At least in the private sector--membership is at its lowest in terms of numbers since 1950.
But public sector unions, along with their almost unanimous Democrat party votes, are going strong--they now have more members than their private sector counterparts.
Wednesday, January 23, 2013
Tuesday, January 22, 2013
Contracts, Promises, and Enforceable Agreements in Illinois
Think your Illinois employee handbook disclaimer language protects you from Illinois state wage claims? Think again.
The issue arose in this recent Illinois federal court decision --one of the most confusing opinions I ever read coming out of a federal court. Unfortunately for employers, its confusing conceptual analysis conceals a holding that results in virtually unavoidable coverage for employers under Illinois’ Wage Payment and Collection Act (“IWPCA”).
The case at issue is a relatively straightforward failure to pay wages claim on behalf of a class of cable TV installers. They alleged that their employer failed to compensate them for pre-shift work, post-shift work, and work during meal breaks. The employees allege that the company violated the Fair Labor Standards Act, the Illinois Minimum Wage Law, and the IWCPA as a result. The IWPCA requires employers to pay all wages earned to employees, where wages are defined to employees as compensation owed pursuant to “an employment contract or agreement between the two parties.” In other words, for there to be a claim under the IWPCA, the plaintiff must allege that wages were due under the terms of an employment contract or agreement.
The company defended the IWPCA claim by moving to dismiss it, noting that the employees were "at-will", and that there was no written or oral contract between them and the company.
The employees claimed that the employer failed to pay them overtime, and that this was a violation of an "agreement" that was documented by statements in the employee handbook describing its overtime policy. The employees also cited company statements in parallel litigation noting that the handbook required the employer to pay employees for all time worked, as well as company documents describing its overtime policy and some other unspecified statements by employer management with respect to its obligation to pay overtime.
That the company would make such statements in its internal documents is hardly surprising – the Fair Labor Standards Act requires an employer to pay overtime. As an initial matter, I am wondering whether the employer’s attorneys raised a preemption argument that this type of a IWPCA claim was in fact preempted by, or at least totally duplicative of, the Fair Labor Standards Act claim in the case. Of course, the FLSA does not prohibits states from enacting their own minimum wage requirements, but I have some difficulty in thinking that this particular claim is not treading heavily on FLSA territory.
No matter--that was hardly the most confusing aspect of this case. The employer initially try to argue that it did not have a contract or agreement with these employees based on its handbook, because like most employers, the company expressly declaimed that its handbook could create a contract. This has been enough to void IWPCA claims with the Illinois federal court in the past, but not now. The judge in this particular case seized on the “agreement” term of the IWPCA and determined that an agreement to pay is different from a promise to pay, which in turn is different than a contract to pay.
Relying on some fairly sloppy language in an Illinois state proceeding, the federal judge held that parties can enter into an agreement without the formalities and accompanying legal protections of a contract. This appears to me to be a distinction without a difference – the legal protections of a contract are that its terms can be enforced; the judge was unclear as to what lesser protections attached to an agreement. The court determined that an enforceable agreement requires only a mutual “agreement” to an employer's policies and the obligations contain therein. This agreement effectively becomes an enforceable contract under the IWPCA. But the judge reemphasized at several places in his opinion that this was not a contract or even a promise, but merely an “agreement.”
The reader at this point is likely as confused as I was when I read the opinion. Further clouding the waters, the court noted that Illinois courts generally treat at-will employment relationships as contractual in nature with respect to wages, benefits, duties, and working conditions. Really? I have yet to see a case brought in Illinois by a plaintiff whose at-will job description was changed, who was then successfully able to sue for breach of contract. But that’s another blog entry, for some other time.
The end result of this holding is that employers are locked into coverage for IWPCA claims as long as they advise as their employees (and the statute requires them to do so) of the rate of pay and time and place of employment. Employers should understand that the requirement for an agreement under the statute does not require anything other than the parties having a mutual understanding of wage rates and time and place of employment. That’s enough to form a binding and enforceable “agreement” here in Illinois.
The issue arose in this recent Illinois federal court decision --one of the most confusing opinions I ever read coming out of a federal court. Unfortunately for employers, its confusing conceptual analysis conceals a holding that results in virtually unavoidable coverage for employers under Illinois’ Wage Payment and Collection Act (“IWPCA”).
