Friday, January 29, 2010

Washington turns to job creation

“Jobs must be our number-one focus in 2010,” President Obama told the nation last week. “That's why I'm calling for a new jobs bill tonight.”

Lawmakers in the House and Senate didn’t wait for the President’s directive, however. Even before Wednesday’s State of the Union address, several pieces of legislation had been introduced in earnest with the goal of creating jobs in the face of sobering unemployment numbers.

Sen. Al Franken (D-Minn) on Tuesday introduced the “Strengthening Our Economy Through Employment and Development” (SEED) Act (S. 2952), a measure that would reallocate $10 billion in TARP funds to spur jobs in the private and public sectors. Also called the “Cash for Jobs” bill, S.2952 provides $5 billion for wage subsidies to incentivize hiring in the private sector. The additional $5 billion will provide direct grants to states, local governments, and tribes to create green jobs.

The SEED Act has the potential to rapidly create up to 500,000 jobs in an efficient way and at a lower cost per job than other proposals, Franken says. “Cash for Jobs will rapidly create jobs in the private and public sector, encourage the expansion of small and medium-sized businesses, and increase the energy efficiency of public buildings. It will boost the economy where we need it most—on Main Street.”

Also on Tuesday, Sen. Russ Feingold (D-Wisc.) introduced a bill (S. 2955) that would help businesses hire workers and reduce unemployment through the creation of a temporary jobs tax credit. The tax credit would enable employers to “hire new employees, expand work hours for their current workforce, or simply raise worker pay.”

Weeks earlier, in the House, Reps. Bob Etheridge (D-NC) and Steve Kagen (D-Wisc) introduced a bill that would provide a refundable tax credit to businesses expanding their payrolls. The "Hiring Incentives to Reinvest and Incentivize New Growth (HIRING) Act" (H.R. 4437), introduced January 13, would provide a 15-percent refundable tax credit to businesses that expand their payroll by at least three percent in any calendar quarter of 2010, and a 10 percent refundable tax credit to businesses that expand their payroll by at least five percent in any calendar quarter of 2011.

Finally, on Thursday, President Obama unveiled his own “Small Business Jobs and Wages Tax Credit” proposal, designed to provide a cost-effective, immediate jump-start to job creation and wage growth. “The credit will provide American businesses with a powerful short-term incentive to not only create good jobs but to increase wages and hours for Americans with jobs who face ongoing economic uncertainty in the current environment,” according to the White House. Among the key provisions:

  • Employers would receive a tax credit of up to $5,000 against their payroll taxes for every net new employee they hire in 2010. The credit would give employers an incentive to add jobs or accelerate the hiring they would have done later in the future.
  • Businesses will receive a bonus 6.2-percent tax credit on aggregate wages in excess of inflation—reimbursing the employer for the Social Security payroll taxes they pay on those payroll increases. This provides firms with an incentive to increase wages or work hours for existing employees as well as hire new employees at a higher wage.
  • All firms with net employment increases will be eligible for these credits. But to ensure that small businesses receive the bulk of the incentive to hire, the maximum credit will be limited to $500,000 per business.
  • Employers could receive the tax credit on a quarterly estimated basis. This option helps get money in the hands of employers earlier in the year, and could help increase awareness of the credit and provides an early incentive to hire.

According to a Congressional Budget Office report, tax breaks along the lines proposed in these measures would be among the most efficient and effective ways to spur employment. The CBO estimated a jobs tax credit would boost gross domestic product by as much as $1.30 for every dollar spent and would increase employment by as much as 18 net full-time equivalent jobs for every million dollars invested through the credit. The Economic Policy Institute, a left-leaning think tank, projected that a jobs tax credit proposal would result in an increase of more than five million jobs over the next two years.

What’s more, a job creation tax credit could garner bipartisan support, a rare achievement in today’s political climate. Republican minority whip Eric Cantor (R-Va) has expressed support for such measures, Etheridge noted.

Right now, all eyes are on the Senate. “The House has passed a jobs bill,” Obama noted on Wednesday night. (The House narrowly passed H.R. 2847, the Jobs for Main Street Act, on December 16.) “As the first order of business this year, I urge the Senate to do the same.”

“I know they will,” Obama stated emphatically. “People are out of work. They're hurting. They need our help. I want a jobs bill on my desk without delay.”

Wednesday, January 27, 2010

Are state wage & hour class actions compatible with the FLSA? The DOL certainly thinks so.

On January 21, 2010, the Department of Labor (DOL) officially threw its support behind the notion that an opt-in class action suit under the Fair Labor Standards Act (FLSA), as well as a related state law class action, can both be pursued within the same lawsuit. To that end, the DOL filed an amicus brief in support of Plaintiffs-Appellants in the case of Parker v. NutriSystem Inc, (3d Cir, No. 09-3545).

