Alternatives to Card Check: What does your sausage look like?

While the Obama Administration has made 'Card Check' legislation a priority, the Congress appears to have other ideas.

Legislators have started to propose alternative approaches to the Employee Free Choice Act (EFCA; H.R.1409, S. 560) which are more likely to satisfy constituents on both the labor and management sides of the issue.

The National Labor Relations Modernization Act (H.R. 1355), introduced by Delaware County Congressman Joe Sestak (D-PA), would apply only to employers of 20 or more. It establishes a 120 day period (versus 90 under EFCA) within which the employer and employee can attempt to bargain collectively, after which the parties are referred to mediation or arbitration.

The NLRMA has other provisions which expand the rights of organizing employees, increase civil penalties for violations, and requires employers to outline for organizing employees the activities in which they intend to engage to oppose any unionizing campaign. Some of these may actually be more onerous on employers than the EFCA, but the bill does not abolish the secret ballot requirement, and therefore avoids the most controversial provision of EFCA.

Watching legislation pass is comparable to watching sausage being made; but it is clear that one way or another, this sausage is going to be made. It will be interesting to see how the final legislation that lands on the President’s desk will compare with the original EFCA language.

I Have a Feeling We're Not in Texas Anymore

According to the website DisabilityInfo.gov the Department of Justice has filed a lawsuit against JPI Construction L.P. and six JPI-affiliated companies in U.S. District Court in Dallas for failing to provide accessible features required by the Fair Housing Act and the Americans with Disabilities Act at multi-family housing developments in Texas and other states.

The defendant has allegedly built more than 200 apartment, condominium and other housing complexes in 26 states as well as the District of Columbia. According to the DOJ's press release, the suit seeks a court order requiring the defendants to modify the complexes to bring them into compliance with federal disability access laws. The suit also seeks monetary damages and a civil penalty.

It is well known that the Obama administration is going to make enforcement of civil rights, accessibility and employment laws a top priority, and signs of this have already appeared.

Most noteworthy, however, is that one of the first such strikes is in the heart of the very state where the former occupant of the Oval Office once ruled.

This announcement, especially when juxtaposed with the White House's recent announcement it intends to review Bush's 'signing statements,' makes it pretty clear that we're not in Texas anymore, Toto.

Stimulus Package includes substantial COBRA changes to benefit the recently unemployed

The Stimulus Package just signed into law by President Obama (a/k/a “The American Recovery and Reinvestment Act of 2009” (ARRA) contains significant changes to the COBRA laws designed to provide temporary relief for those affected by the economic downturn. These changes are effective with the March 1, 2009 health insurance policy period.

Employers already subject to COBRA (i.e., more than twenty employees) must subsidize 65% of an eligible individual’s COBRA premiums for as many as nine months. Persons who are eligible for this assistance (“assistance eligible individuals”) are employees who have been involuntarily terminated for other than gross misconduct between September 1, 2008, and December 31, 2009.
and their qualified beneficiaries.

The employer subsidy becomes taxable to the AEI whose adjusted gross income exceeds $125,000 for individuals and $250,000 for married filing jointly and is waivable by 'high income individuals' with adjusted gross income of $145,000 filing individually or $290,000 filing jointly.

Employers paying the benefit will receive a dollar-for-dollar tax credit against payroll taxes in the year in which the subsidy is paid. The subsidy is retroactive, and therefore, employers who are subject to these amendments will have to re-notice AEI’s, even if they have already made their COBRA elections since employment termination.

Employers are permitted but not required to offer lower-cost benefit coverage to AEI’s within ninety days of the COBRA notice date, and allow such individuals to switch to such benefits to reduce costs.

For further information, see here and the entire text of ARRA is available here.

We feel your pain....

When the economy started its merciless decline, it first hit those least able to afford the consequences. For months, perhaps even a year, the 'higher echelons' of employees were immune, but now even the legal marketplace is experiencing a marked contraction --- and the pain is everywhere.

A review of today's headlines from Law.com show just how dismal things are: "800 Law Firm Jobs Lost in One Day," and there is a list of dozens and dozens of firms where tens of thousands of lawyers and legal assistants have now joined the ranks of the unemployed. A different headline discusses another large firm's approach to the economy, an across-the-board 10% paycut for associates, but an increased bonus pool for those associates as an incentive. While there is no mention of the partners (who typically draw seven figure plus incomes) taking any hit, it is still noteworthy that the firm, which has already laid off associates, has chosen this path. It also serves as a model for all employers.

Money is not the #1 reason employees leave employers. A lack of satisfaction with their workplace is. Toxic bosses. Oppressive work conditions. Lack of recognition for a job well done.

If a distressed but enlightened employer to give its employees the choice of a reduction in force versus a percentage paycut for all employees, I am certain the employees would choose the latter. An enlightened employer looks for ways to maintain esprit de corps, to keep its workforce together and productive through these dark times.

For myself, I find myself in the uncomfortable position of assisting one client with a reduction in workforce on the same day I am negotiating severance packages for other clients who are being laid off. It's hard to find a 'happy client' on a day like that.

