Today’s News & Commentary — October 27, 2016

With fewer than two weeks remaining until the election, The Wall Street Journal reported political tensions have been heating up at work.  A Society for Human Resources and Management survey found that more than half of human resources personnel are reporting more political discord at work in this election cycle than in the past.  As a result, employers have noted decreased productivity, but many have been reluctant to ban political conversations in the workplace, especially in light of the National Labor Relations Act’s prohibition on employers banning employee speech on issues such as wages and working conditions.  Read more here.

The Upshot published an explainer in the wake of the Obama Administration’s announcement that the cost of some health plans would increase.  The price of  premiums for midlevel plans are estimated to rise by 22 percent in 2017.  However, these price increases will only affect those who purchase their own insurance.  Americans who receive health care coverage through their employer or government programs, such as Medicare or Medicaid, will not be affected by these rate increases.

Yesterday, the Fourth Circuit heard Donald Blankenship’s appeal from his conviction to conspire to violate mine safety standards.  Blankenship is the former CEO of Massey Energy Company.  Massey operated the Upper Big Branch Mine where a coal dust explosion in 2010 killed 29 people in the largest mining disaster in 40 years.  Blankenship is believed to be the first head of a major U.S. firm prosecuted for safety violations following a workplace disaster.  Blankenship has termed himself an “American political prisoner” in a pamphlet he authored while incarcerated.  One of the issues Blankenship has raised on appeal is whether the District Court incorrectly instructed the jury on the willfulness standard such that he could be convicted without proof that he understood his conduct to be illegal.  Read more here.

Also in federal court yesterday, a district court in Alabama heard arguments on a motion to dismiss a lawsuit challenging an Alabama law preempting Birmingham’s minimum wage increase to $10.10.  Alabama has no state minimum wage. Plaintiffs in the case, who include civil rights groups, two restaurant workers, and community clergy, have alleged that the law is a violation of the Fourteenth Amendment’s equal protection clause and the Voting Rights Act.  Only Birmingham, a majority black city, was affected by HB 174, the state law preventing the city ordinance from taking effect.  The complaint charges that the Alabama law was motivated by “racial animus.” Read more here.

ACS Issue Brief on Employee Status

ACS is out with a new Issue Brief (authored by Brishen Rogers) on the question of employee status.  The brief, Redefining Employment for the Modern Economy, should be on the reading list of any lawyer or policymaker interested in the question of how to define employment in the 21st Century.  Drawing on the work of David Weil, the National Employment Law Project, and recent memoranda from the Department of Labor, the brief astutely identifies the problems with and sketches some sensible reforms to our labor and employment laws.

Rogers begins by, appropriately, locating his analysis in the broader trend toward what Weil names “fissuring” – questions of employee status matter, that is, not just in the gig economy but in the far more pervasive contexts of misclassification, subcontracting and franchising.  And Rogers, again rightly in my view, rejects the call for a new category of worker (describing Harris and Krueger’s “independent worker” proposal as a “false start”).  Rather than creating a new legal category, Rogers argues that we ought to “expand and clarify” the scope of employment under existing statutes. Through legislative amendment, he suggests that we:

  1.  Redefine employment per the “suffer or permit” test and specify that the “suffer or permit” test defines employment very broadly;

  2. Define workers in certain highly fissured industries as the legal employees of firms who contract with them individually for labor, and/or the joint employees of user firms who obtain their labor through subcontracting or franchising arrangements;

  3. Develop concrete guidance for courts to apply in other industries, or direct an expert agency to do the same; and

  4. Place the burden of proof on the party seeking to avoid employment status and implement other procedural and remedial reforms.

More particularly, Rogers suggests that Congress or perhaps the DOL provide a list of “enumerated industries whose workers will always be the employees of whoever purchases their services, whether directly or through an intermediary.”  He also effectively defends NELP’s proposal that states make broader use of the unemployment compensation procedural model “by creating a presumption that anyone who performs work for another is the other’s employee, then requiring the other to disprove employment status,” through the so-called ABC test.

