Legislation designed to ensure disability access to telecommunications technology re-introduced

In an attempt to make sure people with disabilities are not left behind as changes in technology race ahead, U.S. Representative Edward Markey (D-Mass) has re-introduced the Twenty-First Century Communications and Video Accessibility Act (H.R. 3101) (Act). According to a summary posted on the website THOMAS (http://thomas.loc.gov/), the Act’s goal is “to establish new safeguards for disability access to ensure that people with disabilities are not left behind as technology changes and the United States migrates to the next generation of Internet-based and digital communication technologies.”

Such legislation would no doubt impact litigation such as the lawsuit filed against Arizona State University (ASU) regarding a pilot program’s use of Amazon’s Kindle DX electronic reading device as a means of distributing electronic textbooks. Several institutions of higher education are deploying the Kindle DX as part of a pilot project to assess the role of electronic textbooks and reading devices in the classroom. The lawsuit, filed by the National Federation of the Blind (NFB) and the American Council of the Blind (ACB), alleges violations of the Americans with Disabilities Act and the Rehabilitation Act of 1973 because the Kindle DX cannot be used by blind students.

Although the Kindle DX features text-to-speech technology that can read textbooks aloud to blind students, the menus of the device are not accessible to the blind, making it impossible for a blind user to purchase books from Amazon’s Kindle store, select a book to read, activate the text-to-speech feature, and use the advanced reading functions available on the Kindle DX.

In addition to their ASU lawsuit, NFB and ACB also filed complaints with the Office for Civil Rights of the U.S. Department of Education and the Civil Rights Division of the U.S. Department of Justice, asking for investigations of the following five institutions: Case Western Reserve University, the Darden School of Business at the University of Virginia, Pace University, Princeton University and Reed College.

“Given the highly-advanced technology involved, there is no good reason that Amazon’s Kindle DX device should be inaccessible to blind students. Amazon could have used the same text-to-speech technology that reads e-books on the device aloud to make its menus accessible to the blind, but it chose not to do so. Worse yet, six American higher education institutions that are subject to federal laws requiring that they not discriminate against students with disabilities plan to deploy this device, even though they know that it cannot be used by blind students,” said NFB President Dr. Marc Maurer. He also said he hoped the matter could be resolved “in a manner that allows this exciting new reading technology to be made available to blind and sighted students alike.”

The objectives of the Twenty-First Century Communications and Video Accessibility Act include:

• requiring mobile and other Internet-based telecommunications devices have accessible user interfaces, and offer people with disabilities use of a full range of text messaging and other popular services that are currently largely inaccessible;



• providing people who are deaf-blind with vital but costly technologies they need to communicate electronically; and



• ensuring video programming offered via the Internet will be described, and call for all devices that receive and playback video programming to employ accessible user interfaces and allow ready access to description.

The Act, co-sponsored by U.S. Representatives Barbara Lee (Calif) and Linda T. Sanchez (Calif), was re-introduced on June 26, 2009.

It's 9:00 AM: do you know where your employee records are?

Earlier this month, Connecticut Governor M. Jodi Rell signed into law An Act Concerning Consumer Privacy and Identity Theft (P.A. 09-239 (S.B. 838), L. 2009, effective Oct. 1, 2009), which is sure to have repercussions for employers in that state. Broadening the definitions of identity theft and “personal identifying information,” the legislation requires private employers to strengthen the security of job applications. In accordance with Section 10, each employer shall obtain and retain employment applications in a secure manner and shall employ reasonable measures to destroy or make unreadable such employment applications upon disposal. Such measures shall, at a minimum, include the shredding or other means of permanent destruction of such employment applications in a secure setting. Employers violating these provisions will be subject to a civil penalty of at least $500, not to exceed $500,000 for any single violation.

Do you know the record-retention laws that apply to your company? For starters, different state laws or operational requirements may have varying record-retention guidelines. Complicating the issue are questions like: How does an employer define an “applicant?” What exactly constitutes personnel records? Also, do the rules differ for unsolicited resumes or Internet applicants?

Many states have laws that require employers to retain particular records for a specified period of time; however, unsolicited resume retention is not specifically addressed in the laws of each individual state. For example, in Illinois, employers are required to maintain, among other things, resumes for one year from the date of application. Pennsylvania law requires all documents relating to employment including the applications of both successful and unsuccessful applicants must be preserved for 120 days following the filing of the forms. Wisconsin requires even longer retention: five years for all records relating to an applicants employment, including the original application.

Who is considered an "applicant?" The concept of an applicant is that of a person who has indicated an interest in being considered, through submission of a resume or otherwise, for hiring, promotion, or other employment opportunities. In an effort to address the difficulties federal contractors face in dealing with the often overwhelming amount of expressions of interest submitted via the Internet or related electronic data technologies in the context of OFCCP compliance, the OFCCP developed the Internet Applicant Rule, which employs the following criteria: (1) the job seeker has submitted an expression of interest in employment through the Internet or related electronic data technologies; (2) the employer considers the job seeker for employment in a particular position; (3) the job seeker's expression of interest indicates the individual possesses the basic qualifications for the position; and, (4) the job seeker does not remove himself or herself from further consideration or indicate that he or she is no longer interested in the position (41 C.F.R. §60-1.3). For paper submissions, however, the traditional applicant rule applies.

Disposal of employee records. Before complying with identity theft legislation, many questions should be resolved concerning the destruction of employee records. Can you be certain that data has been rendered unreadable before recycling or disposal? What really happens to your company’s old computer hard drives? If you used a vendor to shred documents, do you know details of their security?

