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Creating New Tools to Help Build Nondiscriminatory Algorithms

Manish Raghavan & Pauline T. Kim, Limitation of the “Four-Fifths Rule” and Statistical Parity Tests for Measuring Fairness, 8 Geo. L. Tech. Rev. 93 (2024).

In Limitation of the “Four-Fifths Rule” and Statistical Parity Tests for Measuring Fairness, authors Manish Raghavan & Pauline T. Kim critique the use of the four-fifths test and other statistical parity tests (SPTs) in employment decision making. The article discusses how SPTs have been used historically to identify adverse impact as part of a disparate impact discrimination inquiry and how SPTs are being used now, and how that may obscure algorithmic discrimination.

The article is intriguing because it discusses where we have been, where we are, and where we may be going regarding the use of SPTs and algorithmic discrimination. That is especially important because the use of algorithms in employment decision making is likely here to stay. Algorithms can be used to screen job applicants for later evaluation or to rank job applicants for sequential hiring or for other purposes. Concerns regarding the possibility of discrimination through algorithmic use are common. Indeed, various jurisdictions, including New York City, require audits of employment selection algorithms before they are used.

The article provides a good primer on the law regarding SPTs and a discussion of their historical use. The article explains the employment law issues, such as the difference between a finding adverse impact and a finding of disparate impact clearly. It also discusses the problems and possible benefits of using SPTs retrospectively and prospectively, providing a balanced and nuanced approach to using tools that have been used bluntly in the employment context.

As they discuss the uses and misuses of SPTs, the authors suggest how SPTs can be used more judiciously in assessing whether an employment rule has triggered an adverse impact with respect to a known applicant pool. In addition, they propose measures to be used in combination with SPTs to help designers craft algorithms that are fair and nondiscriminatory, rather than algorithms designed in part merely to avoid a finding of adverse impact and possible discrimination claims. The authors’ suggestions regarding the prospective use of algorithms are especially important, as the use of algorithms by employers is unlikely to diminish.

The article is rich with wonderful insights. Three key points stand out.

First, the four-fifths test, the simplest of the SPTs and initial focus of the article, has been used as a rule of thumb to help identify possibly discriminatory rules, but it is not very good at the task. Any employment rule may disqualify a higher percentage of some groups of applicants than other groups of applicants. The core issue is how much adverse impact is sufficient to trigger the need to examine whether the rule might cause an unlawful disparate impact.

The four-fifths test is violated, for example, when the use of a rule yields a selection rate of one racial group is less than 4/5ths of the selection ratio of another racial group. Federal agencies have historically treated the violation of the rule as evidence that an employment rule has had an adverse impact on the under-selected group based on race. That typically triggers further evaluation of whether the rule caused a disparate impact on the group that might violate an employment discrimination statute.

However, the authors note the four-fifths rules is an unsophisticated statistical tool that is both overinclusive and underinclusive in detecting discriminatory conduct. Nonetheless, when used carefully, the rule and other more sophisticated SPTs, can help identify when an employment rule should be scrutinized for possible bias.

Second, the recognition of algorithmic discrimination has led algorithm designers to use the four-fifths test prospectively to attempt to avoid a finding of adverse impact and, they surmise, discrimination. That approach has a number of problems. As noted, the four-fifths test is not an accurate test of adverse impact or discrimination.

In addition, any prospective use of SPTs has a “data-dependence problem” because no data set that is defined prospectively to test the employment rule will necessarily match a subsequent applicant pool. More troubling, concentrating on the results of the prospective use of an SPT can trigger a focus on adverse impact rather than validity, i.e., the algorithm’s ability to identify the strongest set of applicants.

When designers focus insufficiently on an algorithm’s validity, the resulting algorithm may be discriminatory – though it does not violate the four-fifths test – but also may not help the employer make better employment decisions. That is a lose-lose situation.

Third, SPTs and other measures can be used to audit algorithms to lessen discrimination and encourage the accuracy or validity of the underlying algorithm. Though the authors provide recommendations that can help make algorithms better, they caution that even their interventions will not guarantee algorithms will not discriminate.

Anyone who is interested in employment law should read this article. The breadth of coverage makes the article a good read for those who think about employment law and those who practice or seek to practice employment law. It also may be helpful to employers and non-lawyers who care about employee selection processes. For those reasons, it is a Thing I Love Lots.

