Outten & Golden: Empowering Employees in the Workplace

The Meaning of Market Basket

December 3rd, 2014 | Alejandro Reuss

What was so unusual about the recent battle at the New England supermarket chain Market Basket? Well, to begin with, workers staged a mass, sustained walkout. Also, they were neither union members nor striking in conjunction with any union campaign. Oh, and the movement received widespread community support, including a consumer boycott. The company had longstanding policies like relatively high wages and a profit-sharing plan, which workers believed were threatened by a change in top management. And workers were not directly demanding higher pay, improved working conditions, or anything like that—but the reinstatement of the company’s recently sacked CEO. What’s more, they got what they were demanding.

In other words, what wasn’t unusual about it?

The confrontation was sparked by the firing of CEO Arthur T. Demoulas (hereafter, ATD) in June. Other members of the chain’s founding family owned the majority of the company’s stock, controlled the board, and—led by ATD’s own cousin Arthur S. Demoulas—decided to sack ATD. According to the Boston Globe, the “branch of the family headed by Arthur S. Demoulas,” unsatisfied with $500 million in dividends in the last decade, “has reportedly sought as much as $1.5 billion.” For ATD’s supporters, the family feud came to represent the contrast between a brand of management that cared for workers and consumers and one that cared only about profit. Protesters at rallies numbered in the thousands. Workers who walked out persisted even when threatened with “permanent replacement.” Some managers were fired for organizing the initial protests. Market Basket customers joined the protests, motivated both by sympathy with the embattled workers and loyalty to a company beloved for its low prices. The combination of the workers’ walkout and consumer boycott brought what local news reports called a “near-complete shutdown of business for six weeks in July and August.” The standoff finally ended on August 28, with ATD buying out his rival relatives—with funding from a private equity firm and other lenders—and returning as CEO.

To be sure, Market Basket workers were defending employment conditions that they felt were threatened by the change in management. Workers in the United States, even union members, have been on the defensive for decades. There are examples of fight-backs here and there, but by and large workers and unions have been fighting losing battles, making concessions on wages, health plans, and so on for the privilege of keeping their jobs. So one can take the Market Basket battle—both the mobilization of workers themselves and the community support—as a heartening example that it’s possible to fight and win (even if the “win” basically entails defending past gains).

The workers at Market Basket fought without benefit of a union. That can be seen as encouraging, too, because the vast majority of workers in the United States are not union members. If non-union workers could not fight and win, under any circumstances, the prospects for a labor revival would be very bleak indeed. On the other hand, the fight was neither for a traditional union nor any alternative type of workers’ organization. So what the workers “won” does not include any institutionalization of workers’ organized power.

The focus on the reinstatement of ADT is a major matter of concern. On the one hand, workers effectively asserted that they should have a collective say in how and by whom the company was directed. Let’s not forget that, historically, stockholders and directors have jealously guarded the power to choose management personnel and make decisions they regarded as “management prerogatives.” Here, workers exercised, by collective action, a veto on the stockholders’ choice of the company’s top executive. Had a major U.S. union—even in the heyday of unionism in the 1950s and 1960s—effectively asserted a right to veto a change in top management, to fire one CEO and hire another, or any similar power, it surely would have been accused of attacking the very foundations of the capitalist system!

That’s certainly not what the Market Basket workers intended—not the overthrow of capitalism, nor even a general assertion of workers’ rightful power to choose (or discharge) company management. Would that their attitude had been so steely and impersonal. In fact, it was anything but. The Market Basket workers were apparently motivated by a deep loyalty to Arthur T. DeMoulas. The Boston Globe marveled at the “extraordinary show of support for a multimillionaire chief executive in an era when most corporate workers barely know their CEOs and would be loath to risk their jobs on behalf of top executives.” At demonstrations, workers chanted “ATD!” and “Bring him back!” That’s certainly not a good lesson for workers in general. Loyalty to this or that boss—far more often than not—fetters workers’ demands and willingness to fight. It leaves them open to appeals for sacrifices for the company, while they have no institutionalized authority over the running of the company and someone else enjoys the fruits of these sacrifices. With ATD taking on over $1 billion in debt to the private-equity firm Blackstone Group and other lenders to finance the buyout—a sharp departure from Market Basket’s longtime low-debt approach—it is a worrisome possibility that workers will be asked to sacrifice so the financiers get what they are due.

The kind of labor-relations practices that prevailed at Market Basket have a long history in the United States—though their heyday in America’s largest corporations is a fading memory. In fact, they have a name: “welfare capitalism.” Economic historian Sanford M. Jacoby writes, in his 1997 book Modern Manors: Welfare Capitalism Since the New Deal, that early 20th-century welfare capitalism started with amenities like company cafeterias and gymnasiums (sometimes along with a paternalistic intrusion into workers’ and their families’ off-the-job welfare and behavior), eventually encompassing employment benefits like pensions, health-care plans, and profit-sharing, plus higher job security and internal “career ladders.” The early forms of welfare capitalism, he notes, “initially prevailed in companies controlled by their founders. Observing that their firms had become large and impersonal, these men hoped welfare activities would reproduce the close ties that had existed when they knew each of their employees by name.”

