Wednesday, September 30, 2009

Republic Windows & Doors redux: Can you spell k-a-r-m-a?

All’s well that ends well

December 5, 2008: It wasn’t supposed to work like this. Days after getting a $45 billion bailout from the U.S. government, Bank of America shut down a line of credit that kept Chicago’s Republic Windows & Doors factory operating. The bosses, who knew what was coming, had been sneaking machinery out in the middle of the night. They closed the factory and sent the workers home. Then something surprising happened: Republic’s workers occupied the factory and refused to leave.

The above quote was taken from Kari Lydersen’s new book, Revolt on Goose Island: The Chicago Factory Takeover, and What It Says About the Economic Crisis, which documents one of the nation’s largest labor sit-ins. At issue was Republic's clear violation of the WARN Act, which requires companies to give employees at least 60 days' notice before closing a plant or initiating mass layoffs.

After receiving widespread media attention, as well as support from the public, Chicago police, and state and national politicians, the six-day sit-in staged by 200 members of United Electrical Workers Local 1110 ended peacefully when Bank of America and JPMorgan Chase set up a fund to pay them what they were rightfully owed.

In February 2009, the company was purchased by Serious Materials, a California-based manufacturer of eco-friendly building products. Although a lot fewer workers than they had hoped by this point have been hired back, the company has a new contract with the union and has promised to respect past seniority.

But, wait—there’s more!

Money laundering, mail fraud and robbery, oh my...

If you caught the above reference to the bosses sneaking machinery out of the plant in the middle of the night, then you might have already surmised that the plot has since thickened. But, that may be an understatement because, on September 11, the other shoe dropped with a giant thud. As reported by the Chicago Tribune, prosecutors charged—in a detailed 56-page filing—that former CEO Richard Gillman and two other executives, anticipating the imminent results of Republic’s crushing debt, stole its assets, laundered the money through shell corporations, paid off luxury car leases for themselves and secretly trucked the equipment from the plant to a new, non-unionized operation in Red Oak, Iowa.

In a recent interview on, however, Lydersen, a Washington Post reporter, indicated that the media’s portrayal of the sit-in as a spontaneous event was not entirely accurate. The reality, she says, was much more significant. Machinery was disappearing and, since the workers sensed that something was up, they decided they needed a strategy. They were willing to do what it took, Lydersen said, noting that they had even some more radical ideas in their brainstorming sessions than the occupation. “It’s sort of a combination of the workers’ willingness to really go out there and then the UE’s kind of long-term strategy and meeting with the Canadian autoworkers, who had had some successful factory occupations just in recent years, in the past five years. So they were fully ready, you know, when this all went down.”

Here’s an interesting tidbit: unbeknownst to the workers at the time, barricaded in the executive offices with them was a PowerPoint presentation that laid out how the conspirators sought to “remove, conceal and convert collateralized manufacturing equipment without the consent of Republic’s creditors.” (Oops.)

In fact, prosecutors alleged Gillman and the others defrauded company creditors who were owed at least $10 million and stole more than $200,000 cash from the company. I'll let the Tribune paint the picture of what happened next: “After a judge hit former company CEO Richard Gillman with a whopping $10 million bail, he was led away to Cook County Jail while wearing a pin-striped suit, white collared-shirt and a dazed expression on his face.”


Last week, though, Gillman’s bail was reduced to $5 million and he was released from jail with the condition that he be electronically monitored. But, what about the Red Oak, Iowa, window company? Gillman had taken it over at the beginning of 2009 with promises to continue the operation that had begun in 1985. Work soon slowed, however, and the company that had employed 120, including the mayor’s wife, closed only a month and a half later. Many of those employees had to leave Red Oak after the small town suffered this devastating loss and, the Tribune adds, one-fourth are still looking for work.

Monday, September 28, 2009

The Tipping Point?

The Fifth Circuit's recent decision in Jones v Halliburton Co has attracted quite a bit of attention, as well it should, as the facts are heart-wrenching and the potential legal implications are fascinating.

Jamie Leigh Jones was a young woman working for Halliburton/KBR when, following an instance of sexual harassment, she was given the choice of either losing her job, or moving to Iraq. She chose Iraq and, prior to her departure, the company gave her a contract to sign, one in which she agreed to arbitrate any and all claims relating to her employment. Pretty standard agreement, but what happened next was anything but the standard expatriate employment agreement.