The case originated when an employee for NutriSystem argued that he, along with current and former employees employed in a call center, was not paid overtime wages for working hours beyond the required 40 hours per week. The employee contended that this was a clear violation of both the FLSA and the Pennsylvania Minimum Wage Act (PMWA), and he wanted to bring a class action suit under both laws.

Appearing before the United States District Court for the Eastern District of Pennsylvania on September 26, 2008, the employee first sought class certification under the FLSA, which the court granted conditionally, but on July 25, 2008, the employer’s motion for summary judgment as to the state wage class action under the PMWA was granted. The court reasoned that “a state law opt-out class action [is] incompatible with an FLSA opt-in collective action and [courts] have declined to exercise supplemental jurisdiction over the state law claims.”

The case then moved forward to July 30, 2009, where the court then ruled that, because the employees were paid commissions for all orders that they took, their positions fell within the FLSA’s retail commission exception. In so finding, NutriSystem’s request for summary judgment with regard to the FLSA overtime pay and class participants was granted.

The ensuing appeal was then brought before the Third District Court of Appeals, of which the DOL filed its amicus curiae brief in support of the Plaintiffs-Appellants. The DOL’s argument rests mainly on its conclusion that “state law class claims are not incompatible with the FLSA, and that the FLSA's section 7(i) exemption for commission-paid employees of retail and service establishments, 29 U.S.C. 207(i), does not apply to flat-fee compensation schemes that bear no relationship to the cost of the goods sold.” In particular, the DOL finds nothing within the text of the FLSA, nor within the legislative history of section 16(b), that supports the lower court's conclusion that the provision for an “opt-in collective action under the Act is incompatible with a Rule 23 opt-out class action brought under analogous state wage laws.”

In addition, the DOL argued that the straight flat-fee payments have routinely been considered synonymous with piece-rate compensation, which is governed by the piece-rate overtime requirements. As such, reasoned the DOL, the fees paid to the employees in this case are more similar to flat-fee compensation and, as such, flat fees "which are paid without regard to the value of the service performed do not represent 'commissions on goods or services' for purposes of Sec[tion] 7(i). Such employees are considered to be compensated on a piece rate basis and not on the basis of commissions."

A lot of information to digest, no doubt, and yet it is easy to see that there is a lot riding on all this for both employers and employees. If the Third Circuit agrees with the DOL’s position, employers can expect to face collective class actions for wage and hour issues under both federal and state law, and so the costs associated with these claims are sure to increase, and compliance with these rules is sure to be checked heavily by employers. Conversely, employees will have another avenue on which they can base their collective wage claims, which certainly would seem to strengthen their positions both inside and outside the courts.

Monday, January 25, 2010

What a difference a continent makes (for corporations and quotas)

On January 21, 2010, Elaine L. Chao, the Secretary of Labor in the George W. Bush Administration, testified before the Republican members of the House Committee on Education and Labor and stated that the Obama Administration's agenda “constitutes a veritable Europeanization of America.” Yet, an action taken by the French National Assembly just hours before demonstrates Chao’s statement to be hyperbole, at least in terms of government control over the gender composition of corporate boards. On the evening of January 20, the French National Assembly passed legislation that will require large corporations to appoint women to 40 percent of their seats on their boards.

According to a January 21 blog by a correspondent for The Times newspaper in the United Kingdom (hat tip to the American Association for Affirmative Action blog), the bill has the backing of President Sarkozy's administration. The blog further notes:
“The quota is likely to reach the statue [sic] books, with amendments, later this year, making France the biggest state so far to use the law to break the boys only culture of the boardroom. Norway introduced a 40 percent rule in 2002 when women accounted for only 6 per cent of board seats there. Spain has also just passed a similar law.”

It’s hard, if not impossible, to imagine a similar law being passed in the United States, where the word “quota” is regarded as a piranha in the sea of politics. In contrast to the European nations cited above, quotas are prohibited under U.S. law. Executive Order 11246, issued by President Lyndon B. Johnson and kept in force by every succeeding president, requires covered federal contractors to take affirmative action to employ, and advance in employment women and minorities. However, OFCCP regulations implementing this order expressly forbid the use of quotas (see, 41 CFR 60-2.16(e)) and the U.S. Supreme Court has repeatedly held that quotas are unconstitutional (see, Grutter v Bollinger, 539 U.S. 306, 84 EPD ¶41,415 (2003); Gratz v Bollinger, 539 U.S. 244, 84 EPD ¶41,416 (2003); and Regents of the Univ of California v Bakke, 438 U.S. 265, 17 EPD ¶8402 (1978)). Moreover, the use of quotas would, with rare exceptions (such as a court-ordered remedy in an egregious case where discrimination has been proven in court), violate Title VII of the Civil Rights of 1964. Despite rhetoric to the contrary, there is no sign that the Obama Administration is planning to amend the Executive Order or its implementing regulations, or otherwise advocate a change in the existing law on quotas.

