Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘U.S. Supreme Court’

Nine Years Later: Why We're Still Fighting Pay Discrimination

Monday, January 29th, 2018

Nine years ago today, then-President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law, restoring working women’s right to sue over pay discrimination. It was the first piece of legislation enacted during his presidency, and he noted the significance of the moment: “It is fitting that with the very first bill I sign…we are upholding one of this nation’s first principles: that we are all created equal and each deserve a chance to pursue our own version of happiness.”

Lilly Ledbetter, the law’s namesake, had blazed a trail forward in the spirit of that fundamental idea. After two decades of hard work at Goodyear Tire and Rubber Co.’s Gadsden, Alabama, plant, she learned that she was making thousands less than her male counterparts. Over the course of her career, she had lost out on more than $200,000 in wages—plus even more in retirement benefits. She challenged Goodyear’s discriminatory actions, eventually taking her case to the U.S. Supreme Court and the halls of Congress.

Her journey led to a major step forward in the fight for justice in the workplace. But that fight is far from over. Women continue to face discriminatory pay practices—and the problem is even worse for women of color:

  • Women overall make 80 cents on the dollar that men make.
  • African American women make 63 cents.
  • Native American women make 59 cents.
  • Latinas make 54 cents.

This outrageous pay disparity doesn’t just hurt women. Some 40% of working women in the United States are the sole breadwinner for their families. When they face discrimination on the job, their loved ones suffer as well.

The AFL-CIO is fighting to end this injustice. The first step is collecting and releasing data on gender pay discrimination. When employers can’t hide their despicable actions, we can effectively fight to end them. Take action today and urge the U.S. Equal Employment Opportunity Commission to collect equal pay data.

This blog was originally published at AFL-CIO on January 29, 2018. Reprinted with permission. 

U.S. Supreme Court Accepts Cert in Dudenhoeffer ERISA Moench Presumption of Prudence Case

Friday, January 3rd, 2014

Paul SecundaToday, the United States Supreme Court granted certiorari in a case where the 6th Circuit found that a company may have breached its fiduciary duties under ERISA by continuing to offer company stock as a retirement plan investment option even after the value of the stock plunged.

The case is Fifth Third Bancorp v. Dudenhoeffer, No. 12-751 (don’t ERISA cases have the best names?) and here is the decision below in the 6th Circuit.  SCOTUSBlog says the case is likely to be heard in March.  The Solicitor General had urged the Court to hear the case.

The issue is whether courts should apply a presumption of prudence or reasonableness (sometimes called the Moench presumption based on a similar case by that name in another circuit court) when a company,  like Fifth Third, decides to retain investments in its own securities for its ESOP (employee stock ownership plan) when the stock’s price dropped 74 percent because of the company’s involvement in subprime mortgage lending.  The employees in the retirement plan claim they were never alerted to the company’s new riskier investment course.

Participants in Fifth Third’s ESOP filed an ERISA class action, asserting that the company’s actions  violated their fiduciary responsibilities to plan participants and beneficiaries by imprudently investing in company stock.  Initially, the U.S. District Court for the Southern District of Ohio had determined that Fifth Third did not violate ERISA because plan fiduciaries are entitled to a “presumption of prudence” permitting investment in their own stock and the plaintiffs had not overcome that presumption by showing that the company had plausibly abused their discretion in investing the ESOP money in the company stock.

The participants appealed to the 6th Circuit, supported by an amicus brief by the Department of Labor (DOL).  The DOL maintains that the presumption of prudence should not apply and that plaintiffs had plausibly alleged a breach of fiduciary duty.  The 6th Circuit agreed, at least as far as holding that the presumption should not be applied at the pleading stage of the lawsuit.

The 6th Circuit also held that Fifth Third acted as an ERISA fiduciary when it incorporated its Securities and Exchange Commission (SEC) filings into the ESOP’s plan documents. The Court did not take cert. on a challenge to this finding.

