Outten & Golden: Empowering Employees in the Workplace

Archive for February, 2004

New Civil Rights Bill Contains Some Important Legal Fixes

Thursday, February 19th, 2004

A bill recently introduced before Congress is designed to fix some of the most persistent problems faced by those bringing employment discrimination lawsuits, and will correct some of the most damaging U.S. Supreme Court decisions in recent years. On February 10, FAIRNESS: the Civil Rights Act of 2004 (PDF of House version), was introduced before Congress. While the bill faces an uncertain future in this session of Congress, it sets the stage for repairing some of the erosion to major civil rights legislation suffered in recent years.

Here are just some of the highlights of FAIRNESS:

Improves age discrimination remedies

This bill provides damages for state workers who are victims of age discrimination in employment, overruling the Supreme Court decision in Kimel v. Fla. Bd of Regents, 528 U.S. 62 (2000), which held that states are immune to damage suits by employees under the Age Discrimination in Employment Act. The bill also prohibits polices and practices that have an unjustified discriminatory effect on persons 40 years of age, allowing older workers to bring what are known as “disparate impact” claims.

Prevents employers from forcing workers to sign away their right to a day in court.

The bill makes it illegal for employers to force workers to give up their right to bring discrimination and labor claims to court by signing a mandatory arbitration agreement. This overrules Circuit City Stores v. Adams, 532 U.S. 105 (2001), which held that it is not illegal for employers to force workers to arbitrate employment discrimination and unfair labor disputes in order to obtain a job.

Gives all workers adequate remedies for unfair labor practices. Recent decisions have denied state workers and undocumented workers the ability to get full relief in court for unfair labor practices. This bill responds to Alden v. Maine, 527 U.S. 706 (1999), which prevents state workers from seeking relief in state court when their state employer violates the Fair Labor Standards Act, and Hoffman Plastic Compounds v. NLRB, 535 U.S. 137 (2002), which denied lost wages to an undocumented worker illegally fired for joining a union.

Enhances enforcement of the Equal Pay Act. Loopholes in the Equal Pay Act have prevented working women from realizing the full promise of equal pay for equal work. This bill will counteract decisions broadly interpreting the “factor other than sex” defense, which have allowed employers to argue, for example, that if a man previously had a higher salary, he can be paid more than a comparable female employee doing the same job. These types of factors are inherently discriminatory and contradict the very purpose of the EPA.

Other groups of individuals protected by the new legislation: those who suffer discrimination when using federally funded services; state employees who serve in the military who encounter discrimination based on their military status; students who face harassment based on race, gender, national origin, color, and disability; and disabled and older employees subjected to intentional discrimination.

The fight for FAIRNESS is being led by the Leadership Conference for Civil Rights (LCCR), the leading coalition of national civil rights organizations, and endorsed by its member groups, including our allied organization NELA. The LCCR web site has a great deal of material about FAIRNESS, including much of the content included here, and will be a key ongoing resource in this fight, which could last for many years to come.

While many workers may not understand just how important this legislation is, especially if they are not currently engaged in their own discrimination battle against an employer or other entity, it is important to remember that if the civil rights laws cannot be fully enforced to deter discrimination, there is little incentive for employers to comply with existing law. The existence of all these loopholes and exceptions created by the Supreme Court and followed by the lower courts means that not all employers are suffering the consequences of discriminating against employees, and that someday, maybe even sometime soon, you could be one of the employees without any way to fight back. So it is extremely important that all workers, even those not personally affected by this legislation, speak out and let their members of Congress know that the civil rights laws need fixing, and that FAIRNESS is a key step in doing so.

Take Action: Urge Members of Congress to Cosponsor FAIRNESS

News Article: Updates of Civil Rights Urged

NELA’s Bruce Fredrickson joins other Civil Rights Advocates on Why You Should Care

Job Gone Overseas? Don't Worry, It's a Good Thing

Wednesday, February 11th, 2004

Down because your plant closed down and reopened in China? Angry because your tech job is now being handled in India? Don’t worry, let it go. Because it’s a good thing. The Administration says so. According to N. Gregory Mankiw, the chairman of President Bush’s Council of Economic Advisors, “[o]utsourcing is just a new way of doing international trade. More things are tradable than were tradable in the past. And that’s a good thing. ” (See Los Angeles Times article.) Tell that to those who are out of work with obsolete job skills and dim employment prospects, and “good thing” is unlikely to be the characterization you will hear.

It’s a tale of two economies at present. In one, things are looking up. On Monday, the President released his annual “Economic Report of the President,” which predicted 4% growth in the economy overall. As President Bush said in an attached statement, “As 2004 begins, America’s economy is strong and getting stronger.” (See USA Today article.) In the other view of the economy, things are not so rosy. It is replete with references to the “jobless recovery,” where the number of jobs created each month is not enough to accommodate monthly growth to the work force. When January’s job statistics were released last week, the number of jobs created, 112,000, was well below forecasts and below the 150,000 number necessary to maintain equilibrium. (See New York Times article.) In one economy, the unemployment statistics are showing improvement: last week’s statistics showed a drop in unemployment to its lowest level in two years. (See CNN/Money article.) In the other economy, the unemployment rate has been reduced to near meaninglessness, as it fails to reflect all the Americans who have simply given up looking for work or who have exhausted their unemployment benefits. (See New York Times commentary.)

