Off-topic post -- (relatively) good news from Iraq

This is an unusually optimistic perspective on the recent fighting, which has generally sounded like a dismal failure in most media reportage: "Subtle strategy, lethal tactics pushed Iraqi cleric into deal" (from the Chicago Tribune, by Bill Glauber, via Yahoo! News)

What is clear is this: U.S. forces pushed Sadr's fighters into two final strongholds in Kufa and Najaf by the end of last week and brought the U.S. to the cusp of solving one of the thorniest problems before the June 30 hand-over of limited power to the Iraqi people.

Regardless of whether the cease-fire holds, American commanders say they inflicted maximum damage to Sadr's organization while limiting damage and civilian casualties in urban environments. . . .

Even while operating in some of the holiest cities and around some of the holiest shrines in Islam, the U.S. in its offensive against Sadr did not inflame Iraq's wider Shiite Muslim population. It also has succeeded in isolating Sadr, the son of a martyred man with a revered family name.

"It was pretty clear he was trying to take what was a fairly small--let's call it narrow--uprising [and] was trying to expand it to a popular uprising," said Dempsey, commander of the 1st Armored Division. "The principal goal in return was not to allow this thing to become a popular uprising, because if he gained broad support of the Shiite population, there truly would have been nothing we could have done." . . .

Once the militia was beaten in skirmishes, humanitarian projects were quickly started and radio stations were opened to spread the news. The former foes were given jobs. "In Kut, we were fighting the al-Mahdi Army one day, and the next day we put them to work repairing the amusement park," Dempsey said. Rubble was also removed as the battle moved to the next city.

Not wanting to inflame religious or political passions, U.S. troops couldn't forcibly remove Sadr's militiamen from holy sites in Karbala or Najaf. "In both cases the local populace became so outraged by the use of the shrines essentially they were able to tip the scale in our favor," Dempsey said.

Sadr finally relented and agreed to negotiate after U.S. forces captured his key aide and brother-in-law, Riyadh al-Nouri, early Wednesday. Apparently, al-Nouri was relieved. "He said, `First of all, thank you for capturing me not killing me,"' Dempsey said. "`Thank you for treating me as well as you are, and thirdly, I'm really glad this is over."' Read more

My feelings about Iraq are very mixed.

Clearly, there is much about our objectives and execution of this war that can be legitimately questioned and criticized.

But we're in it now, and this article suggests our military may not be quite as bumbling as many would have us believe. It also points out that fortunately there is (still) not a widespread rebellion against the occupation.

Remember, everything you read about domestic or foreign economic, political, diplomatic, or military American policies between now and November is likely to be written by somebody who has long ago picked sides in the election (full disclosure: I haven't yet).

Continued . . .

Exchanging pats on the back with fellow blogger; wise words on workers comp

Workers Comp Insider is one of the blogs I like to read.

They read this blawg as well, and have this nice compliment for it in connection with this post on overtime.

I, in turn recommend this post of theirs: "The workers' compensation crisis: a labor viewpoint," particularly for this sound advice on work comp costs:

[T]he best way to control your experience and your costs is to ensure that no injuries occur; the second best way to control your costs is to treat injured workers well and fairly, provide excellent medical care, and help workers to recover and get back to work as soon as possible; that, and taking the trouble to become an educated, savvy, and active consumer of the administrative services that your insurer provides. At an average 1.8% of payroll, managing your workers compensation experience must become a core corporate competency. Read more

On "help[ing] workers to recover and get back to work as soon as possible," I'll add this thought.

From my management employment law perspective, we sometimes look at possible termination of an employee who has been out on comp solely in employment law terms, evaluating risk of ADA, FMLA, and/or work comp retaliation liability. Work comp is not our thing.

Sometimes termination is the right decision, particularly if continued temporary arrangements to get the work done are proving infeasible.

But we are not the work comp attorneys, and the client may not be looking at that side of the equation.

If employment is terminated, it will not help (and probably hurt) in terms of the objective of getting the employee back to work and thus cutting or eliminating continuing comp costs.

The employer's on the hook for those costs, whether the person remains on the payroll or not; keeping them on the payroll may help control the costs if there is any prospect of getting them back to work.

Continued . . .

Seventh Circuit case illustrates several useful defenses to discrimination claims

In Little v. Ill. Dept. of Revenue, No. 02-2507 (7th Cir. 5/27/04), the Seven Circuit affirmed summary judgment for the employer in a Title VII termination case alleging race discrimination and retaliation.

Winning summary judgment is the name of the game in defending discrimination cases. See this post.

This appeal appears to cover no new ground, but is an opportunity for us to review some good basic aspects of discrimination defense and add a nice new Seventh Circuit citation to our brief writing toolkit if we practice in this circuit.

First, the court stated its standard for proof of discrimination, indicating that a prima facie case requires proof that "the employer treated at least one similarly situated individual outside of his protected class more favorably."

Then, upon such proof, the employer has to articulate a nondiscriminatory reason for termination, and in response the plaintiff must "put forth competent evidence that the proffered nondiscriminatory reason was a pretext for unlawful discrimination."

On the first point, more favorable treatment of an employee outside the protected class, the court said:

A similarly-situated employee must have been disciplined, or not, by the same decisionmaker who imposed an adverse employment action on the plaintiff. . .

This rendered immaterial the plaintiff's evidence of disparate treatment, as it involved different decisionmakers.

Note a couple of points here.

First, this standard can be used to limit broad discovery requests regarding discipline or termination of other employees to those disciplined or terminated by the same decision maker as the plaintiff.

Second, particularly when taken together with other case law that is quite stringent about the similarity of the conduct upon which discipline or termination was based, this standard renders proof of discrimination extremely difficult.

This standard could be used to argue for pushing decision-making to a lower level, as lower-level supervisors will make less discipline and termination decisions than, for example, human resource personnel, and therefore the likelihood of there being truly similarly situated people will be less.

I would advise the opposite, however, as centralized decisionmaking by properly trained human resource personnel who appreciate the legal risks posed by inconsistent discipline is likely to be better decisionmaking, less likely to be contaminated by a variety of (lawful or unlawful) biases that individuals in direct contact with the employees being disciplined or discharged may have.

The court in Little also held summary judgment was appropriate because there was insufficient evidence of pretext. It stated the applicable law as follows:

Pretext exists where the ostensible reason for the employment decision is really a lie contrived to mask unlawful discrimination. . . . This circuit adheres to the honest-belief rule: even if the business decision was ill-considered or unreasonable, provided that the decisionmaker honestly believed the nondiscriminatory reason he gave for the action, pretext does not exist. . . .

We have stated that, "the more objectively reasonable a belief is, the more likely it will seem that the belief was honestly held." . . . Conversely, it is also true that, the more objectively unreasonable a belief is, the more likely it will seem that the decisionmaker did not actually hold it.

Here is another powerful legal principle for summary judgment.

Employees frequently try to prove pretext by contending they didn't do whatever it was they were fired for. If a reasonable investigation preceded the termination (which obviously should be the case) then all such evidence, and the factual issues it entails, becomes immaterial. All that is material is what the decision maker reasonably believed after completing the investigation.

No genuine issue of material fact. Summary judgment granted! Read the case

Continued . . .

Rethinking attitudes and policies towards workplace romance

Appropriately, this topic hit with a wave of stories around Valentine's Day, but I never got around to posting them. When I saw more stories in April, with no holiday to inspire them, I figured this was a recurring theme worth noting.

Start with USA TODAY: "Cupid lurks in cubicles, so what's a worker to do?" by Del Jones

The team of Amy Henry and Nick Warnock won [a] task on The Apprentice, and when Donald Trump put them aboard his corporate jet for a reward trip to Florida he told viewers: "They may be in love. If so, they had better not use my bedroom."

That sums up the corporate attitude about office romance. First, don't do it. Second, that's a futile request, so don't make the company clean up the mess. That's futile, too. . . .

Nick and Amy are one of 20 million workplace romances in progress right now, estimates Dennis Powers, a law professor at Southern Oregon University and author of The Office Romance: Playing With Fire Without Getting Burned. . . .

Office romances often work out. An American Management Association survey last year found that 30% of managers and executives have dated someone at work, and of those, 44% get married.

Only 12% of companies have tried to combat it with a written policy on dating, and most of those only prohibit a supervisor from dating a subordinate. Just one in 100 companies has a written policy prohibiting dating among co-workers.

Even when lovers get along, their relationships can be distracting. A note of praise or recommendation suddenly becomes suspect when it is written by one lover for another. Others worry about favoritism. Read more

The next story is by Aïssatou Sidime, San Antonio Express-News Knight Ridder/Tribune Business News: "Workplace Romances Pose Special Concerns for Employers, Colleagues"

Workplace romances are extremely common given that people spend most of their waking hours on the job, human resources experts say. They can enhance the workplace, but they also pose special concerns for employers. . . .

At larger companies, anti-nepotism policies minimized this kind of fraternization to some extent. Recent tight labor markets sparked some larger employers to drop nepotism policies or encourage employees to recruit their loved ones to fill jobs. . . .

Two-thirds of the managers surveyed said they knew of a workplace romance, according to the Society for Human Resource Management. And a third of all managers admitted dating someone in their workplace in an American Management Association survey last year.

Southwest Airlines, which has a reservation call center in San Antonio, openly lauds its 1,100 couples, equaling 6 percent of its work force. . . .

But occasionally that closeness results in unprofessional workplace behavior.

Managers in the Society for Human Resource Management study revealed that dating couples were most likely to meet amorously in conference rooms, a supervisor's office, the copy room and the elevator. Personal relationships also can hurt productivity and teamwork [well, yeah, if you're "meeting amorously" on working time!]. . . .

The most common management crises develop when a manager dates subordinates. . . . But even equally powerful officers and senior executives can create a problem if they're having extramarital affairs with co-workers, said Carroll Lachnit, editor of Workforce Management, which has researched the issue.

Sometimes romantic co-workers implode. One in three workplace relationships were short-term liaisons, according to the American Management Association. The result can be an uncomfortable workplace or legal problems.

About 20 percent of companies have reacted by adopting official policies governing office romances as of 2002, according to the management resource society [some discrepancy in the figure compared to the previous article?].

Still, employment lawyers have begun encouraging clients to require dating and married couples to sign "volitional relationship contracts," sometimes called "love contracts," to inoculate themselves against retaliation, favoritism and sexual harassment claims.