On her first day, Jones, who had allegedly been promised private quarters, found herself assigned to barracks with her male co-workers. On her third day, Jones complained of the sexually hostile situation in the barracks and asked again for a "safer" location. And, on her fourth day, after a party, Jones was allegedly drugged, beaten, and gang-raped in her own sleeping quarters. She went to Halliburton medical personnel, where her rape kit was mislaid, and was placed under armed guard, without means of communication to the outside world. Eventually, her supervisors gave her a choice of "get over it" or go home, but without a guaranteed job. Jones chose a third route, the court system, alleging a number of claims, including assault and battery, intentional infliction of emotional distress, negligent hiring and supervision and false imprisonment. Halliburton invoked the arbitration clause.

The Fifth Circuit slammed the brakes on Halliburton's attempt to duck public scrutiny, finding that Jones could proceed to trial on the aforementioned claims. Simply put, none of the four claims were sufficiently "related to" Jones' employment for the arbitration agreement to hold sway. Halliburton argued that the claims were related to her employment because she lived in employer-provided housing and because, in raping Jones, the perpetrators violated the same employment policies that governed Jones. But the Fifth Circuit ruled that the mere fact that the perpetrators acted in ways contrary to their employment did not mean that the plaintiff was acting in any way related to her employment. Furthermore, unlike in Jones' workers' compensation claim, in which she was allowed to recover because her employment created the "zone of special danger" that led to her injuries, her tort claims did not have a significant relationship to her employment.

Does this case represent the limits of arbitration agreements? One fervently hopes so, as Halliburton's attempts to invoke the clause in connection to these claims is nothing short of shameless. Yet, other district courts, when faced with virtually the same fact pattern and the same defendant, ruled that tort claims arising from a rape were related to employment. The case law is decidedly unsettled on this point, but the hope here is that the unusually strong language employed by the Fifth Circuit represents a push back by the courts against attempts by corporations, like Halliburton, to deprive their employees of their day in court.

Friday, September 25, 2009

LGBT employees seek protection from workplace discrimination ASAP

There seems to be little that stokes the flames of passionate argument more than the terms “sexual orientation,” and when you add “workplace” and “rights” into the mix, it has the potential to stir up a hornet’s nest of controversy. Yet, Congress is dealing with these very workplace discrimination issues with the introduction of the Employment Non-Discrimination Act (ENDA), a bill (S. 1584) that would prohibit discrimination against employees on the basis of sexual orientation, gender identity, and disability—and specifically includes transgendered individuals—and would apply to civilian employers with over 15 employees (religious employers excepted).

For most employers, discriminatory practices are simply not tolerated, but sexual orientation discrimination, consisting mainly of discrimination against lesbian, gay, bisexual & transgender (LGBT) employees, continues to lie in the proverbial “gray area.” A recent study by the Williams Institute found that:

"Twenty-nine states do not have anti-discrimination statutes that prohibit sexual-orientation discrimination and 35 do not have statutes that prohibit gender identity-discrimination. Of the states that do have anti-discrimination statutes that prohibit discrimination on these bases:

  • Three do not prohibit discrimination on the basis of perceived sexual orientation;
  • Five either do not provide for compensatory damages or subject such damages to caps that are lower than ENDA’s; and
  • Five do not provide for attorneys’ fees, and another five only provide for them if the employee files a court action as opposed to an administrative action."

The study, which primarily showed that unconstitutional discrimination on the basis of sexual orientation occurred with the same high frequency in state and local governments as it did in the private sector, showed two disturbing workplace realities: (1) Job discrimination on the basis of sexual orientation or gender identity by employers appears to be legal in a majority of U.S. states; and (2) One in five LGBT public sector employees has experienced workplace discrimination on the basis of sexual orientation, and a significant wage gap exists between heterosexual and LGBT employees.

While the study dealt with state and local government employers, it no doubt illustrates the chilling effect this type of workplace discrimination can have on its recipients, even those working for private employers. The question most likely posed by many of these LGBT individuals is: Why—with race, gender, religious and national origin employment discrimination laws—are we, as a group, not also afforded protection by anti-discriminatory laws? The answer does not appear to be simple, and most employers, public and private, likely don’t want to venture into issues surrounding employees and their sexual orientation unless forced to do so.

