March 24th, 2015 | Laura Clawson
Nursing is an occupation massively dominated by women. But the small fraction of nurses who are men earn substantially more than the women
, according to an analysis of two large data sets:
Every year, each of the data sets found men earned more than women; the unadjusted pay gap ranged from $10,243 to $11,306 in one survey and from $9,163 to $9,961 in the other.There was a gap for hospital nurses, $3,783, and an even bigger one, $7,678, for nurses in outpatient settings.
Men out-earned women in every specialty except orthopedics, with the gap ranging from $3,792 in chronic care to $17,290 for nurse anesthetists.
Some of the usual possible explanations for how it’s totally not sexism apply, except that those explanations themselves typically involve some form of sexism, if not direct wage discrimination. So, yes, maybe women are more likely to work part-time (because they’re doing the work of caring for families that men don’t bother with).But given pay differentials this pervasive within one occupation (so we know it’s not that women make less because men are on Wall Street and women are secretaries) and across specialties within that occupation, a few of the “it’s not sexism because it’s really about women’s choices, which I am pretending are not constrained by sexism” excuses for the gender pay gap are eliminated. Which makes it just one more big glaring data point on the mile-long list of data points showing that women are systematically underpaid (or men are systematically overpaid) throughout the American economy.
This blog originally appeared on dailykos.com on March 24, 2015. Reprinted with permission.
About the Author: Laura Clawson is Daily Kos contributing editor since December 2006. Labor editor since 2011. Laura at Daily Kos
March 24th, 2015 | Anne Richardson
The massive push toward subcontracting and supply chains I wrote about in my prior post didn’t happen overnight, and it certainly won’t be fixed overnight either. There are many pieces to this puzzle, all in the service of one big overarching principle: Lead companies must take their fair share of responsibility for the pain and misery that is generated when they squeeze too much from their suppliers and subcontractors. Here are some of the pieces:
1. Challenge Payroll Fraud. What used to be called “misclassification” of employees as independent contractors is really the practice of defrauding employees out of social security, overtime, worker’s compensation, health and safety protections, family and medical leave, unemployment insurance, protections against discrimination, and the right to bargain collectively, among other things. In addition to losing these protections, employees who become “independent contractors” have to cover their own costs.
Cases challenging bogus “independent contractor” status have been multiplying as more and more businesses adopt this practice in order to cut their payroll costs. Last August, the Ninth Circuit held that thousands of FedEx truck drivers were employees, even though FedEx called them independent contractors. Recently, the judge in a misclassification case against Uber ruled that a jury should decide whether the drivers employees of the company, and noted that “many of the factors in that test appear outmoded” in the “context of the new economy.”
Former Secretary of Labor Robert Reich has proposed that, instead of waiting for the courts to decide these cases one-by-one, the IRS and Department of Labor adopt a new, simpler test: “Any corporation that accounts for at least 80 percent or more of the pay someone gets, or receives from that worker at least 20 percent of his or her earnings, should be presumed to be that person’s employer.”
2. Treat Lead Companies as Joint Employers. Every federal circuit and many state courts have their own version of the “joint employer” test to determine when one company should be liable for the wage and hour violations of another – including subcontractors or franchisees. Some of these tests are being re-examined to take into account the ways in which “lead companies” maintain control.
In December 2014 the National Labor Relations Board issued complaints naming McDonald’s Corp. as a joint employer of workers at its franchises. In another case, theNLRB has proposed a “totality of the circumstances” test that would impose joint employer status on any company that wields sufficient influence over the working conditions of the other company’s employees, to make meaningful bargaining impossible in its absence. A similar rule in state and federal courts would recognize the significant power and control that is exerted from the top.
3. Enforce Supply Chain Liability. Regulators and legislators are also coming to recognize the need to affix responsibility at the top of an industry. California Labor Code Section 2810.3, which became effective January 1, 2015, provides that an employer must share responsibility for wages, taxes, and workers compensation with the middlemen who provide the labor to the employer. In a similar vein, a provision of the Fair Labor Standards Act known as the “hot goods” provision, prohibits the selling or transporting in commerce any goods produced in violation of the FLSA’s wage and overtime provisions.
Decent wages and safe working conditions are not just an idealistic goal. The lack of a healthy middle class hurts all of us. Public health researcher Richard Wilkinson has reported that the average well-being of modern societies — including health, lifespan, literacy levels, crime levels, and so on — is no longer correlated with national income or economic growth, but with the extent of income inequality. The Center for American Progress has just issued an exhaustive report on “inclusive prosperity,” concluding that nations succeed when their middle class is secure in the expectation that those willing to work are able to work and that standards of living will increase.
Clearly, more work needs to be done. It is time to invest in living wages and sustainable employment, instead of pioneering ever more ways to create dead-end jobs that benefit only those at the very top.
This article originally appeared in CELAVOICE.ORG on March 23, 2015. Reprinted with permission.
About the Author: Anne Richardson is the Associate Director of Public Counsel Opportunity Under Law, a project aimed at eliminating economic injustice on behalf of underrepresented workers, students, and families throughout California and nationwide. Previously she was a partner at Hadsell Stormer Richardson & Renick representing plaintiffs in all varieties of employment discrimination and civil rights matters for over twenty years. A graduate of Stanford Law School, she has been named to the Top 100 Lawyers in Southern California and has received numerous honors for her work.
March 24th, 2015 | Anne Richardson
A fundamental change has taken place in the American workplace, and we are only now beginning to realize just how monumental it is.