The contracts are a promise that the couple will behave professionally during and after a relationship, will notify the employer of any breakup and, in some cases, waive any claims against the company in the event of an ugly breakup. . . . Read more

Next we have a scientific study from Montana State University:
"MSU Psychologist Takes Workplace Romance from Water Coolers to Scientific Journals," by Carol Schmidt

Ah, spring. Time for a young man's heart to turn to ... the woman sitting at the next computer. According to one of the foremost scientists studying such workplace romances, that may not be such a bad thing.

Charles A. Pierce, a professor of psychology at Montana State University-Bozeman specializing in industrial and organizational psychology, says scientific data shows workplace romances can result in productive employees. Instead of a blanket policy forbidding them, Pierce recommends workplace romances be evaluated on a case-by-case basis.. . .

Pierce thinks one reason his research has attracted so much attention is the pervasiveness of workplace romance. Studies show that as many as 80 percent of U.S. employees report some sort of social-sexual experience on the job. The workplace is now the most likely place for Americans to meet a romantic partner, Pierce said. . . .

Their preliminary findings are, that under certain conditions, workplace romances can increase productivity, motivation, job satisfaction and involvement. On the down-side, such romances may also negatively affect employee gossiping and managerial decisions.

As a result of his research, Pierce is critical of traditional management policy that unilaterally forbids, and even punishes, workplace involvements. . . .

Pierce said he began his research not because he was involved in a work relationship, but because he happened to thumb through a popular women's magazine while waiting in line at the grocery store.

"The cover had a headline about a story on workplace romances," Pierce said. "I was in my second year of grad school (at State University of New York, Albany studying under noted social psychologist Donn Byrne) and interested in the areas of attraction and organizational behavior. I thought workplace romance was a way to combine the two."

After several years of research, Pierce believes he has just scratched the surface of his topic. He is now broadening his research to examine the effects of dissolved workplace romances, as well as sexual harassment allegations and implications on management policies. . . . Read more

Finally, the family-oriented conservatives at family.org (Focus on the Family) express valid concern about adulterous workplace relationships: "Workplace Romance: The New Infidelity" by Rob Moll

Today’s workplace has become the No. 1 spot for married individuals to meet affair partners. More men and women are breaking their marriage vows by engaging in office friendships that slowly become romantic relationships — relationships that would have been socially impossible just 20 years ago. . . .

In her book Not ‘Just Friends’, Dr. Shirley Glass says, "The new infidelity is between people who unwittingly form deep, passionate connections before realizing that they’ve crossed the line from platonic friendship into romantic love. Eighty-two percent of the 210 unfaithful partners I’ve treated have had an affair with someone who was, at first, ‘just a friend.’" From 1991 to 2000, Glass discovered in her practice that 50 percent of the unfaithful women and about 62 percent of unfaithful men she treated were involved with someone from work. . . .

A different work environment has spawned a different kind of affair. Glass says the old idea of workplace romance between a powerful company executive and his single young secretary no longer reflects today’s office relationship. The new infidelity occurs between peers who first become emotionally attached, having no thought of physical involvement. Men and women who work closely together under stressful conditions can quickly become attracted to each other. They often share interests and think nothing of spending time over coffee or lunch getting to know one another. Nevertheless, lunch between married friends, no matter what their intentions, can have unanticipated and dangerous consequences.

One researcher calls this new kind of affair the "cup of coffee" syndrome. Men and women begin with safe marriages at home and friendships at work. As they regularly meet for coffee breaks and lunch, these relationships develop into deep friendships. Coworkers come to depend on these coffee rendezvous, and soon they have emotional work friendships and crumbling marriages. Read more

Whew, it's late and I'm not sure what wise words of advice I can give. My typical sexual harassment seminar presentation fudges the issue by saying policies in this area should be considered, but complete bans on dating are unrealistic.

Continued . . .

Weekly jobless claims report looks good after slight bump last week

CNN/Money reports: "Initial jobless claims down slightly"

The number of people filing for first-time claims last week was 344,000, down from the revised 347,000 . . . the previous week. . . .

The four-week moving average of filings, which smoothes weekly fluctuations to provide a better picture of underlying trends, advanced by 1,500 to 335,500. It hit its lowest level since September 2000 the previous week. Read more

Continued . . .

I missed my (blawg) anniversary

I just realized it's been over a year now that I've been blawging away.

I started May 12, 2003.

It's become a bit of an obsession, as I seize whatever time I can on the home computer (when kids aren't IM-ing or gaming) to desperately try to keep updated.

I have a long, long list of backlogged news items I meant to post, but didn't find time for. The good thing is it's kind of like those piles of paper that clutter the office and dining room table at home -- if you wait long enough, you find you can throw a bunch of them out and just save the best.

Gradually, but steadily, my readership has been building. Now running about 70-80 pageviews a day, many one-time hits from Google, but many others return visits. Some of you have written comments or emailed me; I thank you for the feedback and invite others to do the same. Any suggestions are always welcome.

Continued . . .

The United Methodist Church: leading a new (old) benefits trend?

Mary Williams Walsh writes in the New York Times: "United Methodist Church Bucks the Trend on Employee Pensions"

More than 17,000 employers in the United States have discontinued their traditional pension plans in the last 10 years. Countless others have scaled them back. . . .

Now, though, one big employer is resisting the tide. Earlier this month, the United Methodist Church voted . . . to start an old-fashioned, defined-benefit pension plan for its 25,000 American pastors and lay employees . . . .

The United Methodist Church appears to be the first sizable employer to create such a pension plan in many years. The church has about $12 billion in other types of retirement plans, putting it on a par with big pension-plan sponsors like Bank of America and Dow Chemical. . . .

For older workers, the birth of a brand-new pension fund holds out tantalizing possibilities. As the ranks of aging baby boomers have begun to contemplate their retirements, some have shown renewed appreciation for the defined-benefit pension.

In the booming 1990's, workers happily enjoyed the gains they recorded on their defined-contribution plans - like the 401(k) - that companies often set up to replace their discontinued pension plans.

But the bursting of the stock market bubble showed how quickly a hard-earned 401(k) balance could melt away, and the sturdy old pension began to look better by contrast. . . .

The rekindled interest in traditional pensions, however, comes at a time when most employers have decided that it makes no sense to start a pension fund. Defined-contribution plans are widely seen as simpler to set up and cheaper to offer. . . .

"I guess I'm old-fashioned," said Barbara Boigegrain, secretary general of the United Methodist Church's General Board of Pension and Health Benefits. "But I don't feel that a defined-contribution plan only is necessarily the best way to take care of employees. Especially for a large, stable organization that has a considerable future in front of it."

The United Methodists have a couple of big advantages over profit-making companies in their ability to offer pensions. . . .

But the United Methodists could set an example for others not subject to the federal pension rules. Potential converts include county hospitals, state universities, police and fire brigades, public and parochial school systems, professional associations and other employers outside the private sector.

Church officials say that in any case, they can justify their decision on solid financial grounds. Their experience running a 401(k)-like defined-contribution plan left them unconvinced that such programs are cheaper and simpler to run than pension funds. Their defined-contribution plan has been an administrative nightmare . . . .

In addition, the United Methodists' existing retirement plan was troubled by its own success. . . . By 1999, their investments had reaped such big returns that some pastors could retire, withdraw their retirement balances, and buy annuities that paid better incomes than they would have earned by staying in the pulpit.

"We pushed them out the door," . . . "That was a mistake. Under a defined-benefit plan, you don't waste that money. You don't give too much away in some years." . . . Read more

OK, I have a bias here. I'm a member of a United Methodist Church and find it to be a very good, well-run organization in many ways.

But as the next article shows, this may indeed be the wave of the future. To mix metaphors, the pendulum on so many things in America tends to swing from one extreme to another, and maybe now this one's ready to swing back the other way a bit.

Investors.com has this story by Andrea Coombes: "Are firms underestimating cost of switching to 401(k)s?"

Against a rising tide of companies dumping their traditional pension plans, one industry expert is raising a red flag: Firms could face unforeseen costs in the future from abandoning such plans. . . .

Companies "might lower their contribution to retirement plans by making this switch (to 401(k) plans), but their labor costs overall, including retraining and turnover costs, are likely to rise, and they're less likely to have people retiring when they expect them to or hope that they might" . . . . Those costs will become more striking as waves of Baby Boomers start retiring in coming years . . . .

"The people that often have a lot of the intellectual capital of the firm, the experience with clients, people that add a lot of value to an organization: The defined-benefit plan provides a real hook to keep them there to the target retirement date," Fuerst said.

Plus, traditional plans give firms greater control over their workforce, said William Arnone, partner in Ernst & Young's human capital practice.

"Under the defined-benefit plan, you can say 'we're going to make the formula more attractive, add some years to your service, if you retire within a certain period. In a 401(k) plan, there's no formula to manipulate," he said. . . .

There are fewer than 31,000 private-sector pension plans now, down from 100,000 in the 1970s, due largely to new companies bypassing traditional pensions, plus older companies switching from traditional pensions to 401(k) or other defined-contribution plans.

In 2001, about 21 percent of heads-of-household who participated in a retirement plan had a traditional pension, down from 42 percent in 1992, according to the Employee Benefit Research Institute.

Meanwhile, in 2001 about 62 percent of family heads had a defined-contribution plan, up from 41 percent in 1992. The percentage with access to both types of plans stayed steady at 17 percent in those years. . . .

The average expected retirement age among defined-contribution plan participants jumped to age 64.4, from age 60 in 1995, and 70 percent are somewhat or very concerned that they won't have enough money to retire, according to a new survey by John Hancock Financial Services.

That's in large part because 401(k) and other defined-contribution plans put longevity risk -- the risk that the retiree will outlive her benefits -- onto each individual rather than pooling that risk across a group of workers. . . .

But, while some companies have re-opened frozen pension plans, experts see little evidence that there'll be a full-scale move back to traditional plans soon. . . .

Some see a future where both 401(k) plans and defined-benefit plans exist, but are changed to meet changing needs. . . .

In the end, it may be up to workers to push for a stronger retirement benefit for themselves. "As the Baby Boom generation gets closer and closer to retirement, (employers) are going to realize they indeed have an increased demand for the benefits that defined-benefit plans have for employees," said Jack VanDerhei, a fellow at EBRI and a professor of risk insurance and health care management at Temple University.

While VanDerhei sees little evidence of market forces impelling employers to revisit defined-benefit plans, Fuerst is optimistic that workers will push for benefit changes. . . . Read more

"

Continued . . .

SBC strike settled, pending ratification

Reuters reports: "SBC, Union Reach Deal After 4-Day Strike"

SBC Communications Inc. and a union representing 100,000 employees reached a tentative new contract on Tuesday . . . .

While the deal gives union members annual wage increases, a five-year ban on some layoffs and the prospect of moving outsourced jobs back from overseas, it also allows SBC to require increased health-care payments by employees and does not offer new employees the same job security as current workers. . . .

