Friedrichs and Broccoli

The more I think about the Friedrichs case, the more I am reminded of broccoli.  Remember how the opponents of the Affordable Care Act kept going on about broccoli?  If the government could make you buy health insurance, then couldn’t the government also force you to buy broccoli?  The implication was that this would be some sort of outrageous infringement upon personal autonomy.  Unfortunately, defenders of the Affordable Care Act tended to avoid addressing this argument directly.  The Obama Administration lawyers argued strenuously that health insurance is not the same as broccoli, but they never challenged the premise that the federal government can’t require us to buy broccoli.  In fact, the federal government already compels us to buy broccoli and a ton of other fruits and vegetables.  The government spends tax dollars on school lunches, military meals, agricultural research, crop insurance subsidies, and the White House garden, to name some of the more obvious ways that taxpayers are forced to pay for broccoli.

The Friedrichs plaintiffs object to paying money to the union that represents them because they disagree with some of the union’s public policy positions.  But, as government employees, the Friedrichs plaintiffs routinely fund speech on public policy that they may disagree with.  For instance, the pension fund covering California public school teachers maintains a series of investment policies, and each policy contains implicit and in some cases, explicit, political judgments.  To take one example, there is a policy addressing how the pension fund will respond to divestment requests.  As participants in the pension plan, the Friedrichs plaintiffs are funding this speech.  Furthermore, it’s not possible for a pension fund to avoid making public policy choices.  Any investment decision is political in a sense, and not just because corporations use their treasuries to engage in political speech.  Refusing to consider the environmental consequences of an investment is as much a political decision as taking into account the investment’s potential impact on the environment.  If they win their case at the Supreme Court will the Friedrichs plaintiffs claim a First Amendment right to a rebate of all administrative fees their pension fund incurs?

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Today’s News & Commentary — December 1, 2015

Hillary Clinton unveiled a $275-billion federal infrastructure program as part of a shift to a domestic “jobs agenda” in her presidential campaign, according to the New York Times.  Clinton’s jobs proposals will be the most detailed and expensive planks in her campaign platform, and the infrastructure plan will stand as its “centerpiece.”  Relying on data from the President Obama’s Council of Economic Advisors, the campaign stressed that each $1 billion in investment would result in 13,000 well-paying jobs.

Customer service and gate agents reached a labor agreement with American Airlines, according to the Dallas Morning News.  The five-year agreement between the union and the company raises the pay of nearly 15,000 workers an average of 30%, making them the highest paid agents in the airline industry.

The Supreme Court agreed to expand the oral arguments in Friedrichs by ten minutes, according to the Wall Street Journal.  The additional ten minutes will be allotted to Solicitor General Donald Verrilli, who will argue  that agency fees are constitutional.  The California solicitor general will also speak for half of the time allotted to the defendant teacher’s union in support of the state’s agency-fee law.

The Wall Street Journal also reported that Ford sought to downplay the increase in labor costs resulting from its new contract with the United Auto Workers in a conference call with its executives.  The company brass argued that the costs will have minimal effects on Ford’s profitability, projecting that the pay increases will come at a rate lower than inflation and stating that domestic hiring will slow as a result of outsourcing and the use of temp workers.

Notable Decision — Professional Janitorial Services, Inc.


This post details a recent development in the jurisprudence of mandatory arbitration agreements that requires an employer’s mandatory arbitration policy to unambiguously communicate the fact that the policy does not prohibit employees from bringing any unfair labor charges in front of the National Labor Relations Board (NLRB).

On November 24, 2015, a three-judge panel appointed by the NLRB issued a noteworthy decision in the case of Professional Janitorial Services of Houston, Inc and SEIU, affirming in part and modifying in part the Administrative Law Judge’s decision below. Although the panel agreed with the ALJ on some of the issues presented (addressed in more depth below), the judges diverged with respect to the charging party’s allegation that the employer’s mandatory arbitration policy violated §8(a)(1) because employees would reasonably construe it to interfere with and limit their access to the NLRB and its processes.

Ultimately, the Board held that the mandatory arbitration policy employed by the Professional Janitorial Service (PJS) did, in fact, constitute a violation, resting its conclusion on the ambiguity of the language contained in the policy and the probability that it would mislead employees into believing that some unfair labor charges, although cognizable under Board law, would nevertheless be subject to the binding arbitration agreement and thus blocked or removed from the NLRB’s procedures. Because such a construction would prohibit activities protected by §7 of the NLRA, the Board deemed PJS’ maintenance of the policy unlawful.

The panel overruled the relevant portion of the ALJ’s decision, and modified the order accordingly.