A new book, The Fissured Workplace: Why Work Became So Bad for So Many and What Can be Done About It, by David Weil, makes the case that in every corner of the employment world, companies are increasingly shedding their employees, while maintaining control over the ultimate product or services to be provided under the “lead” company’s logo and brand. Beginning with peripheral services such as janitorial and security, and gradually including ever more central services, such as receptionists, truckers, and even lawyers, large employers are deliberately subcontracting out their work.
Here’s how it works: A member of a loading dock crew is paid by one company, which is in turn compensated by another company, for the number of trucks loaded. That company, Schneider Logistics, manages distribution centers for Wal-Mart. Wal-Mart sets the price, time requirements, and performance standards that are followed by Schneider, which in turn uses those standards to structure its contracts with its subcontractors.
Why do they do it? Employers can reduce costs by pushing many of the responsibilities connected to being the employer of record down the chain to someone else. Yet by controlling the quality and price of their goods and services, they do not lose their reputations and the goodwill of their brands.
But should lead companies be allowed to have it both ways? Should they be permitted to control the production, delivery, and cost of goods and services, without sustaining any liability for the manner in which their contractors provide them? To take a real world example, if a company like Wal-Mart sets a price that is so low that the only way for suppliers to meet it is by underpaying their employees, isn’t that really Wal-Mart’s responsibility?
This new “fissuring” model has drastic consequences for employees who have been forced to trade in traditional jobs at a lead company, with benefits and a pension plan, for part-time temporary positions with no benefits. Pushing responsibilities down the chain often means that the direct employer is less well capitalized and less capable of maintaining wage and hour standards, or enforcing health and safety rules. Since the company on top sets the price, often as low as the market will possibly bear, the company on the bottom is forced to cut to the bone. Many of the subcontractors are small businesses that go under, and then reemerge as a different company, which results in there being no responsible party to foot the bill when legitimate claims are made.
Fissuring also negatively affects the health and safety of the broader public. Weil argues that a significant contributing factor of the devastating environmental oil spill caused by the BP Deepwater Horizon accident in 2009 was the extent of BP’s use of contractors. In order to shield itself from liability by maintaining less control over its subcontractors, BP did not sufficiently oversee the safety component of the operation. Other authors have similarly noted the increase of injuries and fatalities that have accompanied the rise of contracting in, for example, coal mining, construction, and trucking, among others.
To be sure, there are some who benefit from the practice. The third consequence of “fissuring” is to shift the surplus generated by businesses away from the workforce and to investors. This helps to explain why the operative trend in the American workforce is the widening income gap between the rich and the working poor. The gap between the wealthy and the poor is at a hundred year high. For example, in 1965, the average CEO made about 20 times what the average worker made at any given company. By 2013, the ratio had grown to approximately 331 to 1. What’s fascinating is that a recent study found that not only did people worldwide grossly underestimate the ratio of CEO to worker pay, but that people across all backgrounds preferred a smaller pay gap.
Weil, who was appointed the Administrator of the Wage and Hour Division of the United States Department of Labor in May 2014, argues that since “[t]he modern employment relationship bears little resemblance to that assumed in our core workplace regulations,” laws and judicial decisions need to adapt current rules about workplaces to the realities of the modern world.
In every corner of the American workforce, the pressures to cut costs and improve the investor’s return have resulted in a worsened standard for the middle-class worker, as well as a worsened standard of health and safety. What can be done about it? Stay tuned for my next post.
March 20th, 2015 | Alan Pyke
Workers who get cheated out of their due pay in central Florida will have a much easier time recovering what they’re owed after Osceola County approved a tough new wage theft law, making it the latest in a string of local governments to take on increased responsibility for enforcing federal wage and hour laws.
Under the new rules, workers will be able to file cases with the county and employers who are accused of wage theft could end up having to repay triple the amount they stole from employees if they fight a case and lose. Workers in Miami-Dade County have so far recovered about $1.8 million since that wage theft law came online in late 2010.
Osceola’s law adds an important, tougher element to the basic model laid out in Miami-Dade. Companies that fight a wage theft claim and lose can have their business license revoked by the county.
Efforts to combat wage theft at the local level appear to be spreading, according to Tesedeye Gebreselassie of the National Employment Law Project (NELP). “It’s clear that existing laws and resources on fed state level are insufficient, and we’re starting to see more cities and counties take action in any way that they can,” she said. “There’s a growing trend to figure out what can be done on the local level now that everybody’s acknowledged that wage theft is a huge problem.” Propagating enforcement systems that work will be especially important if low-wage workers are to actually realize the economic benefits that should come from a rash of state and local minimum wage increases around the country, as the NELP argues in a new report.
There is no perfect deterrent, since a business owner willing to ignore wage laws in the first place is often going to choose to go out of business rather than dole out back pay. And the prevalence of low-wage, low-skill jobs in the American economy has helped create a sort of race to the ethical bottom among employers who are more interested in cutting corners than giving honest pay for honest work. As David Weil, the top federal official in charge of enforcing wage and hour laws for the Department of Labor, told the New York Times in 2014, “We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law.”
“I have a very close relative that had this happen to him,” Osceola County Commissioner Michael Harford (D) told ThinkProgress. “It was very difficult for him to understand how he was getting paid.” Harford gradually realized that wage theft was relatively common among his constituents, and helped push the law through this spring after voters elected four Democrats and one Republican to the commission last fall.