Company motivations were certainly not purely benevolent. By offering benefits that other employers didn’t, employers were able to recruit more highly skilled workers, reduce turnover, and (at least for a time) stave off unionization. Welfare capitalism allowed employers to cast unions as unwelcome intruders into a close, family-like relationship. These practices declined greatly with the unionization of U.S. mass-production industry between the 1930s and the 1950s. The kinds of benefits welfare capitalists had offered were no longer gifts from the employer (and no longer made “benevolent” employers stand out from their brethren)—they were now things that workers had fought for and won for themselves.

The decline of unions since the 1950s, and the freefall since the 1970s, have certainly not brought a revival of welfare capitalism. Employers have taken advantage of union decline to claw back what workers and unions had once won, and have shown very little inclination to return those things as gifts. To the extent that welfare capitalism in an earlier age was meant as a firewall against unions, that factor is hardly present today. Employers have found other, less conciliatory means to prevent unionization.

Employers certainly bear some costs for practicing a cold-blooded, naked-greed style of capitalism. U.S. companies are notoriously top-heavy with managers and supervisors—deciding, basically, to extract worker effort by surveillance and threat, rather than by cultivating workers’ good will. It would be a mistake, however, to think that capitalists generally have been misguided in their ruthlessness, and that they would be better off practicing “high road” labor relations. The current era of bare-knuckle capitalism, after all, has on the whole been spectacularly successful for owners and top managers—as seen in soaring corporate profits, stratospheric CEO pay, and the growing income share of the “one percent.” They know what they’re doing.

The answer to that is not going to be found in workers’ loyalty to their employers, nor in employers’ benevolence, nor in the pining (even if sincere) for a win-win solution that benefits workers and capitalists alike.

It could start with the words, also from the annals of the American class struggle, “The working class and the employing class have nothing in common …”

This blog originally appeared in Dollarsandsense.org on October 1, 2014. Reprinted with permission. http://dollarsandsense.org/archives/2014/0914reuss.html

is an historian and economist and co-editor of Dollars & Sense

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Newly-Elected Congressman: Anti-Poverty Programs Are ‘A Bribe Not To Work That Hard’

December 3rd, 2014 | Alan Pyke

Anti-poverty aid programs are nothing more than a bribe to keep low-income people from getting married or going to work, according to a new U.S. Congressman from Wisconsin.

“When you look at that amount of money, which is in essence a bribe not to work that hard or a bribe not to marry someone with a full-time job, people immediately realize you have a problem,” Rep.-elect Glenn Grothman (R) said on a statewide television show aired Sunday evening.

When the show’s host gave him a chance to walk back the bribery line, Grothman instead doubled down. “Well, if you tell somebody you’re going to get $35,000 if you don’t get married and you’re not going to get anything if you marry somebody making 50 grand a year, it’s certainly a strong incentive not to raise children in wedlock,” he said.

That $35,000 figure is seemingly plucked from a Cato Institute study that was discredited more than a year ago by the Center on Budget and Policy Priorities (CBPP). As the CBPP explained last August, the Cato study describes theoretical totals that a person could extract from a combination of anti-poverty programs without bothering to link that theoretical figure back to practical reality. The study’s assumptions about how bureaucratic rules and real-world experience interact produce “a misleading portrayal of the trade-off between work and welfare.” In the real world, CBPP wrote, the vast majority of public assistance program beneficiaries are working families rather than jobless ones, and very few families that receive public benefits tap into every available system in the way Grothman’s $35,000 figure implies.

While Grothman’s use of the word “bribe” caught his interviewer’s attention, a different, less-inflammatory phrase in his remarks is concealing an even larger deception. In portraying public assistance programs as an incentive “not to work that hard,” Grothman insinuates that people who work part-time or earn so low a wage that they qualify for housing aid and food stamps aren’t doing hard work, or that they are settling for poorly compensated positions rather than chasing better jobs. The comment simultaneously ignores the reality of the modern American labor market — where there are two job applicants for every opening and most hiring comes from service industry jobs that pay poverty wages — and hints that people who skull pots and fry potatoes for $8 an hour are lazy.

For most of the people Grothman is talking about, working full-time hours in a physically or emotionally demanding service job doesn’t provide enough income to survive. Six out of seven children who get health insurance from the federal government have parents who work. Six out of seven able-bodied food stamps recipients had a job within a year of their enrollment date, and more than half work while on food stamps. The work requirements that conservatives like Grothman enshrined during the Clinton-era welfare reform push have made the safety net less effective during recessions when jobs are scarce, but they mean that very few families are getting the sort of free ride the Wisconsin Republican imagines.

The social contract whereby a person’s willingness to work hard assured them of basic economic security has frayed. Progressives see that as a reason to raise the minimum wage to restore buying power low-income workers have lost to inflation. But Grothman and several of his fellow anti-safety net conservatives say the solution is instead to spend less money helping poor people (despite the fact that leaving them to fend for themselves is more expensive for the economy as a whole) and more money encouraging them to get married (even though that does nothing to cure poverty).

This blog originally appeared in Thinkprogress.org on December 2, 2014. Reprinted with permission. http://thinkprogress.org/economy/2014/12/02/3598130/welfare-bribe-grothman/

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.