The case at issue is a relatively straightforward failure to pay wages claim on behalf of a class of cable TV installers. They alleged that their employer failed to compensate them for pre-shift work, post-shift work, and work during meal breaks. The employees allege that the company violated the Fair Labor Standards Act, the Illinois Minimum Wage Law, and the IWCPA as a result. The IWPCA requires employers to pay all wages earned to employees, where wages are defined to employees as compensation owed pursuant to “an employment contract or agreement between the two parties.” In other words, for there to be a claim under the IWPCA, the plaintiff must allege that wages were due under the terms of an employment contract or agreement.
The company defended the IWPCA claim by moving to dismiss it, noting that the employees were "at-will", and that there was no written or oral contract between them and the company.
The employees claimed that the employer failed to pay them overtime, and that this was a violation of an "agreement" that was documented by statements in the employee handbook describing its overtime policy. The employees also cited company statements in parallel litigation noting that the handbook required the employer to pay employees for all time worked, as well as company documents describing its overtime policy and some other unspecified statements by employer management with respect to its obligation to pay overtime.
That the company would make such statements in its internal documents is hardly surprising – the Fair Labor Standards Act requires an employer to pay overtime. As an initial matter, I am wondering whether the employer’s attorneys raised a preemption argument that this type of a IWPCA claim was in fact preempted by, or at least totally duplicative of, the Fair Labor Standards Act claim in the case. Of course, the FLSA does not prohibits states from enacting their own minimum wage requirements, but I have some difficulty in thinking that this particular claim is not treading heavily on FLSA territory.
No matter--that was hardly the most confusing aspect of this case. The employer initially try to argue that it did not have a contract or agreement with these employees based on its handbook, because like most employers, the company expressly declaimed that its handbook could create a contract. This has been enough to void IWPCA claims with the Illinois federal court in the past, but not now. The judge in this particular case seized on the “agreement” term of the IWPCA and determined that an agreement to pay is different from a promise to pay, which in turn is different than a contract to pay.
Relying on some fairly sloppy language in an Illinois state proceeding, the federal judge held that parties can enter into an agreement without the formalities and accompanying legal protections of a contract. This appears to me to be a distinction without a difference – the legal protections of a contract are that its terms can be enforced; the judge was unclear as to what lesser protections attached to an agreement. The court determined that an enforceable agreement requires only a mutual “agreement” to an employer's policies and the obligations contain therein. This agreement effectively becomes an enforceable contract under the IWPCA. But the judge reemphasized at several places in his opinion that this was not a contract or even a promise, but merely an “agreement.”
The reader at this point is likely as confused as I was when I read the opinion. Further clouding the waters, the court noted that Illinois courts generally treat at-will employment relationships as contractual in nature with respect to wages, benefits, duties, and working conditions. Really? I have yet to see a case brought in Illinois by a plaintiff whose at-will job description was changed, who was then successfully able to sue for breach of contract. But that’s another blog entry, for some other time.
The end result of this holding is that employers are locked into coverage for IWPCA claims as long as they advise as their employees (and the statute requires them to do so) of the rate of pay and time and place of employment. Employers should understand that the requirement for an agreement under the statute does not require anything other than the parties having a mutual understanding of wage rates and time and place of employment. That’s enough to form a binding and enforceable “agreement” here in Illinois.
They Need Some Serious Management Training in China
The people in charge here sound like junior high vice-principals. Two minutes for a bathroom break? Where is the AFL-CIO?
Oh, yeah, I forgot. The PRC is a dictatorship. But it won't be for long if it keeps putting the lid (or closing the toilet seat cover) on these types of problems in the economy.
Oh, yeah, I forgot. The PRC is a dictatorship. But it won't be for long if it keeps putting the lid (or closing the toilet seat cover) on these types of problems in the economy.
Monday, January 21, 2013
Work for a Male CEO?
Keep an eye on your paycheck when he starts having kids.
At a recent session at the American Economic Association, some members presented a paper indicating that the gender of a male CEO’s children is linked to the salary of his own employees.
Haven gotten your attention, let me give you the data. When a male CEO has a baby, his worker’s salaries drop an average of .2% per year. If it’s a boy, the drop is .4%. But if the first child is a daughter, employee wages actually go up and, surprisingly, female employees get a larger boost, with their salary tending to grow by 1.1%, compared with a .6% gain for male employees.
It gets more serendipical. In general, female workers do better when a male CEO has children, regardless of the child’s gender or birth order. When a male executive has a son, female employees' salaries shrink .2%, but their male counterparts drop .5%. When a son is a first born to a male CEO, female salaries actually go up .8%.