Yet, with ENDA, these individuals would enjoy workplace discrimination protections. However, ENDA has been introduced in every Congress, except the 109th, since 1994, and has failed to pass. So what is the proper course of action an employer should take with respect to sexual orientation and gender-identity discrimination in the absence of ENDA? Well, when looking at dollars and cents, as every employer does, it only makes sense to preemptively address these issues, and educate company officials on not only current state employment laws regarding sexual orientation, but also on what changes are to be expected if ENDA does pass.

Because, however uncomfortable the discussion of sexual orientation discrimination in the workplace might be, the discussion is not going to go away, and it will cost an employer a lot more (e.g., litigation costs, lower worker productivity) if it simply turns a blind eye to the issue.

Monday, September 21, 2009

Take note of the latest outsourcing trend: Employer liability for contractors’ discriminatory acts

Most employers assume if they outsource their HR functions to independent contractors, so, too, will they not be held liable for their contractors’ discriminatory acts. That is simply not the case. As the Second Circuit’s recent decision in Halpert v. Manhattan Apartments, Inc., illustrates, just because you have hired an independent contractor to recruit and hire the staff for your company, it does not mean that you are off the hook for the contractor’s bad acts. Kinda scary when outsourcing HR is so commonplace in big business.

Just the facts. Michael Halpert interviewed for a position that required showing rental apartments for Manhattan Apartments, Inc. (MAI). The interview was conducted by the “apparent” hiring agent for MAI, Robert Brooks. During the interview, Brooks allegedly told Halpert that he was “too old” for the position. Not surprisingly, our applicant filed suit under the Age Discrimination in Employment Act (ADEA). The district court dismissed the case, finding that Brooks was an independent contractor, not an employee of MAI, and, the ADEA “does not apply to independent contractors.”

The Second Circuit reversed, holding that “an employer may be liable for discrimination by third parties, including independent contractors, that [it] authorizes to make hiring decisions on its behalf.” By its terms, explained the circuit court, employer liability under the ADEA is direct, not derivative: an employer may not “fail or refuse to hire… any individual…because of such individual’s age.” And, when liability for discrimination is “direct,” that prohibition applies to employers regardless of whether the employer “uses its employees to interview applicants for open positions, or whether it uses intermediaries such as independent contractors to fill that role,” explained the court. “If a company gives someone authority to interview applicants and make hiring decisions on behalf of the company, the company may be held liable if that contractor discriminates against an applicant because of the applicant’s age,” wrote the court.

Ultimately, MAI’s potential liability turned on whether Brooks was acting as the (apparent) hiring agent for the rental company when he interviewed Halpert for the position, or whether Brooks was simply hiring an employee on his own behalf. The Second Circuit observed that there were triable issues of fact precluding dismissal of the case on that issue: (1) MAI sponsored a training program for individuals hired to show the apartments and those chosen for the program would earn commissions from MAI; (2) MAI enlisted so-called “sales associates” like Brooks to interview candidates for the program; (3) the career counselor, who arranged the interview for Halpert, believed he would be interviewing for a position with the MAI, not Brooks; (4) the interview took place at the rental company’s offices; and (5) after the interview, both Brooks and another rental company associate told the counselor they were looking for someone younger.

There was also an agreement between MAI and Brooks, which set forth in great detail the rights and duties of both parties, especially with respect to Brooks’ jobs functions as a sales associate. While Brooks was to pay “his own expenses,” including “automobile, travel and entertainment expenses,” the agreement did not indicate that he was to compensate showers directly. MAI also presented affidavits from Brooks and an MAI representative asserting that Halpert, if hired, would have been compensated by Brooks, not MAI. But, MAI failed to corroborate the affidavits. In all, we are left with evidence cutting both ways.

What does all this mean? Every year we see an increase in HR outsourcing…the obvious reason being because it is “cost effective.” According to a recent survey from HR consultant Hewitt Associates, 94 percent of companies outsource at least one HR function or program. A case like Halpert serves as a warning to employers who want to outsource their recruitment and hiring functions. Employers will not be released from their obligations under federal anti-discrimination laws just because they have authorized independent contractors to make hiring decisions on their behalf. This should be taken into account when structuring any contract that outsources your HR functions. Perhaps a clause in the agreement requiring the independent contractor to buck up on its anti-discrimination training couldn’t hurt…for both parties.

Friday, September 18, 2009

Individualized ADA assessment by checklist?