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City Passes Historic Retail Workers Bill Of Rights

December 3rd, 2014 | Bryce Covert

On Tuesday evening, the San Francisco Board of Supervisors unanimously passed the Retail Workers Bill of Rights, the country’s first-ever legislation aimed at improving life for retail employees.

The new rules will require retail chains that have 11 or more locations across the country and employ 20 or more people in San Francisco to provide advance notice of schedules, improve the treatment of part-time employees, and give current workers the opportunity to take on more hours before hiring new people. Employers will have to give their workers at least two weeks’ advance notice of their schedules, and if they fail to do so they will have to give those workers additional “predictability pay.” Workers also get paid if they’re required to be on call but their shifts are canceled. Employers will have to give part-time employees the same starting wage as those working full time in the same position and access to the same benefits.

The bill’s passage comes at a time when erratic schedules are increasingly wrecking havoc on people’s lives, particularly in retail. Nearly half of part-time workers and just under 40 percent of full-time ones only find out their schedules a week or less in advance. In a survey of more than 200 retail employees in New York City, nearly 40 percent said they don’t get a set minimum of hours they’ll work each week and a quarter are required to be on call for shifts, often finding out just hours ahead of time that they’ll have to go to work. Many say schedules are posted on Saturdays for workweeks that start on Sunday.

Workers also show up just to be told to go home thanks to computer software that uses algorithms to determine if there are too many employees compared to sales volume — McDonald’s employees have sued the company over its use of exactly this technology.

At the same time, workers often struggle to get enough hours to survive. There are 7 million people in the country working part time who want to be full-time, an increase from 4.5 million in 2008. Employees in retail note that getting more hours or full-time status is treated like a reward, and docking hours is used as a punishment. Employers also keep workers just under what would qualify as full-time hours to avoid having to give them benefits.

Bills similar to its Retail Workers Bill of Rights are being pushed in Milwaukee, New York, and Santa Clara, California. Federal lawmakers have taken notice as well. In July, Reps. George Miller (D-CA) and Rosa DeLauro (D-CT) introduced the Schedules that Work Act. It would require all the country’s employers to give at least two weeks’ notice on schedules, give employees an hour’s pay for each shift changed within 24 hours, and pay them some wages if they get sent home before the end of their shifts or call in but aren’t given one. Workers would also have the right to request their own schedules.

This article originally appeared in Thinkprogress.org on November 26, 2014. Reprinted with permission. http://thinkprogress.org/economy/2014/11/26/3597287/san-francisco-retail-bill-of-rights/

About the author: Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

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Low wages & unpredictable schedules: A toxic combination for part time employees

December 3rd, 2014 | Charlotte Fishman

OLYMPUS DIGITAL CAMERAIn a society that blurs the lines between corporations and people, perhaps it was inevitable that some employers would blur the lines between people and inanimate objects.  Even so, it is shocking to learn that in a growing number of low wage industries, employers  treat part time employees as fungible, disposable assets, instead of human beings worthy of  respect.

Part time workers who toil in retail, food service, and janitorial jobs often find that their time is treated like just another production cost to be sacrificed on the altar of “maximizing profitability.”  They may be kept “on-call” with no compensation, assigned shifts with short notice, or burdened with unpredictable, fluctuating hours.  Even if scheduled to work, they may be told “we don’t need you today,” and sent home empty-handed.

When the labor needs of a business increase, a part time employee’s request for increased hours or  full time work is often denied.  Why? It is more “cost effective” to hire an additional part time worker than to pay a current employee the statutorily mandated benefits that come with increased hours.  Job security is illusory.  Nothing stops an employer from firing a part time employee who refuses to come in on short notice, even if the cause is a sick child or inability to rearrange an established childcare schedule at the last moment.

In addition to being inhumane, these insecurity-inducing employment practices take a huge toll on the  nation’s economic and social health. Without a predictable schedule, how can a low skilled worker improve his or her employability through education? How can a working mother arrange for stable childcare? How can a low wage worker take on additional part time employment to raise the family income above poverty level?

Scheduling abuse of low wage part time workers is a serious social issue that is finally getting the attention it deserves.   On July 22, California Representative George Miller and Connecticut Representative Rosa DeLauro introduced  H.S. 5159, “The Schedules that Work Act” in the House of Representatives.   A companion bill sponsored by Senators Elizabeth Warren and Tom Harkin will be taken up by the Senate.

“The Schedules that Work Act” is characterized by its proponents as a conversation starter about the devastating effect of unreasonable scheduling demands – a practice that has become commonplace in industries as diverse as Big Box stores, fast food chains and multi-national banks.  If enacted, it would prevent retaliation against employees who ask for schedule adjustments;  create an interactive process for employees to obtain accommodation for caregiving responsibilities, classes, second jobs, and other needs;  require employers to provide at least two weeks advance notice of work schedules; and provide at least some compensation for last minute schedule changes, split shifts and early dismissals.

Unfortunately, the bill’s provisions, modest as they are, may be too controversial to pass the gridlock in Congress.  While employer-side representatives loudly proclaim the benefit of flexible part time schedules for both employers and employees, the Bureau of Labor Statistics reports  that roughly 7.5 million employees are working part time only because their hours were cut or they were unable to find full time work.

This is not to say that flexible part time scheduling can never be beneficial for employees.  A predictable flexible schedule — one that enables part time employees to take a second job, to enroll in a training course or to provide care for family members – would be highly desirable to many.

