Today’s News & Commentary — October 11, 2018

Published October 11th, 2018 -  - 10.11.182


The U.S. Department of Labor announced that it is extending its Payroll Audit Independent Determination (PAID) program by six months.  The program protects employers from enforcement action resulting from federal wage-and-hour violations if they work in good faith with the Wage and Hour Division (WHD) to correct their errors. POLITICO reports that at least nine employers, together owing $508,767, took part in the PAID program in its first six months.  This week WHD also announced that it recovered $304 million in employees’ unpaid wages during Fiscal Year 2018, the largest year for recovery on record.

This week musicians in the orchestra at Lyric Opera of Chicago went on strike.  Members represented by the Chicago Federation of Musicians are protesting management’s position that it must make cutbacks in this round of contract negotiations to ensure the company’s survival as audience demand for grand opera continues to fall.  Management has sought to cut guaranteed work time from 24 to 22 weeks, to reduce the full-time musician count from 74 to 69 through attrition, and to end radio broadcasts, which have earned musicians additional payments.  The orchestra members have explained that the cuts will diminish the quality of a world-class orchestra.  Several early season performances have been cancelled since the musicians walked out on Tuesday morning.

Jane McAlevey, author of No Shortcuts: Organizing for Power in the New Gilded Age, writes in The New York Times that Democrats can learn important lessons about winning elections from union organizers.  McAlevey contends that labor organizers have long dealt with elections in which the other side has the advantage of favorable laws and significantly more resources.  Now that “the very tactics long used against workers in workplace elections have . . . been exported to the broader electoral arena,” she suggests that Democrats focus on building supermajority support and inoculating voters against anti-Democrat arguments early on to prepare for the inevitable final-weeks blitzkrieg of negative campaigning that is common in union elections.

Last week United States District Judge F. Dennis Saylor IV granted in part a preliminary injunction brought by custodial company C&W Facility Services to enjoin a former employee from working for another custodial company now servicing the same property because of a restrictive covenant in her employment contract.  The employee, who earned just $18 an hour at C&W, had signed a non-compete agreement stipulating that she would not provide services for two years after her termination from C&W at any locations where she had worked for them.  Saylor concluded the agreement would likely be enforceable because C&W had a legitimate business interest in protecting against a competitor bidding at a lower price and then saving money by using the same employees as C&W without having to pay workforce assembly and training costs.  Saylor found the agreement to be overbroad, however, stating that four months was a more appropriate period than two years and denying C&W’s ability to seek reimbursement for court and attorney’s expenses.

Uber may face a major public test under California’s new ABC test for distinguishing employees from independent contractors for purposes of state wage-and-hour claims.  The California Supreme Court adopted the ABC test earlier this year in Dynamex Operations West v. Superior Court.  Diva Limousine filed a motion for partial summary judgment on the employee/contractor question in its suit claiming that Uber has unfairly hurt competitor business by skirting the law.  Diva’s motion focuses on part B of the test, which requires a hiring entity seeking to prove that a worker is a contractor to show that the hired person’s work is outside the usual course of the entity’s business.  Diva contends that the usual course of Uber’s business is selling rides, which its drivers provide.  While misclassification suits brought by Uber’s drivers have largely been forced into private arbitration as a result of enforceable agreements between the company and its workers, Diva Limousine’s suit faces no such risk since the company is a business competitor without any arbitration agreement with Uber.

Readers of The New York Times reacted divergently to news that Amazon is raising its minimum pay to $15 an hour.  Two letters to the editor discussed the importance of unionization as a necessary next step.  Frank Gattie of the National Employment Law Project wrote that “[w]hen a company’s minimum wage is increased without legislation — and especially without a union contract — we must keep in mind that what has been given can always be taken away.”  One letter argued that that Amazon’s decision reflected a natural response to soaring profits and a tight labor market and that progressive calls for a general minimum wage hike could hurt employees.  Another letter praised the wage hike for American and British workers, but urged Amazon to do more to ensure that it is not using forced labor in its supply chains.

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