Obviously, these are all complicated issues that cannot be easily addressed, so it is imperative that employers take a thorough look at their compliance with both state and federal laws to adequately define both their record-retention and disposal requirements. In cases where federal and state requirements overlap, the employer is expected to adhere to the stricter requirement.

An employee by any other name...

Many employers utilize independent contractors to meet short-term business needs or to carry out non-core functions. Some employers, however, adopt the independent contractor distinction for more unsavory reasons, such as evading payroll tax obligations, employee benefit costs and union organizing campaigns, or to avoid wage-hour suits or other employment claims. In either case, and regardless of an employer’s intentions, merely calling a worker an independent contractor does not make it so.

This truism is hardly new, nor are the murky and varied criteria that go into determining how to classify individual workers. What has changed, though, is the heightened liability that can befall unwary employers that get it wrong. Employers that improperly classify their workers have been targeted from all angles of late.

Consider FedEx. Perhaps no employer has been more under siege due to its use of independent contractors. In a closely watched case, a California appellate court found the company’s driver-operators were indeed “employees,” notwithstanding the terms of their Delivery Contractor Operating Agreement, and thus were entitled to reimbursement for work-related expenses under the California Labor Code (Estrada v FedEx Ground Package System, CalAppCt 2007, 154 LC ¶60,485). Soon thereafter, a plaintiff’s firm sent out more than 27,000 notices to past and current FedEx Ground/Home Delivery drivers across the country in multi-district litigation challenging the company’s independent contractor model. In all, more than 45 class-action suits have been filed against FedEx in state and federal courts over its classification practices. In addition, the IRS tentatively determined FedEx Ground drivers should be reclassified as employees—and that the company owed more than $319 million in back taxes and penalties for 2002 alone. Most recently, in June, eight state attorneys general announced they were teaming up to ensure the FedEx Ground division adheres to state employee classification laws.

FedEx won one key skirmish, however: earlier this year, a federal appeals court reversed a NLRB finding that FedEx delivery drivers were employees, concluding instead that they were indeed independent contactors and therefore did not fall within the Board’s jurisdiction (FedEx Home Delivery v NLRB, DCCir 2009, 157 LC ¶11,217). The ruling foiled a Teamsters effort to gain recognition as FedEx drivers’ bargaining rep.

Independent contractor misclassification isn’t just an employee rights issue, though. It’s estimated that more than $4.7 billion in federal income is lost due to misclassification. And for every 1 percent of workers misclassified, states lose an average of $198 million each year in unemployment insurance funds.

It’s no surprise, then, that cash-strapped states are pursuing the cause. To cite just two examples from last month alone: Colorado passed a bill allowing any individual to file a state agency complaint alleging an employer is misclassifying an employee as an independent contractor. The statute imposes a fine of up to $5,000 per misclassified employee for the first instance of misclassification made with willful disregard of the law; subsequent violations carry fines of up to $25,000 per misclassified employee. And Maryland enacted the “Workplace Fraud Act of 2009,” specifically targeting construction and landscaping employers that misclassify workers as independent contractors. State governors have also entered the fray, issuing executive orders that create state commissions or task forces expressly geared to addressing worker misclassification, and state agencies are beefing up their audit and enforcement activities in this area.

In some instances, states have created a private right of action for workers improperly deemed independent contractors. Here’s where it gets even pricklier: Some statutes allow any “interested party” to sue. In June, a federal district court in Illinois denied an employer’s motion to strike a union as a party plaintiff in a suit filed under the Illinois Employee Classification Act (Chicago Reg'l Council of Carpenters v Sciamanna, NDIll 2009, 157 LC ¶60,814). The court concluded the union was an “interested party” under the state law, enacted in 2008, which provides a cause of action for the improper classification of construction workers as independent contractors. The statute broadly defines an interested party as “a person with an interest in compliance with the Act.” The union has an economic interest in requiring employers to comply: it represents workers who perform construction work for the defendant employer and in the industry generally, and there is more than a “speculative possibility” that the union itself is entitled to relief under the statute, the court reasoned. The strategic value of such legislation to labor unions is clear.

At the federal level, the “Employee Misclassification Prevention Act” (H.R. 6111) was introduced in the 110th Congress. It would have amended the Fair Labor Standards Act to provide a penalty for employers who misclassify employees as non-employees. The bill has not yet been introduced in the current Congress. Give it time.

Minimum wage increase still pretty “minimal,” but impact on businesses may be great

On Friday, July 24, 2009, the federal minimum wage increases to $7.25 per hour, and with that increase, millions of citizens will see a boost in their weekly pay. That’s the good news. The bad news is that this increase does not even begin to raise working families above the poverty threshold, and many businesses may view this as just another cost that will inevitably eat away at their already struggling profit levels.

No one will ever turn a blind eye toward more money; in fact, while this increase is federally mandated, many businesses already offer higher minimum wages to their employees. Yet, it is impossible to ignore the fact that if an employee works 40 hours a week at $7.25 an hour, they will make $290.00 a week, or $15,080 a year (before taxes). Factor in higher gas prices and other bills, and a family of three is still well below the federal poverty guideline of $18,310, so any expectation of an “up tick” in the economy due to this increase seems more wishful thinking rather than reality.

But it isn’t just workers who will be feeling this increase. Employers, both big and small, will either have to bump those employees making less up to the minimum, or they will have to give small increases to those already making more, because they can’t pay existing employees the same as those just beginning their employment. The problem is, with decreased revenues due to the current economic downturn, this increase could not come at a worse time. Since the increase is so minimal, employers probably aren’t figuring that it will lead to greater consumer spending by the very employees getting the increase, which is the hope of many employers as wages increase.