The United States government utilizes a less-aggressive approach in its efforts to break the barriers to women and minorities in advancing to senior executive positions. During the George H.W. Bush Administration, under the leadership of Secretary of Labor Elizabeth Dole and OFCCP Director Director Cari M. Dominguez, the OFCCP began conducting corporate management reviews, also know as “glass ceiling audits.” The term "glass ceiling" is commonly used to describe those artificial, invisible barriers that are based solely on attitudinal or organizational bias, which prevent qualified individuals from advancing upwardly into management level positions. In 1991, Congress established the Glass Ceiling Commission which issued its final report in November 1995.

An OFCCP corporate management review is an audit of a corporate headquarters that focuses on identifying barriers to women and minorities advancing to senior executive positions. The OFCCP conducted 41 corporate management compliance evaluations in fiscal year (FY) 2008. (The OFCCP has not yet released its enforcement data for FY 2009.) The EEOC has also engaged in efforts to break the glass ceiling. A recent EEOC glass ceiling settlement occurred in December 2009, when Outback Steakhouse agreed to pay $19 million and furnish significant remedial relief to a class of thousands of women at hundreds of its corporately owned restaurants nationwide where the EEOC found that women could not get promoted to the higher-level, profit-sharing management positions in the restaurants. In 2004, the EEOC issued a report, entitled "Glass Ceilings: Status of Women as Officials and Managers in the Private Sector," which showed that women represent about 36 percent of all officials and managers in private sector employment, a seven-percent increase over the 12-year period examined.

The American approach to the glass ceiling and quotas and the European approach are remarkably different. Although Chao’s January 21 statement focused primarily on union issues and did not specifically reference glass ceilings or quotas, her painting of the broader picture of the Obama agenda as one in which the American government exerts the same degree of control over corporations as is exercised by European governments is an overt exaggeration.

Friday, January 22, 2010

High Court rejects limits on corporate speech

The United States Supreme Court has thrown open the door to unfettered spending by corporations and unions on political elections, ruling that corporations may spend as much of their general treasuries as they like in support or opposition to presidential and Congressional candidates for president and Congress. The 5-4 decision threw out a 63-year-old law designed to limit the influence of such entities and explicitly overturned the Court's own decision in Austin v. Michigan Chamber of Commerce (494 US 652, 1990).

The case, Citizens United v. Federal Election Commission, (No. 08-205, Jan. 21, 2010) stemmed from an attempt by the group, Citizens United, to release a documentary that was brutally critical of then-presidential candidate Hillary Clinton. The group's funds were largely from individuals, but a small portion came from for-profit corporations. That portion raised concerns when the documentary, which referred to Clinton by name, was placed in the on-demand option of a cable company. Citizens United wanted to advertise for the documentary, but feared that it might fall afoul of Section 441b of the Bipartisan Campaign Reform Act (BCRA), which prohibited electioneering communications made within 30 days of a primary or 60 days of a general election. The group asked a district court for a declaratory relief, which the court refused.

The Supreme Court first found that it could not rule on the narrower grounds set forth by the group. The film was publicly distributed under BCRA; the cable company reached 34.5 million households, and the movie could have easily been seen by more than the 50,000 person threshold for public distribution. Furthermore, any effort to decide which communication would be best for a specific type of message would have, held the Court, raised questions as to the Court's authority on that point.

Lastly, the Court found that any attempts to rule on narrower grounds would chill political speech. The ongoing problems with the law would continue, ruled the Court. Entities that wished to challenge the law would have to do so far ahead of the election cycle and a general fear of prosecution would force entities to ask the government for advice, which in of itself, is an onerous restriction on free speech. Thus, the Court rejected the grounds on which the case came to it and went after overall viability of the law.

"The censorship we now confront is vast in its reach," Justice Anthony Kennedy said in his majority opinion, and that phrase summed up the majority's approach to the law. The Court ruled that the law is an unacceptable restriction on the political speech of corporations. Use of political action committees, ruled the court, did not evade this restriction, as PACs are "expensive to administer and subject to extensive regulation." Moreover, ruled the Court, the public has a right to know certain things and have every right to gain that knowledge from corporations or unions.

The Court batted away arguments by the United States government that the law prevented the distortion of public discourse and the appearance of corruption. There can be no distortion in a true marketplace of ideas, the Court appears to have held. There is no concern of corruption as the public can discern for itself when a public official has traded influence or access for communications assistance.

Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas joined Kennedy to form the majority in the main part of the case.