The accord, which must be approved by workers, came after the four-day strike ended at 12:01 a.m. Tuesday. . . .

The four-day strike and the union's threat of further action, likely drove the company to reach a settlement, analysts said. . .

Under the new pact, workers will receive a 2.3 percent pay raise, on average, for each year of the contract, with an additional 1 percent lump sum payment in the first year and cost-of-living increases in the fourth and fifth years.

The deal includes some compromises on health-care costs, which SBC said would provide much of the $2 billion in savings it is targeting.
Workers will still pay no monthly health insurance premiums for themselves, a key union goal, but must pay a monthly $40 surcharge to cover a spouse or partner who could be covered by a different employer. Co-payments for drugs and exams increase, but drug costs are capped . . . .

The union also said the two sides would work on moving technical support jobs to the United States from overseas once the company's outsourcing contract with Accenture expires in 2007.

The company said union workers would be allowed to perform jobs in some growth areas considered extensions of traditional telephone work, while jobs in other high-growth areas would be offered to union workers at competitive wages. SBC had said during talks that nonunion cable technicians were paid as much as 50 percent less than similar workers at SBC. Read more

Here's the Company press release: "SBC Announces New Labor Contract with CWA"

Here's the Union press release: "CWA Settlement with SBC Provides for Employment and Health Security"

I'd like to see that language on reversing outsourcing. I wonder if it will mark the start of any kind of trend. Not clear the union gave up much to get it, but such a provision is certainly something, if it has teeth, worth doing some serious horsetrading over.

Curious about the four-day strike, with the duration announced in advance. It's hard to imagine it actually making much difference. Usually it takes longer for a strike to break a true impasse.

Perhaps it was orchestrated by both sides' negotiators to placate more militant union members, and SBC was prepared with a predictably acceptable last-minute change or two to create the appearance the union went the extra mile for them, flexing its muscle, and got something in return.

The problem with such a tactic for management is that it can encourage future strikes, by creating the appearance management is quick to knuckle under.

I hope the employees and Union realize what a sweet health care deal they got: coverage with no employee contributions is indeed a rarity these days.

Continued . . .

Sometimes you ought to stop and think: "how would this look in the local paper?"

In a St. Louis story with which I have a personal, but nonprofessional connection, Amanda C. Tinnin of the St. Louis Suburban Journals writes: "Disabled teacher's aide sues SSD over right to have service animal"

Introductory note: "Special School District" provides services to students with disabilities and special educational needs. It is represented in this matter by one of St. Louis' largest law firms.

Of all the places in St. Louis, Susan Thompson thought the Special School District would be the one to accept her. She was wrong.

Thompson was a teacher's assistant in the district and her students bonded well with her because she had a noticeable disability like many of them. But when a service dog was given to Thompson, the district gave her notice saying she had been put on leave.

Thompson has filed suit against the district charging discrimination and retaliation. The district denies any claims and in a prepared statement said it made all necessary accommodations and that Thompson never proved she needed the service dog to do her job. The matter will come to trial in January 2005.

"The last seven years have really and truly been hell," Thompson said. . . ."My dog allows me to stay independent." . . .

After an accident seven years ago left her with bone damage, nerve damage and a twisted right leg, Thompson lost much more than her ability to walk. . . . Determined to work, she went back to school to find a new career where legs wouldn't be necessary. She found it working as an interpreter for the deaf at the Special School District, but now she fears she may have lost this new career, too.

Following her second year in the district, she received a service dog to help her with such simple everyday tasks as walking. . . . [S]he was told "the presence of dog in the classroom with students with behavioral and emotional disorders could be disruptive to the learning environment and could present a safety issue." . . .

The Special School District provided only a prepared statement about the current situation: ". . . The district has made accommodations and offered accommodations that address all of her concerns." "Despite the efforts of the district, the teacher's assistant continued to insist upon one specific accommodation, the use of a service dog. Recently, the district proposed a job assignment for this employee in which, in addition to all other accommodations she had been afforded, she would be able to have her dog with her during the workday. She turned down this assignment."

Neither Thompson, nor her attorney, was impressed by the district's assignment. "The district assigned her to a student with a history of running at teachers and grabbing their legs," Thompson's attorney, Bob Herman said. . . .

Her service dog allows Thompson to spend less time in her wheelchair and more time on her feet, albeit with a brace and cane. . . .

Herman said he discussed Thompson's situation with the U. S. Equal Employment Opportunity Commission. The commission was outraged, Herman said. . . .

"She's a tough lady," Herman said. "The irony is that the Special School District is refusing a disabled person something to make her life easier." . .

On May 17, the district's board voted to accept Thompson's resignation because she had not accepted the job offer.

"For the people that are supposed to promote the success of children with disabilities, what is it that makes me different?" she wondered aloud. "Why am I not as precious? I've done everything they tell the children to do. I've gone back to school. I follow my doctor's orders. I wear my leg braces. I've done everything to ensure my success. My goal was to have a job and work for the rest of my life. What kind of message are they sending?" Read more

My wife works in the office of Bob Herman, Thompson's attorney, and is well acquainted with both Sue and her dog, Droopy. Apparently the latter is so well behaved no conceivable interaction with a child would be disruptive for either child or adult.

Bob will fight the good fight as long as it takes.

Sometimes the cost of an employment decision includes a major PR problem. I'd say this one qualifies. And the benefit of the decision to the District is a mystery.

And sometimes it makes more sense to provide an accomodation that may not be strictly necessary legally than to spend $100,000 litigating over it.

Of course, I haven't yet read the District's brief. Maybe they've got a real winner (?)

Continued . . .

Another overtime update

First, the latest about overtime reform from the political front: ( "House Blocks Overtime Vote Sought by Dems" (Guardian Unlimited (AP- Leigh Strope)

House Republicans rebuffed a Democratic attempt Wednesday [May 12, 2004] to force an election-year vote on the Bush administration's new overtime pay rules.

The vote, 222-205, blocked a move by Democratic Rep. George Miller of California to force the House to take sides on the controversial issue. Miller sought a vote on a provision to require the new regulations to retain eligibility for all workers who currently qualify for overtime pay. . . .

The GOP-controlled Senate approved a similar measure last week. The Labor Department rules were issued last month and take effect in August.

Had Miller succeeded, the overtime vote would have been largely symbolic, and would not have changed the new regulations. But it would have forced members of Congress to take a stand in an election year on a pocketbook issue important to many voters. . . . Read more

Now here's what the AFL-CIO has to say about the new regulations: "Protect overtime pay for all workers" (by John Sweeney, special to the Atlanta Journal-Constitution)

The new overtime regulation . . . could strip millions of workers of overtime pay eligibility. . . .

The Bush overtime plan contains numerous provisions that threaten overtime rights for currently covered workers earning as little as $23,660. The Bush administration, on the other hand, claims that workers earning between $23,660 and $100,000 will not lose their overtime rights. There is a simple way to settle the matter. Congress can and should enact legislation to guarantee that workers who are entitled to overtime pay under current rules will not lose their overtime rights under the new rule.

I'll go for that, as long as it also includes a safe harbor for employers: workers who are not currently receiving overtime pay will not be entitled to such pay in the future (or to recover back pay) absent a change in circumstances. This would really put the debate to the test.

Do Sweeney and all the other naysayers really think employers will respond to the new rules by yanking overtime from employees currently receiving it more than they will grant overtime to those currently not receiving it?

My guess is the net outcome will be much more realization by employers that employees have been improperly regarded as exempt, and adjustment by granting them overtime, than deprivation of overtime presently being paid, which, after all, is a cost of labor already factored into operations and an element of employee compensation deprivation of which will have adverse morale and turnover consequences. Do they really think employers are going to, in effect, start cutting employees' pay left and right, just because the law permits it?

Back to Sweeney:

[T]he Bush administration has not linked the salary caps for overtime to inflation, which means that many more workers will be pushed out of receiving overtime pay in coming years as earnings increase. . . .

This is a valid criticism, to the extent earnings increases are inflation-based only, as opposed to real earnings increases. A built in COLA (cost-of-living-adjustment) indexed to CPI would have been a good idea.

Sweeney again:

In fact, the Bush overtime plan contains a surprising number of ambiguous provisions whose precise impact will depend on the outcome of litigation. One thing we can predict with some certainty is that the regulation will result in a deluge of lawsuits. This is ironic, since one of the administration's main justifications for its overtime revisions is to clarify the rules and reduce litigation. Moreover, if these lawsuits are resolved in favor of employers, the impact of the regulation on workers will obviously be much greater. . . .

Yes, there will continue to be litigation, but it is questionable it will be worse than before, and certainly unlikely employers will win all the cases.

Sweeney concludes:

An overtime guarantee would give workers the peace of mind of knowing that they will not be losing their right to overtime pay, and it would calm the intense political passions that have been stirred by the Bush plan. We think President Bush should be for that. Read more

The pot calling the kettle black? What chutzpah -- stir up the "political passions" with class warfare rhetoric, and then expect the opposition to buckle, in order to "calm" the situation you caused!

And not one word about the careful consideration to an unprecedented volume of public comment on the originally proposed regulations, and the resulting significant changes, largely favorable to employees!

Another story from last month, "Overtime plan still under fire; Labor vows to continue fight against new rules," by Diane E. Lewis for the Boston Globe, quoted Christine Owens, AFL-CIO public policy director, as saying: "We hold open all of our options, one of which would be litigation," "If we determine after looking at the regulations that it makes sense, we will file a lawsuit."

Why don't you look at them first, before breathing a word about a lawsuit, thank you very much.

The same article quotes Tammy McCutchen, administrator of the Labor Department's Wage and Hour Division, as saying that"the Labor Department was unfairly accused of attempting to strip workers of overtime. 'This final rule will put that issue to rest,' she said. 'We have been responsive to all the major comments: If you are paid by the hour, no matter your duties, you will get overtime.'" Read more

Of course the issue isn't hourly workers, but salaried, and obviously this rule has put nothing to rest. The flip side, however is that even if you are not paid by the hour, but on a salary, you may still be entitled to overtime based on your pay and duties.

This is nothing new, but for years far too many employees and employers alike have assumed all salaried employees are exempt.

For this reason, if all the hoopla over the new rules causes more attention to be paid to this overlooked issue, and salaried employees who have always been entitled to overtime finally start receiving it, more, not less, employees will get overtime pay as an indirect result of the rules.

Here's another article on the complaints about the new rules, by Leigh Strope, who does nice work writing about labor issues for AP (here via San Diego Union Tribune): "Democrats say white-collar workers will lose under overtime overhaul"

Democrats are challenging the Bush administration's overtime pay overhaul, saying many white-collar workers will lose premium pay despite election-year promises that the effects will be minimal.