Harford’s reforms not only increase the consequences of wage theft for employers who get caught, but also make it easier for workers to find legal help. If the new adjudication process finds a company liable for wage theft, it must pay treble damages for the withheld pay and also cover the legal fees incurred by the workers who brought the allegation. “If we had more of an incentive for representation in these cases, we’d see hopefully the same effort to vindicate workers’ rights that we see to vindicate the rights of the injured in personal injury cases,” Rep. Alan Grayson (D) told ThinkProgress.
There’s no reason other localities can’t follow Osceola and Miami’s lead. Jeanette Smith, executive director of South Florida Interfaith Worker Justice and a key member of the coalition that researched the wage theft question for two years before bringing a legislative proposal in Miami-Dade, told ThinkProgress she thinks the model ought to be easily transferred even beyond the state line.
“I tell people not to just change the name on it, make sure it works,” Smith said. “But in general I think this kind of process is portable, as long as you’ve got a division of your government that can pick it up and administer it, and you have the political will, and frankly that you have responsible businesses that speak up.” Partly that’s because the laws don’t require business owners to comply with any new regulations and they don’t require local governments to hire new enforcement officers. “These ordinances do not put new regulations in place. Nothing at all. It’s simply offering a venue where the workers can go,” Smith said.
The real cutting edge of a law like Osceola’s comes well before a lawyer would ever get involved, in a pre-hearing process called conciliation. After a worker notifies the county of a wage theft allegation and provides evidence for the claim, the county contacts the employer and invites him to address the complaint voluntarily. Conciliation has produced a little over half of the $1.8 in recovered wages and damages under Miami-Dade County’s law and 53 percent of cases brought under the law were resolved at that early stage, according to Smith.
“There’s a big emphasis on conciliation, because the idea is that these are predominantly low-wage workers and they need to get their money right away. These are people who can’t go to court and wait all that time,” Smith said. By creating a two-stage process and giving employers immunity from the damages provision of the law as long as they resolve a legitimate wage violation in the conciliation stage, these laws give employers an incentive to be responsive to complaints. “There is gonna be that smaller group of completely unscrupulous employers that just completely disappear, often people who never even had a business license to start with,” Smith said. But even if workers for such employers never get made whole under this new process, the law still discourages willful violators from setting up shop in the area.
Wage theft steals more money from American workers each year than the combined haul from every robbery and heist nationwide. The term refers to violations of federal wage and hour protections, and that federal jurisdiction is part of the reason that local protections like the ones just passed in Osceola County are rare. Workers who think they’re being cheated by the boss can file a suit anywhere, regardless of local ordinances, and they have done so at a rapidly increasing clip in recent years. Workers have won court settlements from retail logistics firms, trucking companies, strip clubs, and fast food companies. They’ve also lost one significant case before the Supreme Court, though it only narrowly curtailed the types of employer policies that can be considered wage theft.
But going to court is expensive, in both dollars and time, and Osceola is the most recent place to erect a more worker-friendly system for addressing the complaints. Wage theft laws intended to help workers recoup wages without getting tied up in court have come into effect in Chicago, Houston, andColorado in recent years.
Lowering the local barriers to recovering stolen wages is a good start, Grayson said, but it does not address the various other ways in which workers have been pitted against one another by recent attacks on union solidarity on the job. “The right to organize has been frustrated and in many cases defeated by business groups. That’s left a disorganized low-wage labor base that can be exploited at will by unscrupulous employers, so the problem increases over time,” Grayson said. Right now, “crime does pay if you’re cheating your employees. And we have to stop that.”
This blog originally appeared in Thinkprogress.org on December 10, 2014. Reprinted with permission.
About the Author: Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites.
March 19th, 2015 | Mike Hall
A judge at the National Labor Relations Board (NLRB) yesterday found T-Mobile U.S. guilty of engaging in nationwide labor law violations against workers. The unprecedented ruling comes after a rare move last year by the NLRB consolidating multiple complaints against T-Mobile U.S. for illegal actions and policies in Albuquerque, N.M.; Wichita, Kan.; Charleston, S.C., and New York City.
At issue were illegal corporate nationwide policies that block workers from organizing or even talking to each other about problems at work. Workers throughout the T-Mobile U.S. system were subjected to and effectively silenced by these illegal policies; the judge’s order to rescind them covers 40,000 workers.
Communications Workers of America (CWA) President Larry Cohen said:
“This decision exposes the deliberate campaign by T-Mobile U.S. management to break the law systematically and on a nationwide scale, blocking workers from exercising their right to organize and bargain collectively. This behavior can only be changed by a nationwide remedy to restore workers’ rights. Deutsche Telekom, the principal owner of T-Mobile U.S., has claimed that its U.S. subsidiary follows the law. Now we have the official word: T-Mobile U.S. is a lawbreaker. Bonn, the headquarters of DT, no longer can hide behind the false statements made by T-Mobile U.S. executives. These behaviors would be almost unimaginable in Germany or any other democracy in the world.”
The decision by NLRB Judge Christine Dibble focused on T-Mobile U.S.’s illegal employment policies and restrictions that prohibited workers from discussing wages with each other or criticizing working conditions or seeking out assistance to blow the whistle on unlawful behavior.
The decision finds that the corporate policies “would chill employees in the exercise of their…rights” or would be construed “as restricting [an employee’s] rights to engage in protected concerted activities, including unionizing efforts.”
Judge Dibble found that T-Mobile U.S.’s Wage and Hour Complaint Procedure, for example, “tends to inhibit employees from banding together.” She writes that the corporate procedure’s requirement that an employee notify management of a wage issue first, “in combination with the threat of discipline for failing to adhere to the rule, would ‘reasonably tend to inhibit employees from bringing wage-related complaints to, and seeking redress from, entities other than the Respondent, and restrains the employees’…rights to engage in concerted activities for collective bargaining or other mutual aid or protection.”