Why? The paper postulates a few explanations: becoming a father causes a male CEO to look favorably toward women generally (there is previous research to show that a man’s esteem for his wife rises after childbirth, and there may be some type of halo effect for female subordinates) or perhaps it's just that men start thinking more about other people’s well being after they have a daughter. Whatever the linkage, the research is based on a study of CEOs in Denmark, so there may be some old-world, Hamlet stuff playing out here, as well. But it wouldn't hurt to take extra care with that baby shower gift, just to mitigate any possible paycheck damage.
At a recent session at the American Economic Association, some members presented a paper indicating that the gender of a male CEO’s children is linked to the salary of his own employees.
Haven gotten your attention, let me give you the data. When a male CEO has a baby, his worker’s salaries drop an average of .2% per year. If it’s a boy, the drop is .4%. But if the first child is a daughter, employee wages actually go up and, surprisingly, female employees get a larger boost, with their salary tending to grow by 1.1%, compared with a .6% gain for male employees.
It gets more serendipical. In general, female workers do better when a male CEO has children, regardless of the child’s gender or birth order. When a male executive has a son, female employees' salaries shrink .2%, but their male counterparts drop .5%. When a son is a first born to a male CEO, female salaries actually go up .8%.
Why? The paper postulates a few explanations: becoming a father causes a male CEO to look favorably toward women generally (there is previous research to show that a man’s esteem for his wife rises after childbirth, and there may be some type of halo effect for female subordinates) or perhaps it's just that men start thinking more about other people’s well being after they have a daughter. Whatever the linkage, the research is based on a study of CEOs in Denmark, so there may be some old-world, Hamlet stuff playing out here, as well. But it wouldn't hurt to take extra care with that baby shower gift, just to mitigate any possible paycheck damage.
Friday, January 18, 2013
The Continuing Regulatory Attack on an Employer's Ability to Conduct Internal Investigations
As I've commented before, federal employment and labor regulatory agencies have been working overtime in the last several years to limit the rights of employers in a variety of settings, and perhaps in no area more than the conduct of internal investigations.
In the latest attack on an employer’s ability to run internal investigations as it sees fit, the NLRB overturned decades of precedent and now requires employers to provide unions with confidential witness statements taken during the course of a disciplinary investigation. Of course, the Obama Board members are fully aware of the chilling affect their decision will have on an employer’s ability to find out what happened in policing its own workplace. In particular, in grievance arbitrations (which is what this decision pertains to), pre-hearing production of witness statements is likely to diminish rather than bolster the integrity of the grievance and arbitration process because of the potential for witness coercion and intimidation by union co-workers. Moreover, once witnesses being interviewed by the employer understand that the employer will be required to provide their names and statements to the union prior to the hearing, it would not be unusual for witnesses to simply to refuse to make such a statement or to talk to the employer.
The danger of witness intimidation or coercion is not fanciful --- in fact, the Board has long protected statements from witnesses that it collects in an unfair labor practice proceedings, shielding those statements from the employer until the witness actually testifies. Why this same protection should not be extended to employers' witnesses at grievance proceedings is unclear from the Board’s opinion.
Nevertheless, union employers seeking to arbitrate grievance proceedings must now factor into their process that they cannot guarantee witnesses confidentiality prior to the hearing.
The Board’s decision makes it much more difficult for employers now charged with protecting employees and avoiding liability by maintaining workplace safety and identifying and addressing workplace violence, bullying, or sexual or racial harassment. Revealing witnesses' names and statements to co-workers will likely reduce candid, truthful statements from potential witnesses. Coupled with EEOC’s determination in that a blanket policy prohibiting witnesses from talking to other employees during the pendency of an investigation is per se retaliatory, this NLRB decision further erodes an employer’s ability to talk frankly with its work force to ferret out and correct employee misconduct.
UPDATE: This decision, along with numerous others, apparently has now been invalidated (pending appeal) by the DC Court of Appeals opinion referenced here.
In the latest attack on an employer’s ability to run internal investigations as it sees fit, the NLRB overturned decades of precedent and now requires employers to provide unions with confidential witness statements taken during the course of a disciplinary investigation. Of course, the Obama Board members are fully aware of the chilling affect their decision will have on an employer’s ability to find out what happened in policing its own workplace. In particular, in grievance arbitrations (which is what this decision pertains to), pre-hearing production of witness statements is likely to diminish rather than bolster the integrity of the grievance and arbitration process because of the potential for witness coercion and intimidation by union co-workers. Moreover, once witnesses being interviewed by the employer understand that the employer will be required to provide their names and statements to the union prior to the hearing, it would not be unusual for witnesses to simply to refuse to make such a statement or to talk to the employer.
