the future of the NFL, and perhaps the future of all U.S. sports leagues.  Whether or not the league wins the battle over the injunction, there is a lot left to come.  And we could end up with a completely new landscape.

The case is a great example of how the law makes strange bedfellows.  The NFL is relying primarily on the Norris-LaGuardia Act to strike down the injunction against its lockout of the players.  Yes, that Norris-LaGuardia Act -- the one that was passed to prevent state federal courts from enjoining unions from forming.  Clement acknowledged as such in his argument, which I think was a savvy move, because the thrust of his argument was that this is all really a labor dispute and it should be treated as such.  Although he did not, until the very end, insinuate that the NFLPA's disclaimer was not legitimate, he essentially said that the union should not be allowed to jump back and forth between labor coverage and antitrust coverage as it suits their needs.  Collusive activity is perfectly legal and even encouraged in the nonstatutory labor exemption context, but suddenly it's illegal once the union has disclaimed.  Clement analogized this to turning a light switch off and on, and he made this back and forth seem unfair to the NFL.  After all, he argued, a lockout is one of the "classic tools" of labor law that employers can use in an attempt to resolve a dispute. 

Olson, representing the players, emphasized that the players had voted to get rid of the union, and it was gone.  "That union does not exist," he said, at least a few times, with emphasis.  The players were therefore entitled to antitrust protection.  Olson maintained that players could elect whether to have a union and enjoy collective bargaining rights under labor law, or disclaim the union and get the protection of the antitrust laws.  If not, players would be stuck in a "no man's land" where neither labor law nor antitrust protections applied.  Characterizing the NFL as antitrust "recidivists," Olson convincingly contended that the players needed some form of protection, and he made it clear that the decision to disclaim should mean that the antitrust protections apply.

The oral argument was fascinating to me, because it illuminated the jury-rigging that is necessary for modern sports leagues to exist in their current forms.  They are clearly collusive, and they clearly dominate their respective industries.  So antitrust liability seems to naturally follow.  The leagues have escaped this quandry (when it comes to the players) by falling under the nonstatutory labor exemption.  But what if the players don't want to play ball, as it were?  Brady v. NFL is the result.

That's why this injunction may not matter that much.  Let's say the court holds that Norris-LaGuardia prohibits the injunction.  Well, that only removes the injunction against the lockout; it does not mean that the NFL won't ultimately be liable for antitrust violations.  In fact, Judge Benton seemed to indicate that antitrust damages would continue to accrue even if the lockout could not be enjoined under the NLA.  Or, let's say that the injunction is lifted because the nonstatutory labor exemption still applies.  Well, even Clement admitted it can't apply forever -- so how long?  Clement seemed to be pushing for at least a year, but Benton seemed comfortable with six months -- which would be, according to his calculations, September 11.  Would the antitrust violations and the injunction kick back in then?

So the hearing ultimately convinced me that (a) the players took a truly radical move by disclaiming and (b) this problem is not going away, even after the Eighth Circuit rules on the injunction.  I had thought that the longer the lockout lasts, the more it favors the owners -- players need paychecks after all.  But what if the longer it lasts, the more antitrust damages that pile up against the league?  It's one thing for players to resist a deal in the hopes that the league will cave before they do.  That's a hard one to win, and I think the NBPA showed how disastrous such a strategy can be in the late 1990s.  But what if the players resist a deal in the hopes that one day soon, it will be all free agency all the time.  No draft, no salary cap, no restrictions whatsoever.  Could you hold on for a few more months in the hope that there's no salary cap -- hard, soft, or otherwise?  Seems like a lot more to fight for.

So for those of you -- like me -- who thought that the disclaimer was just a clever, but ultimately discardable, negotiating tactic, think again.  When the news went out that (former) NFLPA president De Smith was calling for "war," I now understand those ramifications.  I believe the league brought this upon itself by a series of moves: characterizing the last deal as way too player-friendly, hiring Bob Batterman, opting out of the deal early, and enforcing a lockout.  They opened the can of worms. But this could get away from the players, too -- do all players really want a world with no collective bargaining agreements?

In his argument, Clement said that the lockout would be "a self-inflicted wound" and "suicide" if it were not intended to ultimately bring about a settlement of the labor dispute.  He's right.  And I think the league now, far more than the players, needs to settle that dispute to save itself.