I agree with much of what Rogers proposes here.  But, in setting out the problem to be addressed by legal reforms (what Rogers calls “the challenge of defining employment”), Rogers discusses the Lyft litigation and the widely-cited quote from Judge Chhabria’s opinion.  As Rogers puts it, “Chhabria struck a telling metaphor: if the case reached a jury, [the jury] would be ‘handed a square peg and asked to choose between two round holes.'”  Why?   Continue reading

Today’s News & Commentary — October 26, 2016

The Pentagon is forcing thousands of soldiers deployed in Iraq and Afghanistan to repay enlistment bonuses granted to them a decade ago. The demands for repayment have surfaced in the wake of a 2011 audit of the California Guard that revealed “widespread overpayments” by officials struggling to meet enlistment quotas at the height of both wars. The soldiers’ bonuses often exceeded $15,000 and were mostly spent by those soldiers and their families years ago. Today, for many soldiers, the unexpected debt is causing severe financial hardship, including the necessity of choosing between paying the debt or buying food and diapers for their children. In 2014, the California National Guard tried but failed to obtain relief from Congress, asking for funds to cover the costs of the improper bonuses. However, as of this week, members of Congress from both parties have newly called for a legislative solution and an end to the collections by the Pentagon.

Yesterday the White House issued a statement urging states to ban non-compete agreements. The Obama administration noted that such agreements are particularly unjust for low-wage workers, who do not pose a risk to company secrets, nor are they likely to lure clients away when changing jobs. Vice President Joe Biden weighed in on his opposition to non-competes, stating that workers “can’t reach their true potential without freedom to negotiate for a higher wage with a new company, or to find another job after they’ve been laid off.” Almost all states, with the notable exception of California, currently allow non-competes. But California successfully relies on employee non-disclosure and non-solicitation clauses to protect trade secrets. It is possible other states will follow suit in the wake of the infamous Jimmy John’s settlement this summer and the increased political pressure from the Administration.

Lastly, corporate wellness programs are facing a new hurdle—this time in the form of an AARP lawsuit against the EEOC for its regulations of these programs. In May 2016, the EEOC issued new rules, stating that employers could set incentives for participating in a wellness program as high as 30% of workers’ annual health care coverage costs. However, in order to receive the bonuses or incentive pay, many of these programs require employees to turn over personal, medical, and biometric information to their employers. Critics of the programs, including the AARP, argue that this exchange of information violates anti-discrimination laws, specifically the ADA and GINA (Genetic Information Nondiscrimination Act). The AARP is seeking a preliminary injunction to prevent the EEOC rules from going into effect in 2017.


Today’s News & Commentary — October 25, 2016

After a 20-day strike, Harvard University and the union representing its dining services workers have reached a tentative agreement on a new five-year contract.  The strike has attracted considerable campus, local, and national attention to difficulties faced by low-wage workers facing seasonal unemployment and untenable health-care costs.  According to The Harvard Crimson, to be ratified by workers the tentative agreement “must first be sent to a 30-member bargaining subcommittee Tuesday” before “the full membership of dining workers in the union vote on the deal Wednesday.”  UNITE HERE Local 26 President Brian Lang told The Crimson that workers could return to work as early as Thursday, but declined to provide details about the agreement but said it “accomplished all of our goals.”  In an email to the community, Harvard Executive Vice President Katie Lapp said said the new contract “represents a fair and reasonable resolution to negotiations” and addresses the core issues of wages and health care.  More from The Boston Globe.

The Department of Labor’s new overtime regulations almost doubling the salary threshold below which workers must receive time-and-a-half will take effect December 1st, and commentators are already hypothesizing how employers may respond to their new responsibilities.  In commentary in Time, Professor Daniel Hammermesh of the Royal Holloway University of London argues that employers “will cut weekly hours of previously exempt workers who had been working more than 40 hours per week, but that cut will be small enough so that those workers’ weekly earnings will increase” and thus “employees will work less but make more.”

At least one major union head isn’t happy with New York City Mayor Bill de Blasio, who was elected on a platform of supporting organized labor.  The New York Daily News published an op-ed authored by John Samuelsen, president of the 39,000-member Transport Workers Union Local 100, criticizing Mayor de Blasio for his record on organized labor since taking office.