The danger of witness intimidation or coercion is not fanciful --- in fact, the Board has long protected statements from witnesses that it collects in an unfair labor practice proceedings, shielding those statements from the employer until the witness actually testifies. Why this same protection should not be extended to employers' witnesses at grievance proceedings is unclear from the Board’s opinion.
Nevertheless, union employers seeking to arbitrate grievance proceedings must now factor into their process that they cannot guarantee witnesses confidentiality prior to the hearing.
The Board’s decision makes it much more difficult for employers now charged with protecting employees and avoiding liability by maintaining workplace safety and identifying and addressing workplace violence, bullying, or sexual or racial harassment. Revealing witnesses' names and statements to co-workers will likely reduce candid, truthful statements from potential witnesses. Coupled with EEOC’s determination in that a blanket policy prohibiting witnesses from talking to other employees during the pendency of an investigation is per se retaliatory, this NLRB decision further erodes an employer’s ability to talk frankly with its work force to ferret out and correct employee misconduct.
UPDATE: This decision, along with numerous others, apparently has now been invalidated (pending appeal) by the DC Court of Appeals opinion referenced here.
The Social Media Evidentiary Goldmine
Federal courts continue to open the door to mandatory disclosure of social media account information and content by litigants. The most recent example comes out of the Eastern District of New York, where the court found that publicly posted and available Facebook photographs and comments provide useful and admissible evidence of a person’s mental and emotional state, especially in a case where the plaintiff is claiming mental anguish resulting from an alleged episode of sexual harassment by employer.
That’s not necessarily news. What I found particularly interesting is that the Court noted that even if the Plaintiff used privacy settings allowing only her friends on Facebook to see postings, she had no justifiable expectation that her friends would keep her information to themselves. In other words, any postings on Facebook that are seen by others are fair game for discovery and review. This would include statements regarding an individual’s social activities, as well as other postings that might provide information regarding potential witnesses. Accordingly, the court ordered the plaintiff to disclose any social media communications or photographs that “reveal, refer, or relate to any emotion, feeling, or mental state; and that reveal, refer, or relate to events that could reasonably be expected to produce significant emotion, feeling, or mental state.”
That is an exceedingly broad disclosure. To make sure its ruling was clear, the court also ordered photographs uploaded to Facebook by the plaintiff and other third parties to be produced because they may reveal a claimant’s emotional or mental status.
This case and its rationale could open the doors to discovery of a lot of information that were previously closed. Normally, defendant employers could not get this kind of a look at the private musings of individuals and their friends, unless there was some separate indication that discoverable information was there. By acknowledging that Facebook contains snapshots of an individual’s current emotional state, the court has given employment defendants a valuable tool in assessing not only damages, but perhaps motivation and intent in employment cases.
That’s not necessarily news. What I found particularly interesting is that the Court noted that even if the Plaintiff used privacy settings allowing only her friends on Facebook to see postings, she had no justifiable expectation that her friends would keep her information to themselves. In other words, any postings on Facebook that are seen by others are fair game for discovery and review. This would include statements regarding an individual’s social activities, as well as other postings that might provide information regarding potential witnesses. Accordingly, the court ordered the plaintiff to disclose any social media communications or photographs that “reveal, refer, or relate to any emotion, feeling, or mental state; and that reveal, refer, or relate to events that could reasonably be expected to produce significant emotion, feeling, or mental state.”
That is an exceedingly broad disclosure. To make sure its ruling was clear, the court also ordered photographs uploaded to Facebook by the plaintiff and other third parties to be produced because they may reveal a claimant’s emotional or mental status.
This case and its rationale could open the doors to discovery of a lot of information that were previously closed. Normally, defendant employers could not get this kind of a look at the private musings of individuals and their friends, unless there was some separate indication that discoverable information was there. By acknowledging that Facebook contains snapshots of an individual’s current emotional state, the court has given employment defendants a valuable tool in assessing not only damages, but perhaps motivation and intent in employment cases.
A Badly Managed Case From Start to Finish
It's hard to imagine a personnel matter as significant to the NFL as Bountygate being managed as badly as it was. I know the League has bunches of very expensive lawyers both on its staff and at its beck and call at its outside counsel firm in Washington, DC. I am also reasonably sure that whatever advice these people gave, League management either ignored it, or only followed it in part. I’m sure of that because the result of the this process was so garbled that it's virtually impossible to draw any meaningful conclusions as to exactly what conduct violated what provision of the NFL Collective Bargaining Agreement.