Cite as: Henry L. Chambers, Jr., Creating New Tools to Help Build Nondiscriminatory Algorithms, JOTWELL (March 13, 2024) (reviewing Manish Raghavan & Pauline T. Kim, Limitation of the “Four-Fifths Rule” and Statistical Parity Tests for Measuring Fairness, 8 Geo. L. Tech. Rev. 93 (2024)), https://worklaw.jotwell.com/creating-new-tools-to-help-build-nondiscriminatory-algorithms/.

The Supreme Court’s Evolving (and Dubious) View on Causation

Sandra F. Sperino, The Causation Canon, 108 Iowa L. Rev. 703 (2023).

In The Causation Canon, Professor Sandra Sperino performs a superb analysis of the Supreme Court’s evolving analysis of causation standards. The piece carefully synthesizes the decisions in this area, identifying a new canon of statutory interpretation now used by the Court – coined by Professor Sperino as the “Causation Canon.”

The law with respect to causation has always been muddled. In the field of employment discrimination law and worklaw more generally, causation has persistently presented a tremendous burden to claimants in the field. While establishing causation in other areas of the law may often be much more straightforward, showing discriminatory employer intent can present a Herculean task. There are a variety of reasons for the difficulty, including that so much of the critical information in such cases often resides with the employer and can be notoriously difficult to uncover. Personnel files, worker emails, and other critical evidence may not be readily accessible to a worker who has been recently fired, or may be accessed only at substantial cost during discovery. Yet the law requires that causation be established to recover in most workplace cases, particularly with respect to disparate treatment employment discrimination claims.

Professor Sperino’s groundbreaking paper identifies the new way that the Supreme Court has approached statutory interpretation with respect to issues involving causal determinations. As she identifies the Court’s new doctrine, which has evolved over the past decade, “[w]hen a statute uses any language that might relate to factual cause, the Court will assume that Congress meant to require the plaintiff to establish ‘but-for’ cause.” (P.704.) Professor Sperino traces the doctrine back to 2013. Prior to this time, she notes that the Court looked at each statute individually in determining how to interpret factual cause in each matter. Over the past decade, however, the Court has looked at causation differently, assuming that the but-for requirement exists universally across statutes.

Professor Sperino discusses the questionable way the Supreme Court has justified this new canon. Indeed, the Court purports to rely on ancient common law to support its interpretation and application of causal standards when interpreting statutes. Professor Sperino expertly highlights through the examination of numerous cases how such a standard did not previously exist. In particular, she closely explores the Price Waterhouse v. Hopkins and Gross v. FBL Financial Services cases (which both arose in the employment law context) to demonstrate that this doctrine is a new phenomenon. Professor Sperino then turns to Court cases issued in the last decade, most notably the Nassar, Burrage, and Comcast decisions, to highlight the development of the Court’s so-called “Causation Canon.”

The implications for employment discrimination plaintiffs are immediate, given the noted difficulty with establishing causation. Generally, the canon identified by Professor Sperino means that it will typically be even more difficult for victims of discrimination to overcome this hurdle. Of course, Professor Sperino‘s theory means much more than this, and is not limited exclusively to employment matters. Indeed, the Court’s new doctrine, as identified by Professor Sperino, would extend to all federal statutes. Nonetheless, causation is typically the critical determination in most employment discrimination cases. The McDonnell Douglas test, which Professor Sperino has examined extensively in her prior research (see, e.g., McDonnell Douglas: The Most Important Case in Employment Discrimination Law, (Bloomberg)), is still an evidentiary standard of causation with which the courts struggle and offer differing opinions even half a century after the case was first announced.

The genius of this work is the masterful way in which Professor Sperino synthesizes the shortcomings of the Supreme Court’s analysis. Given her extensive expertise in this area, Professor Sperino is uniquely situated to demonstrate how the Court’s announced underpinnings for its standard — more specifically ancient common law – is at odds with the new canon that it purports to develop. As she correctly notes, the “causation canon creates a stand-alone factual standard. In contrast, the common law uses a bundled approach” where in some circumstances it was recognized that “this standard does not work well.” (P. 705.) In those situations, prior to 2013, the law would “adapt[] by changing the subject of the standard, or the party required to prove it.” Id. After the creation of this canon, however, the Court “has made a powerful substantive choice” by favoring the stand-alone approach, and has “magnified this choice by imposing it as the default for factual cause in all federal statutes.” Id.