The case law had been trending in favor of the presumption of prudence in these stock-drop cases in recent years, with the Sixth Circuit being a notable exception. It is always hard to predict where the Court will come out on ERISA fiduciary cases, but given that the Court granted cert. on the question as presented by the company (and did not re-write the question as requested by the Solicitor General), we may gain some insight. The question presented is:

Whether the Sixth Circuit erred by holding that respondents were not required to plausibly allege in their complaint that the fiduciaries of an employee stock ownership plan abused their discretion by remaining invested in employer stock, in order to overcome the presumption that their decision to invest in employer stock was reasonable, as required by the Employee Retirement Income Security Act of 1974 . . . and every other circuit to address the issue.

Phrasing the question presented in such a leading manner suggests only one possible reasonable answer upholding the presumption of prudence in ERISA stock drop cases.  But we shall see.

This article was originally printed on Workplace Prof Blogs on December 16, 2013.  Reprinted with permission.

About the Author: Paul Secunda is a professor of law at Marquette University Law School.  Professor Secunda is the author of nearly three dozen books, treatises, articles, and shorter writings. He co-authored the treatise Understanding Employment Law and the case book Global Issues in Employee Benefits Law.  Professor Secunda is a frequent commentator on labor and employment law issues in the national media.  He co-edits with Rick Bales and Jeffrey Hirsch the Workplace Prof Blog, recently named one of the top law professor blogs in the country.

WORST SUPREME COURT ARBITRATION DECISION EVER

Thursday, June 20th, 2013

PaulBlandWeb-172So, today, in American Express v. Italian Colors, the U.S. Supreme Court said that a take-it-or-leave-it arbitration clause could be used to prevent small businesses from actually pursuing their claims for abuse of monopoly power under the antitrust laws. Essentially, the Court said today that their favorite statute in the entire code is the Federal Arbitration Act, and it can be used to wipe away nearly any other statute.

As Justice Kagan said in a bang-on, accurate and clear-sighted dissent, this is a “BETRAYAL” (strong word, eh?) of the Court’s prior arbitration decisions. You see, until now, the Supreme Court has said that courts should only enforce arbitration clauses where a party could “effectively vindicate its statutory rights.” Today, in a sleight of hand, the five conservative justices said that this means that arbitration clauses should be enforced even when they make it impossible for parties to actually vindicate their statutory rights, so long as they have a theoretical “right” to pursue that remedy.

The plaintiffs in this case, restaurants and other small merchants, claim that American Express uses its monopoly power over its charge card to force them to accept American Express’s credit cards and pay higher rates than they would for other credit cards. This is called a “tying arrangement” under the antitrust laws — American Express is alleged to be using its monopoly power over one product to jack up the price of another product to higher rates than it could charge in a competitive market.

For plaintiffs to prove this kind of case, they have to come up with hard evidence — economic proof — that costs hundreds of thousands of dollars. And each individual merchant has only lost, and thus can only hope to recover, a small fraction of that amount. The U.S. Court of Appeals for the Second Circuit recognized that if American Express’s arbitration clause (and particularly its ban on class actions) was enforced, that would mean that none of the small business plaintiffs could enforce their rights under the antitrust laws. And under a long line of Supreme Court cases, arbitration clauses are only enforceable when they permit the parties to effectively vindicate their statutory rights.

Today’s decision turns that rule on its head. According to Justice Scalia’s majority opinion, even if an arbitration clause would mean that no individual would ever actually be able to pursue an antitrust claim on an individual basis, the arbitration clause still has to be enforced. The law has changed dramatically — parties no longer have a right to “effectively” vindicate their statutory rights; they are left with the meaningless but formal right to pursue economically irrational claims if they choose to do so.

The decision is catastrophic for the antitrust laws, as well as for civil rights, consumer rights, and many other statutory rights. The decision is an unmitigated disaster, replacing adhesive contracts for an idea of actual law. The drafters of the FAA would not recognize what it has turned into.