There are hopeful signs of change to come at the local level.  In San Francisco,  Supervisor Eric Mar is poised to introduce the aptly named “Retail Workers Bill of Rights” to the Board of Supervisors at its July 29 meeting.   The proposed ordinance targets “formula retail” businesses,  a designation that includes chain stores, fast food restaurants, and multi-national banks.   Among the rights granted to employees are the right to  four hours pay for “on call” time or shift cancellation on short notice and the right to be offered additional hours before  any new part time workers are hired. The bill is supported by Jobs with Justice, a broad coalition of labor, community and small business groups.

The families of part time low wage workers need and deserve help creating a path out of their current predicament.  The toxic combination of low wage employment and unpredictable schedules is a form of involuntary servitude that should have no place in 21st century America.

In a society that blurs the lines between corporations and people, perhaps it was inevitable that some employers would blur the lines between people and inanimate objects.  Even so, it is shocking to learn that in a growing number of low wage industries, employers  treat part time employees as fungible, disposable assets, instead of human beings worthy of  respect.

Part time workers who toil in retail, food service, and janitorial jobs often find that their time is treated like just another production cost to be sacrificed on the altar of “maximizing profitability.”  They may be kept “on-call” with no compensation, assigned shifts with short notice, or burdened with unpredictable, fluctuating hours.  Even if scheduled to work, they may be told “we don’t need you today,” and sent home empty-handed.

When the labor needs of a business increase, a part time employee’s request for increased hours or  full time work is often denied.  Why? It is more “cost effective” to hire an additional part time worker than to pay a current employee the statutorily mandated benefits that come with increased hours.  Job security is illusory.  Nothing stops an employer from firing a part time employee who refuses to come in on short notice, even if the cause is a sick child or inability to rearrange an established childcare schedule at the last moment.

In addition to being inhumane, these insecurity-inducing employment practices take a huge toll on the  nation’s economic and social health. Without a predictable schedule, how can a low skilled worker improve his or her employability through education? How can a working mother arrange for stable childcare? How can a low wage worker take on additional part time employment to raise the family income above poverty level?

Scheduling abuse of low wage part time workers is a serious social issue that is finally getting the attention it deserves.   On July 22, California Representative George Miller and Connecticut Representative Rosa DeLauro introduced  H.S. 5159, “The Schedules that Work Act” in the House of Representatives.   A companion bill sponsored by Senators Elizabeth Warren and Tom Harkin will be taken up by the Senate.

“The Schedules that Work Act” is characterized by its proponents as a conversation starter about the devastating effect of unreasonable scheduling demands – a practice that has become commonplace in industries as diverse as Big Box stores, fast food chains and multi-national banks.  If enacted, it would prevent retaliation against employees who ask for schedule adjustments;  create an interactive process for employees to obtain accommodation for caregiving responsibilities, classes, second jobs, and other needs;  require employers to provide at least two weeks advance notice of work schedules; and provide at least some compensation for last minute schedule changes, split shifts and early dismissals.

Unfortunately, the bill’s provisions, modest as they are, may be too controversial to pass the gridlock in Congress.  While employer-side representatives loudly proclaim the benefit of flexible part time schedules for both employers and employees, the Bureau of Labor Statistics reports  that roughly 7.5 million employees are working part time only because their hours were cut or they were unable to find full time work.

This is not to say that flexible part time scheduling can never be beneficial for employees.  A predictable flexible schedule — one that enables part time employees to take a second job, to enroll in a training course or to provide care for family members – would be highly desirable to many.

There are hopeful signs of change to come at the local level.  In San Francisco,  Supervisor Eric Mar is poised to introduce the aptly named “Retail Workers Bill of Rights” to the Board of Supervisors at its July 29 meeting.   The proposed ordinance targets “formula retail” businesses,  a designation that includes chain stores, fast food restaurants, and multi-national banks.   Among the rights granted to employees are the right to  four hours pay for “on call” time or shift cancellation on short notice and the right to be offered additional hours before  any new part time workers are hired. The bill is supported by Jobs with Justice, a broad coalition of labor, community and small business groups.

The families of part time low wage workers need and deserve help creating a path out of their current predicament.  The toxic combination of low wage employment and unpredictable schedules is a form of involuntary servitude that should have no place in 21st century America.

This blog originally appeared in CelaVoice.org on July 24, 2014. Reprinted with permission. http://celavoice.org/tag/part-time-work/

About the Author: Charlotte Fishman is a San Francisco attorney with over 30 years of experience handling employment discrimination cases on the plaintiff side. In 2005 she launched Pick Up the Pace, dedicated to overcoming barriers to women’s advancement in the workplace through legal advocacy and public education. She has authored amicus curiae briefs in major cases before the United States and California Supreme Court and writes and speaks to a wide audience on cutting edge employment issues affecting women.

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Employers Keep Shifting Costs to Workers Under Obamacare

December 3rd, 2014 | Mark Dudzic

in these timesObamacare enrollment season is here again, and people with insurance through the Affordable Care Act’s marketplaces are being urged to look at their options.

It’s been a year since the exchanges originally opened. Despite spectacularly incompetent website design and poor management by the federal and many of the state exchanges, most of the glitches were finally resolved, and 7.3 million people signed up and paid for private insurance through the marketplaces.