So much of what happens in a down economy is knee-jerk. Cut marketing! (so what if we already are losing customers?) Fire employees! (so what if we don't have the staff to do what we need to do as it is?) Reduce equipment maintenance! (so what if the machines are already broken?) So much of those knee-jerk reactions are destructive, and only accelerate the employer's distress.

The survivors of this downturn will have taken a 40,000 foot approach to the situation, made the tough decisions at the right times and in the right manner, and will emerge stronger than before. As Abraham Lincoln said, recalling the ancient folktale about King Solomon, "This too shall pass."

Court may award damages to offset tax effects of back pay award

The Third Circuit Court of appeals has held that the trial court may add an amount to a jury verdict which will adequately compensate the prevailing plaintiff for the tax consequences of the verdict.

Joan Eshelman sued Agere Systems claiming discrimination on the basis of age and disability, and the matter was tried before Magistrate Timothy Rice. The jury awarded $170,000 in back pay and $30,000 in compensatory damages, and following trial the Plaintiff moved the Court for an award of money damages to offset the effects of taxation on the lump sum payment. Judge Rice granted the motion, and the Defendant appealed.

In affirming, Judge Chagares wrote:

We hold that a district court may, pursuant to its broad equitable powers granted by the ADA, award a prevailing employee an additional sum of money to compensate for the increased tax burden a back pay award may create.

This decision follows the 10th Circuit's holding in Sears v. Atchison, Topeka & Stanta Fe Ry. Co., 749 F.2d 1451 (10th Circuit 1984) and rejects a later decision from the D.C. Circuit, creating a clear split in the circuit courts of appeals on the issue. It remains to be seen whether the issue will reach the Supreme Court as it is unlikely the Eshelman case will be appealed further.

The decision is reported at: Eshelman v. Agere Systems, Inc., (No. 05-4895 January 30, 2009).

Some thoughts on the Lilly Ledbetter Fair Pay Act of 2009

Imagine this, you are a woman supervisor in a plant with 16 other male managers and find out that after twenty years on the job, your pay is 20% to 40% less than all the other male supervisors. Imagine that once you learn that, you promptly file a charge of discrimination with the EEOC, get a right to sue letter, and actually win your trial before a jury which awards you $360,000. Then imagine that the verdict is taken away by a U.S. Supreme Court which holds that you had only 180 days from the FIRST moment the pay disparity began to occur, not when you finally learned about it.

This is precisely what happened to Lilly Ledbetter, and was the holding of the Ledbetter v. Goodyear Tire & Rubber Company case before the Supreme Court. Justice Ruth Bader Ginsburg, the Court's only female justice, protested loud and long in her dissent, and urged Congress to fix the purported problem upon which the majority had hung its judicial mantle in reversing the verdict.

Now imagine it's two years later, and you are standing next to the President of the United States, who hugs and kisses you as he signs into law the Lilly Ledbetter Fair Pay Act of 2009. No, it's not worth $360,000 --- not to you --- but it will hopefully be worth more than that to millions of employees who do not receive fair pay due to their age, sex, religion, race, or qualified disability.

So said President Obama today, during the White House signing ceremony, when he announced to Ms. Ledbetter and the assembled guests:

"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.… If we stay focused, as Lilly did, and keep standing for what's right, as Lilly did, we will close that pay gap and ensure that our daughters have the same rights, the same chances, and the same freedom to pursue their dreams as our sons."

It is uplifting to see that the lawmaking process as originally conceived by our country's founders works. It is heartwarming to see an individual disenfranchised by the courts vindicated by the Congress. More importantly, it is a testament to what the workplace of the future has to start looking like.

Finally, it is a warning shot across the bows of employers who fail to engage in enlightened human resources management.

For another blogger's take on the Bill, see this post.

Supreme Court extends anti-retaliation protection to anyone participating in investigation --- even if its not their own complaint.

The Supreme Court held yesterday in Crawford v. Metropolitan Government of Nashville that persons who participate in an internal investigation of alleged discriminatory behavior are protected from retaliation even if they did not bring the original internal complaint. The provision of the Civil Rights Act which prohibits retaliating against those who ‘oppose’ discriminatory acts includes everyone who participates in an investigations of allegations of discrimination, even if the investigations precede in the time the official filing of a charge of discrimination with an administrative agency, and even if those investigations involve allegations by other employees than the one interviewed.

In a 9-0 decision, with Justices Alito and Thomas concurring in the judgment, Justice Souter explained that to hold otherwise would undermine the mechanism established by the Faragher and Ellerth cases which provide an incentive for employers to prevent and eliminate workplace discrimination by allowing the punishment of anyone who participated in such activities.

The decision, completes a series of cases starting with Burlington Northern v. White (expanding what constitutes retaliation under Title VII) in the 2007 term, continuing with Gomez-Perez v. Potter (federal employees can sue for retaliation under ADEA) and CBOCS West, Inc. v. Humphries (Section 1981 also bars retaliation claims) from the 2008 term in which the Supreme Court has expanded and fortified retaliation claims.