This decision sets important precedent regarding the kind of “clear statement” that the Board requires all mandatory arbitration policies to have — one that unambiguously excludes from the policy’s coverage all claims arising under the NLRA that could otherwise be filed with the NLRB. In light of the prevalence of mandatory arbitration agreements in employment contracts and the likelihood that many employ language similar to that deemed to be a violation here, this decision has serious and far-reaching implications for employers and unions alike.

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Today’s News & Commentary — November 30, 2015

The Washington Post  reports that Democratic presidential candidate Hillary Clinton has earned the endorsement of Boston’s Mayor Marty Walsh, a lifelong union man.  The endorsement came on Sunday from Boston’s Fanueil Hall where Walsh emphasized something Clinton often does not  —  her gender.  At the rally, Walsh called on union members nationwide to shatter the “glass ceiling” by electing Clinton to the oval office.  “Where are my fellow tradeswomen and men? Get your sledgehammers ready, because we’ve got a glass ceiling to demolish.”  Walsh added, “[i]t’s time we stop talking about having a woman for president — it’s time we make it a reality.”  Clinching Walsh’s support, the Post notes, will likely carry weight among Boston’s union voters who view Walsh as “one other own.”  Walsh is a 20-plus year member and former president of the Laborer’s Local Union 223 and previously headed the Boston Building Trades.

Cash for citizenship?  An editorial in Sunday’s LA Times called for “fundamental changes” to the EB-5 visa program, which provides employment-based immigration preference for immigrant investors who invest $1 million  —  or $500,000 in the case of areas of high unemployment  —  in job growth.  Immigrants who meet the criteria of the EB-5 visa receive a two-year conditional green card for themselves, spouses, and children, that then “convert[s] into permanent resident status with a path to citizenship” once 10 or more jobs are created or preserved.  So what’s the problem?  For the LA Times, at least, the issue is that poor regulation allows immigrant investors to game the system.  “[T]he poorly conceived structure of the regional centers lets investors withdraw their money in two years, once they’ve received their Lawful Permanent Resident status.”   Looks like Washington can now add the EB-5 visa to one of the many employment-based visa programs, think the H – 1B, that are in need of reform.

Germany’s largest airline carrier, Lufthansa, has settled one of its many scores with labor by agreeing to increase wages for all employees and paying lump sums of 2,250 euros ($2,383.3) to 30,000 ground staff, reports the International Business Times.  The wage hike, which raises salaries by 2.2% across the board, will take effect on Jan. 1, 2016.   In the meantime, Lufthansa must still contend with the pilot and cabin staff unions, which have initiated separate disputes against the airline.  All major unions representing Lufthansa staff are set to discuss their grievances at a summit on Dec. 2.

President Obama’s top civil servants are slated to receive an uptick in compensation and other employment perks as a new executive order goes to print, reports the Washington Post.  The employees who stand to benefit are the 7,000 members of the Senior Executive Service (SES) who lead the executive’s federal agencies, but often make less than lower level employees.  Yet while increasing pay is a top priority for the Senior Executives Association (SEA), the organization representing SES members, much more needs to be done to make employment among the agency elite attractive again.  “[T]he risk-reward imbalance of serving in the SES has worsened significantly in recent years” notes the SEA.  “From the standpoint of career executives (and potential candidates for SES jobs) inadequate compensation, lack of pay-for-performance, limited recognition . . . and expanding work-life imbalances . . . threaten the future quality and commitment of the career executive corps.”


Today’s News & Commentary — November 29, 2015

Walmart protests this weekend were short and sweet, thanks to a split in worker organizing. The OUR Walmart campaign, launched by the United Food and Commercial Worker Union to agitate for better conditions and higher pay, has drifted from the UFCW. Rather organize Black Friday protests, the UFCW focused on advertisements calling out problems with the company. The Huffington Post noted that, in spite of the relatively few protesters, Walmart’s PR team was outside its Washington, D.C. store, ready to pride Walmart on the benefits and wages it offers.

Native American leaders are lobbying to exempt casinos from the National Labor Relations Act. The National Indian Gaming Association argues casinos provide a crucial part of tribes’ budgets, and those tribes cannot afford labor disputes. The AFL-CIO opposes the measure, seeking the same protections for the 600,000 casino employees as in other workplaces. Unite Here has already reached labor agreements with some individual tribes. According to the Wall Street Journal, President Obama said he would support the measure if tribes were forced to adopt regulations with standards equivalent to the NLRA.

Contractors for the New York City Metropolitan Transportation Authority are demanding higher wages, writes the New York Times. Employees at a calling center that links people with disabilities to rides from the city’s transit service earn between $9-11 per hour. Although they work for a state agency, as employees of the calling center, they will not receive the $15 minimum wage promised to state workers. In addition to low wages, the workers allege unfair firing of hundreds of workers, discrimination, and sexual harassment. Last year, the workers voted to join Transport Workers Union Local 100.