The much-anticipated proposed regulation implementing the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) is set to be published in the Federal Register the week of September 21, now that the Equal Employment Opportunity Commission (EEOC) has approved its notice of proposed rulemaking by a 2-1 vote. And it looks like the new regulation will include a checklist of impairments that always constitute a “disability” under the ADA.

The ADAAA, which took effect January 1, 2009, expands the scope of the ADA’s coverage. The new law leaves undisturbed the basic definition of “disability” as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment, but changes the manner in which these terms are interpreted.

The federal agency says that, consistent with the ADAAA, its proposed rule emphasizes that:

  • the definition of disability - an impairment that poses a substantial limitation in a major life activity - must be construed in favor of broad coverage of individuals to the maximum extent permitted by the terms of the ADA, and should not require extensive analysis;
  • major life activities include “major bodily functions”;
  • mitigating measures, such as medications and devices that people use to reduce or eliminate the effects of an impairment, are not to be considered when determining whether someone has a disability; and
  • impairments that are episodic or in remission, such as epilepsy, cancer, and many kinds of psychiatric impairments, are disabilities if they would “substantially limit” major life activities when active.

According to the EEOC, its proposed regulation also provides a more straightforward way of demonstrating a substantial limitation in the major life activity of working, and implements the ADAAA’s new standard for determining whether someone is “regarded as” having a disability.

A new question-and-answer document (Q&A) posted on the EEOC’s website on September 17 gives a preview of what to expect in the proposed regulation. Of particular interest to employers is a list of impairments that will “consistently meet the definition of 'disability'”:

  • deafness;
  • blindness;
  • intellectual disability;
  • partially or completely missing limbs;
  • mobility impairments requiring use of a wheelchair (a mitigating measure);
  • autism;
  • cancer;
  • cerebral palsy;
  • diabetes;
  • epilepsy;
  • multiple sclerosis;
  • muscular dystrophy;
  • major depression;
  • bipolar disorder;
  • post-traumatic stress disorder;
  • obsessive-compulsive disorder; and
  • schizophrenia.

The Q&A instructs that “the individualized assessment of whether a substantial limitation exists can be done very quickly and easily with respect to these types of impairments, and will consistently result in a finding of disability.”

But is an “individualized assessment” meaningful when it is expressly presumed that the same result will always be obtained?

This looks more like a checklist – a per se list of disabilities – than the “individualized assessment” that has always been the cornerstone of any ADA analysis. Will employers have any argument against these asserted impairments? Has the EEOC gone too far?

Wednesday, September 16, 2009

Should attorneys’ ethical obligations bar them from bringing whistleblower claims?

Should attorneys’ ethical obligations to their clients bar in-house counsel from bringing whistleblower claims against their employers? In Van Asdale v International Game Tech (2009 U.S. App. LEXIS 18037, August 13, 2009), the Ninth Circuit Court of Appeals found that the ethical obligations of two Illinois-licensed attorneys, who claimed that a gaming machine company fired them in retaliation for raising fraud claims related to a merger, did not prohibit them from bringing federal SOX whistleblower claims. The federal appellate court ruled that the Van Asdales, a husband and wife who both worked for the company, could bring their SOX claims – even though the Illinois Supreme Court, in Balla v Gambro, Inc (145 Ill. 2d 492, December 19, 1991), has held that in-house counsel cannot bring a state law retaliatory discharge tort claim.  

In Balla, the Illinois Supreme Court held that a corporation’s general counsel, who was terminated as a result of his efforts to prevent a shipment of misbranded and/or adulterated medical devices, could not bring a retaliatory discharge claim even though his discharge was in contravention of a clearly mandated public policy. The state supreme court reasoned that extending the tort of retaliatory discharge to in-house counsel would compromise the attorney-client relationship because employers might be less willing to be forthright and candid with their in-house counsel. Moreover, allowing the claim would not promote disclosure of the misconduct because the attorney was required under the state’s rules of professional conduct to report the employer's intention to sell the misbranded and/or adulterated medical devices; thus, the public policy of protecting the lives and property of citizens was adequately safeguarded. Finally, the court reasoned that if the tort were extended to in-house counsel, “the employer/client would be forced to pay damages to its former in-house counsel to essentially mitigate the financial harm the attorney suffered for having to abide by [the Illinois] Rules of Professional Conduct,” which was “impermissible” because attorneys may “have to forego economic gains in order to protect the integrity of the legal profession.”