To many employers, the math adds up as follows:

Hourly wages raised + continued economic downturn + continued downward trend in consumer spending = potentially less money coming in while more money goes out.

No one generally knows what this means for business, but if one could speculate, it could mean the loss will be passed on to consumers in the form of higher-priced products. In addition, it could mean fewer workers hired, or more workers fired, or an across-the-board reduction in hours. The fact is, an increase in the minimum wage was needed, but the amount will do little to change many families’ fortunes, whereas it may do a great deal to change how businesses hire and deal with employees and hours.

It remains to be seen what the trickle-down effect of this increase will mean to employees, businesses and consumers. Those who feel that the increase is bad for the economy and those who feel it is positive have both stated their cases (see video below). However, with the economy in a condition of instability, the road to economic recovery might get a little bumpier.

Video Discussing Pros and Cons of Minimum Wage Increase

(Opinions expressed in video are not those of CCH Workday)

For further analysis, read Don’t believe the hike, say opponents of minimum wage increase.

Gunfight at the OK Stripmall

Arizona is the latest in a growing number of states that have restricted an employer's right to maintain a firearm-free place of business. In enacting the new law, S. 1168, the Grand Canyon State legislature is the latest such body to put gun rights ahead of both the property rights of employers and the safety rights of just about anyone who happens near those establishments.

But the Arizona law, which forbids Arizona property owners, tenants, public and private employers and business entities from prohibiting firearms in vehicles that enter their property, is not even the most egregious example of the gun lobby’s power.

An Oklahoma law makes it unlawful for employers, private or public, to even ask employee applicants whether they own or have guns. A Florida law allows employees, including those at daycare centers, to have their guns in their car during the workday. In the battle between the business lobby and the gun lobby, it's the National Rifle Association that is number one with a bullet.

The NRA has, in recent years, made these laws a priority and this trend should concern employers. This isn't a case of a legislature rightly informing employers that they cannot discriminate in their hiring practices or mandating certain accommodations for persons with disabilities. These laws tell employers that they cannot enact safety measures that might step on the tender toes of the all-powerful American gun lobby.

And, have no doubt, keeping businesses gun-free is a real and serious safety issue. A 2005 survey in the American Journal of Public Health found that gun-friendly workplaces were five to seven times more likely to host workplace homicides than safety-friendly workplaces. The same survey found that 60% of major employers stated that disgruntled employees had threatened senior managers with serious physical harm. One doesn’t have to take a giant leap to imagine the potential disasters that could arise, should an unstable employee with a pistol in his trunk be given his walking papers.

Don't these laws implicate the OSHA-mandated responsibility of employers to maintain a safe workplace? Of course they do, but in upholding a different Oklahoma law that prohibited employer gun bans, the Tenth Circuit found insufficient evidence that guns on company property constituted a real threat. In Ramsey Winch v Henry, 555 F.3d 1199 (10thCir. 2009), the court found that OSHA only requires employers to keep their workplaces free of "recognized hazards." Because OSHA hasn't promulgated standards prohibiting guns in the workplace, reasoned the court, guns in the workplace must not constitute a "recognized hazard."

It's the judicial-ese equivalent of "guns don't kill people, people kill people." And it completely ignores the political reality facing OSHA, a government agency, accountable to politicians who, more often than not, face intense pressure from the NRA.

So if OSHA won't act and state legislatures insist upon allowing guns into every inch of the American fabric and the courts refuse to intervene, what can employers do? The answer is, currently, not much. Employers need to ensure that their HR policies reflect the current, dismal reality. Don’t prohibit or ask about guns in these states. And consider stocking up on Kevlar.

“ICE, ICE baby”… please don’t come knocking on my door!

In late April, the Obama Administration announced a refocused worksite enforcement strategy aimed at reducing the demand for illegal employment in the US and protecting employment opportunities for the nation’s lawful workforce. Unlike the Bush Administration’s worksite enforcement policy, which focused on large-scale raids designed to arrest and deport undocumented workers, the Obama Administration’s intention is to prioritize criminal and civil actions against employers that knowingly hire undocumented workers over actions against the illegal workers themselves. Little was said, however, about how the strategy would be implemented, but it is clear now that the Obama Administration means business.

On July 1, the Department of Homeland Security’s enforcement arm, Immigration and Customs Enforcement (ICE), launched a new initiative, investigating compliance with employers’ Form I-9 obligations, issuing an unprecedented 652 Notices of Inspection (NOIs) to businesses nationwide. The number of NOIs issued by ICE on this one day was more than the 503 total number of NOIs issued by ICE in all of Fiscal Year 2008. This action by the Obama Administration signifies that ICE will be inspecting employers’ hiring records to determine whether or not they are in compliance with US immigration law.

All employers are required to prepare and retain (for three years after the employee’s date of hire or one year after the date that the employee is discharged) the Form I-9, Employment Eligibility Verification, for each new employee they hire, regardless of that individual’s citizenship. The employer must examine the new hire’s identity and employment authorization document(s) to determine whether they reasonably appear on their face to be genuine and relate to the person presenting them. Once the employer has accepted the documents, the information is recorded on the Form I-9. Form I-9s can be retained in paper, microfilm, microfiche or electronically.