Strongly disagreeing, Justice John Paul Stevens said in his 90-page dissent, "The court's ruling threatens to undermine the integrity of elected institutions around the nation."

Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined Stevens' dissent, which complained that the court majority overreached by throwing out earlier Supreme Court decisions that had not been at issue when this case first came to the court.

The decision's most immediate effect is that corporate and union-sponsored political ads will be able to run right up to the day of an election. Such entities will be allowed to call for the election or defeat of specific candidates.

This spending cannot be coordinated with political candidates and the rules governing PACs remain, for now, untouched.

The political reaction was swift and varied.

"With its ruling today, the Supreme Court has given a green light to a new stampede of special interest money in our politics. It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans," said President Barack Obama, who promised a swift, bi-partisan repudiation of the decision.

His 2008 opponent, Senator John McCain said that he was "disappointed by the decision" and Senate Minority Leader Mitch McConnell praised the decision, calling it an "important step in the direction of restoring the First Amendment rights of these groups."

Wednesday, January 20, 2010

Michigan strengthens anti-discrimination protections for pregnant employees

Although state law prohibits discriminatory treatment of women due to pregnancy, childbirth and related medical conditions, Michigan legislators found it necessary to amend their state civil rights act to strengthen protections for female employees. Public Act No 190 (H.B. 4327) is a plan designed to strengthen women's rights by protecting the jobs of female employees who are forced to take unpaid leave when they become pregnant, according to State Representative Coleman A. Young II (D-Detroit), the bill’s primary sponsor.

P.A. 190 amends Article 2 of the Elliott-Larsen Civil Rights Act (ELRCA) to protect all female employees whose job could be affected by pregnancy – but can still perform light duty – by requiring employers to treat a pregnant employee the same as any other employee who has limitations placed on their ability to work.

Signed into law by Governor Jennifer Granholm in December 2009, P.A. 190 was created in response to a recent federal court case (Prater et al v Detroit Police Department and the City of Detroit, no 08-CV-14339, EDMich) in which five female DPD police officers allege violations of Title VII of the Civil Rights Act of 1964 and the Equal Protection Clause of the U.S. Constitution.

According to plaintiffs’ complaint, the Detroit Police Department (DPD) previously maintained an informal policy and practice of providing light-duty assignments to officers who had medical conditions or injuries that temporarily prevented them from performing the full range of confrontational police duties. Under this policy, pregnant officers were placed in restricted duty positions until they opted to use leave time or were required by their medical providers to discontinue work. In 2004, the DPD stopped offering light duty to pregnant police officers and, according to the lawsuit, when the DPD learns that an officer is pregnant, regardless of whether she has actual work restrictions or has a desk job, she is placed on sick leave and receives a salary only until accrued personal leave or sick time is exhausted. Also, pregnant officers are placed on a waiting list for light-duty positions, which are prioritized based on seniority. Reportedly, however, nonpregnant officers with minor nonduty-related injuries are not placed on sick leave and in some cases they received preferential assignments to light-duty work. The case is expected to go to trial in July or August 2010.

When Young’s plan passed the state legislative house, he said “This is great news for Michigan's hard-working women, who have been discriminated against for far too long. No woman should have to put her job, health and family's livelihood on the line just because she is pregnant. In these tough times, it's more important than ever that we ensure that Michigan's expecting mothers are treated fairly. I commend my colleagues in the Legislature for coming together to pass this major piece of civil rights legislation that will help improve gender equality in Michigan.”

Monday, January 18, 2010

Some US jobs may be permanently lost as longer-term unemployment class grows

In the last two years following the economic downturn, the economy has seen a loss of 7.2 million jobs, which brought the jobless rate from 5% to 10%, according to the Department of Labor. (Of course, it’s pretty much understood that the 10% does not take into account unemployed part-timers, contract workers, small business owners, recent graduates who can’t find jobs and older workers “encouraged” to retire early.) While some jobs will eventually come back, the permanent loss of others may keep the labor market from fully recovering for a long time to come.

Falling under the category of “No Kidding,” the doors to many credit market, housing and finance jobs made possible by the boom have closed. Other reasons for jobs that have permanently disappeared, according to a recent Wall Street Journal article, include: natural attrition due to technological and communications advancements, competition from low-wage countries like China, and an opportunity for employers to lay off workers who performed jobs that are no longer as critical as they once were.

In contrast to earlier recessions prior to the 1990s, the article noted, jobs rebounded quickly because losses were considered essentially temporary, with employees having the implicit expectation that they would be hired back once the worst was over. This time around, however, jobs have been much slower to recover.