Citing Balla, the company that employed the Van Asdales asserted that allowing them to maintain their SOX claim would violate the attorneys’ obligations under the Illinois Rules of Professional Conduct. Rejecting this argument, the Ninth Circuit distinguished Balla, noting that the Illinois Supreme Court explained that it “base[d its] decision as much on the nature and purpose of the tort of retaliatory discharge, as on the effect on the attorney-client relationship that extending the tort would have.” Furthermore, the Ninth Circuit concluded that “federal courts in Illinois have uniformly declined to apply Balla to claims based on federal law.”  

The company then argued that, irrespective of the specific rules applicable to Illinois-licensed attorneys, the Van Asdales should not be permitted to maintain their SOX claim because doing so would require use of attorney-client privileged information. However, the Ninth Circuit determined that such concerns did not justify barring the Van Asdales’ SOX claims because nothing in statute indicates that in-house attorneys are not protected from retaliation “even though Congress plainly considered the role attorneys might play in reporting possible securities fraud.” In addition, it was unclear to what extent their suit required disclosure of confidential information and the trial court could use equitable measures to minimize the possibility of harmful disclosures, the federal appellate court observed. 

It seems that the federal nature of the SOX claim was a key distinction here. Securities laws are exclusively under the jurisdiction of the federal government, and, as the Ninth Circuit indicated, Congress “plainly considered” when enacting SOX that attorneys would be privy to information regarding possible securities fraud. That being the case, it appears Congress determined that any adverse impact on attorney-client communications did not outweigh its goal of encouraging disclosures related to securities fraud.

Monday, September 14, 2009

Less than half of Americans now approve of labor unions

The results of Gallup's annual Work and Education survey find organized labor taking a significant image hit over the past year. While 66% of Americans continue to believe unions are beneficial to their own members, a slight majority now say unions hurt the nation's economy.

More broadly, fewer than half of Americans – 48%, an all-time low – approve of labor unions, down from 59% a year ago. The 48% of Americans now approving of unions represent the first sub-50% approval since Gallup first asked the question in 1936. The previous low was 55%, found in both 1979 and 1981. That first poll found 72% of Americans approving of unions and only 20% disapproving.

Gallup attributes the downslide to the economic recession, and the aftermath of major economic interventions by the government on behalf of two of the Big Three domestic auto companies. Results were based on telephone interviews with 1,010 national adults, aged 18 and older, conducted Aug. 6-9, 2009. Gallup released its poll on September 3.

Friday, September 11, 2009

Should the ADA certify service animals?

Service animals seem to be in the news a lot lately and the stories indicate either confusion about or an unwillingness to recognize what service animals are. It’s not simply a matter of what the service animal is--be it a dog, a miniature horse, a monkey, or a parrot. The questions are about the tasks being performed and whether the animal is truly a service animal.

For instance, an Illinois public school district was sued by the parents of an autistic child after the school district banned the child’s service dog from entering the classroom. A judge granted a preliminary injunction against the school district but the child will have to start school without the dog since the judge believed it would be unfair for the dog to start without further discussion between the parties. (No date was set for the dog to enter the classroom.)

The school district argued the dog was not a service dog and not part of the student’s Individual Education Plan (IEP). The school district claimed that, because of this, the district had not been able to ascertain if the dog was necessary for the student to obtain an adequate and appropriate education. The district also argued the dog’s presence was an unfair burden to the rest of the students. Another student’s parent testified that her child had severe allergies that would prevent her from attending class if the dog were present.

In Texas, a university student claimed he needed his “doctor-ordered, therapy dog” for “emotional support,” but has run into the university’s “no-pets” policy. The university argued the student had not proven he is disabled or that his dog is a certified service dog. The student claimed to have provided the necessary documentation but--still no dog.

Then there’s always the question of whether the animal is truly a service animal. Litigation is currently pending in Canada where a dog owner has filed suit against the owners of a food store claiming they discriminated against him by not allowing him to bring his service dog into the store. The store’s owners argue that they were suspicious because the dog, a teacup Chihuahua, was not really a service animal. While the dog owner had a prescription sheet describing the dog as a service animal, the dog did not have any special harness, muzzle or markings and did not behave like a service animal. What’s more, the dog owner usually carried the dog in his arms. The dog owner claimed to suffer panic attacks and episodes of claustrophobia.

Under the Americans with Disabilities Act (ADA), employers and private businesses that serve the public are prohibited from discriminating against individuals with disabilities who use service animals trained to provide assistance.