Carolina Figueroa, a T-Mobile U.S. call center worker from Albuquerque, said:
“We are happy and relieved. We are finally being heard. My co-workers and I at T-Mobile U.S. will have the right to speak out against unfair treatment and should not be muzzled or retaliated against—and with today’s decision, the company has to declare this to all of its employees nationwide.”
This blog originally appeared in aflcio.org on March 19, 2015. Reprinted with permission.
About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journaland managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.
March 18th, 2015 | Rand Wilson
Viewpoint: A Smart Strategy to Defeat ‘Right to Work’
March 17, 2015 / Rand Wilson
Wisconsin is now the 25th state to adopt a so-called “right-to-work” law, which allows workers to benefit from collective bargaining without having to pay for it.
It joins Michigan and Indiana, which both adopted right to work in 2012. Similar initiatives, or variants, are spreading to Illinois, Kentucky, Maine, Missouri, New Hampshire, New Mexico, and West Virginia—and the National Right to Work Committee and the American Legislative Exchange Council probably have a well-developed list of additional targets.
Without aggressive action, the right-to-work tsunami will sweep more states. To defeat it, the first step is committing to fight back, rather than resigning ourselves to what some say is inevitable.
We’ll have to go beyond what we’ve mostly been saying so far, which is that right to work is “unfair” or “wrong.”
That argument certainly works for most union households and many of our community allies. But the real challenge is to convince a much broader public that a strong (and fairly-funded) labor movement is in their interest and worth preserving. Clearly most Americans aren’t yet convinced.
Many unions over the last few years have undertaken important campaigns along these lines. For example, teachers unions have positioned themselves as defenders of quality public education. Refinery workers have struck for public safety.
Nurses and health care unions have fought for safe staffing to improve the quality of care. And most notably, the Service Employees (SEIU) and others have waged the “Fight for $15” for fast food and other low-wage workers.
In its own way, each union is working hard to be a champion of the entire working class. Yet with the exception of SEIU’s Fight for $15, each is essentially focused on the issues of its core constituency at work. This still limits the public’s perception of labor.
Supporters of right to work cynically play on the resentment many workers feel about their declining standard of living. Absent a union contract, the vast majority have few, if any, ways to address it. To most, organizing looks impossible and politics looks broken.
Workers’ understandable frustration is fertile ground for the far right, which promises to improve the business climate and create more jobs by stripping union members of their power.
Thus, when we anticipate right to work’s next targets, the best defense should be a good offense—one that clearly positions labor as a force for the good of all workers.
‘Just Cause for All’
Here’s one approach that would put labor on the offensive: an initiative for a new law providing all workers with due process rights to challenge unjust discipline and discharge, “Just Cause for All.”
Such a law would take aim at the “at-will” employment standard covering most non-union workers in the U.S. At-will employees can be fired for any reason and at any time—without just cause.
While such a major expansion of workers’ rights as Just Cause for All would be unlikely to pass in most state legislatures—Montana did it in 1987, but it’s still the only one—it could become law in states that allow ballot initiatives.
A well-orchestrated attack on the at-will employment standard would force the extreme, anti-worker, and big business interests who back right to work to respond. If nothing else, imagine how competing initiatives would force a debate. On one side, extending due process protections and increased job security to all workers: a real right-to-work bill. On the other side, taking away fair share contributions for collective bargaining.
This strategy isn’t untested. When the Coors beer dynasty backed a right-to-work ballot initiative in Colorado in 2008, labor collected signatures for a counter-initiative, “Allowable Reasons for Employee Discharge or Suspension,” which would have overturned at-will employment. (Labor also supported a proposal that would have provided affordable health insurance to all employees and a measure to allow workers injured on the job to sue for damages in state courts.)
Fearing that the just cause proposal might pass, centrist business people offered a deal. In exchange for labor withdrawing its proposal, they provided financial support and manpower that helped labor defeat right to work in Colorado. (For more on this story, read “The 2008 Defeat of Right to Work in Colorado: Is it the End of Section 14(b)?” Raymond L. Hogler, Labor Law Journal, Spring 2009.)
While it’s unfortunate that the labor initiative didn’t go before Colorado voters, the result was still encouraging—and instructive. By championing the interests of all workers, labor split business and blunted the right-to-work effort.
To win back “fair-share” participation in the three new right-to-work states and stop further attacks, we’ll need well-planned campaigns that include grassroots mobilization, direct action, paid and earned media, and focused electoral work.
Just Cause for All campaigns should be part of the strategy. Even if we lose, campaigns for due process and job security for all will help shift the debate on right to work, leave the labor movement stronger—and make labor and its allies once again the champions of the “99%.”
About the Authoer: Rand Wilson is policy and communications director at SEIU Local 888 in Boston.
– See more at: http://www.labornotes.org/blogs/2015/03/viewpoint-smart-strategy-defeat-right-work#sthash.pYXbeTz1.dpuf
March 18th, 2015 | Eric Schneiderman
Posted on 05 March 2015.
It’s a good thing when we use real words to describe the truth. When bankers rip off people with mortgage scams, it’s robbery–even if they get away with it because we have a government unwillingness to jail them. And, once and a while, a politician gets it right.