And speaking of bad trends, here’s another depressing statistic: the number of job openings relative to the unemployed population were at an all-time record low in November. According to the US Bureau of Labor Statistics, 22.9 percent of the unemployed had been out of work for at least 27 weeks as of December 2008. One year later, the number of those out of work rose to 39.8 percent. The result is what one New York Times blogger refers to as a “growing underclass” of the longer-term unemployed: months after unemployment insurance benefits have run out, a growing segment of the unemployed is taking longer and longer to find work.

Will it be the case that the longer they remain unemployed, the less likely it may be that they eventually find work? One can only hope that once the health care bill is passed, Congress and the Obama Administration will finally turn its sights on Main Street.

Friday, January 15, 2010

The power of one

For months, we’ve been hearing about the extraordinary measures taken by the Senate leadership to appease centrist Democrats like Ben Nelson (D–Nebraska) and the Independent from Connecticut. The public option was dropped, stringent restrictions on abortion were accepted and Medicare expansion was swept away, all in the name of ensuring that a health care reform bill reached the President’s desk.

As it turns out, the Democrats should have been paying a bit more attention to the tedious process of winning elections. Because, in what could be the greatest of ironies, the special election to replace Ted Kennedy – who famously said that health care reform was the cause of his life - suddenly has the potential to flush the entire bill into the sewer of unrealized good intentions.

Martha Coakley is the Attorney General of Massachusetts, a state where Democrats outnumber Republicans 3-1. Yet, despite the advantages of demographics, name recognition and the desire to honor the foremost advocate of health care reform, the Bay State is poised to deliver the death blow to health care reform. Recent polls suggest that Coakley, who until recently declined to run an aggressive campaign, is now in danger of losing the race to (formerly) little known state senator, Scott Brown. Brown, the Republican, has been running like it means something and is now pulling in hordes of cash in his bid to upset the Democrat. A recent poll by the respected pollster Nate Silver had the race as a dead heat.

If Coakley manages to lose a race that most pundits assumed was hers, the Senate tradition of the filibuster will ensure that the health care bill, at least in its current iteration, will never even have a vote, let alone reach the President’s desk. Scott Brown, should he prevail, will have all the power. Elections, as they say, have consequences.

Elections have other consequences, such as presidents appointing people to serve who share a similar worldview. President Obama did just that when he nominated Craig Becker to serve as a member of the National Labor Relations Board. Becker, a controversial nominee due to his views on the employer’s role in organizing campaigns, was approved by the Senate Committee on Health, Education, Labor and Pensions. However, Senator John McCain has placed a hold on his nomination, thereby denying Becker an up or down vote before the full Senate. The hold is especially troublesome, given the Board’s current two-member panel and the challenges to that panel’s authority.

McCain may not like Becker, and that’s his right, but his opposition threatens to undermine one of the most important agencies in the labor and employment field. The Senator should remember that his Democratic colleagues allowed such votes for Chief Justice Roberts and Justice Alito, two men who have far more power to shape the landscape than does Mr. Becker.

Wednesday, January 13, 2010

Federal jobs website bans gender identity discrimination…is ENDA coming next?

Last week, the Obama Administration quietly added language to its EEO statement on the federal government’s jobs website ( that explicitly bans employment discrimination based on gender identity. While the change may only apply to federal jobs, since the federal government is the country’s largest employer, the Administration’s move could have a real impact. By making gender identity a protected class, the Obama Administration has made its strongest commitment yet to protecting transgender applicants and employees from discrimination. And, since sexual orientation discrimination is already prohibited, the change is also a significant step toward ending employment discrimination of LGBT applicants and employees in the federal workforce.

The change was hinted at in June 2009 when President Obama issued a memorandum directing the Office of Personnel Management to issue guidance to all executive departments and federal agencies regarding compliance with, and implementation of, the civil service laws, which make it unlawful to discriminate against applicants and employees for and in federal employment on the basis of factors not related to job performance. The memorandum also extended certain employee benefits to the same-sex partners of federal employees. In particular, domestic partners of federal employees can be added to the federal government’s long-term care insurance program, and federal employees must be allowed to use their sick leave to take care of domestic partners and non-biological, non-adopted children.

In a January 6 statement, Human Rights Campaign media director Michael Cole said: “[d]iscrimination has no place in the federal workforce and this common sense measure puts our country’s largest employer in line with other major American businesses. Already, 207 Fortune 500 companies have policies that ban gender identity discrimination and the number among Fortune 100 companies is 69. Not only will the federal government improve their ability to recruit and retain the best and the brightest, they will serve as an example of creating fair and equitable workplaces.”

“Employment discrimination can have a devastating effect on transgender Americans and the families they support,” said Christopher Anders, ACLU Senior Legislative Counsel in a January 6 statement. “With its new policy, the federal government is setting a good example for all employers. Although many state governments and businesses already provide workplace protections for transgender employees, explicit protection of transgender federal employees will likely be a catalyst for many more states and businesses to apply the federal policy.” Currently, 13 states (California, Colorado, Illinois, Iowa, Maine, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington), the District of Columbia and many municipalities and counties have laws prohibiting discrimination on the basis of sexual orientation and gender identity in employment. Other states have laws that protect against employment discrimination based on sexual orientation, but not gender identity.