The new regulations . . . specify a number of white-collar jobs that will be exempt from overtime pay eligibility. They include pharmacists, funeral directors, embalmers, journalists, financial services industry workers, insurance claims adjusters and human resource managers. Others are management consultants, executive and administrative assistants, dental hygienists, physician assistants, accountants and chefs. Even athletic trainers with degrees or specialized training, computer system analysts, programmers and software engineers generally will be exempt.

How many of these have traditionally received overtime, anyway?

Labor Department officials say those jobholders are not eligible for overtime anyway, based on case law.

"Few, if any," workers will lose overtime eligibility, Labor Secretary Elaine Chao said. . . .

"For most of these jobs, there is some law on both sides," said Mark Wilson, a lawyer for the Communications Workers of America union who specializes in overtime issues.

Good, so I guess there is clarification going on here.

Chao said about 107,000 white-collar workers earning $100,000 or more a year could lose their eligibility. That is fewer than in a draft proposal 13 months ago that estimated that 1.5 million to 2.7 million workers "will be more readily identified as exempt."

Also, about 1.3 million lower-wage white-collar workers will be newly eligible for overtime, she said. "Workers will clearly know their rights and employers will clearly know their responsibilities," Chao said. . . .

Workers gaining overtime protections include lower-wage retail and restaurant managers. Middle-income workers such as office workers, cooks, inspectors, paralegals, licensed practical nurses and technicians "will have their rights better protected," the department said. . . .Read more

Predictably, some favorable reactions from the employer side have been recognized. "Retailers Welcome New Overtime Regulations" is About.com's summary of an April 20, 2004 National Retail Federation press release

Two sound bites:

"We know this isn't the end of the political battle"

"The idea that this is an attempt to take overtime away from anyone it was intended to cover in the first place is just plain fiction." Read more

And here is the "American Payroll Association's Response to New DOL Overtime Requirements"

Significantly, matters can be more complicated in states that have overtime laws that go above and beyond merely extending the federal rules to otherwise uncovered employers.

Here are a few local stories pointing this out in 3 states:

"Overtime Changes Spark Confusion in Some States" (WDJT TV Milwaukee - AP)

New federal overtime regulations won't automatically take effect in 18 states, including Wisconsin.

The issue is provoking widespread confusion among state officials, employers and workers, and sparking political battles over how to respond.

Wisconsin and the other 17 states have their own overtime rules, some of which are the same as the old federal rules being replaced in August. Read more

LABOR: "Overtime changes spark confusion; Rules won't take effect immediately in some states, including North Dakota, Minnesota" (Grand Forks Herald - AP)

Mark Bachmeier, North Dakota's labor commissioner, said the federal rules will expand workers' eligibility for overtime. Because of the way North Dakota's regulations are structured, no one who may now collect overtime will be ineligible as a result of the federal rules, he said. Read more

"California overtime rules trump federal laws" (Palm Springs Desert Sun - Gannett)

New federal laws determining who is eligible for overtime pay won’t affect California workers. That’s because California companies have a higher state hurdle to clear if they want to avoid paying overtime to workers, state and federal officials said. . . .

With attention focused on the national overtime rules, the state’s industrial relations agency is trying to reinforce to California companies that they must obey the state rules . . . . Even companies with headquarters in other states must obey state laws at their California operations . . . .Read more

Now, in conclusion, what's the reality here: big Bush administration ripoff of poor working families or mere clarification and modernization of outdated rules? And what's an employer to do?

On the first question, I'll just say this. I listened to an hour and a half telephone seminar on the new rules put on by the ABA Section of Labor and Employment Law. it had a DOL representative giving the party line, and attorneys for both employee and employer perspectives. There was little to no argument when the DOL guy said -- as he often did -- something like "this just codifies existing case law." Basically, compared to the Beltway (politician) types, these folks don't seem to think this is a huge big deal.

On the second question, the Blue Ridge Business Journal article "New law: Who gets overtime? Will employees' rights be strengthened or will workers lose valuable overtime pay? Depends on whom you ask" (by Deborah Nason) offers a few practical tips:

1. A job-by-job review to ensure that all jobs are properly classified.

2. Revisions of policies to take advantage of "safe harbor" and other new provisions.

3. Development of a communication strategy to help . . . employees understand who is affected, and to convey that any resulting changes in exemption status "have no bearing on their worth as an employee." Read more

OK, that last point is kind of stupid. If you change someone from nonexempt to exempt, you may be boosting their "status" while cutting their take-home pay. Does that reflect on their "worth as an employee"? You bet, negatively.

I'd say exercise caution about going nonexempt to exempt. Just because you can do it doesn't mean you should. If you do, compensate with a pay raise. This is an employee's pay package you're fooling with, and if you want them to stick around, have good morale, and be productive, . . . .

Going exempt to nonexempt? Now is the perfect time to use the new rule as an excuse to clean up your act on the people who you may have misclassified as exempt. They might be so happy to start getting overtime they don't ask too many questions about why they didn't before. . . .

Continued . . .

Estimate your company's turnover and absenteeism costs

Check out these two cost estimating tools from AON, at this blog post from Workers Comp Insider - a weblog by Lynch Ryan:

The Turnover Cost Estimator (TM)

The Absence Cost Estimator (TM)

Getting an estimate of the true -- and often surprisingly high --cost of such vital aspects of HR may be what it takes to motivate organizational change (i.e., get the attention of someone outside HR!).

Continued . . .

Latest jobs stats

CNN/Money reports: "Jobless claims climb; Initial claims for unemployment insurance rise by 12,000, above forecasts for second straight week"

Initial claims for unemployment insurance rose to 345,000 in the week ended May 15 from a revised 333,000 the previous week. . . .

The four-week moving average, which smoothes out weekly fluctuations in the report, fell to 333,500 from a revised 336,250 the previous week. The four-week moving average hit the lowest level since the week ended Nov. 18, 2000.

Continued claims, counting the number of people drawing benefits for more than a week, fell to 2.943 million in the week ended May 8 from a revised 2.966 million the previous week. Read more

Reuters reports: "Factories Cool Off, But Jobs Coming" (by Victoria Thieberger)

Factories in the U.S. Mid-Atlantic region took a breather in May after a recent sizzling pace, but the prospects for American manufacturing remain bright, a closely watched survey showed on Thursday. . . .

Despite the slight setback indicated in the factory report and the gain in jobless claims, economists said the economic rebound is still on track. . . .

[H]iring prospects improved to the best level since April 1973.

"The manufacturing sector now appears to be enjoying some of its most significant job growth in decades, but also experiencing pricing pressures that firms are increasingly able to pass along for the first time since the 1980s expansion," said Peter Kretzmer, senior economist at Bank of America. . . . Read more

Continued . . .

SBC-CWA strike is on

Reuters reports: "SBC Communications' Union Calls Strike" (by Justin Hyde)

The union representing 100,000 workers at SBC Communications Inc. said on Wednesday it had called a four-day strike to begin Friday and would put other financial pressure on the company to reach an agreement. . . . The strike would start at 12:01 a.m. local time Friday.

CWA President Morton Bahr said the union was limiting its strike to four days because "we know that a prolonged strike could cause a loss of major customers and do significant damage to the company, and hopefully that can be avoided."

But the union said it would also start a campaign aimed at SBC customers encouraging them to switch service to AT&T Corp.

And that wouldn't "cause a loss of major customers and do significant damage to the company"? Give me a break. Could they be any more "doublespeak" than that?

SBC said its proposals to the union were more generous than those in the contract the union reached last year with Verizon Communications Inc. . . .

The two sides have been in talks since mid-February on health care, job security, pensions and wages. Both sides entered the negotiations hailing their good relationship; the union has not struck against SBC since 1983, and the company agreed to continue health coverage for union members even if they did walk out.

What were they thinking? In this day and age, the loss of health insurance during a strike is essential company leverage. This is like the union agreeing that if they struck they would still do emergency work.

But those relations have been strained over the past weeks, mainly over health care. SBC has sought ways to cap health care costs it says have risen more than 10 percent a year since 1999 . . .

SBC's latest wage proposal to the union included a 4 percent lump-sum payment in the first year, with base wage increases of more than 2 percent in the following four years. Solomon said the proposal was more generous than the one CWA won from Verizon last year; but the union said by not increasing base wages in the first year, SBC would save more than $1 billion.

So what's wrong with that? Read more

Continued . . .

Adapting to the new Blogger

I just figured out a problem with the way things have gone since the new Blogger came on and I switched templates.

I tend to save lots of stuff in "draft" form and later work on it and publish it (sometimes weeks later!)

The problem is that Blogger now posts it not in the order published but by the date of the original draft.

So I will in the future just use the draft feature as a memory device and copy the draft to a "new post" page when I'm ready to post so it gets a current date and winds up at the top of the list (if that makes any sense to anyone).

Anyhow, in the meantime, you may want to browse back through the last couple of weeks' archives to make sure you didn't miss a recent post that was drafted earlier.

Additionally, I am very busy at the moment with a summary judgment motion, a strike, and an upcoming mediation, as well as getting over a bad cold and attending end-of-year school activities. I promise there's lots of good stuff in "drafts" and I will get around to it sooner or later.

Meanwhile, my "profile" is now up, so you can read a bit of personal data about me, should you care to do so.

Continued . . .

Much ado about the EEOC's new policy on retiree medical benefits

On April 22, the EEOC issued a new final rule entitled: "Age Discrimination in Employment Act; Retiree Health Benefits" [link is to the rule itself and official explanation ]

The stated purpose of the rule is: "so that employers may create, adopt, and maintain a wide range of retiree health plan designs, such as Medicare bridge plans and Medicare wrap-around plans, without violating the Age Discrimination in Employment Act of 1967 (ADEA)."

The history and intent of the rule is summarized as follows:

In August 2000, the United States Court of Appeals for the Third Circuit . . . held that an employer violated the ADEA if it reduced or eliminated retiree health benefits when retirees became eligible for Medicare, unless the employer could show either that the benefits available to Medicare-eligible retirees were equivalent to the benefits provided to retirees not yet eligible for Medicare or that it was expending the same costs for both groups of retirees.

The Commission subsequently adopted this ruling as its national enforcement policy. . . .

After the Commission implemented the Third Circuit's rule, labor organizations, benefits experts, state and municipal governments, and employers informed us that our actions were further eroding employer-sponsored retiree health benefits by creating an additional incentive for employers to reduce, or eliminate altogether, health benefits for retirees. . . .

