Outten & Golden: Empowering Employees in the Workplace

Archive for August, 2010

Global Youth Unemployment Reaches Record Levels

Tuesday, August 17th, 2010

Image: James ParksThe global economic crisis has been especially bad for young workers. A new report by the International Labor Organization (ILO) shows that while youth unemployment has been steadily worsening for more than a decade, the economic crisis caused an explosive increase in the jobless rate for young workers. The report, issued late last week, kicked off the United Nations International Youth Year.

At the end of 2009, 81 million young workers between the ages of 15 and 24 around the world were unemployed—the highest number ever. The overall jobless rate for young workers globally is now 13 percent, the ILO says. Rising youth unemployment is compounded by some 152 million young “working poor” caught in extreme poverty.

In the United States, an AFL-CIO report, “Young Workers: A Lost Decade,” published last fall, showed a massive decline in the economic situation of young workers here over the past 10 years. Among other findings, the survey shows that one-third of young American workers cannot pay their bills.

This high and rising level of youth unemployment globally is a “social time-bomb” that risks damaging the social, economic and political fabric of countries around the world, says Sharan Burrow, general secretary of the International Trade Union Confederation (ITUC):

An entire generation of young people is being left behind, and the consequences of this for society will be severe. Governments have to act urgently to get job-creation moving, by maintaining economic stimulus where it is needed rather than by cutting public expenditure.

Read the ILO report here.

Trade unions in the United States and around the world are pressing governments to adopt policies that focus on creating good jobs now. Burrow says we also must push for specific measures to improve the access of young people to decent jobs and quality education and training.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris

Will we ever get a real working class hero?

Monday, August 16th, 2010

Image: Bob RosnerIs there anyone out there who hasn’t heard of Jet Blue flight attendant Steven Slater’s profanity filled tirade and exit down the emergency chute carrying beer?

From the Asian animation of his battle with the passenger, 140,000 Facebook fans and T-Shirts, we finally have an authentic working class hero who symbolizes all the frustrations of trying to survive the surly attitudes so common in today’s recession. Or do we?

Turns out that no passengers actually saw the altercation with the passenger that resulted in a gash on Slater’s forehead. In fact, one of the first passengers on the flight claims that Slater had the gash before any passengers boarded the plane.

He was mad as hell and couldn’t take it anymore.

But was his anger based on something that really happened, or did it just happen in his own mind? Maybe this doesn’t matter to you, but if we’re all going to nominate this guy to hero status, I’d like his story to align with other people who were on the flight.

Okay, I saw the movie Red Eye. When Jodie Foster’s kid disappeared on a plane in flight. So the woman who slugged him could have gone all Hollywood and disappeared. But the fact that no one corroborated his story and how he got that nasty gash on his forehead does trouble me.

Earlier in the year we had Conan. Remember when Coco was bounced from his Tonight Show perch. Sure NBC didn’t handle this very gracefully. But he did get many millions of dollars. And ratings have improved dramatically for his replacement, Jay Leno. Oops another working class hero who is hard to relate to.

Can’t a guy get an authentic working class hero anymore? Is that too much to ask?

About The Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via [email protected]

As Netroots Rage at Gibbs, Long-Term Jobless Left Behind

Friday, August 13th, 2010

Image: Art LevineAmid the anger among progressives over White House spokesman Robert Gibbs’ attack on the”professional left,” a leading cause of the wide-ranging disenchantment with President Obama that threatens Democrats in November remains untouched: long-term joblessness. The new, scaled-down legislation signed by Obama yesterday to save teachers’ jobs and help states pay for Medicaid won’t help the nearly 30 million unemployed or under-employed to find work. And it’s paid for, in part, by cutting $12 billion in food stamps benefits.

On Wednesday, a troubling new report from the Economic Policy Institute (EPI) underscored the weakness in the economy — and in the hopes of Democrats to retain Congress and the White House. The report by Heidi Shierholz looked closely at the five to one ratio of officially counted unemployed workers to available jobs, and pointed out in an especially clear way: “The 5-to-1 ratio means that there is literally only one job opening for every five unemployed workers (that is, for every four out of five unemployed workers there simply are no jobs),” she declared (emphasis added).

I have both my feet firmly planted on the floor and nothing in my mouth, to speak of, Gibbs told reporters on August 11, and stuck out his tongue to prove it. (Photo by Chip Somodevilla/Getty Images)

"I have both my feet firmly planted on the floor and nothing in my mouth, to speak of," Gibbs told reporters on August 11, and stuck out his tongue to prove it. (Photo by Chip Somodevilla/Getty Images)

She also clarified a common misunderstanding that this figure means that there are only five applicants for any one job. That’s hardly the case, as shown by news stories of hundreds of people waiting in line for  days for a chance to apply for a single union elevator operator job. “Importantly, this [five-to -one] ratio does not measure the number of applicants for each job. There may be throngs of applicants for every job posting, since job seekers apply for multiple jobs,” she noted.

She also explained on Bloomberg News the continuing double-digit unemployment in the District of Columbia and 16 states, devastated by the collapse of the housing market and the downturn in manufacturing.  As EPI’s interactive state economy tracker reports, “New state unemployment data show that while jobs are returning, the pace of recovery remains slow. The June unemployment rate was 14.2% in Nevada, 13.2% in Michigan, 12.3% in California and 11.4% in Florida.”

Despite such figures, the “99ers,” whose benefits have expired are fruitlessly seeking help from Congress as half of the unemployed have been out of work for over six months. This persistent unemployment – even if it would have been worse under GOP policies – accounts in part for the lack of enthusiasm for the Obama administration among progressives. Another major disincentive to work hard for Democrats in November: what they see as a lack of White House willingness to fight for a genuine progressive agenda, ceding too much to right-wing talking points and Wall Street. But Gibbs’ Fox-style attacks on the left as drug-takers pining for a fantasy world without the Pentagon and with a Canada-type health plan are simply smears on the progressive base. Remember, it’s those activists who propelled Obama into office and, as with health care, in most cases reluctantly accepted his centrist deal-making in office.

Jane Hamsher didn’t go along with those compromises, but her concerns about the White House’s open hostility to the Democratic base are widely shared, as ABC News reported:

Jane Hamsher, the founder of the liberal blog Firedoglake.com, told us that Gibbs’ swipe reflects a White House that’s taken the left for granted – inattention that she said could hurt Democratic candidates in 2010 and beyond.