Public employee Ann Althouse

I've always found it an interesting wrinkle that five of the top conservative/libertarian law prof bloggers are public employees: Glenn Reynolds,  Ann Althouse, Eugene Volokh, Stephen Bainbridge, and Larry Ribstein.  I would imagine this status would create some ripples between one's ideological beliefs and personal economic interests.  Back when the UC system had furloughs in 2009, here was Professor Bainbridge's reaction:

They call it a furlough, but at least as far as faculty are concerned, that's a complete misrepresentation. We are not allowed to cancel any classes . . . .  Nobody's said anything about reducing committee and other service obligations. Likewise, nobody's said anything about reduced research expectations. So where exactly is my furlough time off? . . . . I'm not much of one for strikes and protests. And I think I have an obligation to my students to show up for class as scheduled. But I also won't blame those who participate [in the protest]. It's enough to make one a raging populist.

Ann Althouse has been fairly critical of the Wisconsin protests, based on the language and tone of some of the signs, as well as the conduct of the protesters.  But she also has some interesting thoughts on the conflict between the personal and political:

It really is odd that Wisconsin became ground zero, because we didn't have the budget disaster that was going on conspicuously in some of the other states. I'm really trying to understand this. Why Wisconsin? A distinctive thing about us is how good our public employees' benefits are. The cut we — I'm one of them — are being asked to take is severe. (I'm looking at a loss of more than $10,000 a year, myself.) But it's hard to complain and appear sympathetic, because we're only being asked to go from paying 0.2% of the payments into our pension fund to 5.8%, which probably looks astoundingly low to outsiders. We're being asked to pay more for our health insurance, but the coverage is extremely good, and the annual hit will be about $2,500.

So maybe we public employees in Wisconsin are a great target — a great starting place for what is a national movement by the Republicans. I'm trying to understand the party politics. Tell me if this is correct: There are vast numbers of public employees, who vote overwhelmingly for Democrats. Once elected, the Democrats create more and more public jobs with greater and greater benefits, and, consequently, more voters who are even more locked into voting for Democrats. This is a cycle that approaches political graft, and the Republicans, to win, must overcome all those passionate, self-interested Democratic voters. Why wouldn't the Republicans embrace a strategy hostile to the public employees? Why wouldn't they drive a wedge between the public employees and all the other citizens in the state?

So I see 3 questions: 1. Is this what the Republicans are really doing? 2. How good a political strategy is it? and 3. Is it a good idea to reduce the political and economic power of public employees? 

The 3 questions are interrelated, but they should contemplated separately... but who is capable of doing that? I'm trying to be fair, and it's possible that I'm in as good a position as anybody. I voted for Walker and support many of the things the Republicans are trying to do, but this budget plan — as I said — will cost me more than $10,000 a year.

Employees, the Firm, and the Corporation

Last week you may have seen the 2010 productivity numbers from the Bureau of Labor Statistics.  Overall nonfarm business productivity was up 3.6 percent for 2010, almost identical to 2009's 3.5 percent growth.  Wages, however, were fairly stagnant -- real hourly compensation was up only 0.3 percent.   These most recent numbers are just the latest instantiation of the growing gap between productivity and employee compensation -- a trend that began in the 1970s.  For a nice series of graphical illustrations of this divergence, check out BLS's The compensation-productivity gap: a visual essay.  A similar trend can be seen in this rising share of GDP attributable to corporate dividends.  Karl Smith at Modeled Behavior breaks this down: since the late 1980s, dividends as a share of GDP have more than doubled.

These trends illustrate, in my view, another societal development: the corporation has become the perfect legal machine for separating workers from the firm.  In Employees and the Boundaries of the Corporation, I argue that our legal construction of the corporation has diverged quite significantly from our theoretical conception of the firm.  It's actually quite striking: whenever we think of a firm--whether it be Coase, respondeat superior, or the work-for-hire doctrine--we think of employees.  But employees are nowhere to be found in corporate law.  The result has been a "firm" that consists mainly of employees and a "corporation" that consists of shareholders, directors, and officers.  Labor and employment law seeks to redress the vulnerability of employees left outside corporate boundaries, but these can only go so far.

"Employees and the Boundaries of the Corporation" is a contribution to Elgar's forthcoming Research Handbook on the Economics of Corporate Law (Claire Hill & Brett McDonnell, eds.).   (David Walker is also contributing The Law and Economics of Executive Compensation: Theory and Evidence).  I would love to hear your thoughts.