[E]mployers that chose to provide retiree health benefits had to prove either (1) that the benefits available to Medicare-eligible retirees were the same as the benefits provided to retirees not yet eligible for Medicare or (2) that it was expending the same costs for both groups of retirees.

Making such a showing requires complex comparisons of multiple objective and subjective variables, including types of plans, levels and types of coverage, deductibles, geographical areas covered, and level of provider choice offered by each plan.

Employers could avoid the problem by simply eliminating retiree health benefits entirely , since no law requires that employers provide retiree health benefits. Alternatively, employers could reduce the coverage they provided to those retirees who were not yet eligible for Medicare, leaving these retirees with fewer benefits.

Unions, in particular, argued that the Commission's prior policy made it increasingly difficult to negotiate for the future provision of employer-sponsored retiree health benefits. . . .

The [new] final rule permits employers and labor organizations to offer retirees a wide range of health plan designs that incorporate Medicare or comparable State health benefit programs without violating the ADEA. . . .

In promulgating this rule, the Commission recognizes that the issues surrounding health care coverage, especially for retirees, are complex and that retiree health benefits are highly valued by older Americans. Although employers are under no legal obligation to offer retiree health benefits, some employers choose to do so and thereby provide retired workers with access to affordable health coverage at a time when private health insurance coverage might be otherwise cost prohibitive.

Because the Commission has determined that its prior policy created an incentive for employers to reduce or eliminate retiree health benefits, the agency has concluded the public interest is best served by an ADEA policy that permits employers greater flexibility to offer these valuable benefits. The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide.

The ink had scarcely dried on the new rules when the knee-jerk black-is-white negativity began.

On this, as on overtime, it seems the Administration's credibility is so eroded and/or its opponents are so determined to make political hay in an election year that regulations issued after careful consideration of input from not only greedy employers, but also from labor unions and others, are viewed in some alarmist quarters as designed to screw "working families," despite the clearly expressed intention to do the opposite. (Stay tuned for more on the overtime travesty coming soon in this blawg.)

The next day, AARP (the organization formerly known as the American Association of Retired Persons; now known simply as "AARP") came out fighting:

AARP vows to challenge a decision by the Equal Employment Opportunity Commission that would allow employers to slash health care benefits for Medicare-eligible retirees.

"We are trying to resolve this issue in a way that protects our members' interests," says AARP legislative representative Michele Pollak. "We will not hesitate to go to court if necessary to prevent the regulations from taking effect."

The EEOC approved regulations on April 22 exempting retiree health benefits from the federal age discrimination law . The new rules would let employers reduce or eliminate health benefits for retirees age 65 and older. Millions of Medicare-eligible retirees who have additional coverage from their employers are at risk of losing their supplemental benefits. . . .

The new regulations are EEOC's way of keeping the age discrimination law from having "the unintended consequence of discouraging employers from providing valuable health benefits to retirees," EEOC chairwoman Cari M. Dominguez said in a statement.

But there is no guarantee, says AARP's Pollak, that letting employers jettison benefits for older retirees will ensure continued benefits for younger retirees.

Moreover, the EEOC "does not have the authority to make health care policy," Pollak says. "That's a job for Congress.". . .

The EEOC's rightful role, she adds, is to protect Americans from discrimination in employment practices, including age bias in retiree health coverage. [That's right, but distinctions based on receipt of valuable government benefits are not age discrimination, even if eligibility for those benefits is correlated with age.]

(AARP Bulletin online: "EEOC Rules on Age Bias in Benefits," by Trish Nicholson)

For further reading:

Knight Ridder Newspapers: "Advocates for seniors vow to fight EEOC ruling on health benefits," by Tony Pugh

TheAmerican Benefits Council: “EEOC’s New Rule Protects Retiree Health Benefits” Prepared By The Benefits Group Of Davis And Harman, LLP ("A coalition of employers and unions agree with the EEOC that the EEOC action would resolve a legal issue that if left unresolved would very likely result in further significant reductions in the health benefits provided to retirees not yet eligible for Medicare.")

The American Benefits Council: "Questions and Answers Regarding the EEOC’s Rule on Retiree Health Coverage and Medicare"

HR Policy Association: "AARP's Short-Sighted Attack on EEOC Erie County Fix Ignores Threat to Pre-Medicare Retiree Health Coverage"

Washington Post: "Benefits Bust; No Job-Paid Health, No Pension and More Time to Miss Them," by Albert B. Crenshaw [now there's a loaded title . . . . But in fact this is a very thoughtful, lengthy and far-ranging article, discussing the full range of retirement issues. A pithy quote: "What we're seeing is nothing less than 'a redefinition or change in the whole social contract between employers and workers,' said John Rother, director of policy and strategy at AARP."]

The Post's perspective illuminates what's really troubling AARP: that with or without the new rule there has been, and likely will continue to be, a steady decline in the provision of retiree health benefits. This is the bigger picture.

The really big picture is that the entire health care system's going to you-know-where (not just for retirees) and nobody really knows what to do about it.

Of course, you can check back on these pages for more on this subject, including the little glimmers of hope, as I read about it.)

Employers and their benefits staff or consultants, meanwhile, should view this new rule not as a chance to screw people, but as as an opportunity to maximize the value of the benefit dollar, by taking full advantage of the Medicare-coordination flexibility afforded.

Continued . . .

Preventing high productivity from being self-defeating

Ceridian has this article in their newsletter Ceridian Connection: "The 'flip side' of productivity"

In the third quarter of 2003, the productivity of American workers soared by the largest amount in 20 years . . . .

Soaring productivity means employees are working longer and harder with higher levels of stress and burnout. This has significant consequences for employers. It's estimated that worker stress and burnout now costs the U.S. economy $344 billion a year. Tired and overworked employees have trouble balancing the demands of work and family. Stressed and distracted workers have more unscheduled absences and higher medical expenses. They file more workers' compensation claims, make more mistakes and create more waste. . . .

These symptoms are the "flip side" of productivity, and they confront every employer with trade-offs between productivity and the conservation and enhancement of human resources. Read more

Article suggests solutions lie in "greater work-life supports on the job," including EAP's. Ceridian is selling their solutions, but they have a valid point.

Continued . . .

Thinking creatively about employee benefits

In about.com Human Resources, Brooks C. Holtom, Ph.D. writes:
"Are You Getting the Best Benefit From Your Benefits? A Guide to Benefits for the Human Resources professional"

Is your benefits package giving you the payback you deserve in increased employee appreciation and satisfaction? Chances are, it’s not. On average, organizations spend 41 cents for benefits for every dollar of payroll. That’s 29 percent of the total employee compensation package. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68 percent of the cost or market value of the benefits they receive.

Employees undervalue their benefits for many reasons including: employers communicate the value of the benefits poorly, the employees have little or no choice in benefits packages or options, and the employees misunderstand the market value of benefits. . . .

So, isn't it about time to reconsider the benefits package your company offers? Following is a long list of benefits that are offered across hundreds of U.S. firms. The cost of these benefits varies as do employee and employer perceptions about the value they deliver. The key for organizations looking for a competitive edge is to determine what benefits you can provide that are most valued and useful to employees. Hopefully, these benefits will approach a 1:1 cost to perceived benefit ratio!

What follows, on this page, is a truly impressive list, ranging from the routine to the sublime. Included are many low-or-no-cost perks that may carry high value in employee perception of "a cool place to work" (e.g., "Free popcorn, ice cream or other snacks"; "Nap time during the workday").

My personal fave: "Concierge services," including "Car wash and oil change; Dry cleaning service; Maid service to clean home; Errands run"

Think about it.

Continued . . .

Trying out a new look, thanks to Blogger updates

Blogger just rolled out a bunch of new features, including new templates, as well as more functional improvements. I decided to give this template a try. It means I now have a short headline list to the right, which is cool. It also means I've temporarily given up the blogroll that was on the left. Hope to add it back shortly. Also hope to incorporate a Google search function and keywords that will allow topical searching and filtering.

Continued . . .

Trend towards conniving & dishonesty in termination noted; not a bright idea

Shirleen Holt writes in The Seattle Times (here via the St. Louis Post-Dispatch): "Seldom are heard these discouraging words: 'You're fired!'"

For weeks, millions of television viewers watched Donald Trump squint, purse his lips and, with a swoop of a finger, utter the catch phrase of the day: "You're fired!" The words that punctuated each episode of "The Apprentice" reality show are unambiguous, blunt and final. They're also largely fiction.

Fear of lawsuits has made the fantasy firing obsolete, for the most part. . . . Instead, many companies have adopted more surreptitious ways to get rid of unwanted employees. Human-resources experts call it "managing out," a way to nudge an employee out the door while minimizing legal exposure. Sometimes it involves making a worker's job so miserable that he'll quit. Other times, it might mean building an airtight cause for a firing, even if the cause is bogus.

In her 13 years as a West Coast human-resources executive and consultant, Cynthia Shapiro has pushed out unwanted employees using a string of methods: setting impossible goals, giving problem workers a client nobody else wants, taking them off a project they love or surprising them with a bad performance review.

Most of the time, they quit, never knowing their exit was orchestrated. "It's an art form, really," Shapiro said. . . .

On the surface, managing out seems a normal disciplinary action. In both, employees are told they need to improve or face consequences. But a straightforward correction plan, which often involves extra training or even mentoring, is designed to help the employee. Surreptitious managing out ensures that he won't succeed.

The article goes on to give an example where the strategy backfired, resulting in a successful age discrimination lawsuit, and then gives a different perspective:

"If you're a company trying to avoid unemployment benefits or a severance payment, I suppose you would do it that way," said Janice Clusserath, a former human-resources executive in Redmond, Wash. "But a company that's reputable and cares about its employees wouldn't do that."

Instead, the employer typically explains where the worker is failing and sets up a probation program that might include more training and coaching. If he hasn't improved within a set time, he's terminated.

"I've never, ever said, 'You're fired,'" Clusserath said.

In theory, managing out, whether straightforward or sneaky, isn't necessary.

Most states operate under at-will employment, meaning companies don't need a reason to fire someone who isn't protected by civil-rights laws or employment contracts. . . .

But few employers want to risk losing a discrimination case . . . . "Companies are scared to death to tell employees the truth," Shapiro said. "If you give employees a little bit of ammunition, they're going to run to the nearest lawyer." Read more

"Managing out" may prevent some discrimination claims from being made, but is a recipe for disaster if they are made.

Let's see, Ms. Shapiro, how do we prove discrimination? Treating someone in a protected classification differently than other similarly situated employees. The more determined you are to create conditions for failure, the more you will have to treat the individual differently than his or her peers.