“It went over like a lead balloon – particularly in August when all the members of Congress are back in their home states, campaigning, trying to whip up enthusiasm,” Hamsher told us. “We’re seeing tremendous demoralization amongst the sort of Democratic base.

“Having the White House and [Gibbs] basically call the progressives a big bunch of babies who need to grow up, you know, when their concerns are very valid, probably wasn’t the sharpest political move,” she added.

Columnist Frank Rich argued in yet another trenchant column on Sunday just how much Democrats were threatened by the plight of long-term unemployed workers – and that concern comes from more than just the so-called whining of the “professional left” that Gibbs scorns. Rich points to to the case of a former corporate staffer, 49-year-old Alexandra Jarrin, $92,000 in debt and on the verge of homelessness featured in a Times article on the 99ers.

The polls remain as intractable as the 9.5 percent unemployment rate no matter how insistently the Democrats pummel Bush. To add to Democratic panic, there’s their “enthusiasm gap” with the Tea-Party-infused G.O.P., and the Rangel-Waters double bill coming this fall to a cable channel near you. Some Democrats took solace in one recent poll finding that if Republican economic ideas were branded as “Bush” ideas, the pendulum would swing a whopping 49 percentage points in their favor. But even in that feel-good survey, only a quarter of the respondents were worried that a G.O.P. Congress would actually bring back Bush policies…

But even if the Democrats sharpen their attack, they are doomed to fall short if they don’t address the cancer in the American heart — joblessness. This requires stunning emergency action right now, August recess be damned. Instead we get the Treasury secretary, Timothy Geithner, offering the thin statistical gruel that job growth has returned “at an earlier stage of this recovery than in the last two recoveries…”

The Democrats have already retreated from immigration and energy reform. If they can’t make the case to Americans like Alexandra Jarrin that they offer more hope for a job than a radical conservative movement poised to tear down what remains of the safety net, they deserve to lose.

*This post originally appeared in Working in These Times on August 12, 2010. Reprinted with permission.

About the Author: Art Levine, a contributing editor of The Washington Monthly, has written for Mother Jones, The American Prospect, The New Republic, The Atlantic, Slate.com, Salon.com and numerous other publications. He can be reached at [email protected]

“Stay Remarks” Showing Discriminatory Attitudes in the Workplace Can Be Important Evidence of Employer Discrimination

Thursday, August 12th, 2010

Patrick KitchinOn August 5, 2010, the California Supreme Court issued a unanimous decision concerning the type of evidence a worker can rely upon to prove an employer discriminated against him or her. The Court’s decision concerns the so-called “stray remarks doctrine.

Justice Sandra Day O’Connor coined the term in a 1989 U.S. Supreme Court decision, writing that “stray remarks” made by “non-decisionmaking coworkers or remarks made by decisionmaking supervisors outside of the decisional process” are insufficient evidence of an employer’s discriminatory attitude. Without additional evidence of discrimination, she wrote, a gender discrimination claim can be and should be dismissed by the court before trial.

In Price Waterhouse v. Hopkins (1989) 490 U.S. 228, the worker presented evidence that a partner of the firm told her to “walk more femininely,” “talk more femininely,” “dress more femininely,” “wear make-up,” “have her hair styled,” and “wear jewelry” to improve her chances for partnership. Justice O’Connor concluded that though such “stray remarks” might constitute evidence of a discriminatory attitude in the workplace, they are not sufficient evidence of discrimination on their own. When combined with more direct kinds of evidence of discrimination, however, stray remarks evidence can tend to support a discrimination claim.

Since 1989, some federal courts have expanded the stay remarks doctrine substantially. In Hill v. Lockheed Martin, for example, the Fourth Circuit Court of Appeals ruled that remarks by non-decisionmakers that the worker was a “useless old lady” “who needed to retire” and was a “troubled old lady,” did not influence the decisional process directly and, therefore, were completely irrelevant to the worker’s discrimination claim.

In its August 5th decision, the California Supreme Court concluded that the wholesale rejection of evidence of stray remarks, as suggested by the Fourth Circuit, is improper. It explained that such evidence can tend to show discriminatory animus or attitudes within the workplace. Under California law, then, stray remarks are relevant and cannot be completely ignored by the trial courts in ruling on pre-trial motions for summary judgment.

While the California Supreme Court’s decision focuses on evidentiary issues and pretrial procedures, the importance of the decision for California workers is significant. Although a racial, sexual or age-based slur might not conclusively demonstrate employment discrimination, such stray remarks combined with other more direct evidence of discrimination (statistics, testimony, emails and the like) can be used to defeat a defendant’s motion for summary judgment before trial.

The California Supreme Court explained that “[T]he stray remarks doctrine contains a major flaw because discriminatory remarks by a non-decisionmaking employee can influence a decision maker.” Thus, stray remarks can constitute evidence of discriminatory animus. The Supreme Court of California found another federal appellate court’s position on the stray remarks doctrine persuasive. In Shager v. Upjohn Co. (7th Cir. 1990) 913 F.2d 398, the Seventh Circuit Court of Appeals wrote: “If [the formal decision maker] acted as the conduit of [an employee‘s] prejudice – his cat‘s paw – the innocence of [the decision maker] would not spare the company from liability.”

Thus, for example, discriminatory comments by a worker capable of influencing the actual decisionmakers can provide admissible evidence of discrimination by the employer.

This is good news for workers in California who often find it difficult to unearth more direct evidence of discrimination. While the California Supreme Court ultimately concluded that, on their own, inappropriate stray remarks by non-decisionmakers do not prove discrimination, its decision will permit workers to present evidence of stray remarks in the context of other discriminatory practices in the workplace.

About the Author: Patrick Kitchin is a labor rights attorney with offices in San Francisco and Alameda, California. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a 1992 graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.

Ignoring Courts, Arizona Gov. and Legislature Move Anti-Union Measure

Wednesday, August 11th, 2010

Last week, the Arizona Supreme Court upheld a lower court’s July ruling that a proposed state constitutional amendment that sought to restrict how workers can vote in union representation elections was unconstitutional. Not surprisingly, it’s being pushed by opponents of the Employee Free Choice Act.