Creating a Conference from Scratch

Tomorrow Wash U and SLU will be hosting the Fifth Annual Labor and Employment Law Colloquium.  It's a terrific event, with close to 70 presenters, and I'm very excited to be one of the hosts.

The event itself is a testament to the power of a good idea and hard work by a few folks -- in this case, Scott Moss, Joe Slater, and Paul Secunda.  Here's the original post by Scott that prompted the conference, and here's his follow-up post.  I think it's a great example of what a few prawfs can do when they put their mind to it.

Where Are We Now after Ricci v. DeStefano?

As mentioned a few weeks ago, Prawfs is hoping to serve as a repository for some of the evidence of intellectual life that happens at conferences like SEALS. Thanks to SLU's Marcia McCormick, we now have a document that integrates the reactions and comments of the various speakers on her panel (see below). The theme of this panel is the title of this post. And you can read the notes of the various speakers here. (If you were on a panel at SEALS and want to coordinate collating some or all of your co-panelists' notes, please do so and send me an email and there'll be a post just like this one.)

The Supreme Court's decision in Ricci v. DeStefano at the end of its 2008 term was the first in decades to deal with the question of what practices constitute discrimination under Title VII. This panel will explore the effect of the Court's decision, specifically the current state of the law on employment discrimination, the theory of discrimination that seems to have been adopted by a majority of the Court, and the future of employment discrimination and affirmative action.

Moderator: Professor Jeffrey Hirsch, The University of Tennessee College of Law

Speakers: Professor Marcia McCormick, Saint Louis University School of Law; Professor Michael Zimmer, Loyola University Chicago, School of Law; Professor Kingsley Browne, Wayne State University Law School; Professor Robert D'Agostino, Atlanta’s John Marshall Law School; Professor Harold Lewis, Jr., Mercer University School of Law; Professor Kimberly West-Faulcon, Loyola Law School Los Angeles 

"Formation is a very basic existential analysis": Thoughts on the Rent-a-Center Oral Argument

Those who are interested in contract law, arbitration, labor & employment law, and federal courts should check out the oral argument for Rent-A-Center, West v. Jackson.  The quote above is from Robert Friedman, counsel for Rent-A-Center, and as a Contracts professor I enjoyed the sentiment.  But ultimately Rent-A-Center's argument hinges on a effort to separate unconscionability into two different categories -- a separation that has no basis in common law or statute.

The question before the Court is "Is the district court required in all cases to determine claims that an arbitration agreement subject to the Federal Arbitration Act (FAA) is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this 'gateway' issue to the arbitrator for decision?"  The case involves a Sec. 1981 racial discrimination claim brought by employee Antonio Jackson against Rent-A-Center.  Jackson signed an arbitration agreement which stated:

The Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.

In the opinion below, the Ninth Circuit held that courts must decide whether the agreement to arbitrate is unconscionable as a threshold matter, regardless of what the agreement itself says.

In his argument, Friedman conceded -- indeed, he had to concede -- that if an arbitration clause was fraudulently induced, it cannot force the defrauded party into arbitrating whether there was fraud.  He also conceded that some cases of duress -- namely, "a gun to somebody's head" -- would not go to the arbitrator.  What Friedman was trying to distinguish was cases in which no contract was formed (due to fraud or duress) and cases in which there is a contract but it needs reformation in some way.  Some on the court seemed sympathetic to this, looking to draw a line perhaps between "total" and "partial" unconscionability.  As Chief Justice Roberts put it, "[O]nce you get past that [g]ateway question of whether the formation of the contract was not unconscionable, then claims that particular provisions were unconscionable are by definition for the arbitrator to decide."

The First Circuit suggested something along these lines in Awuah v. Coverall N. Am., Inc., 554 F.3d 7 (1st Cir. 2009).  In that case, the First Circuit said that a court could refuse to enforce an arbitration agreement if it were "impossibly burdensome" or provided only "illusory" relief.  But the common law of unconscionability makes no such distinctions between "illusory" contracts and "non-illusory but unconscionable" contracts.  All unconscionable agreements are subject to judicial reform.  And it would make no sense to say that an agreement to arbitrate is possibly unconscionable, but the arbitrator -- whose power derives solely from that possibly unconscionable agreement -- gets to decide whether it is unconscionable and, if so, what the remedy shall be.  As Ian Silverberg, counsel for Jackson, pointed out, Rent-A-Center wants "a rule where certain unconscionability challenges went to the court and other unconscionability challenges didn't go to the court."  There's no basis for this in the FAA.