For those mired in the “bad economy,” one of the growing targets of frustration and anger is the practice of “outsourcing,” where employers move jobs that were formerly based in the United States to foreign countries, especially China, India, and Central America, where labor costs are lower. While the phenomenon had mostly been limited to manufacturing jobs, an increasing number of white-collar jobs, such as customer service, accounting, medical diagnostics and billing, and computer programming and IT positions, which are also moving overseas as well. For those who have lost their jobs, the practice can be devastating, as reemployment is not simply a matter of going down the street and finding another job when the entire sector in which you were trained moves overseas. Here’s just one example of just how far the process has gone: remember Ross Perot’s criticism during his presidential campaign, denouncing the “giant sucking sound” of low-wage factories in Mexico attracting U.S. companies? Now Perot Systems, the healthcare services firm of which Perot still serves as chairman of the board, is now set to send call center and medical claims processing jobs to India. (See Washington Post article.)

But according to Mankiw, outsourcing is part of a natural economic evolution. Although outsourcing hurts some workers now, the benefits eventually will outweigh the costs as Americans are able to buy cheaper goods and services and as new jobs are created in growing sectors of the economy, the President’s economic report said. As illustrated by Mankiw, “Maybe we will outsource a few radiologists. What does that mean? Well, maybe the next generation of doctors will train fewer radiologists and will train more general practitioners or surgeons.” (See Los Angeles Times article.) Note the use of the words “next generation,” which hardly provides comfort to this generation of workers that the process will soon normalize to their benefit.

Mankiw and the president are already catching flak for their comments. Even one House Republican delivered harsh criticism of Mankiw’s comments: Rep. Donald Manzullo (R-Ill.) called for Mankiw’s resignation, and indicated that industrial state Republicans are furious. “I know the president cannot believe what this man has said. He ought to walk away, and return to his ivy-covered office at Harvard.” (See Washington Post article.) However, it may also be no coincidence that the words Mankiw used, “it’s a good thing,” is also closely associated with another person who is seen as being out of touch with the concerns of ordinary Americans (and who now may be paying the price): Martha Stewart, currently on trial in Manhattan for conspiracy and obstruction of justice. (See Business Week.) Time will tell whether both Stewart and Mankiw will ever clue in to their apparent obliviousness to the “little people” around them, but there are a lot of ordinary workers hoping it doesn’t wait for the “next generation” like having a job is apparently supposed to.

If We Can't Keep Our Promises Now, What's Going to Happen Later?

Tuesday, February 3rd, 2004

Imagine the following: after working for years and preparing for retirement, your company suddenly chooses to switch its pension plan, so that the level of benefits you had been counting on for years would not be there when you retire. On top of that, while your company had a practice of paying retiree health care benefits, it suddenly decides that it’s too expensive to ensure retirees, and so it eliminates the plan entirely. So you’re ready to retire, but you cannot do so, because you have no pension and no health care, after relying on promises made, in some cases for decades, by your employer, who is using the current economic climate to justify this unprecedented shift. While it sounds like a worst-case scenario designed to alarm the public, it is one that is increasingly happening across the United States to older workers, who instead of hitting the most relaxing stage of their lives and reflecting on their accomplishments, are being forced to go back to work, in some cases just to be able to have adequate health care. And for those unable to return to the workforce, life is becoming exceedingly difficult.

In the article Companies Limit Health Coverage of Many Retirees, Milt Freudenheim of the New York Times talks about the new disturbing trend of large employers to reduce or completely eliminate medical benefits for some or all of their retirees. While many of the companies continue to allow retirees to participate in a group plan, they can only do so if they pay for the coverage themselves, rather than having the coverage subsidized or completely covered by the employer. To make matters worse, the retirees are often segregated into a separate insurance pool, away from younger and healthier workers, who would help keep the costs lower for the group. The increase can often be a dramatic one, of several hundred dollars a month or more, which can be impossible to absorb on a fixed income. And retirees too young for Medicare may have no choice but to go back to work to pay for the coverage, or to go without.

According to a recent study, in the last year alone, 10 percent of 408 large corporations surveyed eliminated coverage for future retirees, while 71 percent increased retirees’ contributions for their coverage. (See Cos. Slash Retiree Health Benefits) The trend shows no sign of lessening: one-fifth of companies said they were likely to terminate health coverage for future retirees in the next three years. A separate study of employers with more than 1,000 employees found that in 2003, 57 percent of firms offered health benefits to Medicare-eligible retirees, down from 80 percent in 1991. The survey was taken before Congress passed a Medicare prescription drug benefit last year. Many feared that benefit would provide companies with an excuse to drop coverage. To stop the erosion of corporate-sponsored retiree health plans, however, the new law includes an $89 billion subsidy for employers that retain coverage. It remains to be seen whether the subsidy will be enough. Most experts agree that companies are less likely to terminate benefits for current retirees, but fewer firms will offer them to younger workers.

Unlike pensions, which are regulated by law, companies are not legally obligated to set aside money to pay for retirees’ health benefits. Most health plans can usually be changed or terminated at the company’s choosing, with no appeal available to the retirees. As noted by James Norby, president of the National Retiree Legislative Network (NLRN), these companies have found “a clever way of getting out of the contract they made to people who had been retired for 15 or 20 years.” What’s more, instead of acknowledging that they’re reneging on their promises, companies are pitching the upside of the elimination (as if there was one) by generously offering to keep retirees on their plans, if they pay for their coverage. While the rates may be less than if a retiree was forced to purchase individual coverage (especially for those with health concerns), the fact remains that this coverage was promised, given to hundreds of other retirees, and now it’s gone, most likely never to be resurrected, even if the economy improves.

The NLRN and other groups are hard at work on legislative proposals regulating retiree health benefits. While legislation is unlikely to be passed in the current Congress, it may be the only solution, given that corporate employers don’t seem to be honoring any ethical obligation to give their retirees what they’ve been promised.

Your Rights Job Survival The Issues Features Resources About This Blog