Seven million more people also gained coverage under Medicaid in the past year—despite the fact that 23 states continue to refuse to accept federal funds to expand Medicaid to their own residents, affecting 11 million more Americans.

Late last year, the Labor Campaign for Single Payer posted our Briefing Paper, ”10 Things Unions Need to Look Out for When Bargaining Under Obamacare.” We asserted that, “because it relies on employment-based coverage to provide the lion’s share of healthcare insurance while, perversely, undermining key aspects of that coverage, we have concluded that the ACA will place new stresses and pressures on collective bargaining.”

Resources for Bargaining

Are you preparing to bargain health care? The Labor Campaign for Single Payer has just posted a new video, “How to Negotiate Healthcare under the Affordable Care Act,” a 30-minute tutorial for union activists and staff.

As we predicted, the assault on employment-based benefits continues unabated. A recent survey reports that 71 percent of Fortune 500 companies plan to raise employee contributions for their health insurance, and 73 percent have already moved or plan to move to so-called “consumer-directed health plans,” a fancy catchphrase for skimpy plans that shift costs onto the consumer.

In addition, 30 percent report that they plan to dump pre-65 retirees onto the health insurance exchanges, and 24 percent are moving to keep part-time hours under 30 per week. Employers are required to provide health insurance for all full-time employees (counted as those working 30 hours or more) or pay a penalty under yet-to-be-enforced ACA rules.

Walmart recently announced it was eliminating health care benefits for 30,000 part-timers who work less than 30 hours per week. It’s joined by dozens of other major corporations in the retail and hospitality industries who are eliminating employer-provided benefits for their low-wage and part-time workers.

These actions highlight the contradictory and unstable consequences of the ACA. Many of these workers may be able to access more affordable benefits in the health care exchanges, while Walmart gets away with a huge shift of its employment costs onto the backs of taxpayers.

Cost shifting isn’t only affecting low-wage workers. In Philadelphia, an unelected School Reform Commission unilaterally cancelled its contract with the Philadelphia Federation of Teachers, pulled out of the existing Health and Welfare Fund, eliminated retiree benefits, and imposed a 10 to 13 percent co-pay on working teachers.

Bargaining Advice

Unions are wrestling with the new bargaining environment created by the Affordable Care Act. The Labor Campaign for Single Payer understands that the only long-term solution is to take health care off the bargaining table by making it a right for everyone in America. In the meantime, we stand in solidarity with workers everywhere fighting to defend hard-won benefits.

Getting ready for contract negotiations? The Labor Campaign for Single Payer has just posted a new video, “How to Negotiate Healthcare under the Affordable Care Act,” a 30-minute tutorial for union activists and staff.

The video was prepared by the United Electrical, Radio and Machine Workers union (UE), based on their extensive bargaining experiences under ACA. It includes recommendations for contract language, as well as language to avoid.

Until we win single-payer Medicare-for-All, health care benefits will continue to be the biggest cause of strikes, lockouts, concession bargaining, and givebacks. We need to finish the job. The best way to guarantee health care for every worker is to guarantee health care for all.

This story was first posted at Labor Notes and then reposted on Inthesetime.com on December 2, 2014. Reprinted with permission. http://inthesetimes.com/working/entry/17409/employer_costs_obamacare

About the author: Mark Dudzic is National Coordinator of the Labor Campaign for Single Payer.

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Jimmy John's and Non-Competes: An Unclear Path

November 26th, 2014 | Olivia Nedd

olivia_headFor many companies, non-compete agreements are used to protect trade secrets, business plans and intellectual property. But why is Jimmy John’s, a sandwich chain, requiring its low wage workers to sign non-compete agreements?

These agreements do not allow employees to work for a competing sandwich shop for a period of two years following their employment at Jimmy John’s.

This prompted lawmakers to investigate the company’s policy that bars their workers from working for its competition. House members Rep. Joseph Crowley and Rep. Linda Sánchez call the practice “a form of intimidation.” Jimmy Johns under Fire for Worker Contracts. Together they have drafted a letter asking the Labor Department and the Federal Trade Commission to investigate the reports. But questions still linger. What does this do to the low wage worker? How are their rights impacted? And what are Non-Compete Agreements anyways?

To begin, a non-compete agreement is a contract between an employee and an employer, where the employee agrees not to enter into competition with the employer after they terminate employment. Non-Compete Agreements: Overview. These were once reserved and considered to be commonplace among certain professions. For instance, think of the workers at Coca-Cola who work closely with the secret recipe. It is understandable that their employees sign non-compete agreements not to work for Pepsi immediately after terminating their employment, due to the possibility they may reveal information that gives the new employer a competitive advantage.

Courts usually disapprove of non-compete agreements as they limit the employees ability to earn a living. This can greatly impact the low wage worker with specific set of skill. The court must balance the need to protect the employer’s legitimate interest with any burden that enforcement of the agreement would place on the employee. Additionally, the Court must determine if the duration and scope of the agreement is reasonable. Remember that Jimmy John’s is asking their employees who terminate their employment to wait two years before seeking new employment.