Although these stories do not involve employer-employee relationships, employers undoubtedly share some of the same concerns. How do you recognize whether an animal is truly a service animal? Would the presence of one employee’s service animal cause problems for other employees or for the employer?

While the ADA does provide a definition for a service animal (any guide dog, signal dog, or other animal individually trained to provide assistance to an individual with a disability), the ADA does not license or certify service animals. The Department of Justice does, however, offer guidelines regarding service animals.

Would it help employers if the ADA provided more specifics regarding service animals such as what animals could be service animals or what tasks must be performed (i.e., guidance for a blind or visually impaired person, guidance for deaf individuals)? What if the ADA were amended to provide licensing or certification of service animals? Would that help employers avoid litigation in similar situations?

Wednesday, September 9, 2009

“Workers of the World: Sleep In!”

Last year, former Utah Governor Jon Huntsman (R) announced the Working 4 Utah initiative, which extended state government service hours from 7am to 6pm, Monday through Thursday, thus giving 17,000 of the state’s 24,000 executive branch employees three-day weekends for as long as the program lasts. While at least 70 cities already practice a form of either a staggered or compressed workweek, this large-scale experiment has been watched closely by many cash-strapped companies, cities and states.

Huntsman’s goals were ambitious: “As we go forward with this initiative, we will conserve energy, save money, improve our air quality, and enhance customer service," he said. "We live in a dynamic, ever-changing environment, and it's crucial that we take a serious look at how we can adapt and maintain our state's unparalleled quality of life."

So, one year into the program, how’s “Working 4 Utah” working for Utah? Although a recent evaluation of the program by state planners found that the energy savings haven't materialized quite as much as expected, there were some unanticipated boosts to productivity and worker satisfaction. Lori Wadsworth, a researcher at Brigham Young University, surveyed state workers who’ve switched to the four-day workweek and found that 82 percent prefer it. “Utah employees actually show decreased health complaints, less stress, and fewer sick days,” Wadsworth noted.

In addition, absenteeism has noticeably dropped, while productivity and quality of service have improved, with early evidence seeming to allay fears that 10-hour workdays would “burn out” employees. Longer weekends can also result in more time spent in recreation and/or with the family. In addition—as noted by Tufts University research—workers also reported having more time to volunteer in their communities.

Although the original goal of the shorter workweek was to cut energy use by 20 percent, actual savings were more in line with a 13-percent reduction. Believe it or not, one of the major obstacles was trying to figure out how to turn off the massive heating and air conditioning units on Fridays. Even despite the technical difficulties, though, current energy savings translate into Utah shrinking its carbon footprint by 6,000 metric tons.

The financial savings were impressive, too. At the nine-month mark, it was reported that Utah had saved $1.8 million. And, according to Governor Huntsman, “the cost savings will only grow if the four-day workweek is granted permanent status” because the state can renegotiate long-term leases and further refine “smarter” energy, heating, and cooling systems in buildings. Add to that less driving, less gasoline consumption, and more money not spent on commuting that workers can now add to Utah’s economy as a stimulus.

What is the potential downside to this program? Will there be longer-term effects of working a four-day week? Can worker productivity keep up or will it eventually lag? Time will tell—in any case, it can't hurt to at least re-think the post-1938 Fair Labor Standards Act workweek paradigm.

The final report on the pilot program is expected to be sent to Utah state lawmakers in October. In the meantime, there are a whole lot of interested folks out there contemplating taking the three-day weekend plunge themselves.

Tuesday, September 8, 2009

Wage violations may lead to "trickle-up" economy stagnation

Next week, if someone were to rob you of $51, you'd probably call the police. Now imagine that it happens every week. Or let's say that you're driving and someone broadsides you, but pressures you into not going to the hospital for your injuries.

Sound outlandish? Seem a bit predatory? Sound like something that could never happen here? Well, these scenarios are reality for approximately two-thirds of the low-wage workers in the United States, according to a recent study. The New York Times has reported that the study, which analyzed wage violations in low-wage industries, found that the typical low-wage worker lost the aforementioned $51 per week due to wage violations. That's a hefty chunk taken out of an average paycheck of $339.

See the story here:

It gets worse for those toiling in, among other industries, apparel manufacturing, child care and retail. In what is certain to be a controversial finding, the study suggests that employers have enjoyed astounding success in pressuring their low-wage workers not to file workers' comp claims. A breathtakingly low eight percent of these workers file for compensation when they suffer serious injuries on the job.