The identification of the causation canon alone will prove extraordinarily helpful to those researching in this area, and in analyzing any causation questions which are likely to find their way to the courts. Perhaps more importantly, however, the Supreme Court should own the new theory that is has silently developed and not be permitted to quietly rely upon an unsubstantiated examination of past precedent. The causation standard has already created difficulty for plaintiffs in the workplace context. Now, through a clearer understanding of this canon, as identified and detailed by Professor Sperino so well, plaintiffs will have more clarity when litigating in this area. In this way, the paper is far more than theoretical, and provides a valuable and practical resource for employment law advocates.

At the end of the day, The Causation Canon, which is extensively well-researched and wonderfully written, will serve as the new statement of statutory construction issues related to causation. Unfortunately, the Court’s new approach likely creates an even greater hurdle for workplace plaintiffs, who already faced numerous procedural challenges even prior to this new doctrine. As Professor Sperino correctly observes, “[t]he causation canon is still in its infancy . . . it is worth considering whether the Court should abandon it.” (P. 744.)

Cite as: Joseph Seiner, The Supreme Court’s Evolving (and Dubious) View on Causation, JOTWELL (February 13, 2024) (reviewing Sandra F. Sperino, The Causation Canon, 108 Iowa L. Rev. 703 (2023)), https://worklaw.jotwell.com/the-supreme-courts-evolving-and-dubious-view-on-causation/.

Labor Law and Reproductive Rights

Jeffrey M. Hirsch, Labor Law’s Impact on the Post-Dobbs Workplace, UNC Legal Stud. Rsch. Paper No. 4557256, available at SSRN (Aug. 30, 2023).

Dobbs v. Jackson Women’s Health Organization, 579 U.S. 2228 (2022), meant that the ability to choose an abortion was no longer a right protected under the U.S. Constitution. Instantly, pre-existing bans or extreme limits on abortion in some states went back into effect, and other states adopted new bans and restrictions. This is likely not news to readers of this blog. What likely will be news—and useful news at that—is that labor law may help both unionized and non-unionized workers fight for and achieve abortion-related benefits at the workplace. Jeffrey Hirsch’s Labor Law’s Impact on the Post-Dobbs Workplace is a timely, informative, and well-balanced approach to this issue that I recommend to anyone interested in the intersection of workplace rights and reproductive rights.

Hirsch starts by noting that “[a]ccess to abortion and other health care depends on employers to an unappreciated degree.” That’s because most health insurance is provided by employers. Further, employer policies involving leave and scheduling can also affect abortion access.

He then shows how labor law can help non-unionized employees. Specifically, Section 7 of the National Labor Relations Act (NLRA) gives all employees it covers the right to engage in “concerted activities for . . . mutual aid or protection.” This section protects all employees the NLRA covers, not just those in or trying to form unions, when they act together on matters relating to wages, hours, and working conditions. This right is not as well-known as it should be, but it provides protections for workers advocating for, e.g., employer-provided benefits relating to abortion.

Hirsch describes the basic rules for what constitutes “concerted” and “protected activity,” and how this advocacy could bring better abortion-related rules, including health insurance coverage, leave, travel benefits, and privacy protections. Hirsch delves into the details of each type of benefit. For example, he notes that the AFL-CIO has published model collective-bargaining agreement language for abortion benefits. Also, while there is little precedent on non-unionized employees pressing for privacy protections Section 7, he argues convincingly that it should be covered.

The article then explores another interesting issue under Section 7: political activity designed to elicit employer support. While it’s clear that Section 7 covers activity such as political support for a raise in the minimum wage, other types of political activity (such as “A Day Without Immigrants” protests) create closer questions as to whether they have sufficient connection to workplace issues. Political activity aimed to garner support for specific employment benefits will likely be covered; protests of laws limiting abortion access are less likely to be (although as always, in close cases, rulings may well depend on which party holds a majority on the National Labor Relations Board).

The article then discusses unionized employees. Such employees have a right to bargain collectively about many possible employer-provided abortion benefits. Hirsch notes a few possible proposals that could raise issues over whether the topic was a mandatory subject of bargaining. The most interesting and important of these, I believe, is the issue of whether travel benefits for abortion would be considered an illegal subject of bargaining in states with laws that purport to make travel for abortion illegal. Hirsch notes that such laws may well not withstand constitutional scrutiny. But unless and until such a law is struck down, a union’s only argument would be NLRA preemption. And Hirsch fairly concludes that the preemption argument may not be a winner.