But that hasn’t stopped Arizona Gov. Jan Brewer (R) and the Republican-controlled state legislature from taking a swing at workers and their unions. Brewer called a special session of the legislature and the state Senate and House today passed a measure to put the anti-union amendment on the November ballot.

Talk about fear of unions and real worker rights, even if passed, the amendment wouldn’t go into effect unless Congress passes and the president signs the Employee Free Choice Act.

Rebekah Friend, executive director of the Arizona AFL-CIO, tells the Arizona Republic:

They’re making a law that pre-empts a law that hasn’t even passed.

Of course knowing Brewer’s and the legislature’s anti-immigrant hysteria, their anti-union panic isn’t a real shock.

For more on the special session and the amendment from the Arizona AFL-CIO click here.

This post originally appeared in AFL-CIO blog on August 11, 2010. Reprinted with permission.

About The Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and have written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.

What’s Green, White and Blue? American Jobs

Tuesday, August 10th, 2010

Leo GerardRed, as in furiously red, defined the day last fall when a consortium of companies announced it wanted $450 million in U.S. stimulus money to build a wind farm in Texas, creating 2,000 jobs in China and 300 in America.

Now, nine months later, things have cooled down and turned around. In a deal with the United Steelworkers (USW), two Chinese companies have agreed to build as much of the wind turbines as possible in America, using American-made steel, and creating perhaps 1,000 American jobs.

The deal is a result of white collar Chinese executives negotiating with blue collar union officers to create green collar jobs in the U.S. The agreement defies stereotypes about unions as constantly combative, excessively expensive and environmentally challenged. The USW has a track record of engaging with enlightened CEOs for mutual benefit.  It has a long green history. And it has worked to return off-shored jobs to the U.S.

The USW, like the Democrats in the House and Senate with their Make It in America program, is devoted to preserving and creating family-supporting, prosperity-generating manufacturing jobs in America. And if they’re green, all the better.

Billionaire investor Wilbur Ross has first-hand experience negotiating with unions, including the USW, to sustain U.S. manufacturing. He describes it positively. Here he is on PBS’ Charlie Rose on Aug. 2:

“I have found the leaders of big industrial unions, the steelworkers, the auto workers, they understand dynamics of industry at least as well as the senior management of the companies.”

Ross talked to Rose about dealing with the USW during the time when he was buying  LTV Steel:

“We worked out a contract that took 32 job classifications down to five, changed work rules to make it more flexible and most important of all, we put in a blue collar bonus system. . .We became the most efficient steel company in America. We were making steel with less than one man hour per ton. The Chinese at the time were using six man hours per ton. We were actually exporting some steel to China.”

Ross accomplished that while paying among the highest wages for manufacturing workers in America.

The USW approached the Chinese companies that planned the $1.5 billion Texas wind farm, A-Power Energy Generation Systems Ltd. and Shenyang Power Group, the same way it did Ross. The meetings occurred with the help of U.S. Renewable Energy Group, a private equity firm that facilitates international financing and investment in renewable energy projects. Jinxiang Lu, chairman and chief executive of Shenyang Power, said talking to the union enabled him to see its “vision for win-win relationships between manufacturers and workers.”

For the USW, this deal means the Chinese firms will initially buy approximately 50,000 tons of steel manufactured in unionized American mills to fabricate towers and rebar for the 615 megawatt wind farm in Texas, will employ Americans at a wind turbine assembly plant to be built in Nevada, and will employ more American workers in green jobs at plants constructing the blades, towers and thousands of other wind turbine parts.

For the Chinese companies, the USW, the largest manufacturing union in America, will use its long list of industry contacts to help construct an American supply chain essential to amass the approximately 8,000 components in a wind turbine. The idea is to collaboratively create a solid manufacturing, assembly, component sourcing, and distribution system so that this team – the Chinese companies, U.S. Renewable Energy Group and the USW — will build many more wind farms after the first in Texas.

Additional wind farms mean more renewable energy freeing the U.S. from reliance on foreign oil. As U.S. Sen. Sherrod Brown, D-Ohio, says, there’s no point in replacing imported foreign oil with imported wind turbines. For energy and economic independence, green manufacturing capacity and green jobs must be in the U.S.

This deal does that. And there’s nothing unusual about foreign companies employing Americans. Many Americans, including USW members, already work in factories owned by many different foreign national companies, including German, Russian, Japanese, Mexican, and Brazilian, with names like Bridgestone-Firestone, Arcelor-Mittal, Rio Tinto, Grupo Mexico, Svenska Cellulosa AB (SCA) and Severstal.

In at least one other case, action by the USW forced the hand of a Chinese company to move jobs to the U.S. Tianjin Pipe, the world’s largest manufacturer of steel pipe, said it could not export profitably to the United States if tariffs rose above 20 percent. This was after the USW and seven steel manufacturers filed a petition with U.S. trade agencies in April of 2009 accusing China of illegally dumping and subsidizing the type of pipe used in the oil and gas industry. The union won that case this past April, and the U.S. Commerce Department imposed import duties ranging from 30 to 100 percent to give the domestic industry relief from the unfair trade practices. To continue selling in the U.S., Tianjin Pipe had no choice but to build an American pipe mill. Construction is expected to begin in Texas this fall on the $1 billion plant to employ 600 by 2010.

Although the USW is cooperating with A-Power and Shenyang Power, it will not back off its trade cases involving exported Chinese steel, pipe, tires, paper and other manufactured products. The stakes for U.S. jobs are just too high.

Back in 1990, when green was not as trendy, the USW recognized that the environment would be among the most important issues of the era and issued the report, “Our Children’s World.”  Since then, it has steadily promoted green — became a founding member of the BlueGreen Alliance and Apollo Alliance, which promote renewable energy and renewable energy jobs.

Good, green American manufacturing jobs. Establishing American energy independence. It is win-win. And it’s getting a green light now.

About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.

The Entitlement Poster Child for 2010

Monday, August 9th, 2010

Image: Bob RosnerHave you heard about Mark Hurd, the superstar who turned around HP? He was on track to earn $100 million payday for his efforts. Until he was shown the door last week.

Turns out that he had falsified payments to a contractor. Corporate sleuths determined that approximately $20,000 of expenses reports relating to this contractor were in question.

Okay, here is a guy earning millions of dollars in annual compensation. Millions. We’re still not exactly sure the nature of the relationship with the contractor, but I’m guessing she’s cute.