Kudos to NY Attorney General Eric Schneiderman for calling the wage theft of fast food workers what it is. A crime. No, a crime wave:
At a press conference at his lower Manhattan office, Mr. Schneiderman, a Democrat, linked the recent decision against Ronald Johnson of New Majority Holdings, LLC—who a judge found had rounded down workers’ hours, paid below minimum wage and failed to reimburse upkeep costs of delivery vehicles—as part of a larger string of abuses his office has uncovered. The attorney general highlighted underpayment at 21 other fast food restaurants citywide—at franchises like Domino’s Pizza and McDonald’s—affecting 16,000 workers and for which has reaped $19 million in recovered wages.“There is an effort by thousands of businesses, unfortunately, to underpay workers what they are legally owed. And we have to go after them and treat it like a crime wave, which is what it is. It’s a crime wave. We’re talking about millions and millions, even hundreds of millions of dollars,” Mr. Schneiderman said. “If this money was just being stolen, by some organized gang of crooks, you bet everyone would know about it and be on it. This is something we treat just as seriously.”[emphasis added]
His point is that this goes way beyond one particular fine. It’s broad, it’s deep, it’s persistent.It’s a crime.
Maybe he needs to school the people at the Justice Department about what a crime is. And to call it like it is.
About the Author: Eric Schneiderman is a political/organizing/economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years; his goal is to find the “white spaces” that need filling, the places to make connections and create projects to enhance the great work many people do to advance a better world. He’s also publisher/editor of Working Life.
See more at: http://www.workinglife.org/the-bio-stuff/#sthash.zfgd8cpI.dpuf
March 16th, 2015 | Richard Seymour
Over the years, the U.S. Equal Employment Opportunity Commission has been routinely criticized by charging parties, plaintiffs’ attorneys, respondents, and attorneys for respondents, as to virtually every aspect of the Commission’s activities including the filing, investigation, and conciliation of charges, and the Commission’s litigation.
The courts have added their voices to the criticisms by charging parties and their counsel, with numerous courts coming to the rescue of charging parties by holding that the EEOC’s interim charge-processing steps are not jurisdictional prerequisites to a private suit and echoing the early words of the Fifth Circuit:
“Significantly, under EEOC regulations, a right to demand and receive such a notice accrues sixty days after the charge is filed regardless of any act or omission by the EEOC. Were this regulation not written, we would read it into the Act lest a claimant’s statutory right to sue in federal court become subject to such fortuitous variables as workload, mistakes, or possible lack of diligence of EEOC personnel.”
Beverly v. Lone Star Lead Const. Corp., 437 F.2d 1136, 1140 (5th Cir. 1971) (footnotes omitted). The period for requesting a notice of right to sue was later expanded, of course, to 180 days. 29 C.F.R. § 1628(a).
The courts have also echoed some of the concerns raised by respondents and their counsel, and have sometimes added teeth to the criticisms by sanctioning the EEOC for perceived failures in investigation, conciliation, and litigation. E.g., E.E.O.C. v. CRST Van Expedited, Inc., 2013 WL 3984478, 119 Fair Empl.Prac.Cas. (BNA) 739 (N.D.Iowa Aug. 1, 2013) (No. 07-CV-95-LRR), awarding $4,694,442.14 in defendant’s attorneys’ fees and costs against the EEOC for perceived failures of conciliation and for litigation missteps.
Some employers are using the courts’ criticisms in an effort to tie up the Commission’s enforcement efforts in red-tape preliminaries that could require more effort than the litigation they are trying to stave off. The Courts of Appeals are split as to whether respondents have an affirmative defense for the EEOC’s failure to conciliate reasonably, and the issue is now before the U.S. Supreme Court in Mach Mining, LLC, v. E.E.O.C., No. 13-1019 (scheduled for conference on June 19, 2014). Both sides have agreed that the Supreme Court should take the case and resolve this question, and we will shortly find out whether the Court will grant review. The Seventh Circuit had decided that courts could not enquire into the reasonableness of the EEOC’s conciliation efforts. E.E.O.C. v. Mach Mining, LLC, 738 F.3d 171 (7th Cir. 2013). The Commission’s response to the petition for certiorari, however, shows at pp. 3-4 the degree to which allowing such inquiries will stymie the EEOC’s enforcement efforts:
2. In 2008, a woman who had unsuccessfully applied for a mining position with petitioner filed a charge of unlawful employment discrimination with the Commission. . . . She contended that petitioner, which had never hired a woman for a mining position, refused to hire her based on her gender. . . . The Commission investigated the charge, found reasonable cause to believe petitioner had discriminated against a class of women who applied for mining-related jobs, and invited petitioner to conciliate. . . . From late 2010 to late 2011, the Commission attempted conciliation with petitioner, but no agreement was reached. . . .
The Commission then filed this lawsuit, contending that petitioner engaged in a pattern or practice of unlawful employment discrimination and used employment practices that had a disparate impact on female applicants. . . . In its answer, petitioner asserted a failure-to-conciliate affirmative defense, contending that the complaint should be dismissed because the Commission had failed to expend sufficient efforts on conciliation. . . . The Commission responded that Title VII includes no such failure-to-conciliate affirmative defense, and it moved for partial summary judgment on that basis. . . . In the meantime, petitioner submitted “extensive discovery requests”—including more than 600 requests for admissions of fact—that “s(ought) information about the EEOC’s investigation and conciliation efforts.” . . . . Petitioner also “slowed discovery on the merits” by objecting to the Commission’s merits-related discovery requests on “failure to conciliate” grounds. . . .
(Emphasis supplied.) The petition, response, and reply can all be downloaded fromhttp://www.scotusblog.com/case-files/cases/mach-mining-v-equal-employment-opportunity-commission/. (ScotusBlog, www.scotusblog.com, is an extraordinarily useful website.) The text of the response makes a compelling case why there is no judicially-enforceable duty to conciliate; a later blog posting will address that question.