This is an excellent piece. In the spirit of continuing this important conversation, I wonder whether the scope of NLRA coverage limits the respects in which labor law might usefully protect abortion access for workers. While the NLRA covers most private-sector employees in the U.S., it has some significant exclusions. Hirsch mentions that supervisors and independent contractors are excluded. Given the increasing number of women in both higher-level positions and classified as independent contractors, this is a limitation on the NLRA strategy.

More broadly, as those who know me would predict I would say, the NLRA excludes public employees. I will note that many states have public-sector labor laws that grant covered employees’ rights similar or identical to NLRA Section 7 and collective bargaining rights. However, a number of states do not provide robust labor rights to most or all public employees. Not surprisingly, there is a significant overlap between the states that do not provide robust union rights for public employees and those that have imposed significant restrictions on abortion rights (for example, Texas). But in the many states that do give robust bargaining rights to public employees, Hirsch’s discussion would be equally relevant (except for the preemption issue).

I would also have been interested in Hirsch’s thoughts on “internal union politics” issues in this area, assuming not all local unions will have majorities in favor of these rights. But overall, Hirsch makes a valuable contribution by suggesting a potentially very useful tool that reproductive rights advocates should be aware of. I liked this article a lot and I look forward to reading more from Hirsch and others writing on this topic.

Cite as: Joseph Slater, Labor Law and Reproductive Rights, JOTWELL (January 10, 2024) (reviewing Jeffrey M. Hirsch, Labor Law’s Impact on the Post-Dobbs Workplace, UNC Legal Stud. Rsch. Paper No. 4557256, available at SSRN (Aug. 30, 2023)), https://worklaw.jotwell.com/labor-law-and-reproductive-rights/.

Fitting a Square Peg Into a Round Hole: The Myriad Problems with Using Make-Whole Relief To Remedy Breaches of Labor Rights

The National Labor Relations Act is infamous for its weak remedies, particularly the Board’s lack of authority to grant punitive relief. While commentators have focused on the ineffectiveness of remedies, few have tried to answer why, on a theoretical level, those remedies are weak and ineffective. In Consequences of a Mismatch: Remedial Philosophy and Statutory Rights Under the National Labor Relations Act, Rita Trivedi tackles this question. She explains that NLRB remedies have been limited to contract-like make-whole remedies, which she calls ex-post relief, even though labor rights are not contractual rights but “something of value that [Congress] deemed worthy of protection,” which she calls ex-ante legal rights. (P. 25.)

To make her point, Trivedi breaks down her argument into five parts. She begins with the historical fact that NLRA remedies have been limited to make-whole relief, such as that used to remedy breach-of-contract claims, since the Supreme Court’s 1940 decision in Republic Steel Corporation v. NLRB. For example, the remedy for discriminatory discharge is backpay and reinstatement; however, backpay damages fail to deter most employers from violating the Act because wages are generally low. For the employer, it often pays to break the law.

In the next sections, Trivedi explains the difference between traditional ex-post (e.g., contract) and ex-ante (e.g., tort) relief and why ex-ante relief is appropriate to remedy labor violations. In part two, she explains that the three traditional remedial interests of contract law—expectation, reliance, and restitution—“reflect the lack of a value assigned to the parties’ ‘right’ to receive what they contracted for.” In part three, she explains ex-ante deterrence could play a role in more fully remedying labor rights because “ex-ante deterrence remedies send a societal message that the law values the rights that have been violated and is ready to direct compliance with social norms.” (P. 45.) She also draws on the philosophical underpinning of tort law and federal employment law to show how remedies could serve the deterrence function without necessarily being punitive. (Pp. 47–49.) In part four, Trivedi explains that using ex-ante deterrence in conjunction with ex-post relief is appropriate given that Congress created statutory rights, and therefore deterrence is necessary to protect the normative value of those legal rights.

In part five, Trivedi uses examples to show the most problematic aspects of taking only a make-whole approach to breaches of the NLRA’s statutory duties. (Pp. 56–62.) For example, Trivedi explains that nip-in-the-bud unfair labor practices are difficult to remedy with only ex-post relief because “‘[n]o other worker in his right mind would participate in a union campaign in [a] plant after having observed that other workers have been discharged and must wait for three years to have their rights vindicated.’”1 Nip-in-the-bud unfair labor practices are NLRA violations, such as firing union sympathizers during an organizing campaign, which are intended to discourage unionization as soon as it begins.