The Supreme Court has a legitimate concern that some state courts have been pushing the bounds of unconscionability with respect to arbitration agreements. Justice Ginsburg, in particular, seemed to think that the agreement at issue was not all that unconscionable.  But that's the bed the Court made for itself in Gilmer.  Once it said: (a) litigants can agree to arbitrate statutory rights prior to the dispute, but (b) they cannot waive those rights and (c) normal contractual remedies apply, a result like the one in Rent-A-Center was in play.  The Court itself has said: “Of course, courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds ‘for the revocation of any contract.’ ” Mitsubishi, 473 U.S. at 627 (quoting FAA Sec. 2).  The Ninth Circuit has to be upheld, I believe, unless the Court is going to start mucking around in state common law.  It could make the argument that the Ninth Circuit is disingenuously applying unconscionability law here.  But that's not the question presented.  I don't see any way to give the arbitrator the ability to decide the legitimacy of the agreement to arbitrate itself.

Justice Breyer, author of First Options, summed it up this way:

[First Options says that] unless it's clear and unmistakable that they wanted this matter [--] the matter of whether the arbitration clause itself is unconscionable [--] referred to the arbitrator, whether or not they wanted that referred to the arbitrator has to be clear and unmistakable. And they are claiming no, because . . . the provision that says that is itself a product of unconscionability. . . . [W]hy isn't that the simplest, most direct and four-sentence ground for deciding this case?

If you haven't done so already, check out this great preview post by Aaron Bruhl.  I hope Aaron will weigh in with his thoughts on the argument.

Stimulus Blogging II: Can Legislatures "End Run" Governors?

Some recent news reports have mentioned that governors who earlier said they would reject stimulus money now have "backed off" and certified that they will take federal money.  But, as I described in my first post, "certification" is only one of two steps states must take to receive much of their stimulus money.  For most of the important grants, including education and unemployment, the states also have to apply.   Gov. Sanford (SC), for instance, maintains that he won't apply for education dollars, and several other governors say they won't apply for unemployment (and possibly TANF) money.  Reports are that the state legislatures are going to try to "make end runs around their governors and accept the money."  Can they do that?

Whether they can turns on the question I flagged in my first post: we know that state legislatures can "certify," but can they also "apply" in place of the governor?  South Carolina's attorney general has opined that the answer is no (and Prawfs guest Tommy Crocker agreed).  I think that the AG is about half right on educational dollars, and not at all right about unemployment.  Here's why.

First, let's recall that ARRA (i.e., the stimlus legislation) requires governors to certify that they'll take federal money, but also allows state legislature to certify if the governor doesn't.  The SC AG argues that this certification power is insufficient to empower the legislature, acting alone, to obtain federal money. For instance, the education provisions of ARRA state that "the Governor" has to submit certain information to the federal Dep't of Education before federal money can flow.  SCAG argues that this application language would be meaningless if the SC legislature could trigger federal money simply by certifying.

But SCAG simply assumes that the South Carolina legislature can't apply as well as certify.  True, the statute says "the Governor" must provide the required information.  But if the certification clause allows a legislature to stand in the governor's shoes for certification purposes, why can't it also fill his/her role for application, too?  That seems to me at least a plausible way to synthesize the two clauses; otherwise, the clause permitting the legislature to certify doesn't accomplish much, other than to obtain some small pots of money for which no application is needed.  So, at a minimum, I think a federal agency authorized to implement the statute could opine that legislative application would be sufficient, and stand a good chance of obtaining some kind of judicial deference to that view. 

For other provisions, such as the unemployment money, the argument that legislatures can apply is even stronger, because the statute does not mention "the Governor."  Instead, the section simply requires an agreement between the Secretary of Labor and "any State," ARRA section 2002, or for other provisions the "option of a State," ARRA Section 2005(b), or the "request" of "each State," ARRA section 2101(a)(3)(A).  Since ARRA specifically uses the term "governor" elsewhere, there is a strong implication that where that word is not used, action by the governor is not required.  So the legislature or its designee would be able to apply for unemployment and TANF benefits.