Employers have at least three days after receiving a NOI to provide the inspecting office with the requested Form I-9s for all employees employed during the period covered by the audit at the location where the office requests to see them. If it is more convenient, employers may waive the three-day notice. In addition, employers may also request an extension of time to produce the forms. The requesting office will likely also ask to review payroll or personnel records. Although no administrative subpoena or warrant is necessary to inspect Form I-9s, an employer can insist upon such a document before granting ICE access to other personal information. Note that a refusal or delay to the presentation of the Form I-9s for inspection is considered a violation of the Immigration Reform and Control Act’s (IRCA) retention requirements and may result in the imposition of civil money penalties. It is advised that employers obtain counsel prior to the NOI in order to prepare for the external audit. Further, employers should retrieve and reproduce only the documents specifically requested by the inspecting office, review and make corrections to the Form I-9s, where appropriate and abide by IRCA’s antidiscrimination obligations during the audit process.

Remember, an employer’s failure to complete or retain Form I-9s may lead to more serious charges, like knowingly hiring undocumented workers, resulting in significant civil and criminal penalties. In fact, on July 7, Krispy Kreme Doughnut Corporation reached a $40,000 fine settlement with ICE after a Form I-9 audit revealed that the company had employed dozens of undocumented workers at one of their doughnut factories in Cincinnati, Ohio. Los Angeles-based clothing manufacturer American Apparel, Inc received a notice from ICE that the agency has been unable to verify the employment eligibility of approximately 200 current American Apparel employees because of discrepancies in the employees’ I-9 Forms, according to the manufacturer in a July 1 press release. ICE also notified the company that, based upon its review, approximately 1,600 other current employees do not appear to be authorized to work in the United States. This represents approximately one-third of American Apparel’s workforce. The investigation is ongoing.

More information on these matters can be found in a recent white paper published by CCH.

Ricci puts employers between a rock and a hard place

Sonia Sotomayor is undoubtedly not the only person responding to questions about the Supreme Court’s Ricci v DeStefano decision – the 5-4 opinion is surely a “hot topic” for employment attorneys and inside-counsel all across the nation. In Ricci, the Court ruled that a city’s decision not to certify firefighters’ exams, in order to avoid potential race bias claims, was discriminatory. The exams rendered no blacks and at most two Hispanics eligible for promotions. The Court’s decision may have generated many more questions than it answered.

While some US Senators sought to use the case as a litmus test for the qualifications of the Supreme Court nominee, more than a few employers and their legal counsel were likely lamenting the lack of clarity – nothing resembling a litmus test – in the High Court’s opinion as to how to meet the new standard announced for the lawful rejection of a selection procedure that has been determined to have a discriminatory impact on protected members of a workforce.

“[U]nder Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action,” wrote Justice Kennedy, joined by four other Justices. Applying this standard, the Court concluded that the city “was not entitled to disregard the tests based solely on the racial disparity in the result.”

But what exactly is “a strong basis in evidence” and how is that standard applied in the real world of employers diligently trying to meet antidiscrimination obligations? As Justice Ginsberg points out in her dissenting opinion, the “barely described” standard “makes voluntary compliance a hazardous adventure.” Given that three of her High Court colleagues agreed with her observation, how difficult will it be for employers to navigate this tricky landscape? How many varied interpretations of this new standard will we see in the coming months and years and will the Supreme Court be required to revisit the issue?

And then there is the tension that Ricci creates between Title VII’s disparate treatment and disparate impact provisions. How will employers seeking to avoid selection procedures that create a disparate impact manage not to invite at the same time a disparate treatment claim? As Justice Ginsburg laments, under the High Court’s ruling, an employer that changes an employment practice in order to comply with Title VII’s disparate impact provision is acting “because of race,” which is generally forbidden under Title VII’s disparate treatment prohibition. The Justice finds this position at odds with congressional intent and the EEOC’s interpretive guidance: “Congress did not intend to expose those who comply with the Act to charges that they are violating the very statute they are seeking to implement.”

Employers are caught between a rock and a hard place with a new standard and a new view of Title VII that likely applies to selection procedures for many other types of employment decisions. For example, consider an employer that out of good-faith efforts to comply with Title VII, performs a disparate impact analysis prior to implementing a reduction in force in order to avoid unintentional bias and associated liability. If the statistics show a disparate impact on a minority group, what should the employer do?

Under Ricci, a statistical disparity alone would likely be insufficient to justify a change in selection criteria. How much and what type of evidence of unreliability must the employer collect before rejecting the questionable procedure and implementing a new one without incurring liability for disparate treatment of non-minority members not initially identified for layoff, but selected under a new procedure?

These and many other questions will likely arise in the aftermath of Ricci. But I predict a surge in reverse discrimination cases that will soon begin to generate some answers.

Signs show move toward stronger, broader OFCCP enforcement

Although the person who will be the OFCCP Director for the Obama Administration hasn’t been announced yet, signs indicate that the President’s vision for the agency is one that will enhance its enforcement muscle and scope. At this point, we already know that Obama has requested a whopping increase to the agency’s budget and that this increase will be used to beef-up the OFCCP’s efforts to uncover compensation discrimination. We also know that the agency intends to audit significantly more construction contractors than it has in previous years in light of the increase in federal construction contractors resulting from the American Recovery and Reinvestment Act of 2009 (Recovery Act).

Under President Obama's FY 2010 budget proposal, announced in May, the OFCCP would receive $109.521 million in funding. That amount is a $27.4-million increase over the estimated FY 2009 budget allotment (82.1 million) adopted by Congress – a striking increase of over 33 percent! The Labor Department has stated that this budget request includes $25,600,000 to fund 213 full-time equivalent employees and a new case management system. Moreover, the Labor Department has specifically stated that much of this increase is intended to support enforcement and outreach efforts related to compensation discrimination – including “improving the various approaches and investigative techniques used to evaluate compensation” and to “support litigation to amplify enforcement activities by funding external experts to verify OFCCP's allegations and assessments to solidify its commitment to strong enforcement.”