What does all this mean for ENDA? Well advocates of the bill are hoping this development will provide the necessary boost in Congress’ efforts to pass the long-gestating Employment Non-Discrimination Act (S. 1584/H.R. 3017).

ENDA would prohibit employment discrimination against individuals based on their sexual orientation or gender identity. The bill would mirror Title VII, prohibiting private employers, employment agencies, labor organizations and joint labor-management committees from firing, refusing to hire or discriminating against those employed or seeking employment based on their perceived or actual sexual orientation or gender identity. The bill would also prohibit retaliation, covering individuals who have opposed unlawful practices or who have participated in an employment discrimination proceeding. ENDA’s provisions also impact public sector employers, but do not apply to religious organizations as defined by Title VII, volunteers who receive no compensation, private membership clubs or uniformed members of the Armed Forces.

The bill would define “sexual orientation” as homosexuality, heterosexuality or bisexuality. “Gender identity” would mean the gender-related identity, appearance or mannerisms or other gender-related characteristics of an individual, with or without regard to the individual’s designated sex at birth.

While markup of the bill by the House Education and Labor Committee was scheduled for November 18, 2009, it was postponed, confirmed committee spokesperson Aaron Albright. Lawmakers are still “ironing out details” on the legislation, he said. Albright would not speculate when the bill would next be scheduled for a markup. During markup, the House committee was to consider amendments to the legislation before voting to report out the legislation to the full House. On November 5, the Senate Health, Education, Labor and Pensions Committee held a hearing on ENDA. Testifying before the committee, Thomas Perez, the DOJ's Assistant Attorney General for Civil Rights, voiced “the Administration's strong support for fully-inclusive legislation that prohibits discrimination on the basis of sexual orientation and gender identity,” adding that the bill remains a “top legislative priority” for the Administration. Committee Chair Sen. Tom Harkin (D-Iowa) said: “We’re going to move this bill next year.”

Given the ground swell of support for ENDA by the Administration and Congressional leadership, it is a forgone conclusion that the bill is a part of their 2010 labor and employment legislative agenda. As such, employers should anticipate that passage of ENDA is likely this year. This means employers should expect to revise their employment policies and train their managers and supervisors accordingly.

Monday, January 11, 2010

Instances of workplace violence may rise as tough times keep workers feeling low

There have, in the past, been many instances of workplace violence. So much so, that seeing these outrageous and violent acts reported by the news has become, sadly, not that uncommon. So maybe news of recent workplace violence should be examined, but no more so than those cases in the past. However, these are different, and in many cases, more difficult times, as employees deal with increased workplace demands, the constant stress of bills piling up at home, and the ever-present possibility of unemployment peeking its ugly head around the corner. That isn’t to say that these acts of workplace violence are excused—to the contrary, they are just as deplorable as ever, but what if the economic turmoil continues...will the number of events increase?

According to the Bureau of Labor Statistics, the unemployment rate actually stayed the same in December (10%, although pockets of the U.S. have larger numbers). To some, this was championed as a win, because instead of the reoccurring pattern of increases in the unemployment rate, it steadied itself. Yet, those numbers meant little to workers, especially those with the constant fear of losing their jobs, or even those who have already lost their jobs. However, even with the increased stress and anxiety brought on by the economic tornado we are in, that does not mean employees or former employees will succumb to violent behavior—but for employers and employees alike, heightened caution in the workplace may be needed.

Take the recent shooting at ABB Group in St. Louis last Thursday by Timothy Hendron (an employee with 23 years of service) that left four people dead, as reported by the Christian Science Monitor. Here was a situation where “Timothy Hendron, [who] was among several plant employees suing the company and its trustee, Fidelity Management Trust, for an unspecified amount over ‘unreasonable and excessive fees’ related to their retirement benefits[,]” walked into his employer’s business and fired on four innocent people. While it may never be known why Mr. Hendron did what he did, and there is no evidence his violent acts were directly associated with the lawsuit, the fact that he was in the midst of a lawsuit against his company shows the kinds of employment-related problems and situations employees are facing in these tough economic times.

Per the article in the Christian Science Monitor, Larry Chavez, an expert on workplace violence, stated that “the downturn in the economy may be creating more circumstances that lead to violent outbursts…[t]here’s more pressure put on people recently because of the economy," he says. "More people have faced a dissolving of their whole career. It’s too hard to face for some people. When you have 23 years invested, that’s a lot."