This article is well-written, well-organized, and cogently argued. Labor law is a highly specialized field that is subject to constant oscillation. Comparatively few lawyers are truly experts in this field, and even experts can barely keep up-to-date with the current state of the law. Moreover, labor law is highly interconnected, meaning that one doctrine affects many others, ideally forming a seamless tapestry. The problem is that every administration has an agenda, tugging at threads, and leaving gaps of disconnected doctrine. This article shows those connections and why the pattern they weave does not make complete sense at the remedial level.

This article is also particularly valuable to the legal academic because it not only explains the law at the doctrinal level but also analyzes doctrine from a philosophical point of view. It seems obvious, now that Trivedi points it out, that an unfair labor practice is a tort and that the courts have limited remedies to contract-like relief in a mismatch that affects substantive rights granted by Congress. Explaining it in this manner clarifies it for the novice and presents the expert with an “aha” moment: Trivedi provides justification for tort remedies.

This article is also timely. NLRB General Counsel Jennifer Abruzzo has directed the NLRB Regional Offices to “request from the Board the full panoply of remedies available to ensure that victims of unlawful conduct are made whole for losses suffered as a result of unfair labor practices.”2 She has also urged the Regional Offices to seek injunctive relief under Section 10(j) “to ensure that employees’ rights will be adequately protected from remedial failure due to the passage of time” and stated that “[d]uring [her] tenure as General Counsel, [she] intend[s] to aggressively seek Section 10(j) relief where necessary to preserve the status quo and the efficacy of final Board orders.”3 While she uses the ex-post “status quo” language of contract, she suggests something more—that what she wants to protect is worthy of protection in and of itself.

And Abruzzo has made good on those promises. For example, she asked for—and the Board granted—make-whole relief that “expressly order[s] [the employer] to compensate affected employees for all direct or foreseeable pecuniary harms that these employees suffer as a result of the [the employer’s] unfair labor practice.”4

In short, Trivedi’s article is an easy read that is both educational and insightful. It clearly explains how remedies under the NLRA work (or fail to work) and provides both a philosophical and doctrinal justification for the current General Counsel’s agenda to remedy unfair labor practices to the fullest extent of the law.

  1. Rita Trivedi, Consequences of a Mismatch: Remedial Philosophy and Statutory Rights Under the National Labor Relations Act, 27 Advances Indus. Lab. Relations 23, 56 (2023) (citing Nat’l Lab. Relations Bd., GC 10-07, Effective Section 10(j) Remedies for Unlawful Discharges in Organizing Campaigns 1 (2010) (quoting Silverman v. Whittall & Shon, Inc., No. 86 Civ. 1675 (WK), 1986 WL 15735 (S.D.N.Y. June 6, 1986))).
  2. Nat’l Lab. Relations Bd., GC 21-06, Seeking Full Remedies 1 (2021); See also Nat’l Lab. Relations Bd., GC 21-07, Full Remedies in Settlement Agreements (2021).
  3. Nat’l Lab. Relations Bd., GC 21-05, Utilization of Section 10(j) Proceedings 1 (2021).
  4. Thryv, Inc., 372 N.L.R.B. No. 22, at slip op. 1 (Dec. 13, 2022).
Cite as: Anne Marie Lofaso, Fitting a Square Peg Into a Round Hole: The Myriad Problems with Using Make-Whole Relief To Remedy Breaches of Labor Rights, JOTWELL (November 29, 2023) (reviewing Rita Trivedi, Consequences of a Mismatch: Remedial Philosophy and Statutory Rights Under the National Labor Relations Act, 27 Advances Indus. Lab. Rel. 23–63 (2023)), https://worklaw.jotwell.com/fitting-a-square-peg-into-a-round-hole-the-myriad-problems-with-using-make-whole-relief-to-remedy-breaches-of-labor-rights/.

Know Your… Benefits

Brendan S. Maher, Pro-Choice Plans, 91 Geo. Wash. L. Rev. 446 (2023).

Employee Retirement Income Security Act (ERISA) attorneys and scholars are an enthusiastic bunch. They love (love) talking all things benefits, whether this means arcane legislative history or the minutiae of healthcare plans. ERISA folk especially love their statute, even though almost everyone else considers it too dry and far too complex—and even though they themselves often affectionately poke at it with names like the Every Ridiculous Idea Since Adam law. (This was my own ERISA professor’s personal favorite.)

Occasionally, as with Brendan Maher’s recent article, Pro-Choice Plans, the reason for all this enthusiasm becomes eye-wateringly obvious. ERISA affects aspects of life that everyone cares about deeply: what happens when we get sick, and what happens when we get old. As Maher points out, this means it also—if indirectly—affects abortion access.