There might be an argument, though, that these readings empowering the state legislature to act should be set aside because of constitutional concerns.  That is the interpretive move made by the Congressional Research Service memo I mentioned last time (as well as by a second memo that I think hasn't been made widely available, but which I have, if anyone is interested).  CRS, following some earlier suggestions by Jack Balkin, thinks that empowering the legislature might violate the anti-commandeering aspects of the 10th Amendment.  I've already said a bit about that point on Jack's blog, but I'll follow up on the avoidance point here a little later this week. 

Reflections on Ledbetter, the Statute

Thanks to Dan and everybody for letting me guest blog over here this month. I am usually found at Workplace Prof Blog or speaking only to my students at McBlogmick (my class blog), so having the option to publicly embarrass myself on subjects beyond workplace law will be a real treat. I'll start small and stick with a workplace subject first, though.

I hesitate to express value judgments in my analysis of workplace issues at those other places because of the nature of those fora, but I'd like to do that here a little, starting with the first-ish bill that Obama signed into law, the Lilly Ledbetter Fair Pay Act. The statute changes the statute of limitations for when an employee can file a charge of discrimination in pay on the basis of race, sex, age, disability, religion, national origin, or color, restoring it to what the circuits had held before the Supreme Court issued its decision in Goodyear Tire v. Ledbetter almost 2 years ago.

There was a lot of rhetoric on both sides of this legislation--it was going to eliminate discrimination v. it's a field day for the trial lawyers--but no one seemed to ask this question: is it really going to have any effect? My gut reaction is, not much, and I'll explain why after the jump.

All the Ledbetter Fair Pay act does in terms of enforcement is to extend the time to file a charge to within 180 days of a discriminatory paycheck or other decision. It makes these claims easier to bring then, in that plaintiffs will not be time barred so easily. But the time bar was just one obstacle that, frankly, didn't even really exist until the Ledbetter case. It seems to me that other obstacles operate with much more force, and this statute does not address those.  Other, more powerful obstacles include a fear of retaliation and lack of access to legal help to pursue the claims.

I'll address the lack of legal help first. Discrimination cases are difficult to win or get enough of a settlement for to warrant an attorney taking the case on contingency, and most workers can't afford the kinds of hourly fees to pay an attorney up front. There is a wealth of empirical research on this winnability point. And this statute doesn't make these cases more likely to pay, which would enable attorneys to take them. The pay difference (amount of damages) may be a big deal to the individual plaintiff, but a relatively small amount in terms of recovery for the attorney. And attorneys can get fees if they win a judgment, but these cases almost never get to trial, when they get to trial most often lose, and when plaintiffs win at trial, are twice more likely to get reversed on appeal than when defendants win. And even where they win, plaintiffs can only recover damages for the two years prior to the charge being filed, so the available recovery is relatively limited.

And retaliation is a bigger problem. Pay discrimination cases are almost always going to arise in the context of continued employment. Particularly in a weak economy, no one is going to want to give their employer a reason to look for problems by suing for pay discrimination. Some kind of backlash is highly likely. Research has shown that people who complain about discrimination are viewed negatively even when the viewer knows that the person was actualy discriminated against. On top of that retaliation is very difficult to prove, and even if a person can prove they were discharged in retaliation for filing a charge, they're out of work during the time they're pursuing that claim. And at least some industries are tightly knit enough that the person wil be unlikely to be hired anywhere else, either.

So, the statute opens the door to the one group of people who don't have retaliation to worry about, people just like Lilly Ledbetter, those retiring. Maybe that will be enough.

The Employee Free Choice Act

Those of us teaching Labor Law last semester had a rare treat: a proposal to amend the National Labor Relations Act, in a significant way, made the news. Students brought it up on their own, presidential candidates were discussing it, and my own friends and colleagues were asking me about it. I say "rare," because the NLRA is notoriously difficult to amend. Since 1960, there has only been one, relatively minor, amendment (applying the NLRA to hospitals). Indeed, NLRA amendments are exactly comparable to playoff victories by the Detroit Lions, in terms of frequency and significance, in the last half-century. Wait, that’s another post. . . .

Most of the public debate over EFCA has concerned the "card check" provision. My take on EFCA, in short, is this: "card check," while an easy target for opponents to attack, is not nearly as radical as opponents claim; the second part of EFCA, which would stiffen the remedies for employer violations of the NLRA during union organizing campaigns is obviously justified; and that the third part, which would mandate binding arbitration if the parties could not agree on a first contract within a specified time period is the most interesting and radical part of EFCA.