The Recovery Act adds $3 million more for the 2009 budget estimate and $5 million more to the 2010 request. Just last week, the OFCCP posted on its website its plan to conduct 450 compliance evaluations (from July 1, 2009 through September 30, 2010) of federal contractors in receipt of Recovery Act funds in addition to roughly 5,000 federal contractors per FY targeted for audits through the agency’s existing Federal Contractor Selection System (FCSS). Although the OFCCP will audit approximately 90 supply and service contractors receiving federal contracts through Recovery Act funding, it will place a special emphasis on the construction industry because the majority (estimated at roughly 80%) of Recovery Act contractors will be recipients of direct or federally assisted funds for construction projects. To this end, the OFCCP will utilize 50 full-time equivalent employees to complete at least 360 compliance evaluations of construction contractors. By way of comparison, of the 4,333 audits the OFCCP completed in FY 2008 under the FCSS, 204 were of construction contractors. These audits were conducted by a workforce of approximately 400 compliance officers who focused primarily on supply and service contractor audits.

These developments indicate that President Obama has indeed started to implement his vision for the OFCCP, but many elements remain a mystery. For example, given that it seems the agency will continue to increase its focus on systemic discrimination (particularly systemic compensation discrimination), does that mean (as it has in the past) a reduced focus on the affirmative action aspects of federal contractor obligations? Or do the increased funding levels signal an intent to intensify the agency’s focus on affirmative action in addition to systemic discrimination?

President Obama rounds out his picks for vacant NLRB seats

Beginning late April of this year, President Obama made his first of three nominations to the NLRB. The Board, presently composed of Chairman Wilma Liebman (D) and Member Peter Schaumber (R), has been the focus of judicial scrutiny over whether it has the authority to issue decisions as a quorum of just two. That issue was petitioned to the Supreme Court on May 27th. With that backdrop, one would believe that seating new members to the Board ought to move quickly.

While perhaps more urgent matters have stolen the spotlight, here are the President's picks for Member, National Labor Relations Board:

• Republican Senate staffer Brian Hayes. Hayes currently serves as the Republican labor policy director for the Senate Committee on Health, Education, Labor and Pensions. Previously, he was in private practice for over 25 years, representing management clients exclusively in all aspects of labor and employment law. Hayes has represented employers before the Board, the EEOC, and various state agencies and has extensive experience negotiating labor contracts on behalf of management clients, as well as representing clients in arbitrations, mediations and other forms of alternative dispute resolution. Before entering private practice, Hayes clerked for the Chief Judge of the NLRB and thereafter served as counsel to the Chairman of the NLRB. Hayes earned his J.D. from Georgetown University Law Center.



• Democrat Craig Becker. Becker is associate general counsel to both the SEIU and the AFL-CIO. He received his J.D. from Yale Law School and has practiced and taught labor law for the past 27 years, as a professor of law at the UCLA School of Law and at the University of Chicago and Georgetown. Becker has published numerous articles on labor and employment law in scholarly journals and has argued labor and employment cases in virtually every federal court of appeals and before the US Supreme Court.



• Mark Pearce, Democrat and founding partner of Creighton, Pearce, Johnsen & Giroux, a Buffalo, New York, law firm. Pearce practices union-side labor and employment law before state and federal courts and agencies. In 2008, he was appointed to the New York State Industrial Board of Appeals, an independent quasi-judicial agency responsible for review of certain rulings and compliance orders of the state department of labor in wage and hour matters. Prior to 2002, he practiced union-side labor law and employment law at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP, and from 1979 to 1994 was an attorney and district trial specialist for the NLRB. Pearce received his J.D. from State University of New York. He is a Fellow in the College of Labor and Employment Lawyers.

All three nominations have been sent to the Senate; however, hearings have yet to be set on the Health, Education, Labor and Pensions Committee calendar. It's also unclear whether the three will be considered as a package or individually.

Ricci may be a “hot topic” during Sotomayor’s confirmation hearing

The confirmation hearing for Judge Sonia Sotomayor’s nomination to the U.S. Supreme Court is scheduled to begin on Monday morning (July 13, 2009). If confirmed, she will be the first Hispanic, and the third woman, to be an Associate Justice on the High Court. Judge Sotomayor currently sits on the U.S. Court of Appeals for the Second Circuit.

While Sotomayor has received significant support in favor of her nomination, what should really spark interest in Monday’s hearing will be the appearance of two witnesses who were part of the Ricci v DeStefano litigation. Ricci is the reverse race discrimination case decided by the Supreme Court last week (07-1428). In that decision, the High Court held that the city’s refusal to certify firefighters’ promotion exams to avoid a potential race discrimination lawsuit from minority firefighters was discriminatory. A divided Supreme Court (5-4) reversed the Second Circuit’s affirmation of the district court’s grant of summary judgment to the city.

On the list of witnesses invited to appear before the Senate Judiciary Committee (http://judiciary.senate.gov) were the names Frank Ricci and Lieutenant Ben Vargas. Both Ricci (Director of Fire Services, ConnectiCOSH (Connecticut Council on Occupational Safety and Health)) and Vargas (New Haven Fire Department) were plaintiffs in Ricci v DeStefano. Vargas has the distinction of being the lone Hispanic plaintiff.