Oh yeah, there's also that little theory of "pretext." If you insist that the employee just voluntarily quit, and this approach falls apart in litigation you may be tempted to fall back upon the valid reasons for termination you were afraid to honestly rely on. Too late! Now you're offering inconsistent stories, evidence of pretext and thus discrimination.

And finally, count on such a terminated (oops, I mean "managed out") employee to raise a claim of constructive discharge. Such a claim will look pretty good if someone somewhere along the line happens to tell the truth about the company's intentions with respect to the employee.

The honest and straightforward approach advocated by Ms. Clusserath is preferable, IMHO. If an employee is able to conform his or her behavior to expectations, you have avoided the cost of turnover as well as the risk of litigation. If not, you have made it more likely the employee will understand they were treated fairly and not pursue legal action. Or, if they do pursue legal action, they may have difficulty finding counsel interested in their case. Finally, if they do sue, you can consistently and honestly defend your position.

Continued . . .

Court finds job reassignment is adverse action for purposes of race and retaliation claims

Tart v. Illinois Power Co., No. 03-2236 (7th Cir. 4/26/04) is another case on the frequently litigated issue of what constitutes an adverse employment action.

Not every employment action is sufficiently serious to permit recovery, even if there is a prohibited motive. Here the context was whether reassignment to a different position was a sufficient change to permit recovery for race discrimination and retaliation, upon proof of the prohibited motive.

Following a jury verdict for the plaintiff, the Seventh Circuit held that the reassignment was sufficiently adverse where before the reassignment, one of the plaintiffs "worked independently, mostly indoors, repairing gas meters and other equipment, working with computers, maintaining the building’s electrical and mechanical systems, and sometimes answering customer service calls on a one-man truck," and the other plaintiff "worked independently on a one-man truck, which involved customer contact, skilled work repairing gas leaks both inside and outside of homes, and computer access."

In contrast, after the reassignment, they both "worked outdoors in winter digging ditches under the supervision of Caucasian workers they themselves had previously trained. Gone was the independence, the largely indoors environment, the computer access, the skilled labor involved in fixing equipment and repairing gas leaks, and the customer contact. Instead, they were now construction laborers, digging ditches, under the hyper-vigilant eye of a manager who told their new supervisors to work them until they quit."

The court listed three categories of cases where materially adverse employment actions have been found: "1) cases in which the employee’s compensation, benefits or other financial terms of employment are diminished, including cases where employment is terminated; 2) cases in which a nominally lateral transfer without a change in financial terms significantly reduces the employee’s career prospects by preventing him from using the skills in which he is trained and experienced; and 3) "[c]ases in which the employee is not moved to a different job or the skill requirements of his present job altered, but the conditions in which he works are changed in a way that subjects him to a humiliating, degrading, unsafe, unhealthful, or otherwise significantly negative alteration in his workplace environment—an alteration that can fairly be characterized as objectively creating a hardship, the classic case being that of theemployee whose desk is moved into a closet."

Although the employer's attempt to downplay the significance of the reassignment was unsuccessful here, it is important to remember in defending discrimination and retaliation cases, as well as harassment cases, that not every adverse action viewed by an employee as actionable -- and described in the most dramatic terms in the complaint -- is in fact actionable.

In the case of harassment, not every adverse action alleged by a plaintiff is grounds for avoiding the Faragher/Ellerth affirmative defense which is unavailable in the event of a tangible employment action engaged in by a supervisor.

Continued . . .

Good jobs data news on measure I'd not heard of: "JOLTS"

Reuters reports: Job Openings, Hires Show Rise in March

The number of job openings and new hires rose in March, the Labor Department said on Tuesday, a fresh sign that U.S. employment is strengthening.

Job openings rose 5.7 percent . . . in February . . . .

The monthly Job Openings and Labor Turnover Survey, or JOLTS, is more dated than many used to gauge the job market. But it has become a better measure since the department began to adjust the numbers for seasonal variations last month.

The Labor Department said the job openings rate rose to 2.3 percent from 2.2 percent in February. . . .

The rate of quits, a barometer of how easy it is for workers to change jobs, was unchanged at 1.7 percent in March. The report said the number of quits as a percentage of total separations has been on the rise since last December. . . .

The data are available at Web site http://www.bls.gov/jlt/ Read more

Continued . . .

Small business jammed up on health insurance even worse than big business

Neil Adler writes in the Washington Business Journal:
"Diagnosis: Critical, costly; Health insurance pricey, choices skimpy for small employers forced to cut costs"

Insurance is tough to come by for small businesses nationwide, according to a recent study by the Commonwealth Fund (www.cmwf.org), a private foundation that supports independent research on health and social issues and makes grants to improve health care practice and policy.

The study finds small businesses proportionally pay far more in premiums and deductibles than large employers that have access to better plans because of their size.

Premiums jumped almost 16 percent for firms of three to 199 workers in 2003, but rose only 13 percent for firms with 200 or more. Small firms not only get less value than their large counterparts when they provide benefits to their workers, but also face greater financial hazards in doing so, according to the survey. . . . Read more

No great revelations in this story, but a couple of good real-life examples of small businesses forced to pay through the nose -- or forego insurance for employees.

Continued . . .

The long and short of the "lawsuit lottery" in sexual harassment cases

Two harassment plaintiffs. Two jury trials. Two plaintiffs' verdicts.

The difference? A factor of 300.

One plaintiff got $50,000; the other $15,000,000.

Surely there's a rational basis for this dramatic difference? You tell me.

First, the big winner. Newsday.com (AP) reports: "Jury awards sexual harassment victim $15 million"

A jury awarded a 24-year-old woman more than $15 million in a sexual harassment case Friday, though with federal and state limits on punitive damages she stands to collect a fraction of that.

[She] said her boss . . . began harassing her shortly after she went to work . . . in 2001. [She]. . . filed an internal complaint in early 2002. After a company investigation, she said that she was told there was no harassment and that co-workers didn't corroborate her claims. Later, however, she learned that was false.

After a two-week trial, the jury awarded . . . $45,000 for lost earnings, $100,000 for pain and suffering, and $15 million in punitive damages . . . .

[She] claimed that her boss . . . made unwanted advances, including sexual comments, and inappropriately hugged her, slapped her on the rear and poked her in private areas. She said she was victimized further by the company's response.

According to court papers, company officials said Krouse's management style was inappropriate, but his actions showed only favored treatment, not sexual harassment.

Now the lawsuit lottery "loser." The Denver Post reports: "$50,000 in sex harassment"

A federal jury Thursday awarded $50,000 to a former female employee . . . for having suffered sexual harassment by the owner [of the company that employed her]. . . .

Testimony during the three-day trial included reports of [the owner's] walking around his offices and the fax machine clad in only a towel after working out, demanding kisses from female employees before granting them bonuses, and attempting to grab one female's breast.

Did she suffer less than 1% as much as the other woman? I know we can't expect standardized damages like in work comp. ($10,000 per grope?), and these stories don't tell all the facts, but doesn't anybody else think something's a bit off kilter here?

Continued . . .

Unions struggle for relevance; "look for the union label"

A few weeks ago, on the occasion of the annual Union-Industries Show being held here in St. Louis, Gregory Cancelada and Jack Naudi of the St. Louis Post-Dispatch wrote: "Like the jingle, union label fades away"

Calls for "Buy Union-Made" and "Buy American" might appear nostalgic in a day when X-rays of American patients are analyzed by physicians abroad and U.S.-produced shoes are nearly impossible to find.

But the union movement hopes its 130-year-old message to buy products with the union label and more recent calls to buy American are reinvigorated amid the growing debate about overseas outsourcing of service jobs and the steady loss of manufacturing jobs in the United States. . . .

Though the task might seem impossible, groups can persuade consumers to change their buying decisions for the right cause, said Brian Till, chairman of the marketing department at the John Cook School of Business at St. Louis University.

Calls to "Buy American" and "Buy Union-Made" are similar to campaigns to promote the purchase of dolphin-free tuna, recyclable materials and clothing not made in sweatshops, Till said.

"My suspicion is that for a lot of people faced with two different brands that are relatively comparable in price, a symbol or indicator - whether for recyclable, dolphin-safe or union-made - can be just enough of a difference at the margin to make that the choice," he said. "Whether they're going to pay a significant price premium for it, that remains to be seen." Read more

I doubt it.

Meanwhile, one of the old-line, hard-core industrial unions, United Auto Workers (UAW), which has been hemorrhaging members, got some press in Business First of Louisville: "UAW chief sees endangered unions as workers' last refuge"

Will union members eventually join the Barbary Lion and Dodo on the extinction list?

One national labor leader is speaking out about the value of unions in hopes that more people share his vision for their survival.

During a recent visit to Indiana University Southeast, where he received the 2004 Distinguished Alumni Award, Ron Gettelfinger, national president of the Detroit-based United Auto Workers international union, said unions are fighting to stay alive because they are needed now more than ever. . . .
One issue that concerns Gettelfinger is the misperception that some people have about unions. "We're not in the business of putting any company out of business," he said. "Why would we want to do that? We want our members to have jobs, have job security and have benefits so they can plan for their future." . . .

If union leaders and their membership could truly learn to put company survival and success first, they would not wind up putting companies out of business. But intended or not, unions can have a serious detrimental impact on a business. Certainly the sentiment expressed is commendable. But as I've seen recently, sometimes even if union leaders are determined to act reasonably and in their members' long term best interest, the members just don't get it, and commit economic suicide anyway.

Since he took over the UAW helm in 2002, Gettelfinger has been recognized for his efforts to keep jobs from moving out of the country by agreeing to lower wages and benefits for Ford's UAW workers.

"In our negotiations, we've been successful in maintaining a standard of living that keeps up with the cost of living," he said. . . .

Is there a non sequitur there, or what? If he can agree to lower wages and benefits and still maintain the standard of living, he's quite a wizard.

Besides fending off anti-union efforts, Gettelfinger said that his other concern is stopping the number of UAW members from decreasing every year.

Gettelfinger said he believes that people, in general, are in favor of unions and they would join one if they are given the chance.

"There's a lot of people out there who want to join a union. Over 50 percent of the public feel unions are necessary," he said.

They always say this, but it's sure not reflected in the choices people make. Of course they always blame the law:

Right now, it is very one-sided in favor of the employer. We've got to find a way to level the playing field so unions can get in there. Everything is against the union organizing.

Funny thing, employers I work with don't feel the law is stacked in their favor. Read more

Continued . . .