It gets worse still. 57% of the participants did not receive mandatory pay documents that would ensure legal and accurate compensation. 12% of workers who received tips stated that their employer stole their tips. And of the workers who filed wage complaints, 43% said that they experienced some form of illegal retaliation as a result.

And these violations are not, according to the study, limited to a few bad actors, nor do the violations disproportionately affect undocumented workers, those least likely to assert their rights. Instead, the study shows that the disregard for federal labor standards is widespread throughout the low-wage labor market and affects in almost equal parts, undocumented workers (39%), legal immigrants (31%) and native-born citizens (30%.)

We can expect more workers to be affected by such violations. According to recent reports, the underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 16.8 percent. That's more and more workers who are forced to take low-wage, part-time employment.

And that, indirectly, affects us all. An already-struggling economy isn't receiving the assistance it could from these workers who have less money to spend as a result of these violations. And the federal government, which needs the money for little things like health care reform, paying down the deficit and financing two wars, isn't getting all the tax revenues that it can.

So, what is to be done? Obviously hiring more investigators is a good first step. Immigration reform might assist as well, as it would theoretically offer a reason for undocumented workers to come out of the shadows, thereby diminishing the power employers have over those workers. And some version of labor reform is essential to give employees a stronger voice. But, as previously noted, this might not happen.

As any casual observer of labor reform efforts knows, its opponents have been far more effective at spreading their message than have its proponents. And that's fine. One of the hallmarks of our modern American democracy is that the group that messages the best gets to light the cigars. But a recent comment by Senate Majority Leader Mitch McConnell (R-KY) highlights a general belief that may doom labor reform. The Bluegrass State Republican explained why none in his caucus will vote for the Employee Free Choice Act, no matter what form it takes, should the day come when it reaches the Senate floor. Workers, you see, don't want to join unions because of the "very enlightened management in this country now, treating employees better."

If McConnell's statement is taken at face value, it suggests that many simply don't believe that egregious wage violations and unfair labor practices still occur. The participants in this survey would beg to differ. Perhaps because of the industries in which they work and the pay they receive, their voices just don't get heard as often as they should. But we disregard their plight at risk to our own economic future.

Friday, September 4, 2009

If an e-mail is in “all caps” and no one is around, does it make a sound?


Well, at least in one instance, this perceived “e-mail shouting” was a costly endeavor. Just ask Procare Health, which fired Vicki Walker in December 2007 after colleagues in New Zealand complained about her e-mail messages that were in "all caps," and sometimes bolded and in red font. It cost Procare Health $11,500 U.S. dollars ($17,000 NZD) for unfair dismissal, and garnered the company a lot of negative media attention.

Okay, so maybe “all caps” is a bit annoying, but is it something worth firing an employee and going to court over? Although this was a case in New Zealand, it is not a stretch to think that this kind of situation is coming to a courthouse near you. Ms. Walker’s employer determined that her e-mail, making use of “all caps” and sent to other employees, was far too confrontational, and was the equivalent of “shouting” at the employees. Essentially, the employer worried that one employee had hurt the feelings of, or intimidated, another employee, and it took action. If this type of situation doesn’t sound familiar, it should, as the employer clearly thought this kind of “confrontational” e-mail style had the makings of a workplace harassment or discrimination claim.

If this all sounds like a trivial, even silly, employment problem, well, it might be, but as ridiculous as it may sound, it has the potential to cost an employer thousands of dollars, not including court costs and legal fees. Yet, the idea of e-mail usage costing employers shouldn’t be so unbelievable, as there have already been a litany of problems associated with employee e-mail, e.g., inappropriate e-mails sent out, using e-mail to threaten, and using e-mail for personal business on company time. However, firing an employee for “all caps” in an e-mail may be more knee-jerk reaction and less common business sense.

The fact is, e-mail use is so pervasive and necessary in our daily work lives that it has almost single-handedly replaced most telephone calls, so it is no wonder that something so seemingly inconsequential like using “all caps” in an e-mail could lead to a workplace mess. That is why it has become so important for employers to not only teach employees how to utilize e-mail effectively in the workplace, but also how to use proper e-mail etiquette.

The Web site cited an excerpt from Nancy Flynn and Tom Flynn's book, Writing Effective E-mail, which stated:

By requiring employees to use appropriate, businesslike language in all electronic communications, employers can limit their liability risks and improve the overall effectiveness of the organization's e-mail and Internet copy in the process.