One of the reasons Ricci was so closely watched was Sotomayor’s participation as part of the Second Circuit’s panel that affirmed the district court in an unpublished order that was later withdrawn and replaced with a per curiam opinion and an order denying a rehearing and rehearing en banc with written concurrences and a dissent. Will these men be a roadblock in Sotomayor’s path to the High Court? What can they say about her legal analysis and/or performance in a case that was ultimately decided so closely? Particularly when the now-retired Justice Souter (who’s seat she is slotted to fill) voted to affirm the circuit court? Will there be any fallout from Ricci for Sotomayor?

Hartmarx and beyond

Hart Schaffner Marx, an Illinois-based maker of men’s apparel that boasts President Obama as one of its regular customers, recently averted liquidation after it was purchased by Emerisque, a London-based private equity firm. Hartmarx employs nearly 4,000 people nationwide. Here is a look back at the struggle displayed by its workers and supporters over the last six months:

January 2009: Only a few days after President Obama wore one of their suits to his inauguration, Hartmarx, Inc. declared bankruptcy, citing lower borrowing capacity under Wells Fargo, a senior creditor.

May 2009: By early May, Hartmarx had attracted three potential buyers, two of which, it was reported, intended to keep the company intact. Rumors flew, however, that Wells Fargo, which was a recipient of federal bailout funds, was leaning towards a third buyer that favored liquidation. This threat, however, was enough to galvanize workers, supporters, union leaders and federal lawmakers to put a little pressure on Wells Fargo. Two Congressional members at the forefront of this fight, Rep. Phil Hare (D-Ill), who spent 13 years in the employ of Hartmarx, and Rep. Jan Schakowsky (D-Ill), whose great-aunt also worked at the company, urged the bank to keep the company afloat.

During a few days in May, rallies featured labor leaders and workers, along with Rep. Hare and Illinois Treasurer Alex Giannoulias, who threatened to cut off the State of Illinois’ $8 billion in business with Wells Fargo if the company proceeded with liquidation plans. The Hartmarx workforce, in a page taken from that of the Chicago-based Republic Windows and Doors, whose employees staged a successful sit-in to secure the 60 days’ severance and unused vacation days they were lawfully owed, voted to occupy the plant if liquidation were the outcome.

On May 20, Emerisque resubmitted a substantial offer to purchase the company. Choosing not to take this for granted, the next move included a letter to Treasury Secretary Timothy Geithner, written by Schakowsky and Hare and signed by over 40 members of Congress, stressing that the liquidation of Hartmarx should not be an option. “Given the fact that American taxpayers have provided Wells Fargo/Wachovia with $25 billion,” the letter read, “we find it incomprehensible that it would continue to push for the loss of jobs in a viable company.”

Wells Fargo released a statement May 29 opposing the bid by Emerisque, contending that the company “has committed to sell Hartmarx factories in Rock Island, Ill., and Cape Girardeau, Mo., and its distribution centers in Easton, Penn., and Rector, Ark., all within three months of the acquisition.” Emerisque disputed the bank’s claim, noting that “the only factual component of the Wells Fargo statement today is that they believe they should realize a higher cash return on their claim.”

June 2009: Talks, however, continued, and a resolution was finally reached whereby Emerisque revised its cash offering from a numerical amount to a percentage of the debtor-in-possession financing provided by the lending group to keep Hartmarx operating during the bankruptcy process.

When the approval of Emerisque was finally announced on June 26, Rep. Hare noted that “today's approval of Emerisque's bid to buy Hart Schaffner Marx and the cooperation by Wells Fargo is good news for nearly 4,000 workers, their families, and our economy. It is proof positive that the voices of America's working men and women still do matter, even in an era of unprecedented greed.”

Related worker uprising news: In the wake of Hartmarx’s victory, the focus now moves to Moline, Illinois, where Wells Fargo has cut off credit to the Quad City Die Casting factory. Workers at the plant, who are members of the same union that occupied Republic Windows and Doors last year, are calling for Wells Fargo to keep the plant open. As of yet, the bank has refused to even sit down with the union and negotiate.

Stay tuned.

Will federal preemption ensnare state "captive audience" measures?

To supporters, it’s the “Worker Freedom Act.” To detractors, an “Employer Gag Bill.” Call it what you will: On June 30, Oregon Governor Ted Kulongoski signed S.B. 519, a bill that prohibits an employer from holding mandatory employee meetings to convey its views on religious and political issues—including union organizing. With its passage, Oregon became the first state in the nation to bar “captive audience” meetings. It’s a win for the AFL-CIO, which had launched a campaign to enact such legislation at the state level. The victory may be short-lived, however, as the Oregon measure will surely face a legal challenge.

Captive audience bills, if enacted in the states, would have a considerable impact on traditional union-organizing campaigns. One federal government survey found employers force workers to attend captive audience meetings in 92 percent of union election campaigns and that employers, on average, held 11 such meetings during every organizing drive. Why? Because they are a particularly effective weapon in the employer’s union avoidance arsenal, and they are difficult for unions, lacking equal access, to counter.

The Oregon statute (like the AFL-CIO’s model legislation) bars employers from compelling employees to attend meetings aimed at communicating the company’s opinions on “religious or political matters.” (Notably, it bars any forced attempt by an employer to convey its views on unionization, not just the captive audience meeting.) While it does not limit the right of employers to hold these meetings or engage in such communications, it provides that attendance must be strictly voluntary; employers may not discharge or discipline employees who refuse to attend or to listen to the employer’s message. Nor may employers retaliate against employees for exercising their rights under the statute. Aggrieved employees can sue for backpay and reinstatement, among other relief. The statute provides a mandatory award of treble damages, attorney fees and costs.