More high prices ahead for healthcare benefits; some more innovative options for responding

Business Insurance Daily News (Jerry Geisel) reports: "More double-digit health claim costs ahead: Survey"

Health insurers expect claim costs to continue rising by double digits well into next year, a survey has found. A group of health insurers surveyed by Aon Consulting projects that claim costs -- including those for prescription drugs -- will rise by just over 14% on average for 12-month coverage periods beginning between April and September 2004. Read more

This unwelcome news makes it more important than ever for employers to educate themselves on the experimentation that is going on as businesses try a variety of new approaches to cost control.

Workforce Management magazine has this useful article: "Managing Health Costs: Four Case Studies"

The first company profiled, Fall River Group, took the traditional route of increased copays, with the key sucess factor being employee communication and buy-in.

The second company, Highsmith, offered financial incentives for employee participation in various health and wellness activities such as an annual 90-minute health screening; mammograms; complete physical exams for both sexes over 50 and a prostate screening for the men; and pre-and post-natal care for pregnant women. "The impact on Highsmith's bottom line was astounding."

The third company, Nexen Group, adopted a consumer-driven health care approach.

The fourth company, Union Pacific Railroad, "established exercise as the cornerstone of its health-promotion program and built an 8,000-square-foot fitness center at its Nebraska headquarters. To accommodate the track-maintenance workers and other mobile staff, boxcars were converted into rolling railway gyms." A vigorous antismoking program was also implemented.

Read more (if you care about this subject, you should take a minute for this article)

Continued . . .

The real "Friends" story

'While the entire nation was awaiting the final episode of "Friends," some of us were paying more attention to a behind-the-scenes employment law story about the show.

The occasion was a court ruling in a sexual harassment case based on sexually oriented comments and drawings a female secretary was "forced to endure" while transcribing the show's writers' brainstorming sessions. The conduct was essentially admitted, but claimed necessary to the work. The case is Lyle v. Warner Brothers Television Productions

I've sometimes commented that alleged verbal "harassment" in some cases (such as joking, relatively mild discussion of sexual matters) is no worse than what one sees on network TV. Now we have a case that shows how TV got to be that way. . . .

Here are a few good sources on this story:

LA Metropolitan News-Enterprise: "C.A. Limits 'Creative Necessity' Defense in 'Friends' Harassment Case"

Law.com (Alexei Oreskovic, for The Recorder): "Raunchy 'Friends' Meetings Lead to Sex Harass Claim"

CNN.com (Joanna Grossman, FindLaw Columnist): "Are 'Friends' writers 'required' to engage in sexual banter? A ruling in a California court allows the argument to be made"

Here, without all the juicy details, is a nutshell case summary from the law.com piece:

Writing television comedy is dirty work.

So dirty that crass behavior and vulgar jokes may be an acceptable part of the creative process, rather than a hostile work environment, a state court of appeal ruled.

In a unanimous decision Wednesday, 2nd District Court of Appeal Justice Earl Johnson Jr. held that it's up to a jury to determine whether the writers of the hit TV sitcom "Friends" were justified in regularly talking in a sexual nature about female cast members, pretending to masturbate during meetings, and making sexually explicit drawings. . . .

Calling the defendants' "creative necessity" argument "unique in the annals of sexual harassment litigation," Johnson acknowledged that it nevertheless could be legitimate.

"To the extent defendants can establish the [conduct] . . . was within the 'scope of necessary job performance' and not engaged in for purely personal gratification or out of meanness or bigotry or other personal motives, defendants may be able to show their conduct should not be viewed as harassment," Johnson wrote . . . .

A trial court dismissed all of Lyle's claims on summary judgment, and awarded the defendants more than $400,000 in attorneys fees, deeming the case frivolous. . . .

But the court reversed the trial court's dismissal of the harassment claim, holding that the behavior that Lyle was subjected to could constitute harassment, and the fact that it occurred in the context of a special workplace did not automatically excuse it. Read more

The three articles focus mostly on the "creative necessity" defense. Grossman opines on the broader issue of evaluating harassment claims in "context" and the dangers of assuming that the fact certain conduct is common means it cannot be the basis for a harassment claim. She also does a nice job pointing out weaknesses in the "creative necessity" defense under the particular facts of "Friends."

A couple of other interesting issues lurk in this case.

First, the trial court's award of fees to the defense is highly unusual. Would this have occurred had an industry other than Hollywood been involved?

Clearly the court of appeals not only found the claim insufficiently "frivolous" to justify this unusual step, but also sufficiently meritorious to send to trial. As rare as such fee awards to discrimination defendants are, I suspect reversal of not only the fee award, but also the underlying judgment, is even more unusual.

Secondly, there is one other defense that was only briefly mentioned in one of the stories, and another that wasn't mentioned at all.

The feminist agenda of outlawing sexual harassment was implemented through judicial activism, bootstrapping it into Title VII as a form of sex discrimination, rather than by legislation (which could have focused more specifically on the improper sexualization of the workplace). Thus, the prohibition is not of all sexually oriented conduct that a particular woman, or even most women, would find offensive. Rather, as the Supreme Court so clearly held in Oncale v. Sundowner Offshore Services: (1998)

Title VII does not prohibit all verbal or physical harassment in the workplace; it is directed only at " discriminat[ion] . . . because of . . . sex." We have never held that workplace harassment, even harassment between men and women, is automatically discrimination because of sex merely because the words used have sexual content or connotations. "The critical issue, Title VII's text indicates, is whether members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed."

Applying this standard, is there any question whether the writers would have behaved more tamely had they employed a male secretary? I think not; they might even have been worse (though that's hard to imagine, if one reads the raunchy details of their actual conduct). Therefore, it is questionable whether this is sexual harassment at all, despite the sexual explicitness.

This issue is touched upon in the LA Metropolitan News-Enterprise story: But "Johnson, writing for the Court of Appeal, said it was up to a jury to decide whether the defendants? conduct constituted harassment 'based on sex' . . . ."

The other defense not mentioned is the Faragher/Ellerth affirmative defense that deals with the employer's efforts to prevent and correct harassment and the employee's use of available complaint procedures. Did this secretary complain? Did the employer have a harassment policy? Perhaps this is not discussed because the employer hasn't got a leg to stand on in this regard. If so, they screwed up.

Continued . . .

Useful summary of 2003 state labor legislation

The Bureau of Labor Statistics ("BLS") has published a fine resource on state laws: "State labor legislation
enacted in 2003" (by Richard R. Nelson and John J. Fitzpatrick, Jr.)(.pdf)

Many employers (and their attorneys) face additional challenges in remaining current and in compliance with employment laws because they have multi-state operations. State laws on a number of employment matters vary considerably. This is a nice publication for monitoring recent statutory developments in a variety of states.

A greater volume of labor legislation was enacted in 2003 than in recent years, despite the fact that budget concerns were a priority for many States.

California, Illinois, and Texas enacted particularly large numbers of laws.

Legislation enacted addressed several areas of employment standards and included many important measures: increased minimum wage rates; expanded coverage of family and medical leave laws; additional prohibitions on children working in hazardous occupations; and new measures addressing workplace security.

Additional States provided leave for employees who are crime victims; protected the earnings of children working in the entertainment industry; eased regulation of the private employment agency industry; and protected the jobs of reserve and guard members returning from military active duty.

New protections from discrimination were enacted for transgender individuals, prohibitions were enacted on the purchase of goods produced through forced labor, and a California law requires employers to provide healthcare benefits.

This article summarizes significant State labor legislation enacted in 2003. It does not, however, cover legislation on occupational safety and health, employment and training, labor relations, employee background clearance, economic development, and local living wage ordinances. Articles reporting on changes in unemployment insurance and workers’ compensation laws appear separately in this issue. Read more

This article is from the BLS publication Monthly Labor Review Online.

Continued . . .

Great payroll jobs report for April just out

Reuters reports: "Job Growth Strong for 2nd Month"

U.S. employment surged for a second straight month during April, adding another 288,000 to payrolls as jobs were created in nearly every sector at a pace that handily outstripped expectations . . . .

[T]he government [also] revised up its estimates for job creation in both February and March, [saying] . . . 83,000 jobs were added in February and 337,000 in March instead of 46,000 and 308,000 respectively it had previously reported. Read more

Continued . . .

Weekly jobless claims continue to drop

Reuters reports: "Jobless Claims Hit 2000 Low"

America's employment outlook brightened on Thursday after the government said jobless claims dropped last week to their lowest since 2000, bolstering expectations for strong numbers in the April jobs report. . . .

First-time claims for state unemployment benefits shrank 25,000 to 315,000 in the week ended May 1, the Labor Department said. It was the third straight week of declines.

Wall Street analysts had forecast a slight fall in claims to 335,000 from a revised 340,000 the previous week. Read more

Continued . . .

More on overtime reform

Two items in the St. Louis Post-Dispatch on the new overtime regulations (see this post for earlier news stories, links to the regs and explanations).

First, the government's response to the criticism -- an opinion-page piece by Secretary of Labor Elaine L. Chao: "Workers' Overtime: New rules mean more money, not less"

It's time to set the record straight about the Labor Department's new overtime security rules. Contrary to a recent editorial in the Post-Dispatch, the department's new rules guarantee overtime to more workers than ever before and modernize antiquated guidelines badly in need of reform. . . .

Reporters at the Post Dispatch will be pleased to know that the new rules incorporate protections from current federal court cases and make certain that reporters who are entitled to overtime today will actually get their rightful pay.

The notion that the existing overtime rules "have been working well" may be a trial lawyer's dream, but it's not the reality faced by many workers. . . . The rules have become increasingly difficult to understand and enforce, forcing workers to hire lawyers and go to court to get the overtime pay they deserve. . . .

It may be good political rhetoric to claim that the new rules "favor business" and make it easier to "slap a management title on a worker and cut his pay," but Section 541.2 specifically prevents unscrupulous employers from changing workers' titles in order to deprive them of overtime. . . .

Even employers acknowledge that they will be required to pay more overtime under the new rules: up to $375 million a year in additional wages. This will cost businesses money, but one employer representative said that most businesses would rather spend money on wages that benefit their employees than spend millions of dollars defending themselves in court, time and time again. . . .Read more

Meanwhile, Congress is again seeking to block the changes. Today's Post (AP) reports "Senators reject Bush's overtime regulations"

In an election-year snub of the Bush administration, the Republican-controlled Senate voted Tuesday to require that new Labor Department regulations guarantee the right to overtime pay for all workers who currently qualify.

So, what, we get grandfathering of existing employees, with two employees who are doing the same job being subject to different overtime rules depending on whether they were hired before or after the rules change? That'll be fun.