Justice Kagan went on to state: “As a result, Amex’s contract will succeed in depriving Italian Colors of any effective opportunity to challenge monopolistic conduct allegedly in violation of the Sherman Act. … In the hands of today’s majority, arbitration threatens to become … a mechanism easily made to block the vindication of meritorious federal claims and insulate wrongdoers from liability.” Justice Kagan gets this one completely right. The entire point of the majority opinion is to use arbitration to insulate companies from any possibility of class action liability.

We used to have something called “The Federal Arbitration Act.” The Court today might as well have amended its real title to “The Federal Corporate Immunity Act.”

This article was originally printed on Public Justice on June 20, 2013.  Reprinted with permission.

About the Author: Paul Bland is a Senior Attorney at Public Justice.  He has argued and won more than 30 cases that led to reported decisions for consumers, employees or whistleblowers in four of the U.S. Courts of Appeals and the high courts of nine different states.

Supreme Court of the United States to Hear "Ministerial Exception" Case

Friday, April 8th, 2011

Ross_Runkel_aMarch 28, 2011, the US Supreme Court granted certiorari in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC to decide whether the “ministerial exception” applies to teacher at a religious elementary school.

[Details, briefs]

The Equal Employment Opportunity Commission (EEOC) sued the employer, asserting a retaliation claim under the Americans with Disabilities Act (ADA). The trial court dismissed the claim, based on the “ministerial exception” to the ADA. The 6th Circuit vacated the trial court’s dismissal.

The ministerial exception is codified in the ADA (42 USC Section 12113(d)), but it is rooted in the 1st Amendment and has been applied to Title VII and other employment discrimination statutes. The EEOC’s claim arose from the discharge of a teacher from a sectarian school, and the primary issue on appeal was whether the teacher was a “ministerial” employee subject to the ministerial exception. The 6th Circuit noted that “[t]he question of whether a teacher at a sectarian school classifies as a ministerial employee is one of first impression for this Court.”

The 6th Circuit observed that “the overwhelming majority of courts that have considered the issue have held that parochial school teachers … who teach primarily secular subjects do not classify as ministerial employees for purposes of the exception.” The 6th Circuit also observed that “when courts have found that teachers classify as ministerial employees for purposes of the exception, those teachers have generally taught primarily religious subjects or had a central role in the spiritual or pastoral mission of the church.” Applying those standards, the court concluded that the teacher at issue did not fall within the scope of the ministerial exception. The court noted that the teacher taught secular subjects, and spent only forty-five minutes out of her seven hour workday on religious-oriented activities. The court reasoned, “[t]he fact that [the teacher] participated in and led some religious activities throughout the day does not make her primary function religious.”

The US Supreme Court granted certiorari to review the 6th Circuit judgment.

Question presented in petition for certiorari:

The federal courts of appeals have long recognized the “ministerial exception,” a First Amendment doctrine that bars most employment-related lawsuits brought against religious organizations by employees performing religious functions. The circuits are in complete agreement about the core applications of this doctrine to pastors, priests, and rabbis. But they are evenly divided over the boundaries of the ministerial exception when applied to other employees. The question presented is:Whether the ministerial exception applies to a teacher at a religious elementary school who teaches the full secular curriculum, but also teaches daily religion classes, is a commissioned minister, and regularly leads students in prayer and worship.

About the Author: Ross Runkel is founder of LawMemo, is Professor of Law Emeritus at Willamette University College of Law. He has spent 35 years specializing in employment law, employment discrimination, labor law, and arbitration.

This blog originally appeared in LawMemo.com on March 28, 2011. Reprinted with Permission.

Corporate Rewards: Controlling U.S. Trade Policy

Wednesday, November 24th, 2010

Leo GerardReal men, real human beings, with feelings and families, fought and died at Gettysburg to preserve the Union, to ensure, as their president, Abraham Lincoln, would say later, that “government of the people, by the people, for the people, shall not perish from the earth.”

Perversely, afterwards, non-humans commandeered the constitutional amendment intended to protect the rights of former slaves. Corporations wrested from the U.S. Supreme Court a decision based on the 14th Amendment asserting that corporations are people with rights to be upheld by the government – but with no counterbalancing human responsibilities to the republic. No duty to fight or die in war, for example. Earlier this year, the Supreme Court expanded those rights – ruling that corporations have a First Amendment free speech right to surreptitiously spend unlimited money on political campaigns.