(The Oregon law isn’t just about union organizing, though. Its bar on coercive political and religious speech is meant to grant more expansive protection. The Oregon AFL-CIO cites the example of a worker who was disciplined after walking out of the lunchroom after his employer began to make anti-Catholic statements. And, last year, during the presidential election campaign, Wal-Mart famously required employees to attend meetings in which they were told their jobs could be threatened if Democrats were elected. S.B. 519 would prohibit this conduct as well.)

Federal labor law does not prohibit compulsory meetings, nor does it bar employers from imposing discipline on employees who refuse to attend or leave a meeting held for the purpose of conveying the employer’s opposition to a union. In fact, Sec. 8(c) of the National Labor Relations Act (NLRA) expressly confers employer free-speech protections, so long as the speech is not coercive or threatening. However, although the National Labor Relations Board has upheld mandatory meetings, unions contend they are inherently coercive, in that they force employees to listen to anti-union speech, and that they are meant to intimidate workers. So, organized labor has endeavored to enact protections at the state level that federal law does not provide.

Thus far, such legislation has made few inroads. The Michigan and New Hampshire legislatures have passed Worker Freedom bills. The Colorado legislature passed a bill in 2006 that was ultimately vetoed by the governor. Washington’s state legislature held hearings on a measure earlier this year. The legislation has been introduced in several other states, including Connecticut and West Virginia. (New Jersey enacted the Worker Freedom from Employer Intimidation Act in 2006, a bill that protects employees from being forced to hear employer speech on religious and political matters, but it excludes discussions of labor organizations from its reach.)

The Oregon measure will go into effect on January 1, 2010—if it can withstand inevitable challenges on preemption and constitutional grounds, that is. Opponents of the bill contend that state efforts to regulate employer speech in the union-organizing context are preempted by the NLRA. They cite California’s failed attempt to do so, noting that state’s “union neutrality” law was struck down by the US Supreme Court in its 2008 ruling in Chamber of Commerce of US v Brown. In 2005, the Seventh Circuit held a similar ordinance enacted by a Wisconsin municipality was preempted by the NLRA.

Paul Secunda, a professor of law at Marquette University School of Law (and member of the Wolters Kluwer Labor and Employment Law Editorial Advisory Board), argues that such laws should not be preempted. He notes that, notwithstanding the NLRA, states retain the right to regulate employer property rights and contractual relations between employers and employees.

Will S.B. 519 pass muster? We’ll soon find out, as Oregon employers have already indicated they will challenge the statute. The legislation “saddles employers with the potential for devastating liability by creating a new protected class of employees,” noted J.L. Wilson, of the Association of Oregon Industries, a business group that opposed the measure. “[The bill] would severely inhibit an employer’s ability to communicate with its workers and, most importantly, would diminish the competitiveness of Oregon employers.”

Recap of Supreme Court's labor & employment law decisions

As reported in CCH’s WorkWeek e-Newsletter (click here to sign up), here is a recap of the Supreme Court's labor and employment decisions handed down during the October 2008 term:

Ricci v DeStefano. By throwing out the results of an examination to determine those firefighters best qualified for a promotion, the City of New Haven, Connecticut, violated Title VII’s prohibition against discriminatory treatment based on race. A 5-4 majority of the High Court applied a new standard of statutory construction, holding that before an employer can engage in what otherwise would be prohibited discriminatory treatment in order to avoid or remedy an unintentional, disparate impact, the employer must have “a strong basis in evidence” to believe it will be subject to disparate impact liability if it fails to take the race-conscious, discriminatory action (June 29, 2009).

Atlantic Sounding Co v Townsend. An injured seaman may sue to recover punitive damages under general maritime law for the his employer’s alleged willful and wanton failure to provide a “maintenance” (wages he otherwise would have earned, food and lodging) and “cure” (medical services) for the injuries he suffered while working on the employer’s tugboat, the Supreme Court held (June 25, 2009).

Locke v Karass. A union representing Maine's state employees may charge fee-paying nonmembers for the national, or "extra-local" litigation expenses incurred by its parent union, a unanimous Supreme Court ruled, holding that the First Amendment permits such charges (January 21, 2009).

Crawford v Metro Gov’t of Nashville. Continuing its recent trend of broadening Title VII's anti-retaliation provision, the High Court unanimously ruled that the Act’s retaliation protections extend to employees who speak out about discrimination and harassment not of their own accord, but when answering questions during an employer-ordered internal investigation. Because the employee’s conduct was protected under Title VII’s opposition clause, the Court declined to address whether her conduct was also governed by the anti-retaliation provision’s participation clause (January 26, 2009).

Ysursa v Pocatello Educ Ass’n. An Idaho law banning public employee payroll deductions for union political activities did not violate labor unions’ free speech rights, the Supreme Court ruled, noting the distinction between state suppression of speech and instances in which states decline to promote speech (February 24, 2009).

14 Penn Plaza LLC v Pyett. Affirming its decidedly pro-arbitration policy, the Supreme Court held that courts must enforce collective bargaining agreements that “clearly and unmistakably” require union members to arbitrate their claims arising under the Age Discrimination in Employment Act. Such agreements are enforceable under the ADEA since the Act does not preclude arbitration of claims brought pursuant to the statute (April 1, 2009).

Flores-Figueroa v United States. In a case informing on federal worksite immigration enforcement operations, a unanimous Supreme Court ruled that an undocumented worker who presented false Social Security and Alien Registration numbers to obtain employment may not be convicted of identity theft under the federal “aggravated identity theft” statute unless the federal government shows that the worker had actual knowledge that the means of identification belonged to another person (May 4, 2009).