The website goes on to further list the 32 most important email etiquette tips, and notes that a company needs to implement etiquette rules for the following three reasons:

  • Professionalism: by using proper e-mail language your company will convey a professional image.
  • Efficiency: e-mails that get to the point are much more effective than poorly worded emails.
  • Protection from liability: employee awareness of e-mail risks will protect your company from costly law suits.

While the concept of an “all caps” e-mail may not be discharge-worthy at all businesses, the fact that it occurred at all, or that there were employee complaints, shows that today’s work environment might be a little more “tech-touchy” than anyone thought. So, take the time to train employees and senior management on e-mail etiquette, because a little training can potentially save a business all the TIME, MONEY AND EMBARRASSMENT OF LITIGATING THESE TYPES OF CLAIMS.

Wednesday, September 2, 2009

Which side are you on?

Far be it for me to wade into the increasingly bitter turf wars between the SEIU’s United Healthcare Workers-West (SEIU-UHW) and the National Union of Healthcare Workers (NUHW), the upstart formed by exiled SEIU-UHW officials. But the dueling unions aren’t doing any favors for organized labor in its fading hopes of passing the Employee Free Choice Act (EFCA) with card-check intact. If it is to capitalize on the most labor-friendly legislative climate in decades, a united front among organized labor is essential. (Isn’t that why Change to Win and the AFL-CIO are in peace talks, after all?) Failing that, at least don’t air the dirty laundry.

But labor can only hope the anti-EFCA folks don’t get their hands on the latest salvo fired off by SEIU-UHW in this internecine skirmish.

SEIU-UHW is embroiled in a dispute with NUHW over the representation of San Francisco home care workers, among others. Currently NUHW is trying to get SEIU-UHW decertified as the home care workers’ bargaining rep, and SEIU-UHW is crying foul. In an August 31 press release, the SEIU called for a hand-examination of each signed decertification card collected by the NUHW, citing more than 1,000 incidents of “lies, coercion, and fraud” in the signature drive.

According to SEIU, members have reported “more than a thousand incidents in which improper tactics were used to coerce workers, their family members, and the people they care for to sign cards by representatives who came to their homes.” The incumbent union contends the same tactics were used in an earlier representation dispute with NUHW, when one-third of the cards collected were found to be invalid when hand-checked.

"Apparently, the only way NUHW believes it can get the number of signed cards they need is by frightening and tricking us into signing," one worker is quoted as saying—one of a throng who are asking to have their cards returned after NUHW improperly collected signatures, SEIU says.

Sounds pretty ugly.

So the union wants each card and each signature hand-checked against official records to verify the signature—“to protect these workers' rights and ensure a fair process.”

That’s not the anti-union National Right to Work Committee talking, or the Center for Union Facts. It’s the 2.1 million member SEIU—the nation’s fastest growing labor union. The union that put card-check recognition on the map.

Here are a few of SEIU’s claims of improper tactics by NUHW:
  • Workers were told that signing a card was the only way they could keep their union.
  • Workers were threatened that they could be deported if they did not sign.
  • NUHW representatives said they were from a government agency.
  • NUHW reps pressured family members and even home care consumers to sign the cards.
  • A worker was told to sign "a petition to protect our rights." It was not until "a few months ago that I realized that, through their lies, they try to move me to a different union."
  • One member “was overwhelmed when two workers from the hotel union knocked at her door pressuring her to sign a petition. They told her the petition was for their voting freedom and it would not affect her union. Then they refused to leave until she signed.”
Intimidating home visits. Misleading tactics. Widespread unfair labor practices. This kind of talk won’t woo any EFCA fence-sitters in Congress. In fact, these are the very complaints of card-signing coercion that EFCA opponents have lodged. Has the SEIU divulged the unsavory devices that union organizers employ in their efforts to secure workers’ signatures? Or is the SEIU overstating the misconduct of its rival to win its turf battle at all costs?

Again, far be it for me to say. But the SEIU increasingly has been going rogue of late. The union, with Andy Stern at the helm, stands accused of abetting the break-up of UNITE-HERE, of raiding unions, of cozying up to Wal-Mart—labor’s favorite adversary—on healthcare reform. Other union leaders and labor supporters have voiced their displeasure, as UNITE-HERE is all too happy to document:

The SEIU won’t likely win its friends back by making the case against card-check.