Hurd is married. Strike one.

Hurd clearly has some boundary problems between what’s work related and what isn’t. Strike two.

But the strike three is still hard to fathom. Hurd fudged and faked it so the company would pick up the expenses for wining and dining his contractor BFF.

Why does a guy earning millions of dollars fake expense reports that amount to chump change given his salary?

Entitlement.

To me this exemplifies everything that’s wrong with corporate leadership today. These are not people who are upholding a corporate trust. These are people who believe that their needs should be taken care of by their corporate benefactor.

Who have such an exalted view of their own contributions that there is nothing that they’d be too squeamish about charging to the company.

The best part of all of this? Hurd was repeatedly described by the press as being a “button downed” kind of guy. If this is the button-downed one, imagine the corporate swingers.

I don’t really care what Hurd did. But I find it interesting how many corporate executives talk about entitlement as a problem for their employees. But I think this could lead to a great new catch phrase for executive malfeasance, “Have you Hurd?”

About The Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via [email protected]

Will the Supreme Court Issue a Wildly Activist Decision in AT&T Mobility v. Concepcion?

Friday, August 6th, 2010

6a00d83451b7a769e20133f2de36e3970b-500wiThe consumer and civil rights communities are closely watching AT&T Mobility v. Concepcion, a case that will be argued in the Supreme Court this November.  Depending on how broadly the Court reads the question presented in Concepcion, the case could decide the fate of consumer and employee class actions for years to come.

The Corporate Abuse at the Heart of Concepcion

The Concepcion case involves the widespread corporate practice of using standard-form contracts to ban class actions.  Many state courts have held such class-action bans unenforceable, but AT&T Mobility (“ATTM”) has asked the Supreme Court to find that at least some of that state law is preempted by the Federal Arbitration Act (“FAA”).  To understand why the Court’s holding in Concepcion could be so significant, it is important to understand how class-action bans come to be and why they are often disastrous for consumers and employees.

Class-action bans are contract terms that purport to prevent consumers and employees from ever participating in class proceedings.  As in Concepcion, they are often buried in companies’ standardized arbitration clauses.  Class-action bans favor companies at consumers’ and employees’ expense, but companies can impose them unilaterally because they draft the contracts.  Consumers and employees rarely have time to read the lengthy agreements companies send them, let alone the ability to understand their dense legalese.  And even if they did, few consumers or employees could negotiate the contracts’ terms.

Companies love imposing class-action bans because they dramatically undermine enforcement of consumer- and employee-protection laws.  Unlike European countries which mostly rely on large and powerful government agencies to enforce consumer protection and civil rights laws, the U.S. has relatively small government agencies which handle relatively few cases.  Most enforcement of these laws in the U.S. is done by private parties.  We rely upon individual consumers or employees who’ve been cheated or discriminated against to bring cases enforcing these laws.  Many types of illegal behavior can be addressed through individual cases by a single consumer.  But the reality is that many types of illegal behavior that harm very large numbers of people – thousands, sometimes hundreds of thousands of individuals – can only be meaningfully addressed through class actions.

In many circumstances, very few individuals would ever bring a claim (in court, or in a small claims court, or in arbitration) when their rights are violated.  For a huge percentage of the population, for many types of illegal activities there are realistic barriers to individuals bringing cases on their own.  Many people never realize when their rights are violated, for example, and many people do not have the knowledge or skills to begin to pursue a case to protect their rights.  For those who know to seek out a lawyer, very few lawyers will handle cases that are quite small, and few if any lawyers will handle fairly complex cases that involve only a few thousand dollars.  These are only a few examples of situations where the realistic situation is that a case will either be handled on a class action basis or it will never be brought at all.

This is why large corporations are hoping that the Concepcion case will wipe away most class actions – because they want to make it impossible for the vast majority of cheated consumers and employees who’ve suffered discrimination to bring any kind of case, in any forum.  The idea is to atomize individuals, to prevent them from grouping together in a way that lets them enforce these rights.

WILL CONCEPCION BE SIGNIFICANT?

In the worst case scenario, Concepcion could wipe away the vast majority of consumer and employee class actions for years to come.  But that result is far from inevitable.  For one thing, ATTM submitted a narrow question in its petition for certiorari, and if the Court sticks to the question presented (as it should), then the decision may not have much significance.  On the merits, if the Court agrees with the overwhelming majority of lower courts, which have held that state law in this area is not preempted, then the decision should not have much significance.  Indeed, if the Court simply applies the language of the FAA, and doesn’t invent new rules of federal law for the purpose of wiping away state law, then the decision should not be significant at all.

If many members of the corporate defense bar get the Court to use this case to grant their fondest wishes for immunity from consumer protection and civil rights laws granted, however, then this case could have the kind of impact on class actions that an asteroid landing in Mexico millions of years ago had on dinosaurs.

For the Court to Wipe Away Consumer and Employee Class Actions, It Will Have to Ignore ATTM’s Question Presented.

Most cases, including Concepcion, get to the Supreme Court because the party that lost below files a petition for certiorari, presenting specific questions for the Court to review.  In Concepcion, ATTM took care to draft a narrowly worded question.  Essentially ATTM asked: does the FAA preempt state law prohibiting class-action bans in those cases where class actions are unnecessary for the effective vindication of consumer and employee rights?

This question may sound convoluted, and it is.  The last part asks the Court to assume that individual consumers and employees can vindicate their legal rights without a class action.  It’s striking that ATTM asks the Court to begin with this assumption as though it were an uncontroversial and obvious abstract legal principle instead of a factual issue to be resolved on a case-by-case basis in light of actual admissible.2 In any event, if the Court limits its holding in Concepcion to the question presented, then whatever that holding is, it should not apply whenever class actions are necessary for the effective vindication of statutes aimed at protecting consumer and employee rights.

But notwithstanding ATTM’s narrowly worded question, some of its corporate allies (and particularly the U.S. Chamber of Commerce) are claiming that Concepcion raises the issue of whether the FAA preempts any and all state law that would limit class-action bans embedded in arbitration clauses—regardless of whether consumers and employees have other adequate avenues for vindicating their rights.  These ATTM allies argue that it does not matter what the evidence in a case would show, that it does not matter what the state law at issue says, and that there is simply a federal right for any corporation to put in any contract a term that bans class actions (so long as the contract includes an arbitration clause).