Today, Lincoln would have to say America’s got a government of the people by the corporations, for the corporations.

The proposed trade agreement with South Korea illustrates corporate control of government for profit. It’s the same with efforts to revive the moribund trade schemes former President George W. Bush also negotiated with Panama and Colombia, the world’s most dangerous country by far for trade unionists, with 2,700 assassinated with impunity in the past two decades, 38 slain so far this year.

Nobody likes these trade deals – except corporations. They’re all modeled on the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), both of which killed American jobs while giving corporations new authority to sue governments (read: taxpayers) for regulations – like environmental standards – that corporations contend interfere with their right to make money.

The Economic Policy Institute estimates that the South Korea so-called Free Trade Agreement (FTA) would cost America 159,000 jobs and enlarge its trade deficit by $16.7 billion in its first seven years.

Americans, now suffering though corporate-caused 9.6 percent unemployment, know a deal when they see one – and the South Korea FTA is not one. In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.

Many politicians, particularly Democrats, abhor the schemes as well. In July, just after President Obama announced that he would try to get the South Korea pact passed, 110 House Democrats described their disdain for the deal:

“We oppose specific provisions of the agreement in the financial services, investment, and labor chapters, because they benefit multi-national corporations at the expense of small businesses and workers.”

In addition, during this fall’s midterm election campaign, 205 candidates, Republican and Democrat, ran on platforms condemning job off-shoring and unfair trade, and house Democrats who ran on fair trade were three times as likely to survive the GOP “shellacking” as Democrats who supported so-called free trade schemes.

Significantly, the South Korean public and some South Korean politicians also oppose the trade proposal. In the week leading up to the G-20 meetings in Seoul, trade unionists, farmers, peasants and students filled the streets in marches and candle light vigils to express outrage with the proposed agreement, including its provisions giving U.S. corporations the right to challenge South Korean laws in private tribunals.

In October, 35 South Korean lawmakers joined 20 U.S. Representatives in writing President Obama and Korean President Lee Myunk-bak to protest the proposal.

Despite all that opposition, when Obama and Lee emerged from talks without an agreement, the American press, pundits and “analysts on both sides of the aisle,” described the situation as a major diplomacy failure, “a serious setback for the president.”

They were wrong. It wasn’t a setback for Obama. It was the president refusing to sign a bad deal for American workers.

It was, however, a humiliation for the U.S. Chamber of Commerce, which just spent at least $50 million from secret corporate donors to elect Republicans who will do its bidding. The South Korea deal is a priority for the Chamber. Here’s what Chamber senior vice president for international affairs Myron Brilliant told the New York Times after the South Korean negotiations broke down and Obama pledged to attempt to complete the deal over the following six weeks:

“This will be an early test for this president with the new Congress, particularly the House leadership.”

The “Brilliant” test is whether the president of the United States will comply with Chamber demands to complete trade deals that kill jobs and that Americans despise.

When Obama went to Seoul, Chamber President Thomas J. Donohue was there to, as he put it, help win the trade deal. He also was among 120 executives given exclusive access to international leaders including German Chancellor Angela Merkel and Russian President Dmitri A. Medvedev in a conference before the G-20 meeting.

The international organizers didn’t invite to the trade talks or the conference the students, farmers, environmental groups, organized labor and untold millions of individuals who oppose the so-called free trade deals. The human beings who will be hurt most by the trade deals didn’t get a seat at the table. The corporate-people who stand to gain everything did.

Brilliant’s comments express the corporate sense of entitlement. They spent tens of millions to get what they wanted from politicians to increase profits. Now they expect it to be delivered. It’s their recompense, their corporate reward.

If fatter profits mean fewer American jobs and wider trade deficits, that’s simply not a problem for corporations. That’s among the perks corporations got when the Supreme Court awarded them the privileges of personhood in America but none of the pesky personal and patriotic responsibilities of actual people in American society.

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.

“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.

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