Continue reading

Today’s News & Commentary — October 24, 2016

The Department of Labor defended a new regulation requiring businesses to disclose recent labor law violations when bidding on federal contracts, urging a Texas Court not to grant a preliminary injunction against the rule, reports Politico.  On Thursday, DOL argued that the regulations are within their authority as an executive agency,  are not preempted by existing labor law, and do not constitute “compelled speech” in violation of the plaintiffs’ First Amendment rights.  The regulations are set to be phased in beginning tomorrow.

A recent ruling by a California appeals court which found that existing pensions for public employees can be reduced is now before the California Supreme Court in a case that could dramatically alter 60 years of California law governing pensions, reports the L.A. Times.  The ruling approved a a 2012 “pension reform” law which cut pensions, increased the retirement age for incoming government employees, and banned “pension spiking” for existing workers.  The earlier decision, if upheld, would weaken the current “California Rule,” which generally allows the State to alter the formula for calculating retirement income only if the result is neutral or advantageous to the employee.  Twelve other states have adopted some version of the California Rule.

The Wall Street Journal reported that retailers began recruiting seasonal hires for the holidays as early as August this year, anticipating a strong consumer demand and more difficulty in recruiting seasonal workers than in past years.  Companies and analysts attribute this early hiring to several trends: increasingly early holiday shopping, a tighter labor market given the low unemployment rate, and holiday competition between retailers, restaurants, and logistics and distribution firms.  While overall seasonal hiring is not expected to increase much this year, the tighter labor market is expected to put upward pressure on wages for seasonal workers.

Weekend News & Commentary — October 23, 2016

The Hamilton Project released a series of new research papers last week related to the re-integration of formerly incarcerated people. In one of the papers, Jennifer Doleac proposes five principles for policy makers to adopt in order to increase access to the low-skill labor market for individuals with criminal records. These include an increase in work-readiness programs and ways to communicate that work readiness to potential employers. Doleac also analyzes the most recent studies on Ban the Box legislation, and concludes that, perversely, “racial discrimination becomes more likely in the wake of policies that make it more difficult for firms that desire criminal record information to obtain it.” Furthermore, she writes, Ban the Box tends to disadvantage minority applicants without a criminal record, because of negative assumptions about those applicants based on race. For more on Ban the Box legislation, read OnLabor’s recent coverage of the issue here, here, and here.

This election cycle has featured seemingly endless talk about NAFTA and manufacturing jobs, and Donald Trump has promised to “take our jobs back from China and all of these other countries.” However, many have pointed out that those jobs have not, and probably will not, come back. So what will happen to America’s manufacturing towns? Politico tells the uplifting story of how Winston-Salem, NC, the former home of R.J. Reynolds, bounced back from the tobacco company’s departure through investments in technology and medicine. Instead of manufacturing cigarettes, the city is now manufacturing human organs.

And lastly, in a tale of two union-less positions, the New York Times reports that Spanish-language soap opera stars in the U.S. are paid far less than industry standard, because the industry’s union (SAG-Aftra) does not represent actors on the Spanish-speaking shows. So at least one telenovela star, Pablo Azar, has resorted to driving for Uber when he’s off the set.

Today’s News & Commentary — October 21, 2016

The California Occupational Safety and Health Standards Board (OSHSB) voted yesterday to approve a slew of regulations targeting workplace violence in California hospitals and care facilities.  These regulations originated in 2014 legislation sponsored by the California Nurses Association and National Nurses United. California Secretary of State and former State Senator, Alex Padilla, carried the legislation on CNA and NNU’s behalf.  The new rules make California the state with the strongest workplace violence prevention regulation in the nation.  Health care workers experience non-fatal workplace violence five to twelve times more frequently than workers in other jobs.  NNU has also petitioned the U.S. Department of Labor to issue a similar protective standard.

The New York Times today published an article on the phenomenon of “work-campers” in the United States, people who live and travel in their trailers from campground to campground looking for seasonal work.  Work-campers are from diverse class backgrounds, but most are semi-retired baby boomers looking for warm weather and low-commitment work.