It’s unlikely that the Supreme Court will be tempted to take such an extreme position.  But at this point, it is clear that advocates for unlimited corporate power hope and imagine that the U.S. Supreme Court will strip state law in this way.  And it’s clear that a lot of corporate defense lawyers privately believe that the Court is so definitively in their clients’ collective pocket that companies can get whatever they want from this case.  I’ve heard several defense lawyers privately predict a 5-4 ruling that wipes away the vast majority of class actions in America, and I know of several cases that had been in mediation, where the evidence of liability is overwhelming and the only barrier to a recovery for the consumers was a class action ban that’s unenforceable or probably unenforceable under state law, where defendants have walked away from the settlement table because they suddenly believe that the Court will uphold class-action bans in all cases and immunize them from any meaningful liability.

You have to hand it to the tort reforming corporate apologists:  they are asking the Court to issue a decision that would be an immediate candidate for Most Activist Decision Ever

For the Court to Rule for ATTM, It will Have to Sweep Aside a Widespread Consensus of State Supreme Courts and Federal Appellate Courts

More than 100 reported cases have considered the enforceability of class-action bans embedded in arbitration clauses.  While their holdings on enforceability vary, more than 90% have agreed that state law governs the enforceability issue—that courts are free to apply to state law to determine whether a class action ban in an arbitration clause is enforceable.

Many corporate defendants have argued (like ATTM) that the FAA preempts state law limiting the enforcement of class bans embedded in arbitration clauses, but scores of courts have strongly disagreed.  A typical example is a 2007 Washington Supreme Court case called Scott v. Cingular Wireless, where ATTM was also the defendant.  ATTM argued that even if a ban on class actions would be illegal in other contexts as a matter of Washington law, the FAA preempted Washington law in Scott because the company had put its class-action ban in its arbitration clause.  Like most courts, the Washington Supreme Court rejected the argument, concluding that the FAA only preempts state laws that are aimed at arbitration, and that the state’s law against contract terms that gut the state’s consumer protection laws are not aimed at arbitration:

[C]ontracts that effectively exculpate their drafter from liability under the [Consumer Protection Act] for broad categories of liability are not enforceable in Washington, even if they are embedded in arbitration clause . . . .  Class action waivers have very little to do with arbitration.3

A large number of other courts have articulated this same conclusion in very similar ways.4

State Supreme Courts all agree on this issue.  Every single state supreme court to consider the enforceability of a class-action ban embedded in an arbitration clause has resolved the question of enforceability as a matter of state law.5 The last eight state supreme courts to consider the validity of class bans also happen to have struck them down, but even courts that have upheld class bans have done so by applying state law.6 In addition to state supreme courts, intermediate courts of appeal in a number of states have struck down class action bans under state law,7 as have federal circuit courts, which have examined the issue as one of state law.8 Given this settled nationwide consensus, it is puzzling that the U.S. Supreme Court decided to grant certiorari in Concepcion.

FOR THE COURT TO ADOPT THE  CHAMBER OF COMMERCE’S FANTASY SCENARIO, It WILL HAVE TO INVENT ALL NEW FEDERAL LAW

The corporatist idea that the FAA preempts all state law limiting class-action bans hasn’t caught on in the lower courts because there is no serious legal or intellectual basis for it.  If the Supreme Court decides to completely federalize the law in this area, it will have to invent from whole cloth new federal law that is not supported by anything in the language of the FAA or in its history.9

During their confirmation hearings, conservatives like Chief Justice Roberts and Justice Alito solemnly assured the Senate Judiciary Committee that they would bring a very humble approach to their jurisprudence if they were confirmed to the Supreme Court.  They weren’t the kind of guys to throw out precedents, make up new laws, or ignore history.

But if a majority of the Court plays Santa Claus for lawbreaking corporations in the way the Chamber wants, it will have done so only by tossing all of those promises overboard.

Consider these facts:

  • Because the FAA does not contain any express preemption provision, and does not preempt the field of arbitration, it preempts state laws only if they conflict with the purposes of the Act.10 This is important because the latter type of preemption is called implied conflict preemption, and Justice Thomas is on record as saying that the Court should be extremely reluctant to find implied conflict preemption based upon frustration of purpose.11 In light of Justice Thomas’s strong principled stand on this point, it is puzzling that a number of corporate defense lawyers privately claim to be so certain that Justice Thomas will vote for a broad FAA preemption position in Concepcion.
  • The only language in the FAA that relates to the question presented in Concepcion strongly supports the idea that the statute does not preempt state law.  The FAA’s key provision, section 2, provides that agreements to arbitrate will be enforceable only if three criteria are met:  (1) there is an agreement to arbitrate; (2) the agreement falls within interstate commerce; and (3) the agreement is not counter to laws that would lead to revocability of any contract.  9 U.S.C. § 2.  This last criterion necessarily refers to state law because contract law is generally comprised of state law and has been for a very long time.  What corporate defense lawyers want is for the court to cross out this last requirement, whenever it would apply to a contract term banning class actions that is inserted into an arbitration clause.  In other words, the corporate defense bar can only get what it wants from this case if the Court invents some rule to cross out that language whenever a class action is involved.  This is a pretty activist proposal, to put it mildly.
  • When the FAA was passed in 1924, there were no such things as class actions.  Congress could hardly have intended to preempt a body of state law relating to something that didn’t exist.12 And if the class procedure created some conflict with the FAA, one would have expected Congress to mention it in 1967, when it approved Federal Rule of Civil Procedure 23 and expressly authorized class actions.
  • Another line of case law leads to the same conclusion.  When a statute does not address a topic, the U.S. Supreme Court normally has held that there is no preemption with respect to that topic.13 Here, we know that the FAA does not address class actions because the Supreme Court has said so:  “the FAA itself contains no provision designed to deal with the special practical problems that arise in multi-party contractual disputes when some or all of the contracts at issue include agreements to arbitrate.”14
  • The state laws that corporate defense lawyers want the Court to strike down in Concepcion are well-established laws of general application.  They are laws and common-law doctrines, like the rule that exculpatory get-out-of-jail-contract-terms that undermine statutes are unconscionable, that do not mention arbitration, do not target arbitration, and have nothing to do with arbitration—all of which makes it hard to explain why they might conflict with the Federal “Arbitration” Act.
  • A few examples help to make this point.  In pretty much every state, an employer would be prohibited from writing a contract with an employee that says “we can fire you because of your race or gender, or pay you less if you’re a woman or African American, and none of the civil rights laws apply to you.”  Similarly, a corporation would be prohibited from writing a consumer contract that says “we can violate the Truth-in-Lending Act, your state consumer protection act, and other consumer laws.”  These provisions have nothing to do with arbitration, but they would be held unenforceable under the same set of state contract laws that courts have applied to class-action bans—laws that prohibit unfair and exculpatory contracts (i.e., contracts that immunize defendants from basic laws protecting civil or consumer rights).  Similarly, the law from around the nation demonstrates that a number of states have case law striking down class action bans in cases that do not involve arbitration clauses.15
  • State contract laws prohibiting exculpatory contract terms existed for many years before the FAA passed, and the roots of these doctrines track back to the British common law.  No one in the 1924 Congress ever suggested that the FAA was intended to preempt this body of state law and that Congress would have been shocked to hear that it was tossing these laws overboard.  The 1924 Congress intended the FAA to make arbitration clauses as enforceable as other contracts, not as a means of “laundering” otherwise illegal contract terms.16
  • Some corporate defense lawyers argue that class action bans are different from other contract terms that can have an exculpatory effect, because the class action is only a “procedural” device.  The idea here is that a contract term might be illegal if it openly says that it’s exculpatory, but it’s okay if it reaches the same exculpatory end through an indirect and “procedural” path.  Most state courts laugh off this formalism and hold that state laws also strike down contract terms that are effectively exculpatory, even if not explicitly so.  Consider another example:  if an employer’s contract said “you can bring a discrimination claim but only if you pay $1 million to an arbitrator, travel to New Zealand, and arbitrate on Leap Day” no reasonable court would uphold the contract because these effectively exculpatory requirements are arguably merely “procedural.”
  • The Supreme Court has said a number of times that arbitration clauses are only enforceable under the FAA if they let people “effectively vindicate their statutory legal rights.”17 The Court will have to re-write or ignore those decisions if it’s going to find that the FAA preempts state contract laws that insist that contract terms may not bar individuals from effectively vindicating their rights.  For the Chamber what it wants, the Court will have to manufacture a conflict between state law and one of the core principles the Court itself has repeatedly found to be a central premise of the FAA.  It will have to say something that amounts to the equivalent of “the FAA requires that parties must be accorded the formal power to theoretically vindicate their individual rights, but corporations have a newly minted federal right to gut any laws protecting against widespread violations of civil or consumer rights.”
  • State law recognizing the importance of class actions for vindicating consumer and employee rights is also entirely consistent with the decisions of the U.S. Supreme Court.18 It’s hard to see how a state contract-law doctrine is in conflict with federal law when the doctrine, as applied to class-action bans, recognizes something that’s set forth in a number of the Supreme Court’s decisions.

For the U.S. Supreme Court to say, in effect, “the usual longstanding rules barring exculpatory clauses are erased by federal law if the contract term that is exculpatory is a class action ban embedded in an arbitration clause” would be a pretty radical ruling.  Almost every court in the U.S. has blinked and stepped away from that abyss.  Will the Supreme Court be the first to go the other way?

THE STAKES IN CONCEPCION

The Supreme Court’s decision in Concepcion probably won’t be that significant.  There are a number of ways that the Court could decide this case narrowly and make law that doesn’t change the legal landscape one way or the other.  The stakes in the case might be enormous, however.

There are some powerful corporations who are sick and tired of occasionally being taken to task when they get caught violating civil rights and consumer protection laws on a widespread basis.  These corporations want a new federal right to strip their employees and customers of their rights to ever bring class actions, no matter what state law provides or no matter how egregious the facts.

If these corporations get what they want – a very huge “if” – then America will experience the biggest contraction of private enforcement of consumer protection and civil rights laws since those laws were enacted.

Will the majority of the Court abandon the humble role of umpire to invent sweeping and radical new law?  Will scores of state and federal appellate cases be disregarded?  Will the FAA be re-written, widely expanded, and put on an inevitable collision course with congressional intent?  Or will the Court step back and do the right thing?  No one will know for sure until the Court decides Concepcion next spring.

End Notes:

1. Author’s: Paul Bland and Claire Prestel are Attorneys at Public Justice.  Melanie Hirsch is the Brayton-Baron Fellow at Public Justice.

2.    The precise question presented in Concepcion is as follows:

Whether the Federal Arbitration Act preempts states from conditioning the enforcement of an arbitration agreement on the availability of particular procedures – here, class-wide arbitration – when those procedures are not necessary to ensure that the parties to the arbitration agreement are able to vindicate their claims.

Pet. for a Writ of Cert. at i, Concepcion, No. 09-893 (U.S. Jan 25, 2010).

3.   Scott v. Cingular Wireless, 161 P.3d 1000, 1008 (Wash. 2007).

4.   Homa v. Am. Express Co., 558 F.3d 225, 230 (3d Cir. 2009) (“the defense [New Jersey law] provides is a general contract defense, one that applies to all waivers of class-wide actions, not simply those that also compel arbitration.  Therefore, there are no grounds for FAA preemption.”); Kinkel v. Cingular Wireless, 857 N.E. 2d 250, 263 (Ill. 2006) (the “FAA neither expressly nor implied preempts a state court from holding that an arbitration clause or specific provision within an arbitration clause is unenforceable”).

5.   See, e.g., Discover Bank v. Super. Ct., 113 P.3d 1000 (Cal. 2005); Kinkel, 857 N.E.2d 250; Feeney v. Dell Inc., 908 N.E. 2d 753 (Mass 2009); Tillman v. Commercial Credit Loans, Inc., 655 S.E. 2d 362 (N.C. 2008); Muhammad v. County Bank, 912 A.2d 88 (N.J. 2006); Fiser v. Dell Computer Corp., 188 P.3d 1215 (N.M. 2008); Scott, 161 P.3d 1000; Herron v. Century BMW, 693 S.E. 2d 394 (S.C. 2010); Leonard v. Terminix Int’l Co., 854 So.2d 529 (Ala. 2002); West Virginia ex rel. Dunlap v. Berger, 567 S.E. 2d 265 (W. Va. 549 2002).