First, card check. Yeah, yeah, how can anybody oppose elections? I’ll get into why the union elections aren’t much like political elections, but I’ll begin by suggesting that requiring employers to recognize unions if the union produces cards, signed by a majority of workers in an appropriate bargaining unit where there is no proof of coercion or fraud, is not actually a radical idea. For one thing, mandatory card check was the law under the NLRA until the 1950s.

Also, from the passage of the NLRA through today, employers always have been allowed to recognize unions via card check and without an election. This means, among other things, that EFCA does not take away any right that any employee has to an election. EFCA would merely take away the right of an employer to force an election, in the face of a valid majority card showing. Employees would still have the same rights to, say, decertify the union later. Indeed, under Dana Corporation (NLRB 2007), before a card check recognition would be granted any protection from a decertification election, there must be a 45-day window after the recognition in which 30% of the employees are entitled to demand an election.

Further, in the public sector, where labor law is state and local law, five or six states have enacted mandatory card check recognition. I am not aware of any incidents of menacing union/mob stereotypes – the kind one sees in anti-EFCA ads – coercing employees in these jurisdictions. Similarly, mandatory card check recognition is the law in some Canadian provinces.

Second, to understand both the card check and remedies parts of EFCA, one has to understand that lots of folks think that the union election process is fundamentally broken. There are many studies on this. To summarize a few results: 91% of employers force employees to attend intimidating one-on-one meetings with supervisors; 51% illegally threaten to close their worksite when employees try to form a union; 30% unlawfully fire workers who support forming a union as a way of intimidating others. An alarmingly high percentage of employees feel that they would be fired if they supported a union in a union election process.

Now you may say, "but that’s illegal, sp why don’t unions and workers just bring claims?" The problem is the uniquely weak remedies under the NLRA. An employee fired for union organizing gets the right to reinstatement and backpay – minus whatever the employee made or should have made while waiting to be reinstated. And after all the litigation and appeals, reinstatement usually takes years. Compare other employment law statutes, like the FLSA (double damages, attorneys fees) or Title VII (punitive damages, consequential damages, emotional distress damages, attorneys fees); none of that is available under the NLRA. It’s clear that a not-insignificant number of employers intentionally violate the NLRA because the penalties are so trivial. So, I think, the part of EFCA that would increase penalties for employer violations during union organizing campaigns is a no-brainer.

Finally, EFCA would require mandatory arbitration for first contracts when the employer and union haven’t reached agreement. This addresses the problem of employers refusing to agree to contracts with unions, then provoking strikes and/or decertification campaigns, thus frustrating the purpose of the NLRA. A study by Kate Brofenbrenner shows that in about one-third of cases in which unions vote for representation, after a year, employers still have not agreed to labor contracts. Current law does not require any agreement; it merely requires bargaining "in good faith." Again, the remedy for violating the duty to bargain in good faith is almost comically weak: it’s an order to begin bargaining in good faith – which often takes years to get – and that’s basically it. Also, if the union and employees reach an impasse during bargaining, current labor law allows management to implement its proposals unilaterally.

EFCA allows employers or employees to request mediation by the Federal Mediation and Conciliation Service (FMCS) if no agreement on a first contract has been reached after 90 days of bargaining. If the FMCS is unable to bring the parties to agreement after 30 days of mediation, the dispute must be referred to binding arbitration. Unions and employers can agree to lengthen these time limits.

Binding arbitration is a relatively radical idea under the NLRA, in that the NLRB and courts have always been loathe to do almost anything that would set substantive terms of labor contracts. On the other hand, such procedures are common in the public sector in the U.S., and are used in a number of Canadian jurisdictions. Also, it’s likely that if this part of EFCA were enacted, the vast majority of negotiations would not actually use binding arbitration; rather, the law would serve as an incentive to bargain in true good faith.

I don’t have any inside information, but obviously there will be a tough fight over EFCA, and compromises might well be made. Along those lines, I note that the public sector jurisdictions that use binding arbitration to resolve bargaining impasses tend to have very specific rules about how the arbitrations should work (e.g., what criteria arbitrators should use). Some more details might be useful in EFCA’s arbitration section. I also wonder whether, if the unions got the tougher remedies, they would feel quite as strongly about either or both of the other two sections. So we’ll see if EFCA will pass as written, or at all. One thing is for sure, however: in the next couple of years, labor law reform is looking a lot more likely than another Lions playoff win.