I am not going to recap the allegations from the NFL, except to say that apparently the League had statements from at least one coach indicating that bounties were being offered by coaches and players for hard hits out on the playing field. As far as I know, there is not a shred of evidence that these hard hits resulted in anybody being injured, or even resulted in a greater level of penalties for the teams involved. Armed with this revelation, League investigators then set out to try to identify with sufficient specificity individual players who could be disciplined for engaging in bounty hunter conduct.
Ultimately, the League settled on four players from the New Orleans Saints, most of whom had left the team by the time the League penalties were put in place. One of those players, Jonathan Vilma, was particularly vilified as someone who not only accepted bounty money but offered it to his teammates for knocking out opposing players. Vilma promptly filed a defamation lawsuit against the League, and over the course of that litigation, plus the ineptly handled dispensation of League penalties, it became apparent that whatever the NFL thought it had, the evidence was not particularly overwhelming that a bounty system was even operating at the Saints.
After the arbitration panel overturned Commissioner Goodell’s initial round of discipline (finding not that he was too harsh, but rather, too lenient because he had not considered all the potential Collective Bargaining Agreement violations inherent in the alleged conduct), and Goodell reimposed his original punishments, a former commissioner and Goodell’s mentor, Paul Tagliabue, vacated all of the penalties for the players.
So whatever the League was ultimately trying to achieve here (and I do not for a minute believe that Tagliabue made his decision without consulting with NFL officials), it ultimately accomplished nothing except terminating two coaches from their position s for a year, defaming the game as an exercise in brute savagery, and demonstrating the inability of the League to perform complicated investigations without stepping all over itself.
Not that the players did much better – Vilma’s defamation lawsuit, which promised to open up some real evidence about exactly what the process was at the League on this matter, has now been dismissed. Whether that is the actual end of Bountygate fallout will probably not be known until sometime next season after the disgraced coaches have been rehired and any appellate options have been exhausted. But this has been nothing but a black eye for the NFL and its management as far as I am concerned. I cannot think of a single one of my clients that would have allowed such a sloppy investigative process, and such poor internal review of the legal options available to the company.
UPDATE 1: Sean Payton is back in football. And just before Goodell has to show up in New Orleans for the Super Bowl. What a coinky-dink.
I am not going to recap the allegations from the NFL, except to say that apparently the League had statements from at least one coach indicating that bounties were being offered by coaches and players for hard hits out on the playing field. As far as I know, there is not a shred of evidence that these hard hits resulted in anybody being injured, or even resulted in a greater level of penalties for the teams involved. Armed with this revelation, League investigators then set out to try to identify with sufficient specificity individual players who could be disciplined for engaging in bounty hunter conduct.
Ultimately, the League settled on four players from the New Orleans Saints, most of whom had left the team by the time the League penalties were put in place. One of those players, Jonathan Vilma, was particularly vilified as someone who not only accepted bounty money but offered it to his teammates for knocking out opposing players. Vilma promptly filed a defamation lawsuit against the League, and over the course of that litigation, plus the ineptly handled dispensation of League penalties, it became apparent that whatever the NFL thought it had, the evidence was not particularly overwhelming that a bounty system was even operating at the Saints.
After the arbitration panel overturned Commissioner Goodell’s initial round of discipline (finding not that he was too harsh, but rather, too lenient because he had not considered all the potential Collective Bargaining Agreement violations inherent in the alleged conduct), and Goodell reimposed his original punishments, a former commissioner and Goodell’s mentor, Paul Tagliabue, vacated all of the penalties for the players.
So whatever the League was ultimately trying to achieve here (and I do not for a minute believe that Tagliabue made his decision without consulting with NFL officials), it ultimately accomplished nothing except terminating two coaches from their position s for a year, defaming the game as an exercise in brute savagery, and demonstrating the inability of the League to perform complicated investigations without stepping all over itself.
Not that the players did much better – Vilma’s defamation lawsuit, which promised to open up some real evidence about exactly what the process was at the League on this matter, has now been dismissed. Whether that is the actual end of Bountygate fallout will probably not be known until sometime next season after the disgraced coaches have been rehired and any appellate options have been exhausted. But this has been nothing but a black eye for the NFL and its management as far as I am concerned. I cannot think of a single one of my clients that would have allowed such a sloppy investigative process, and such poor internal review of the legal options available to the company.
UPDATE 1: Sean Payton is back in football. And just before Goodell has to show up in New Orleans for the Super Bowl. What a coinky-dink.
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