6.   See, e.g., Forrest v. Verizon Comm.’s, Inc., 805 A.2d 1007, 1013 (D.C. 2002) (upholding class action ban under D.C. law); Walther v. Sovereign Bank, 872 A.2d 735, 70 (Md. 2005) (same, with Maryland law); Stenzel v. Dell, Inc., 870 A.2d 133 (Me. 2005) (class action ban in arbitration clause not unconscionable under Texas law).

7.   See, e.g., S.D.S. Autos, Inc. v. Chrzanowski, 976 So.2d 600 (Fla. Dist. Ct. App. 2007); Vasquez-Lopez v. Beneficial Oregon, Inc., 152 P.3d 940 (Or. Ct. App. 2007); Thibodeau v. Comcast Corp., 912 A.2d 874 (Pa. Super. Ct. 2006); Coady v. Cross Country Bank, 729 N.W. 2d 732 (Wis. Ct. App. 2007); Eagle v. Fred Martin Motor, 809 N.E. 2d 1161 (Ohio Ct. App. 2004); Whitney v. Alltel Communics., Inc., 173 S.W. 3d 300 (Mo. Ct. App. 2005; Woods v. QC Fin. Servs, Inc., 280 S.W. 3d 90 (Mo. Ct. App. 2008).

8.   This has been true in cases where the federal courts have struck down class action bans.  See, e.g., Skirchak v. Dynamics Research Corp., 508 F.3d 49 (1st Cir. 2007) (class action ban in arbitration clause unconscionable under Massachusetts law); Fensterstock v. Edn. Fin. Partners, __ F.3d __, 2010 WL 2729759 (2d Cir. July 12, 2010); Chalk v. T-Mobile USA, Inc., 560 F.3d 1087 (9th Cir. 2009); Homa, 558 F.3d 225; Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir. 2007).  This has also been true, however, for courts that have upheld bans on class actions embedded in arbitration clauses.  Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1377-79 (11th Cir. 2005) (upholding class action ban and other terms in arbitration clause under Georgia law); Iberia Credit Bureau, Inc. v. Cingular Wireless LLC, 379 F.3d 159, 174-75 (5th Cir. 2004) (upholding class action ban as consistent with Louisiana law); Snowden v. CheckPoint Check Cashing, 290 F.3d 631 (4th Cir. 2002) (same, with Maryland law); Pleasants v. Am. Express, 541 F.3d 853 (8th Cir. 2008) (same, with Missouri law).

9.   Of course, it has been widely observed that quite a few of U.S. Supreme Court decisions in this area are not readily traced to the language of the statute itself.  In one case, Sandra Day O’Connor wrote that “the Court has abandoned all pretense of ascertaining congressional intent with respect to the Federal Arbitration Act, building instead, case by case, an edifice of its own creation.”  Allied-Bruce Terminix (Co.s, Inc. v. Dobson, 513 U.S. 265, 283 (1995) (O’Connor, J., concurring).  See also Rent-a-Center, West, Inc. v. Jackson, __ U.S. __, 2010 WL 2471058 at * 12 (U.S. June 21, 2010) (dissent of Justice Stevens) (in holding that arbitrator should decide challenge that an arbitration clause is unconscionable, the Court has extended a “fantastic” and likely erroneous decision).

10.  Volt Info. Sciences, Inc. v. Bd. Of Trustees of Standford Univ., 489 U.S. 468, 477-78 (1989).

11.  Wyeth v. Levine, 129 S. Ct. 1187, 1194-95 (2009).  (Thomas, J., concurring in the judgment.).

12.  See Discover Bank, 30 Cal. Rptr. 3d at 88-89 (“class action litigation for damages was for the most part unknown in federal jurisdictions at the time the FAA was enacted in 1925. . . .  The Congress that enacted the FAA therefore cannot be said to have contemplated the issues before us.”).

13.  E.g., Freightliner Corp. v. Myrick, 514 U.S. 280, 289-90 (1995) (“A finding of liability against petitioners would undermine no objectives or purposes with respect to ABS devices since none exist.”).

14.  Volt, 489 U.S. at 476 n. 5.

15.  See, e.g., Dix v. ICT Group, Inc., 161 P.3d 1016 (Wash. 2007); America Online, Inc. v. Pasieka, 870 So.2d 170 (Fla. Dist. Ct. App. 2004); America Online, Inc. v. Superior Court, 90 Cal. App. 4th 1 (2001).

16.  See Dunlap, 567 S.E. 2d at 280 (FAA does not allow a party to evade state contract law “merely because the prohibiting or limiting provisions are part of or tied to provisions in the contract relating to arbitration”); Scott, 161 P.3d at 1008 (contract terms “do not change their character merely because they are found within a clause labeled ‘Arbitration’.”).

17.  See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler Plymouth, Inc., 473 U.S. 614, 637 (1985) (arbitration clauses are enforceable “so long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum”); Equal Employment Opportunity Comm’n v. Waffle House, Inc., 534 U.S. 279, 295 n. 10 (2002); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991); Green Tree Financial Corp. v. Randolph, 531 U.S. 79, 81 (2000).

18.  See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (“The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.  A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.”); Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 161 (1974) (“A critical fact . . . is that petitioner’s individual stake . . . is only $70.  No competent attorney would undertake this complex antitrust action to recover so inconsequential an amount.  Economic reality dictates that petitioner’s suit proceed as a class action or not at all.”); Deposit Guaranty Nat’l Bank v. Roper, 445 U.S. 326, 338 n. 9 (1980) (to same effect).

Settling Gender Discrimination Class Actions (Part II)

Thursday, August 5th, 2010

Piper HoffmanIt may not seem credible that gender discrimination remains widespread and systemic in American workplaces. Women outnumber men in colleges and graduate programs; they have entered the workforce in force; women run some companies, universities, states, and departments of the federal government.

Despite all this progress, though, discrimination persists. Women are only 17% of Congress members. Women head a mere 2.6% of Fortune 500 companies. In other words, men still overwhelmingly control our most powerful political institutions and our economy.

The familiar glass ceiling argument could explain this striking disparity: women can rise up through the ranks professionally, but at some point they hit the glass ceiling and cannot go any higher. If that were the only problem, it might explain why women are so conspicuously absent from the powerful positions listed above. But the gender disparities start well below the highest levels of power.