The Republic Sit-Down Strike: A Response to Richard Ensberg

Sure, I could have left this in the comments to Richard’s post, but since I’m a guest-blogger too, I’ll make a separate post. Plus, I’ve always wanted to be a part of some "A Response To . . ." debate.

Richard writes:

Neither BOA nor any other bank can survive by making, not merely a poor - but an insane "loan" in response to political pressure. In a free economy, businesses fail and various stakeholders - shareholders, employees and creditors - will be hurt by it. We can't expect banks - even those who have had an influx of federal capital - to insure against it.

The Republic employees acted boldly and certainly benefited from being from the President-elect's hometown. Maybe (although I would oppose it) the government should guarantee obligations under the plant closing laws. But shifting the costs to a firm's lender based upon who can and cannot exert the requisite political pressure seems irrational and even dangerous.

One response to his post questioned whether the loan was indeed "insane," given that this seems to be in part a "run-away shop" issue.

More broadly, though, I don’t think this should be seen primarily as a "make a bank lend money" protest. The workers were protesting that the employer did not pay benefits the workers felt they were owed under the WARN Act and under their union contract. When the employer argued it couldn’t pay these benefits because it didn’t get a loan, the workers then focused on the bank. That was smart, practically and politically. But the protest was first and foremost about rights the workers had or reasonably believed they should have under an employment law and their contract with their employer.

Now, perhaps under the law as currently written, the employer’s financial plight would have allowed it to avoid these obligations. WARN is famously riddled with exceptions and is problematically toothless. Also, as debates over the auto industry’s fate remind us, bankruptcy courts can be part of a process in which labor contracts are rewritten. So, perhaps the legal claims by the workers would have failed. And of course even if the workers had good legal claims, it’s not legal to occupy the employer’s property.

Still, many of us remember with some sympathy a history of workers asserting their conceptions of rights against employers – rights that the law did not at the time recognize, but later did. As I cautioned in my initial post, I wouldn’t over-read this incident as being the harbinger of a new New Deal’s worth of labor militancy. But if workers want to press the point, by peaceful, disciplined protest, that they deserve a better deal when companies go under (or are claiming to go under), I’m for it. And if they succeed in their protest, yeah, I’ll celebrate it.

The Modern Sit-Down Strike (re-post)

[Here's the post I accidentally deleted for the sake of an Accurate Archival Record.  Thanks to Dan M. for finding it in the netherworld.  More new content soon!]

Some labor historians have a tendency to romanticize and exaggerate the importance of certain forms of worker "militancy." With that caveat, I was interested in this story about a group of union workers who were recently laid off by Republic Windows and Doors and Chicago but have thus far refused to leave the plant in what the workers are calling an "occupation." The workers claim they are owed severance pay and that the three-day notice of the shut-down they received violated the WARN Act’s requirement of sixty days' notice. Further, as the NYT reports, "their anger stretched broadly to the government’s costly corporate bailout plans, which, they argued, had forgotten about regular workers."

They want the poor person to stay down," said Silvia Mazon, 47, a mother of two who worked as an assembler here for 13 years and said she had never before been the sort to march in protests or make a fuss. "We’re here, and we’re not going anywhere until we get what’s fair and what’s ours. They thought they would get rid of us easily, but if we have to be here for Christmas, it doesn’t matter."

. . . [S]ome workers said they doubted that the company was really in financial straits, and they suggested that it would reopen elsewhere with cheaper costs and lower pay. Others said managers had kept their struggles secret, at one point before Thanksgiving removing heavy equipment in the middle of the night but claiming, when asked about it, that all was well. Workers also pointedly blamed Bank of America, a lender to Republic Windows, saying the bank had prevented the company from paying them what they were owed, particularly for vacation time accrued.

"Here the banks like Bank of America get a bailout, but workers cannot be paid?" said Leah Fried, an organizer with the union workers. "The taxpayers would like to see that bailout go toward saving jobs, not saving C.E.O.’s."

The workers said they were determined to keep their action — reminiscent, union leaders said, of autoworkers’ efforts in Michigan in the 1930s — peaceful and to preserve the factory.

"The fact is that workers really feel like they have nothing to lose at this point," Ms. Fried said. "It shows something about our economic times, and it says something about how people feel about the bailout."