The regulations are to take effect in August. Barring a reversal in the administration's position, critics have several formidable obstacles to overcome to successfully block them.
The Senate's action took the form of an amendment to corporate tax legislation that has been stalled for months and has yet to clear the House. Moreover, the administration threatened to veto legislation a year ago that would have halted department work on the rules. Read more

Purely political gamesmanship. Why do this as an amendment to stalled legislation if the deadline is impending -- Why not force a prompt vote solely on this issue? Who gains from grandstanding on a vote that won't actually have an impact because the bill never gets out of the House? Who gains from making the President veto this? Why was the vote 52-47, with only five Republicans voting against the regs?

This makes it really fun for employers and the lawyers that represent them. We have to hurry up and learn the new rules (I'm spending my lunch hour tomorrow on an ABA teleconference seminar so I can learn what the nation's top experts have to say about them), while our clients survey their pay practices and determine what changes to make to comply with them, with full knowledge that they may never come to pass and this may all be wasted effort. How productive is that?

Meanwhile, for those who want to get right to the meat of what the new regs are all about, publisher CCH has a very nice, readable publication in newsletter format: "Department of Labor revises white-collar exemption rules"

Some interesting points include this comment: "Both sides [business and labor] will need to review the final rules in greater depth before registering truly informed opinions either way." Note this hasn't stopped them from spouting off vehemently (with truly uninformed opinions)!

An employer "to do" list is included, and the last item is a particularly wise one: "Don’t drop your guard. Employers surely want to believe the rule revisions will ring in a new era of reduced wage-hour litigation. That’s unlikely to be the case. It’s safe to assume that FLSA litigation will be a key weapon in the plaintiff lawyer’s arsenal for at least the near future."

Amen to that. Read more

Continued . . .

Challenges and benefits of managing a virtual business using home-based independent contractors

Business Week Online's Entrepreneur Profiles features an interesting article by John Jordan, based on his own experience running a "virtual" PR firm, Principor Communications.

In this article, entitled "Managing 'Virtual' People," Jordan writes:

In 2002, after eight years with three public relations agencies, I opened my own firm, Principor Communications, as a virtual organization. My major reason was to eliminate the cost of office space and everything connected to it. . . . [T]he major cost savings have been in the area of labor. The skilled, experienced professionals who staff my agency are all independent contractors. They're women who are home raising young children.

Like many new parents, they enjoy the challenges of working and don't want to fully sever their relationship with the work place and their colleagues. Their ability to obtain health insurance through their spouses gives them the freedom to work part-time to keep up skills and networks. Virtual companies provide parents of both sexes with opportunities that did not previously exist.

The challenge in this low-cost model is to keep in mind that eliminating an office doesn't entirely eliminate all the social needs fulfilled through working in a common physical space. . . .

Running a virtual company eliminates a great deal of the more time-intensive elements of management. The office conflicts, tensions, and politics are minimized and nearly eliminated in a virtual company. . . .

It's important for contractors to know they'll profit more both financially and socially by working with a new client through your business than by servicing that client on their own. . . .

An entrepreneur has to deliberately create an environment in which a contractor owes it to himself or herself, in terms of work satisfaction and professional development, to work through your company. . . .

A virtual company allows maximum flexibility and autonomy for everyone concerned. Contractors set their own hours with little oversight. The entire business exists in something of a netherworld in which time and space don't apply. All of this can be extremely liberating. It's also immensely challenging. While it's easier to relinquish control working with trusted, competent people, it's still not a simple thing to do. . . .

I'm not certain I'll run a virtual company indefinitely. This model is an effective way to get a full-service company off the ground quickly and in a way that minimizes costs and maximizes earnings, which, in turn, can be reinvested in the business at the appropriate time. It also allows a great deal of freedom for the entrepreneur and staff.

With freedom come challenges, yet each can be met through conscious, deliberate, and planned activities. . . .Read more

The control issues and flexibility discussed are essential aspects of success on the important legal issue of whether the workers are properly characterized as independent contractors.

If they work from home, using their own computer and other office equipment, have some flexibility in hours of work, and are paid on a per-job or percentage basis, rather than straight hourly or salary, these facts will go a long way towards proving this status.

Watch for this type of business model to grow substantially during the upcoming business expansion.

Continued . . .

Discourse on summary judgment motions, spilling out after I spent most of the week preparing four of them

It's finally done. Thursday evening my motions went out fedex for filing on the East Coast Friday.

The four motions were related, for different defendants in one case, but it was still a hairy experience. Each one required a motion, memorandum, and fact statement, so there were 12 separate documents to write, rewrite, edit, proof, etc. Plus a lengthy affidavit, exhibits, and deposition pages.

But I love doing summary judgment motions. Always have, going back to when, as a summer associate in law school, I spent what seemed like half the summer on one.

For the uninitiated, a quick explanation: a summary judgment motion, if successful, wins the case without trial. The judge decides the case based only on the paper record, including depositions, exhibits, affidavits, and the all-important legal brief or memorandum (despite the sound of these words, this document is often not brief or sketchy, but long and meticulously detailed -- the main one I did this week almost used up the alloted forty pages).

In employment cases, plaintiffs almost never seek summary judgment; defendants almost always do. Why?
Defendants (employers) have reason to fear going to trial before a jury; they avoid this with summary judgment. Employment law is often quite favorable to employers, but juries often decide cases not by strict application of legal doctrine, but based on whether they think the employee got treated poorly or unfairly. At least that's what defense lawyers fear. Judges are often quite motivated to avoid having cases go to trial, and we hope they are willing to focus on applying the law when reviewing these motions, even if it means leaving a sympathetic plaintiff out in the cold.

This is particularly important because in my experience the great majority of employment discrimination cases really are just wrongful discharge claims that would fail due to the employment-at-will doctrine, but that happen to involve persons in protected classifications who hope to get their day in court by claiming discrimination. Under the employment-at-will doctrine, most employees not covered by union contracts -- which is most about 85% of the workforce --- can be fired for a good reason, bad reason, or no reason at all, without legal recourse. This is not understood by, or popular with, many people, so a jury is likely to want to find for a "wrongfully discharged" plaintiff, regardless of whether the evidence establishes discrimination.

So employers want to avoid juries, as a rule. And plaintiffs want to avoid summary judgment. If they have a strong case, they'd rather not seek summary judgment in their favor, but prefer to go to a jury, hoping for the "lawsuit lottery" big punitive damages award.

The standard for summary judgment is deceptively simple: the motion should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment under the law. Put differently, there's nothing important for a jury to decide and thus no need for trial.

Employment cases always involve issues of fact. People always disagree about various details of pertinent events, sometimes testifying under oath in deposition to radically different versions of events. Aren't these genuine issues of material fact? How then do employers ever win? (And we do win quite often; the case reporters are full of employment cases with contentious facts in which summary judgment was nevertheless granted for the employer.)

The standard for granting summary judgment, expressed in a brief sentence above, discloses the way to handle the contentious facts: they either don't involve a "genuine issue" or they are not "material."

An issue is not genuine if no reasonable jury could buy the plaintiff's story on it. While credibility determinations are supposed to be for juries, I believe there's room in the summary judgment for process for showing that a plaintiff's story is so implausible, inconsistent, and contradicted by others that a reasonable jury would never buy it. So I sometimes confront the uncomfortable facts head on. Even if a judge isn't comfortable saying the plaintiff's not believable, if I can show that to be the case, I then need only show the judge a way out -- another way to avoid the factual issue. And if I lose the motion, I've hopefully warmed the judge up enough to my side of the case to be on the right side of the vast discretion trial judges wield on evidentiary rulings and the like.

One way to help the judge avoid finding a credibility issue that requires trial is to show that the apparently direct conflict between the plaintiff and the management witnesses really isn't so direct; that the testimony can somehow be reconciled or that there are important areas of agreement. If both witnesses are right and can be viewed as truthful, there's not a genuine issue. This may require very close reading and rereading of all the evidence.

It may sound implausible to be able to pull this off, but I think most people actually try to be fairly truthful in depositions (if self-serving, nonresponsive and unusually "forgetfull"). As a result, they often avoid direct conflict with the testimony of others, instead hedging, bobbing, weaving, spinning, and nuancing (think Bill Clinton -- no, he didn't have sex with Monica, well not exactly "sex").

And "I don't remember" is not the same as "no." (Actually, they always say "I don't recall" -- who uses that phrase anywhere but in a deposition?) If I say I told you something, and you say you don't recall if I told you, there's no genuine issue -- the evidence is undisputed that I told you.

The other main trick of the summary judgment trade is arguing that the uncomfortable facts are not "material," meaning that even if the plaintiff's version of the disputed fact is true, it doesn't make any difference. This is where thorough research and knowledge of the law, and careful writing that finesses the discussion of legal principles is so important.

The law books (now virtual books on the Westlaw and Lexis servers, for most lawyers) are full of cases in which judges have ruled particular facts immaterial so they could grant summary judgment. Find them. Study them. Cite them. (Never a naked cite, always use at least a "sound bite" quote or quick "parenthetical" spinning the case your way -- but don't spin too hard or you'll lose valuable credibility with the judge and his/her clerks.)

Now to the practical task of putting a summary judgment motion together. It can be hard to control and coordinate the evolution of the documents, particularly in jurisdictions requiring a separate fact statement in numbered paragraphs. Yesterday, I was scrambling to update my fact statements to reflect changes in an affidavit, and then put all the paragraph number references from the fact statement in the briefs. Meticulous citation to the record is key to victory, but it takes time.

I recommend involving a paralegal early and intensively in the writing process so he/she can be of maximum assistance with the meticulous documentation. Also, get an early jump on affidavits (however, you still may want last-minute changes as the brief evolves and additional facts become important).

I suggest getting much research done early in the case, despite the expense, rather than doing it only when preparing the motion. This work -- and the summary judgment strategy it suggest -- is vital to planning discovery, deposition questions, etc. Discovery should be designed not just to generally discover facts and evaluate witnesses, but also to position the case for summary judgment.

Finally, the fact statement deserves at least as much attention as the brief. The judge doesn't want to just read a buch of legal argument. He/she must evaluate the factual record. You must be the guide. It's an art to spin the facts (and law) to one's best advantage without misrepresenting them. "Tell the story" in the fact statement (i.e., keep it flowing naturally). Keep the paragraphs brief (one or two sentences). Chronological order is not always the best organizing principle for a fact statement -- but there must be some organizing principle.

Use lots of headings and carefully think out the document's organization -- for both the fact statement and the brief.

Last, but perhaps most importantly: don't make the mistake of spending many hours of high-priced partner time on depos, and then handing off the summary judgment motion at the last minute to an inexperienced associate unfamiliar with the case -- or throwing it together quickly at the last minute. That's no way to win.

Continued . . .