A striking pattern emerges from statistics analyzing the numbers of women at various levels in financial services companies (which I’ve become familiar with from representing so many women in discrimination cases against them). At the entry level, there can be as many female as male employees. At the next level up, women make up a smaller percentage of employees. At the next level, even fewer of the workers are women. And on it goes, until you reach the near complete absence of women from the position of CEO. Graphically, the numbers describe a pyramid: with every promotion the percentage of women shrinks.

Social scientists like William Bielby of the University of Illinois at Chicago and Barbara Reskin of the University of Washington have studied this phenomenon and traced it to its roots: unconscious bias that affects subjective decision-making.

Even the most fair-minded people are subject to unconscious biases. The Implicit Association Test is one of many studies to demonstrate that people can have strong preferences and antipathies they may not be aware of. Even people who consider themselves very fair-minded can be unconsciously prejudiced against minorities, for example. To give a very rough summary of part of the underlying theory, people tend to think in terms of “in groups” and “out groups.” My “in group” is the group of people who are like me in salient ways such as gender, race, religion, age, educational background, profession, family status, etc. I tend to attribute more positive characteristics to members of the in group and more negative characteristics to members of the out group, who are unlike me. For instance, as a native Midwesterner, I may unconsciously prefer fellow Midwesterners to people from other parts of the country, although if you ask me whether I think Midwesterners are better than other Americans in any way, I will honestly answer that I don’t. The bias is unconscious.

Unconscious biases operate in the workplace as they do in every other sphere of human interaction, with the result that the groups in power tend to stay in power. Male managers may subconsciously believe that other men are more capable than women, outperform women, or are more committed to their work than women. Again, these beliefs can be subconscious, but they still affect decision-making. When it comes to a subjective decision such as who deserves a promotion, a male manager with an unconscious bias in favor of men is more likely to promote a man than a woman. The same is true of granting raises, distributing assignments, and making opportunities like management training available. This is how unconscious bias can combine with subjective decision-making to favor men (and other groups like whites) and to create the pyramid that leaves women at the lower corporate levels while disproportionately men climb to power.

There are other factors at work here too. People tend not only to think more highly of members of their in group, but to be more comfortable with them. As a result, a male manager may invite some employees to a golf outing or to dinner – nothing formal, just being a down-to-earth supervisor. He invites the employees with whom he feels most comfortable or thinks he has the most in common. A slew of scientific studies demonstrate that he is likely to feel most comfortable with the employees who belong to his in group – in this case, men. As a result, he gets to know his male subordinates better and become friends with them. When plum assignments or opportunities for promotion arise, the manager is more likely to dole them out to the subordinates he is more comfortable working with and is friends with.

Unconscious bias is difficult if not impossible to change. Researchers including Frank Dobbin of Harvard University have shown that common techniques for combating prejudice, such as diversity training, not only do not help – they actually backfire.

The way to tackle workplace discrimination is not to try to change people’s unconscious thoughts, but to make decision-making processes less subjective and therefore less vulnerable to unconscious bias. Action must come from the top of the organization: an employer that provides clear, objective criteria to guide otherwise subjective decisions, and that enforces the use of those criteria, will make the workplace less discriminatory by diminishing the opportunity for decision-makers’ unconscious biases to affect their judgment.

The settlement of the gender discrimination class action against Novartis discussed in the first part of this post takes a stab at making these kinds of changes. It requires Novartis to clarify and systematize the criteria for evaluating employees, to train managers to evaluate employees fairly, and to “calibrate” evaluations to check that evaluators are applying performance criteria in a uniform manner.

Where bias is conscious and discrimination is intentional, decision-makers will find ways around objective criteria for decision-making. Conscious prejudice presents an entirely different set of challenges than unconscious bias. But I’d like to believe that a lot of workplace discrimination results from unconscious bias and that employers will improve their procedures to protect decision-making processes from that bias. Some employers have already done so, albeit usually under court order (demonstrating the need for more discrimination class actions). Employer initiatives to make subjective decision-making more objective will help end workplace discrimination. Please post a comment to share your workplace experience

About The Author: Piper Hofman is a writer and attorney living in Brooklyn with a B.A. magna cum laude from Brown University and a J.D. cum laude from Harvard Law School.  She has professional experience with the laws related to employment, animal rights, poverty, homelessness, and women’s rights.

In Illinois, Wage Thieves Will Pay

Wednesday, August 4th, 2010

Image: James ParksIllinois employers who shortchange or don’t pay their employees will face felony charges for repeat offenses and, in all cases, will be forced to pay back wages plus interest and fines under a new law signed by Gov. Pat Quinn (D) last week.

The new law, which experts say is the toughest anti-wage theft law in the country, goes into effect Jan. 1, 2011. It also gives workers more rights to ensure they are paid what they earn.

Chris Williams, executive director of the Working Hands Legal Clinic in Chicago, which led the effort to pass the law, told the Associated Press the law particularly benefits those who are most vulnerable: low-wage, temporary and immigrant workers. Low-wage workers are often paid in cash, making record-keeping difficult, and some undocumented workers fear retaliation if they speak up.

Such laws passed in Illinois and other states are important because they help generate momentum for a national policy, says Ted Smukler, public policy director at Interfaith Worker Justice (IWJ). If the law is administered the right way, it would help workers get justice quicker than the current system, he said.

IWJ, under the leadership of executive director Kim Bobo, has been in the forefront of efforts to stop wage theft. IWJ is organizing a National Day of Action on wage theft on Nov. 18, to increase awareness of the issue and ways workers and communities have fought back. If your worker center, local union or worker advocacy group would like to organize an event on Nov.18 and coordinate with IWJ, contact Smukler at [email protected].

The new law gives the state Department of Labor more oversight in dealing with the more than 10,000 wage theft claims it receives each year. The department will have authority to directly adjudicate claims of $3,000 or less.

The Illinois law is part of a growing national focus on stemming the epidemic of wage theft. In April, U.S. Labor Secretary Hilda Solis unveiled a new campaign to inform workers about their pay rights and to put a stop to wage theft.

Earlier this year, the Miami- Dade County Commission approved a country-wide wage theft ordinance. Several states, including  New York, Washington State, Massachusetts and New Mexico, have toughened penalties for employers who steal workers wages, Smukler said.

A recent study found that low-wage workers in New York City, Chicago and Los Angeles are routinely denied proper overtime pay and often are paid less than minimum wage.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris

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