Part of the reason there are so few solutions this problem is the fact that there is no specific scientific data that connects violent workplace acts with economic downturns, and yet the correlation between the two is certainly worth examining. The fact is, OSHA estimates that nearly two million workers are victims of workplace violence each year (this includes threats and physical violence, not just death), so there are problems even when times are good. So it is not beyond belief that when one combines everyday workplace and life issues with unemployment, or the constant threat of unemployment, a small problem could increase as the emotional, mental and physical toll wears on an employee.

So what is a business to do? Well, there is no way to insulate against all violent workplace acts, but steps can be taken to protect against these crimes. Some of OSHA’s recommendations are:

  • For employers to establish a zero-tolerance policy toward workplace violence against or by their employees.
  • For the employer to establish a workplace violence prevention program or incorporate the information into an existing accident prevention program, employee handbook, or manual of standard operating procedures.
  • For the employer to provide safety education for employees so they know what conduct is not acceptable, what to do if they witness or are subjected to workplace violence, and how to protect themselves.
  • To secure the workplace. Where appropriate to the business, install video surveillance, extra lighting, and alarm systems and minimize access by outsiders through identification badges, electronic keys, and guards.

Of course, there are other things employers can do as well. Preemptively, employers can mandate background checks on employees, and even preemployment psychological tests can be administered, if applicable. Also, because of the high rates of layoffs and unemployment, employers may need to take more time, and spend a little more money, to ensure that those who have been displaced can access proper channels for unemployment, health care, and even job sites for future employment. While these things may cost employers—and businesses must always be aware of “the bottom-line”—the cost of this type of prevention has no monetary limits.

Friday, January 8, 2010

A health reform bill of sorts

It wasn’t all about healthcare reform in the Senate last month. Senator John Kerry took up another issue that’s been generating considerable ink over the past year when he introduced legislation on December 15 to tighten a tax loophole that enables employers to misclassify workers as “independent contractors.”

The measure is not completely unrelated to healthcare, of course. As Senate Dems closed rank around a reform bill that would leave the employer-provided health insurance model essentially intact, whether a worker has health insurance may well continue to hinge on whether he or she is deemed an employee or an independent contractor. (Employment status also determines whether that individual enjoys such protections as workers’ comp, Social Security, Medicare, overtime, unemployment compensation, and the minimum wage.)

Kerry’s bill, the Taxpayer Responsibility, Accountability, and Consistency Act of 2009, (S. 2882) would modify the Internal Revenue Code rules for classifying workers as independent contractors for employment tax purposes. Specifically, the bill would amend Section 530 of the Revenue Act of 1978, commonly referred to as the “safe harbor” provision, which grants employers some leeway to treat a worker as an independent contractor. S.2882 significantly increases penalties for employers that do so improperly. A similar measure (H.R. 3408) was introduced in the House last summer.

Section 530 allows an employer to designate a worker an independent contractor for tax purposes regardless of what the worker’s actual status would be under the common law test, unless the employer has “no reasonable basis” for doing so. The Senate bill tightens the “reasonable basis” standard. It provides that an employer will be deemed to have a reasonable basis for classifying a worker as an independent contractor only if two criteria are met:

1) The employer must have reasonably relied on a written determination as to the employment status of that worker, or of another individual working in a substantially similar position (as determined based on FLSA criteria) for the employer. Alternatively, the employer must have reasonably relied on a concluded examination of whether the worker (or a similarly employed worker) should be treated as an independent contractor, in which there had not been a determination that the individual (or similar worker) should be treated as an employee. But an employer may not rely on an examination or written determination if the employer had misrepresented the controlling facts and circumstances that formed the basis for determining employment status; if those facts and circumstances have changed; or if the Secretary subsequently issues relevant guidance to the contrary; and

2) The employer (or a predecessor employer) has not treated any other individual holding a substantially similar position as an employee for employment tax purposes for any period beginning after December 31, 1977.

S.2882 also allows workers to petition for a determination of their employment status (and, for those in transient or seasonal employment such as construction work, to receive a determination within 90 days). A worker also will be entitled to appeal a determination that he or she is not an employee.

Some prognosticators say true “employee” status is a dying relic—one that will give way, increasingly, to contingent and temporary work arrangements as market forces unfold. At that point we may well have to revisit the employer-based health insurance model that looks to remain entrenched for now. But in the meantime, let’s call an employee an employee. It’s a modest, but meaningful step toward healthcare reform.

Wednesday, January 6, 2010

EEOC well armed and stepping up fight against disability bias

It’s clear that the US Equal Employment Opportunity Commission (EEOC) has stepped up its assault on disability discrimination. Litigation statistics for fiscal year (FY) 2009 reflect that 27 percent of the merits lawsuit filed by the federal agency alleged claims under the Americans with Disabilities Act (ADA). That’s more than double the 12.7 percent of merit suits alleging disability claims the year before. (These are my calculations based on the agency’s enforcement data.)