In the face of all these criticisms, fair-minded persons need to pause and consider how all these perceived problems came to exist.
First, expectations for the EEOC have always been very high. The Fourth Circuit’s view of the “public avenger” role of the EEOC after the 1972 amendments to Title VII giving it the power to sue in its own name were echoed by many courts in more prosaic opinions. Here is how the Fourth Circuit put it:
“But, unlike the individual charging party, the EEOC, when it sued, did so ‘to vindicate the public interest’ as expressed in the Congressional purpose of eliminating employment discrimination as a national evil rather than for the redress of the strictly private interests of the complaining party. Because of this significant difference, the EEOC’s suit was ‘broader (in scope) than the interests of the charging parties. It follows that the standing of the EEOC to sue under Title VII cannot be controlled or determined by the standing of the charging party to sue, limited as he is in rights to the vindication of his own individual rights. To hold otherwise, as did the District Court, would be to continue treating the sole purpose of the Title to be the correction of individual wrongs rather than of public or ‘societal’ wrongs as well as to deny to the EEOC the right to be any more than a mere proxy for the charging party rather than what Congress by the Amendments of 1972 intended, i.e., the public avenger by civil suit of any discrimination uncovered in a valid investigation and subjected to conciliation under the Act. We find no warrant whatsoever for placing such limitation on the right or standing of the EEOC to bring suit; indeed, were such limitation to be imposed, it would be in our opinion a clear nullification of the legislative intent in enacting the Amendments of 1972. . . . “
Equal Employment Opportunity Commission v. General Electric Co., 532 F.2d 359, 373 (4th Cir. 1976) (footnotes omitted; emphasis supplied).
Second, the EEOC has always been starved for resources, and the starvation has become endemic:.
||EEOC Authorized Staff When He Took the Oath of Office
||EEOC Authorized Staff When He Left Office
||Reduction from January 1981: No.
||Reduction from January 1981: %
||January 1981: 3,696
||January 1989: 3,198
|George H.W. Bush
||January 1989: 3,198
||January 1993: 3,071
||January 1993: 3,071
||January 2001: 3,055
|George W. Bush
||January 2001: 3,055
||January 2009: 2,556
||January 2009: 2,556
||N.A. Currently 2,347
Source, EEOC Budget figures, http://www.eeoc.gov/eeoc/plan/budgetandstaffing.cfm, last visited June 8, 2014, with my calculations in the last two columns.
During this same time period, the EEOC has been given very substantial new responsibilities, including the Older Workers Benefit Protection Act of 1990, the Americans with Disabilities Act of 1990, and the Genetic Information Nondiscrimination Act of 2008.
Similarly, the EEOC’s web site shows that 93,727 charges were filed in FY 2013, compared with 72,302 in FY 1992, the earliest year with reported data. That is a 22.9% increase.
Moreover, during this period Congress has required the EEOC to devote a substantial part of its budget to help fund State and local fair employment practice agencies.
Third, the recent difficulties in financing government operations make realistic planning very difficult. Not only do agencies know whether the Office of Management and Budget will recommend budget figures for the next year comparable to those of the current year, the present dysfunction in Congress makes it impossible to tell what will be appropriated. There may be government-wide hiring freezes lasting for years. When those are lifted, agencies hire as many as possible, because they do not know when they will be able to hire again. Meanwhile, salaries and rents increase with inflation, and the training budget is among the first to be cut. The lack of professional training for attorneys, investigators, and others harms many aspects of the Commission’s operations.
Fourth, while many EEOC staff members are extremely well-skilled and dedicated, not all meet those criteria. The EEOC has never taken seriously the idea in the Civil Service Reform Act of 1978 that it should adopt truly objective and fair performance standards, train staff to meet those objective standards, and terminate staff who either cannot or will not come up to objective and fair performance standards. It has routinely refused to take action against unwilling or incompetent employees, and incoming Chairs have sometimes withdrawn pending disciplinary charges against large numbers of employees in a misguided effort to build good will, and an understandable but still mistaken effort to avoid the large amounts of management time that would have to be devoted to cleaning house.
Now consider: What private firm would have a chance of meeting its goals under these conditions: heavily increased workload, almost a 40% reduction in staff, little technology to make up the slack, no money for training, an inadequate effort to identify and get rid of poor performers, and the need to give a lot of discretion to untrained staff regardless of their performance?
It is close to a miracle that the EEOC can accomplish anything at all. Yet it has provided very useful guidance to employers, unions, and employees, and has recovered substantial amounts in resolutions of charges and in litigation.
When we criticize the agency, we need to be mindful of the difficulties under which it labors.
About the Author: Richard Seymour graduated from Harvard Law School in 1968, and has worked in civil rights and employee rights ever since. In the 36 years since leaving the U.S. Commission on Civil Rights in 1969, he have spent more than 90% of my time representing plaintiffs in class actions.
March 13th, 2015 | Susan Harley
The Seventh Amendment to the United States Constitution states, “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved …”
Even though we are all granted the right to a trial by jury in the U.S. Constitution, Big Banks and corporations regularly use fine print in contracts to trick consumers out of their right to a day in court. Forced arbitration means that if consumers are ripped off or otherwise harmed, they must use private arbitration proceedings to air their grievances.
If you’re already angry about forced arbitration and you want to do something to get these predatory terms out of financial products, skip to the end of this post for ways to get involved.