As this issue progresses it will be important for all those investigating to consider how some states have chosen to approach the topic. California, for example, has forbidden the use of non-compete clauses, providing for a few exceptions (California Non-Compete Site) while other states require that the use of non-competes be reasonable in scope.

It is unclear where this will lead. But it is clear that Jimmy John’s use of the non-compete clause intimidates its low-wage workers and places a restraint on them to find better work.

For more information on non-compete agreements and their impact in the workplace visit: http://www.workplacefairness.org/noncompete

About the Author Olivia Nedd is a legal intern for Workplace Fairness and a student at Howard University School of Law.

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Two Lawyers Explain Why There's No Legitimate Reason For Most Non-Compete Clauses

November 26th, 2014 | Marilynn Mika Spencer and Anthony Munter

 

We were mad as hell after reading the excellent article on non-compete causes by Danny Westneat of the Seattle Times.

Mr. Westneat described the absurdity and unfairness of employers forcing non-compete agreements on low-wage workers – thus limiting or even eliminating the employees’ future job options –and then going even further and suing those low-wage workers to enforce those provisions.

What made us so mad?

First, knowing how desperately low-wage workers need an income, and need it now. These are not workers with a cushion of savings to tide them over in hard times. For these workers, hard times are all times. They are always there. If a low-wage worker is lucky enough to find a job in this rotten economy, chances are good the worker will sign anything and everything thrust before him. Most employers know this and are quick to take advantage, adding arbitration clauses, privacy waivers, non-compete agreements, and more to the mass of paperwork a job applicant or new hire must sign just to get to the next step.

As a society, we don’t condone a party with great power forcing its will on a party without power. We limit interest on loans and fees, we enact usury laws, we require critical contract language to be highlighted in bold type, we declare certain agreements unenforceable because they violate public policy, and more.

Yet, most states still allow and enforce employee non-competition agreements. When we did a little research on the subject, we found confirmation of the more disturbing trend that we’ve already noticed: increasingly courts and society weigh the social benefit from employers as greater than the social benefit from workers. They use only a shallow rationale to support their pro-employer decisions. This has created an increasing solidification of the role of money in society as the most important consideration.

For example, one article in favor of restricting employee’s future job options began by explaining that the employer makes an investment in training workers, and then jumped to the horrors of losing that investment – as if that loss were worse than losing one’s income, home, and ability to feed the family. The article therefore concluded that only the employer has an interest in protecting its investment and so we should enforce the non-compete.

What are we really talking about with respect to low-wage workers? How much has the employer invested in training? Specialized tools or equipment? How long was the training? A few hours? A few days? Certainly not a few weeks. If an employer pays an employee $10 an hour, how much of an investment has the employer made in this worker? Obviously the employer doesn’t see the worker as valuable enough to pay $13 or $15 an hour. Wouldn’t it be more likely the employee would stay on the job if the employer paid $15, $16 or (gasp!) $17 an hour? The idea that the worker also is investing in his or her own life and career did not merit consideration.

No, the employers who force non-competition agreements on employees are not protecting a meaningful investment. There must be something else.

Although we concentrated our review of non-competes on those provisions that limit future job options, we also found false arguments in the justification employers’ use to impose trade secret agreements on low-wage workers. The employer’s main argument here is that it needs to protect against potential damage from a competitor getting its hands on the employer’s trade secrets. That might be fair, but it has nothing to do with a non-compete. An employer with trade secrets can sue to protect them so they do not need a non-compete clause for that reason.

Even worse in this context we have to ask: How much access to a trade secret does a minimum wage or low-wage worker have?

It doesn’t look like the employer is protecting itself from the competition. Again, something else must be going on.

What is really going on is employers imposing non-competition agreements on low-wage workers to undercut any power the employees have. The employers want to remove perhaps the workers’ only bargaining chip: the right to stop working for an employer when they want. If the employee is not free to withhold his or her labor and not free to quit and work somewhere else, then the employee is wedded to the current employer, like it or not.

This gives the employer inordinate power over any employees. It doesn’t matter how poorly paid the worker is, how unsafe the workplace is, how oppressive management is. The employee is stuck. If the employee wants to pay the rent and feed the kids, the employee has to endure whatever the employer imposes. This utter inequality makes a mockery of the employee’s supposed freedom to contract for his labor. It also reveals the lie inherent in at-will employment. (At-will employment is the legal doctrine found in 49 of the 50 United States that says an employer can fire, or demote an employee whenever it wishes, and an employee can quit whenever she wishes.) This kind of top-heavy control severely hampers the likelihood that the employees will organize into a union, thus completely eliminating any potential to even-out the playing field.

The argument that non-competes should be valid has no balance. The worker being paid (and demonstrably underpaid, considering he can get a higher-paying job somewhere else) must suffer lower than market rate wages because his employer wants to enjoy as much control as possible over his employee’s life.

What does the low-wage worker get? Subsistence, if she is lucky. Who among us hasn’t heard of, or doesn’t know, people working two or even three jobs, just to get by? Can the low-wage worker work toward a better future? Can the low-wage worker learn a skill and outgrow her current job? Can the low-wage worker increase her contributions to society?

As our economy started its decline in 2006 and 2007, the voices against capitalism got louder and gained support. To counter this opposition, those in power argued back that once the economy got better and employers must again compete for labor, then labor would get something out of the deal, too. Yet the economy has been improving, albeit slowly, for a couple years now without the workers “getting something” out of the bargain. At best, they’ve regained just a fraction of what they’ve lost.