It’s true that the EEOC received a record number of disability discrimination charges in FY 2009. But the 21,451 ADA charges that were alleged represented 23 percent of total bias charges as compared to 20.4 percent the year before. Since ADA allegations have comprised between 18.9 and 22 percent of bias charges during the last decade, the increase in disability discrimination charges filed in FY 2009 is rather moderate.

On the other hand, since 1999, between 10 and 17 percent of merit suits filed by the EEOC have alleged ADA claims – the jump to 27 percent in FY 2009 can hardly be described as merely moderate. (These are also my calculations based on EEOC data.) Something’s afoot and it’s likely the ADA Amendments Act of 2008 (ADAAA).

The new law, effective January 1, 2009, rejected the holdings in several Supreme Court decisions and portions of EEOC’s ADA regulations that Congress believed construed the definition of “disability” too narrowly, preventing individuals with certain impairments from bringing discrimination claims. Under the ADAAA, it’s much easier for these individuals to establish that they are disabled within the meaning of the ADA.

On September 23, 2009, the EEOC published a proposed rule implementing the ADAAA. The comment period ended but the agency has yet to publish a final rule. During the 60-day comment period, the EEOC, in conjunction with the Department of Justice Civil Rights Division, held town hall meetings about its proposed regulations in Oakland, Philadelphia, Chicago and New Orleans. The federal agency has also issued a Q&A guide on its proposed rule.

Employers beware - armed with the ADAAA, the EEOC has already stepped up its campaign against disability bias.

Monday, January 4, 2010

New DOL efforts aimed at addressing employment of Native Americans

The Obama administration is making noticeable efforts to address the employment concerns specific to Native Americans – an all-too-often overlooked group of workers. On December 18, 2009, the Department of Labor posted the first edition of its bimonthly Native American Newsletter. Among other actions, the newsletter reported that the department hosted, in advance of the White House Tribal Nations Conference on November 5th, a meeting with more than two hundred tribal leaders from across the country. Attendees at the meeting included Secretary of Labor Hilda L. Solis, Deputy Secretary Seth Harris, OFCCP Director Patricia Shiu, ETA Assistant Secretary Jane Oates, and VETS Assistant Secretary Ray Jefferson. The agency heads highlighted programs within the department that are focused exclusively on tribes, including the OFCCP’s TERO program and ETA’s Workforce Investment Act grant program for American Indians and Alaska Natives. Secretary Solis also told the gathering that she will be touring tribal lands in the upcoming year to gain first-hand insight into enhancing workforce and economic development.

Tribal employment rights forum. On December 10, OFCCP Director Shiu joined in a forum at the Council for Tribal Employment Rights' (CTER) 2009 Tribal Employment Law & Legal Updates Conference in Las Vegas. At the forum, Shiu discussed the OFCCP's role in Secretary Solis' stated goal of "good jobs for everyone" and the new, refocused agenda for the OFCCP with legal experts and resource professionals from the private, tribal and public sectors. In addition, OFCCP Pacific Regional Director William Smitherman signed a Memorandum of Understanding (MOU) designed to promote a mutually beneficial working relationship between the CTER Pacific Northwest Region and the OFCCP. The ultimate goal of the MOU is to improve the services both agencies provide to the public, especially the Indian community.

Special Assistant for Indian Affairs. The newsletter also reports that Secretary Solis has appointed Nicole Willis to the newly created position of "Special Assistant to the Secretary [of Labor] for Indian Affairs." Willis (Cayuse, Nez Perce, Yakama, Oglala Lakota) worked for the Obama campaign as the First Americans Vote Deputy Director. She later joined the Presidential Inaugural Committee in its political office. In addition to her work with the Obama Administration, Willis has spent time working with her own tribe as well as at a small law firm specializing in Indian law.

Implementation of Clinton’s executive order on working with tribal governments. The Department of Labor also scheduled three consultation sessions, currently ongoing, to develop – in coordination with tribal governments – a plan of action to comply with President Obama's November 5, 2009 executive memorandum directing federal agencies to conduct activities designed to result in complete and consistent implementation of President Clinton's November 6, 2000 Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The goal of the sessions is for Labor Department officials to seek best practices from tribal leaders to ensure tribes are engaged at each step when the department initiates, develops and implements policies with tribal implications. The first session was held on December 14 in Washington, D.C. Upcoming session dates and locations include January 5, 2010, in Minneapolis, Minnesota and January 12, 2010, in Phoenix, Arizona.

Given that the unemployment rate for American Indians/Alaska Natives is notably higher than the rate for the general population, both government and private efforts to enhance employment opportunities for Native Americans should be applauded.