According to other reports I’ve read, Bank of America received $25 billion in bailout money and then cut off operating credit to the Republic Windows and Doors.

Despite all the comparisons to the Great Depression and New Deal floating around these days, it would be a stretch to call this single act a tip of an iceberg of renewed labor militancy. Still, one can see this act as consistent with a long tradition of alternative views of economic justice and rights at the workplace, a tradition that has had a significant impact on the development of labor and employment law.

Setttlement at Republic Windows and Doors

Because I'm an idiot, I inadvertently deleted my previous blog post here about the sit-down strike at Republic Windows iand Doors in Chicago.  Fortunately, events give me a chance to update the story.

Jobs With Justice has the following report.

Workers at Republic Window and Doors in Chicago voted to accept a settlement late last night. 

The settlement totals $1.75million. It will provide the workers with:

• Eight weeks of pay they are owed under the federal WARN Act;
• Two months of continued health coverage, and;
• Pay for all accrued and unused vacation.

JPMorgan Chase will provide $400,000 of the settlement, with the balance coming from Bank of America. Although the money will be provided as a loan to Republic Windows and Doors, it will go directly into a third-party fund whose sole purpose is to pay the workers what is owed them. In addition, the UE has started the "Window of Opportunity Fund" dedicated to re-opening the plant.

As the Local 1110 leaders characterized the settlement, "We fought to make them pay what they owe us, and we won."

It's also worth quoting labor historian Nelson Lichtenstein.  In a good editorial comparing and contrasting this action with the sit-down strikes during the New Deal, he writes in part:

Factory occupations are rare because they violate the everyday laws of property, and for the most part American workers are law-abiding people.

They occur only when workers feel morally aggrieved, when they sense that ownership has itself violated the law, when the boss has become the outlaw in their eyes and in that of the community as well.

Awkward But Interesting

Imagine you are a labor/employment law prof. with interests in, among other things, gay/lesbian rights, employment discrimination rules, religion, public employment, and the First Amendment.   Imagine further that a very interesting case with all these issues involving a public university as an employer has just hit the court system (and blogosphere).  And imagine it's your turn to guest blog on a prominent legal blogsite.  It would be a great opportunity to make a post analyzing the case, legal rules, and policies involved, right?

It would be, unless the defendant in the case was your very own employer.  Which counsels discretion, to say the least.  Still, it's worth discussing, and there are interesting posts and comments at the V.C. and Religion Clause.

I would be interested in the thoughts of others.   FWIW, I don't have any "inside information" about this case.

An Exercise in Judgment

Further to Bill Henderson's comments on judgment (and the difficulties in teaching it), I went back to an article I wrote on the subject and pulled out the following hypothetical:

The company has two valuable and high-potential employees, Jack and Stephanie.  They are managing the critical launch of the company’s newest product, one upon which the future of the company rides.

An internal audit reveals that the two have been using Jack’s company credit card to purchase personal items that have no conceivable connection to the company (a new DVD recorder, for example).  The human resources manager confronts Jack, who admits that his personal finances had gotten out of control, that it was a bad mistake, but he was desperate, and at some point, intended to repay it. Jack says that he told Stephanie what he was doing, learned that she also was in bad financial straits, and lent the card to her.  Jack is terminated for cause immediately and escorted out of the building, and does not contest the termination.

The human resources manager then confronts Stephanie.  Stephanie first admits that she used the card, then claims later that she did not, and that Jack purchased the items for her, without her knowing the source of the funds.  Over the next two days, as the manager investigates the situation, Stephanie consults with a lawyer, who insists that the company does not have a basis for a termination with cause.  In order to get the matter behind him, the manager agrees that Stephanie will be allowed to sign a routine separation agreement and mutual release, and to receive two weeks’ severance pay, half of the amount to which she would have been entitled under the company policy.

Friends of Jack complain that concessions made to Stephanie are not right, and that there has been unfair and unequal treatment of the two: if Jack was terminated for cause, Stephanie should have been as well.

Was it either illegal or wrong for the manager to treat Jack and Stephanie differently?   I am more interested in the wrong than the illegal (as I cannot think of any reason why it would be). 

Note Bill Henderson's observation that "it is just damn hard to define judgment in a way that is objectively defensible."  Is objective evaluation of this judgment even possible?  If not, how do we evaluate it?  Respond to Jack's friends?