Thailand’s labor woes continue. Shortly after facing allegations of slavery in the Thai seafood industry, a major Thai poultry producer has been found to violate labor rights. Finnwatch and Swedwatch, two corporate responsibility groups, released a report alleging forced labor, exorbitant recruitment fees, and confiscation of documentation at six poultry processing plants. According to the Associated Press, Thai food manufacturers have preemptively released statements condemning worker exploitation in recent weeks.

Today’s News & Commentary — November 26, 2015

As thousands of shoppers prepare to flock to Walmart stores tomorrow, they may be greeted by more than just rollback prices and Black Friday deals. Per Politico, two different labor groups — OUR Walmart, which split from the United Food and Commercial Workers International Union earlier this year, and the UFCW-backed Making Change at Walmart — are planning protests, organizing food drives, and launching an ad campaign aimed at reforming the conglomerate’s labor policies. And while Black Friday is sure to be good for Walmart’s bottom line, this hasn’t exactly been the best public relations week for the retailer. On Tuesday, Bloomberg Businessweek published an exposé of Walmart’s employee surveillance practices, which have included enlisting defense contractor Lockheed Martin to gather “intelligence” on its workers’ advocacy efforts.

Wage and hour suits are on the rise, says Lydia DePillis of the Washington Post. DePillis describes recent findings by an employer-side law firm that federal wage and hour litigation has increased 358% since 2000 (federal litigation as a whole rose only 7% during the same period). The firm points the finger for this trend at the “increased attention being drawn to wage and hour issues by a Labor Department that’s been cracking down on misclassification of independent contractors, moving to change overtime rules, and promoting minimum-wage hikes on the local level.” The firm further contends that “the Fair Labor Standards Act, originally enacted in 1938, has failed to adapt from an industrial to a service-based economy, creating ambiguities that often have to be litigated to resolve (witness the lawsuits over the employment status of Uber drivers and other ‘gig workers’).” Yet NYU labor law Professor Samuel Estreicher posits a different theory: “As unions have declined, lawyers are suing less under the laws that govern labor-management relations and more over wages and hours, gaining familiarity with the statute as they go.”

“It makes no sense for labor unions to endorse Hillary Clinton,” says Michael Sainato of the New York Observer. Pointing first to Clinton’s hesitancy to support a minimum wage hike, Sainato suggests that the Democratic presidential contender’s eventual endorsement of a $12/hour minimum wage (rather than the $15/hour wage that SEIU, which recently backed Clinton, has set its sights on) illustrates Clinton’s penchant for “political expediency” over “genuine interest” in the causes that she purportedly champions. Sainato goes on to note Clinton’s historical and continuing ties with Walmart, her husband’s rocky relationship with teachers unions while he served as Governor of Arkansas, her initial reticence to denounce the Keystone XL pipeline and the Trans Pacific Partnership, and the Clinton Foundation’s close relationship with corporate donors as additional red flags that should give labor unions pause in their rush to support Clinton’s candidacy.

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Today’s News & Commentary — November 25, 2015

A group of Disney workers is filing a complaint against Disney, alleging national origin and age discrimination, Politico reports. Earlier this year, Disney announced its plans to fire about 250 workers and replace them with guest workers on H-1B visas employed by a subcontractor. A group of at least 23 of these workers petitioned the EEOC to hear the case, evoking Title VII, and specifically emphasizing “hostile treatment in forcing the Americans to train their replacements.” Computerworld provides more details about the EEOC petition as well as the potential political and legislative ramifications of the case.

Nestle has admitted that fish in its global supply chains are the product of forced labor in Thailand, the Los Angeles Times reports. The laborers come from Thailand’s poorer neighbors Myanmar and Cambodia, and brokers charge them fees to get jobs, trapping them in jobs on fishing vessels and ports until they can pay back more money than they could possibly earn. Nestle disclosed that a self-policing internal investigation shows “virtually all U.S. and European companies buying seafood from Thailand are exposed to the same risks of abuse in their supply chains.” This comes months after the Associated Press reported on slavery in the seafood industry, which has led to the rescue of over 2,000 fishermen. Nestle has announced it will publish the reports and a yearlong solution strategy online as part of its efforts to protect workers.

The Massachusetts legislature has begun discussing creating a state-administered retirement plan for businesses without them, The Boston Globe reports. Earlier this week, Secretary of State William F. Galvin urged legislators to pass a bill that would apply to companies with over 25 employees, and give millions of workers an opportunity to save for retirement using payroll deductions. Following the launch of the Obama administration’s “myRA” program, as well as U.S. Department of Labor’s decision earlier this month to ease regulations to allow states to serve as fiduciaries for multiemployer retirement plans, states across the country are considering similar bills. The Massachusetts legislature’s session is official over for the year, so the earliest this bill will be considered is next year.

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