We urge you though not to think of this fight as “the other guy’s problem.” Maybe you make a lot more than $15 an hour. Maybe you have a better paying job. Still, what would happen to your marketability in this already-tough labor world if you had to sign one of these non-competition agreements? Do not be pacified just because you may make more than $15 per hour. Once large employers realize they can suppress wages and eliminate dissent through this tool, they will use it on everyone.

The mid-term elections are over, but you still have a voice. Don’t stop using it. People don’t change their views quickly, and we have to be aware of these issues at all times. If this issue makes you mad, watch carefully and write a lot about it. If you think you have a case then talk to a lawyer and find out what your rights are.

The people who want to impose these kinds of conditions on your right to earn a living will not stop. It is up to us to fight to prevent these provisions from taking away our right to compete.

This article originally appeared in Crooks and Liars.com on November 24, 2014. Reprinted with permission. http://crooksandliars.com/2014/11/two-lawyers-explain-why-theres-no.

About the authors Marilynn Mika Spencer of The Spencer Law Firm  is an employment and labor law attorney in San Diego, California.

Anthony Munter of Price Benowitz is a qui tam and whistleblower attorney in Washington , D.C.

 

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At Chattanooga Volkswagen Plant, Workers Finally Win a Different Kind of Union

November 26th, 2014 | Will Craft

in these timesAfter a harsh anti-union campaign and a failed union vote, some workers at the Volkswagen factory in Chattanooga, Tennessee will finally be allowed to be represented by a union—more than one, if they so choose.

Volkswagen recently introduced a new policy that allows a variety of unions different tiers of representational rights based on the percentage of the workforce that sign up to become members of the union, the New York Times reported last week. The unions will have different representational responsibilities based on how many employees are members of the union. And, as the Detroit Free Press reports, because the company policies now allow for workers to be represented by multiple unions, the United Auto Workers (UAW) are not the only union vying to represent Chattanooga Volkswagen workers: another organization called the American Council of Employees is also hoping to sign up workers.

The policy follows an unsuccessful vote in February to approve the UAW as the sole union representing the workers. The campaign was marred by an unprecedented level of involvement from local and state politicians.

Volkswagen’s new policy addresses some of the concerns that workers voiced about the UAW. With the new rules, as long as at least 15 percent of the workforce are members, then the union will have some level of representation. According to the Free Press, if a union has 15 percent membership, then the union can use conference space in the factory and meet with Volkswagen human resources once a month. At 30 percent, the union can meet quarterly with members of the Chattanooga Executive Committee; at 45 percent, the union can meet bi-weekly with HR and monthly with the executive committee.

Some critics of the move say it’s not enough. Detlef Wetzel, the head of the German auto-workers union, recently issued a statement demanding that the plant honor the UAW as the majority union—a move still hotly contested by right-to-work groups.

The fact that multiple unions are now vying for workers’ membership (and dues money) could prove to be chaotic on the shop floor. Still, the fact that workers will now have any level of representation may represent a step forward not only for VW employees, but for the idea of “minority” or “members-only” unionism in the U.S. Many unions have opted not to pursue such campaigns due to the amount of resources they require, with no guarantee that they will ever be able to turn a majority of workers in a given workplace into dues-paying members.

Since workers at VW—and at many workplaces around the country—who want to become union members don’t have much of an alternative at this point, the fact that unions like the UAW are slowly taking steps towards embracing minority unions may prove to be an important development for organized labor.

About the Author: Will Craft is a fall 2014 intern with In These Times, and is a political science major at The University of Chicago. He has previously worked for The Cancer Letter and The Triple Helix. He is also a devout member of Le Vorris &Vox, the University of Chicago circus. He is on twitter @craftworksxyz.

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NELP Report: Falling Wages In Factory Jobs

November 26th, 2014 | Dave Johnson

Dave Johnson“My experience is that the greatest aid to efficiency of labor is a long line of [unemployed] men waiting at the gate.”

— Magnate Samuel Insull, 1920s

Economists strive for “efficiency” in our economy. “Efficiency” means that the things we buy are produced at their lowest possible cost. The wages that working people are paid are a “cost” to be eliminated. Egypt’s Pharaohs built the pyramids with “efficient” labor. Imperial Rome and the old Confederacy also had particularly efficient labor markets.

American factory jobs used to provide reasonable pay and benefits – largely because of unions and democracy. So how do you make manufacturing jobs more “efficient?” You can move the factory to a country that doesn’t allow unions. Our country used to recognize this game and “protected” the good wages and benefits that democracy provided people with tariffs that raised to price of goods made in places that allowed exploitation of working people. Solution: “free trade” that pits our democracy against thugocracies with few or no protections for people or the environment.

“Free trade” worked – to force unemployment up and wages down. We lost more than 6 million manufacturing jobs and 60,000-plus factories between 2000 (the year before China entered the World Trade Organization) and 2010.