There’s plenty to be mad about. These expensive arbitration “tribunals” have no judge or jury. They are overseen by paid arbitration providers who are selected by the companies. Arbitration firms have a very good reason to guarantee repeat business for themselves by finding in favor of the corporations over the consumers. The findings of arbitration decisions are not public and the appeals process is very limited. Most likely, you will also be required to go to arbitration in another state!
If consumers were interested in choosing arbitration, they would enter into the decision after some harm has come to them. It would need to be an informed decision where they did so with a full understanding of the consequences of their choice to not go to court.
But that’s not how we’re all roped into signing (or even clicking) away our rights. It has been proven that consumers rarely understand that their contracts contain arbitration clauses and have little idea of the repercussions of having their complaints heard in a non-court venue.
And, even if you understood they were there and knew it meant you were losing your right to go to court, it’s not like your average adult can simply opt out of getting a checking account, taking out that student loan, or financing that car.
What about if those very same companies with arbitration clauses were systematically ripping off you and your fellow consumers – but only in small dollar amounts? The only way it makes sense for consumers to bring those cases is through class actions where those who have been harmed can band together to make a complaint about a company’s action. Makes sense, right? Except most arbitration clauses contain class action bans, which were unfortunately upheld by the U.S. Supreme Court in 2011. Now Big Banks basically have free rein to steal a few dollars here and there from all of their customers without worry of being held accountable.
Congress saw the unfairness of forced arbitration clauses and prohibited them in certain industries and in housing-lending contracts via the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Dodd-Frank tasked the Consumer Financial Protection Bureau (CFPB) — the brainchild of Elizabeth Warren — that was created by the same legislation with studying arbitration in all consumer financial contracts and determining whether consumers would be better served by prohibiting the practice.
The CFPB’s study is finally complete. It shows that consumers have little idea about arbitration clauses and how the fine print strips them of their constitutional right to their day in court. In fact, three out of four consumers surveyed as part of the study did not know whether they had an arbitration clause in their credit card agreements. And, of those who did have arbitration clauses, only seven percent understood that meant they had given up their right to their day in court.
Now it’s time for the public to get involved. Every person who’s even been steaming mad at Wall Street’s sticking it to the little guy and thinking they can weasel out of being held accountable needs to get involved.
Urge the CFPB to stand up to Big Banks and do the right thing. It’s certain that the U.S. Chamber of Commerce and its corporate cronies will do everything it can to keep unfair forced arbitration in consumer financial products, so we need as many people as possible to join this fight. There’s a whole toolbox of tactics we’d love to get you involved with, and it only depends on how much time you have to invest in protecting consumers.
Only have a second or two to take an online action? Easy!
What about a minute to share this social media meme? Great! While you’re at it, Tweet with the hashtags #CFPB and #ForcedArbitration.
If you have a lot to say on the subject and want to get your community fired up too, write a letter to the editor. We have ideas on what to say! There are even more ways to get involved. If you want to learn more, email: [email protected].
You could be part of scoring a major win for our country by reclaiming the Seventh Amendment. Americans, take back your day in court!
About the Author: Susan Harley is the deputy director of Public Citizen’s Congress Watch division.
March 11th, 2015 | Gabriel Hopkins
In today’s era of Big Data, analytics, and sabermetrics, the cheeky motto “in God we trust, all others must bring data” has never seemed more relevant. Well, in the arena of mandatory arbitration provisions in consumer contracts the data is in, and the verdict is clear: mandatory arbitration is unfair to consumers and harmful to the public interest.
Yesterday, the Consumer Financial Protection Bureau officially released its long- awaited report on the use of mandatory arbitration clauses in consumer financial services contracts. At a field hearing in Newark, N.J., CFPB Director Richard Cordray discussed the report’s essential findings, noting that it was “the most comprehensive empirical study of consumer financial arbitration ever conducted.”
I’ll briefly outline the results, but what was really interesting – and what I’ll discuss below – is the discussion among panelists at the hearing Tuesday.
The 768-page report, three years in the making, was mandated by Congress in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. It analyzed six different consumer financial markets to compare the relative value of arbitral forums and courts for resolving disputes between customers and service providers. The evidence led to several key conclusions:
- Mandatory arbitration clauses affect tens of millions of Americans. In both the credit card and checking account sectors, half of all accounts were covered by such provisions. The CFPB estimates that 80 million credit card holders are subject to mandatory arbitration.
- Consumers don’t know they’ve signed away their rights. In a survey conducted for the report, 75% of consumers did not know whether they were subject to mandatory arbitration clauses. Of the 25% who thought they did know fully half were wrong about the true nature of the contracts they had signed. The survey also revealed that only a small fraction of consumers actually understand what mandatory arbitration and class action bans really mean for their rights.
- Consumers rarely act on an individual basis. Over a three-year period, consumers filed only 1,800 claims in arbitration and 3,500 individual claims in federal court. Evidence from small-claims courts showed that individuals rarely turn to that forum for redress, and that most activity in those courts was by companies filing debt-collection suits against consumers.
- Consumer class actions work. Over a five-year period 420 class action settlements in federal court netted $2.7 billion in cash, fees, and other relief. Contrary to the familiar protests of industry advocates, only 18% of this money went to plaintiffs’ lawyers, meaning $2.2 billion accrued to the benefit of affected consumers, with approximately half paid directly to consumers in cash payouts. These settlements benefitted at least 34 million consumers across America, not to mention all those protected by the settlements’ deterrent value.