Arthur Anderson LLP v Carlisle. In an investor suit, the Supreme Court held that a litigant who was not a party to an arbitration agreement may invoke Sec. 3 of the Federal Arbitration Act to compel arbitration if applicable state law would allow enforcement of contracts by (or against) a nonsignatory through assumption or third-party beneficiary theories (May 5, 2009).

AT&T Corp v Hulteen. The Pregnancy Discrimination Act does not require employers to set current pension benefits at a level that will restore service credits to female employees for pregnancy leaves taken prior to the passage of the PDA. In one of the last opinions to be authored by Justice Souter, the High Court held that employers do not necessarily violate the PDA when paying pension benefits calculated in part under an accrual rule – applied prior to the PDA's enactment – that gives fewer service credits for pregnancy leaves than for other medical leaves. Because AT&T’s benefit calculation rule accorded with the terms of a bona fide seniority system under Title VII, the company was insulated from a legal challenge (May 18, 2009).

Ashcroft v Iqbal. “Civil rights plaintiffs will have to be more thoughtful about how they frame their complaints to avoid pleading themselves out of court” following the Supreme Court’s ruling in an antitrust case, notes plaintiff’s lawyer Paul Mollica in his Daily Developments in EEO Law blog. Though not an employment case, the High Court’s ruling makes clear that the heightened pleading standards set forth in its 2007 decision in Bell Atlantic Corp v Twombly applies to all civil actions, not just antitrust cases, and that "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." (May 18, 2009).

Gross v FBL Fin Servs Group. Declining to import the mixed-motives burden-shifting rubric applied under Title VII, the Supreme Court ruled that an employee claiming disparate treatment under the ADEA must establish by a preponderance of evidence that age was the “but-for” cause of the adverse employment action challenged. Even when the employee has produced some evidence that age was one motivating factor in the employer's decision, the burden of persuasion does not shift to the employer to show that it would have taken the same action regardless of age, held the Court (June 18, 2009).

“My fiancée got me fired”: The evolution of retaliation claims

With the Sixth Circuit’s recent pro-employer ruling on associational retaliation, and a current split on the matter unfolding among the circuits, this issue may well be headed to the Supreme Court next term…to a Court under Chief Justice Roberts that has been decisively pro-employee in its retaliation decisions. But is this case really much ado about nothing?

In Thompson v North American Stainless, LP, a male employee, who alleged that he was fired shortly after his fiancée filed an EEOC sex-bias charge against their shared employer, had no reprisal claim under Title VII. The plain and unambiguous statutory language of Title VII’s anti-retaliation provision requires employees to personally engage in protected activity, held a 10-6 en banc Sixth Circuit, affirming a district court’s grant of summary judgment for the employer. The majority observed that the plain language of Title VII will protect most close relationships because “‘[i]n most cases, the relatives and friends who are at risk of retaliation will have participated in some manner in a co-worker’s charge of discrimination.” Here, though, the employee did not claim that he engaged in any statutorily protected activity either on his own behalf or on behalf of his fiancée.

In so holding, the Sixth Circuit joined the Third, Fifth and Eighth Circuits, which have previously considered and rejected similar associational retaliation claims.

Note, however, the EEOC takes the position in its Compliance Manual that Title VII prohibits retaliation against someone so closely related to, or associated with, the person exercising his or her statutory rights that it would discourage that person from pursuing those rights. For example, “it would be unlawful for [an employer] to retaliate against an employee because his or her spouse, who is also an employee, filed an EEOC charge.” Both spouses, in such circumstances, could bring retaliation claims, said the agency. Does this mean simply having that close association to the charging party, without engaging in protected activity, is enough to also assert an associational retaliation claim? It seems that way, according to the EEOC. The Seventh and Eleventh Circuits have also interpreted Title VII’s anti-retaliation provision broadly to protect associated third parties from retaliation.

What does all this mean? Well, in its holding, the majority wrote: “[the] plaintiff and the EEOC request that we become the first circuit court to hold that Title VII creates a cause of action for third-party retaliation on behalf of friends and family members who have not engaged in protected activity.” (Emphasis added).

Personally, I think the majority got it right by not doing so. The Sixth Circuit appears not to question the legality of associational retaliation claims, but believes that merely having an “association” with the charging party, without also personally engaging in some protected activity, is not enough. The employee did not personally oppose any alleged discrimination. And we won’t get into whether “silent opposition” is opposition, even if some dissenting judges seem to think it is. If, however, the employee had engaged in some kind of participation activity, like help his fiancée complete her EEOC sex-bias charge, and participated in any interview with the agency, he likely would have been able to get past summary judgment on his retaliatory discharge claim. But, the employee admitted he did not personally oppose any alleged discrimination or participate in her charge. So, no dice.

None of this means employers should rest on their laurels. The Supreme Court seems to like retaliation cases and may take this one just to clarify the issues. Besides, there is this circuit split, a split that may have more to do with whether closely associated individuals have personally engaged in a protected activity, not with whether the reach of Title VII’s anti-retaliation provision includes associational discrimination claims. Of note, the employee’s attorney indicated that he is considering filing a cert petition.

In the meantime, a little retaliation-prevention training couldn’t hurt, since the EEOC reported that the number of retaliation claims filed with the agency jumped from 22,663 in FY 2007 to 32,690 in FY 2008, a nearly 23-percent increase. This was the second highest increase in charge filings, next to age discrimination.