The National Employment Law Project (NELP) has a new study out today that finds that factory jobs now pay much less than they did even a few years ago. The NELP study, “Manufacturing Low Pay: Declining Wages in the Jobs That Built America’s Middle Class,” by Catherine Ruckelshaus & Sarah Leberstein, says:

“… while the manufacturing sector has been resurging in the last few years, growing by 4.3 percent between 2010 and 2012, the jobs that are returning are not the ones that were lost: wages are lower, the jobs are increasingly temporary, and the promised benefits have yet to be realized. “

Some key findings from the report:

  • Americans perceive manufacturing jobs as “good jobs.”
    Nine out of ten Americans believe that a strong manufacturing base is very important to our country’s standard of living, according to a poll conducted by the consulting firm Deloitte for the Manufacturing Institute. When asked what type of facility they would support to bring jobs to their community, a manufacturing plant was at the top of the list.
  • Manufacturing wages now rank in the bottom half of all jobs in the United States.
    While in the past, manufacturing workers earned a wage significantly higher than the U.S. average, by 2013 the average factory worker made 7.7 percent below the median wage for all occupations.
  • The perception that manufacturing jobs are highly paid disguises how many workers are stuck at the bottom.
    Today, more than 600,000 manufacturing workers make just $9.60 per hour or less. More than 1.5 million manufacturing workers — one out of every four — make $11.91 or less.
  • Manufacturing wages are not even keeping up with inflation.
    Real wages for manufacturing workers declined by 4.4 percent from 2003 to 2013—almost three times faster than for workers as a whole.
  • In the largest segment of the manufacturing base—automotive—wages have declined even faster.
    Real wages for auto parts workers, who now account for three of every four autoworker jobs, fell by nearly 14 percent from 2003 to 2013 — three times faster than for manufacturing as a whole, and nine times faster than the decline for all occupations.
    The growth in the number of auto parts jobs is cause for concern, because the typical parts worker makes one-third less than the typical auto assembly worker, and puts downward pressure on the higher assembly wages.
  • There has been a resurgence in the number of auto industry jobs since the economic crisis peaked in 2009.
    The auto industry has added nearly 350,000 jobs and invested $38 billion in U.S. facilities since 2009, which indicates a long-term commitment to building vehicles here. As long as vehicles are assembled in the United States, the economic benefits of a just-in-time manufacturing base ensures that jobs at many parts suppliers are also likely to remain in the country, even if wages rise.
  • New jobs created in the auto sector are worse than the ones we lost.
    In five of the 10 “Auto Alley” states—Michigan, Indiana, Ohio, South Carolina, and Tennessee—new hires at auto parts plants are paid roughly one-quarter less than the other auto parts workers in the state.
    In six of the 10 Auto Alley states—Alabama, Mississippi, Indiana, Ohio, Michigan, and Illinois—auto parts workers saw real monthly earnings decline between 2001 and 2013. Alabama saw the steepest decline—24 percent—over that period.
  • Heavy reliance on temporary workers hides even bigger declines in manufacturing wages.
    About 14 percent of auto parts workers are employed by staffing agencies today. Wages for these workers are lower than for direct-hire parts workers and are not included in the official industry-specific wage data cited above.
    Estimates based on U.S. Census Bureau data, however, indicate that auto parts workers placed by staffing agencies make, on average, 29 percent less than those employed directly by auto parts manufacturers.

More “Free” Trade?

The giant companies are trying to seal the deal now, with a “trade’ agreement called the Trans-Pacific Partnership. This agreement not only pits American workers against workers in places like Vietnam, it also allows corporations to sue governments for doing things that might hurt profits – like anti-smoking initiatives. They are trying to push something called “Fast Track” through Congress to grease the skids for this agreement.

About Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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Chicago’s Black Unemployment Rate Near Quadruple That of Whites

November 23rd, 2014 | Adeshina Emmanuel

Adeshina EmmanuelWith 25 percent of its African-American residents jobless, Chicago has the highest black unemployment rate among the nation’s five most populous cities. Chicago’s rate is higher than Philadelphia’s 19 percent, Los Angeles’ 18 percent, Houston’s 15 percent and New York City’s 14 percent, based on 2013 U.S. Census figures.

Why?

Experts point to Chicago’s unique brand of residential segregation, among other factors.  Almost 75 percent of black Chicagoans live in a community that’s at least 90 percent black, according to Census data. Blacks are about one-third of Chicago’s population. The unemployment rate for white Chicagoans is 7 percent; for Latinos, it’s 12 percent.

Michael Dawson, a leading scholar on politics and race, said Chicago’s “extreme segregation” deprives many residents of the predominantly black South and West Sides of adequate public transit and job networks.

“The way people get hired is through networks,” and most people’s social networks are predominately within their own race, he said.

For decades, the city’s economically marginalized black communities have been saddled with failing, underfunded public schools, high youth unemployment and low college graduation rates.

“You get neighborhoods where not only do you not have a job, you don’t know many other people who have one and can help you get one,” said Valerie Wilson, an economist who heads the Program on Race, Ethnicity and the Economy at the Economic Policy Institute, a Washington, D.C., think tank.

But segregation alone doesn’t explain the situation.

This blog originally appeared in the Chicago Reported and then reposted on In These Time on November 18, 2014. Reprinted with permission. http://inthesetimes.com/working/entry/17378/chicago_ranks_fifth_in_highest_black_unemployment_rate

About the Author: Adeshina Emmanuel is a reporter for the Chicago Reporter.

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