- Companies use arbitration clauses to kill class actions. Companies rarely invoke arbitration clauses to move individual suits out of court. In contrast, such provisions are raised in nearly two-thirds of class actions, and almost all arbitration clauses prohibit class treatment in the arbitral forum.
- Arbitration does not make financial services cheaper for consumers. There is no evidence for the claim that arbitration clauses make the cost of doing business cheaper for companies who pass those savings onto consumers. Indeed, after four large credit card issuers removed arbitration clauses from their form contracts under an antitrust settlement, they did not significantly increase costs or reduce access to credit compared to other unaffected companies.
At the hearing in Newark, Director Cordray’s overview of the report’s findings was followed by a panel discussion between advocates for the financial industry and consumer protection advocates, including Public Justice Executive Director Paul Bland.
Given the reams of empirical data contained in the report, the industry-side panelists had little ground to stand on. Their responses consisted largely of nit-picking about the report’s methodology and doubling-down on their belief that arbitration is cheaper, faster, and fairer for consumers. For example, Ballard Spahr attorney Alan Kaplinsky cited “studies” and his own “personal experience” representing financial institutions to back up these claims. , but did not cite any specific study by name. . He protested that it’s too early to judge how consumers fare in arbitration compared to court because arbitration is “in its infancy,” ignoring the fact that the report analyzed three years’ worth of data from the nation’s largest arbitration provider. He also raised the familiar bugbear of the predatory plaintiffs’ bar, which reaps untold profits from “frivolous” lawsuits without any real benefit for their clients. His most intriguing comment, if only for its irony, was that his clients in the financial sector are regulated well enough by the CFPB and other federal and state agencies. Leave enforcement to government actors, he argued, they are far better at protecting consumers than the private sector.
Probably the most interesting comments from the industry side of the aisle came from Louis Vetere, president and CEO of a New Jersey credit union. Though he also did not grapple directly with the report, he agreed with his ideological colleagues that arbitration was good for consumers. However, he also repeatedly clarified that his company did not mandate arbitration in its contracts, nor did it think doing so was proper. Rather, he preferred to offer arbitration as an option when disputes with depositors arose, ultimately accepting whichever forum the depositor felt most comfortable with.
The panel’s consumer advocates fired back on several fronts, refuting both the specific arguments made by the industry advocates, and pointing out the many systemic problems caused by mandatory arbitration. Jane Santoni, a consumer lawyer in Maryland, said that arbitration was never a better option for her clients. More troubling to her was the fact that she has had to turn away the majority of prospective clients who have meritorious claims because as individual cases they are simply untenable for her to take. From her perspective mandatory arbitration has an “astronomical chilling effect” on the civil justice system.
Myriam Gilles, professor at Cardozo School of Law, noted that deciding consumer law cases in the “hermetically sealed” forum of private arbitration rather than in public court proceedings undermines the common law system in which future decisions build upon past precedents. She also pointed out that companies put mandatory arbitration clauses in their contracts because it’s in their interests and is a matter of “common sense” from their perspective: as the report clearly bears out, arbitration is not about dispute resolution. It’s about avoiding liability.
Public Justice’s Paul Bland drove this point home in his remarks, noting that the innocent-sounding claim that arbitration is just about moving disputes to a simpler, easier forum is a “fairy tale.” He noted that mandatory arbitration prevented consumers from protecting themselves, particularly as marginal financial actors such as payday lenders move their practices online, burying arbitration agreements in tiny-text terms and conditions on obscure webpages, all to avoid answering to consumers and government overseers when they violate consumer protection statutes. Mandatory arbitration does little more, he argued, than permit companies to break the law with impunity by taking away people’s basic constitutional and statutory rights via mouse print contracts.
The hearing closed with comments from the assembled audience. Dozens of consumer advocates stood up and added further arguments against the use of mandatory arbitration. The points raised were remarkably varied, ranging from the practical – poor consumers can’t even afford the AAA’s $200 filing fee – to the theoretical – pre-dispute arbitration agreements violate consumers’ First Amendment right to petition for redress in a government court. One common refrain in the public comments, made in response to industry panelists’ claims that consumers enjoy the simplicity and informality of arbitration, is that if arbitration is such a good deal for consumers, it should be offered as a choice rather than being forced upon them as a condition of signing up for a credit card, cell phone or car loan.
Now that the data is in, the CFPB will soon announce what, if any, action it should take to regulate the use of mandatory arbitration provisions in consumer financial services contracts. Given the content of the report, the wealth of arguments supporting its conclusions, and the empirically bankrupt arguments from the other side, it is hard to imagine that the Bureau won’t come down hard on these clauses, perhaps even banning them outright. We here at Public Justice certainly hope that it does.
This post originally appeared at http://publicjustice.net/content/cfpb-hearing-data-one-side-empty-rhetoric-other. Reprinted with permission.
About the Author: Gabriel Hopkins joined the Public Justice DC Office in September 2014 as the Thornton-Robb Attorney. Before joining Public Justice he spent a year clerking on the New York State Court of Appeals for the Honorable Susan P. Read. Gabriel attended New York University Law School and received his J.D. in 2013. While at NYU he worked with attorneys from the New York Civil Liberties Union to sue the New York Department of Corrections over its unconstitutional use of solitary confinement to discipline prisoners, securing significant relief from this practice for minors and the mentally ill in the prison system. He also summered at the New York Attorney General’s Civil Rights Bureau, and the Los Angeles civil rights firm Schonbrun DeSimone Seplow Harris & Hoffman, where he helped partner Paul Hoffman bring the landmark international human rights case Kiobel v Royal Dutch Petroleum to the US Supreme Court.