News & Commentary

May 19, 2023

Swap Agrawal

Swap Agrawal is a student at Harvard Law School.

In today’s news and commentary, Minnesota Democrats pass a sweeping labor bill; the Supreme Court held that a State National Guard is a federal agency under the Federal Service Labor-Management Relations Statute; the EEOC released new guidance regarding employer use of automated hiring tools; and house cleaning app Handy settles a worker misclassification lawsuit for $6 million.

On Tuesday, the Minnesota state legislature passed a sweeping labor bill that Governor Walz intends to sign into law. The bill makes nine major changes that have long been on Democrats’ wish list, including mandating paid sick days, banning noncompete agreements, allowing teachers to negotiate over classroom sizes, creating a sectoral bargaining system for nursing home workers, banning captive audience meetings, boosting funding for workplace safety inspectors, and increasing protections for workers in meatpacking plants and construction sites. The bill also takes aim at Amazon’s warehouse labor practices by requiring employers to provide warehouse workers with written information about all quotas and performance standards they are subject to and forbidding employers from taking disciplinary action against a worker who fails to meet a quota that wasn’t disclosed. These provisions are a result of organizing by East African workers who have spent years fighting for better pay and conditions at Amazon warehouses. To enforce this provision, the bill establishes a private cause of action for workers.

On Wednesday, the Supreme Court held that a State National Guard acts as a federal agency for purposes of the Federal Service Labor-Management Relations Statute. The case, Ohio Adjutant General’s Department et al. v. Federal Labor Relations Authority et al., arose from the Ohio National Guard’s effort to unilaterally end its nearly 50-year-old collective bargaining relationship with an American Federation of Government Employees affiliate that represents Guard technicians. This decision preserves federal sector labor law rights for more than 32,000 dual-status technicians who are represented by unions in every state but Mississippi.

The EEOC released new guidance yesterday affirming that employers must assess their use of automated hiring or employment tools to ensure compliance with Title VII of the Civil Rights Act. The guidance stated that an employer’s use of an algorithmic decision-making tool counts as a “selection procedure” and that employers are responsible for their use of algorithmic decision-making even when the tools are designed or administered by another entity, such as a software vendor. The EEOC also said that AI hiring tools may discriminate not only based on single characteristics such as race or sex but also based on combinations of characteristics, e.g. by disfavoring Black women. The guidance cautioned employers that the four-fifths rule is simply a starting point for catching bias and that courts routinely examine other standards of statistical significance. The EEOC’s focus on algorithmic bias has been lauded by the Center for Democracy and Technology, which published ‘Civil Rights Standards for 21st Century Employment Selection Procedures’ in December of 2022.

San Francisco and Los Angeles district attorneys announced yesterday that the housecleaning app Handy agreed to pay $6 million to settle a lawsuit alleging that the company had misclassified workers in violation of California labor laws, including AB 5. Over 25,000 workers who perform cleaning and handyman services through the app will receive a total of $4.8 million in restitution, an average of under $200 per worker. Handy will also pay $1.2 million in civil penalties. As part of the settlement, Handy also agreed to changes to its workers’ control over the jobs they accept, including allowing workers to set their own hourly rates and contact customers directly to negotiate hours and pay. Veena Dubal, an employment law professor at the University of California College of the Law, San Francisco, said, “This is a really great example of how district attorneys can conceptualize their role in prosecuting the most rampant theft in the economy — that is the theft of workers’ wages … I’m hopeful this will give these workers some autonomy instead of allowing the firm to have it both ways — to act as an employer and an intermediary.”

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