The first great virtue of Maher’s article is its mercifully clear and minutiae-free explanation of core ERISA concepts and elements. Walking non-ERISA folk through the workings of a statute that generates instant eye-glaze is, as I know all too well, no easy task. Maher accomplishes it with both brevity and nuance. You might even read the article as a primer on the statute itself, regardless of your interest in ERISA’s impact on abortion rights. It’s that accessible. You could certainly assign it to a classroom of exhausted and preoccupied law students. I plan to do so.

Of course, if you’re at all interested in reproductive rights, American politics, or law, you’re probably reading Pro-Choice Plans for what it has to say about abortion. That would also be an excellent choice, no pun intended, because what Maher says is both insightful and exciting without getting carried away by its own creativity. If you’re pro-choice and still weighed down by the long shadow of Dobbs, as I am, it offers a much-needed glimmer of possibility.

Maher’s argument is simple. Many people who seek abortions will do so via their healthcare plans, and most healthcare plans are subject to ERISA. How ERISA intersects with the myriad state laws limiting abortion access is thus self-evidently important. I should note here that, in the course of laying out his normative argument, Maher constructs a nice, four-fold categorization of state abortion laws that is keyed to ERISA but is also more broadly useful.

Two types of state laws, he writes, are unlikely to survive ERISA’s well-established preemption powers: “reporting” laws that force individuals to report pending or completed abortions, and “aiding and abetting” laws that prevent individuals or institutional actors from facilitating abortions. But, of course, there are four benefits-relevant types of state laws in his taxonomy. Maher acknowledges that the remaining two categories—“direct” laws that prohibit getting or providing abortions within state boundaries, and “insurance” laws that prohibit in-state insurers from covering abortion expenses within state boundaries—are trickier. In states that enact these latter two kinds of laws, ERISA doesn’t offer an easy path to continued access.

Even so, there may be options for employers who want to provide abortion coverage to their employees. Self-insured plans are quite likely to survive state prohibitions, assuming that the Supreme Court does not decide to upend decades of ERISA precedent. (Maher, to his credit, is appropriately cautious on this point.) But that only takes care of wealthy employers whose bank balances can support their ideological preferences. What about small employers who share an interest in providing abortion coverage but not at the expense of their own survival? Maher makes a few tantalizing observations about the use of stop-loss insurance coverage—and, yes, observations about insurance can be “tantalizing.” I would have loved to hear more of his thoughts on this front. Nevertheless, since we don’t have much precedent to go on, Maher’s circumspection is once again entirely warranted.

Read Pro-Choice Plans for its humane explanation of a complicated statute. Read it for a rare spot of hope in an otherwise disheartening time. Read it for a renewed appreciation of the ways legal solutions may not always come from obvious legal sources. But do read it.

Cite as: Deepa Das Acevedo, Know Your… Benefits, JOTWELL (October 31, 2023) (reviewing Brendan S. Maher, Pro-Choice Plans, 91 Geo. Wash. L. Rev. 446 (2023)), https://worklaw.jotwell.com/know-your-benefits/.

Turning NDAs into NCAs

Camilla A. Hrdy & Christopher B. Seaman, Beyond Trade Secrecy: Confidentiality Agreements That Act Like Noncompetes, 133 Yale L. J. __ (forthcoming 2023), available at SSRN (Mar. 15, 2023).

Over the last decade or so, there have been remarkable developments in the law’s approach to employee noncompetition agreements (NCAs). After years of little movement, many states have recently restricted noncompetes (for example, by barring them entirely for lower-compensated workers), while a few jurisdictions (including Massachusetts, D.C., and Minnesota) have taken more dramatic steps to rein in their use. And further change may be in the offing, including the Uniform Law Commission’s (ULC) proposed Uniform Restrictive Employment Agreement Act, the Federal Trade Commission’s proposed rulemaking that would largely bar NCAs, and the National Labor Relations Board’s challenge to using noncompetes for covered workers.

But not everyone realizes that these changes may reach contract terms beyond those formally phrased in terms of restricting a worker’s post-employment competition. Indeed, both the ULC and the FTC actions would reach contracts framed as barring disclosure of confidential information when such an agreement has effects similar to those of a noncompete.

It is this possibility that drives Camilla A. Hrdy and Christopher B. Seaman’s article, Beyond Trade Secrecy: Confidentiality Agreements That Act Like Noncompetes. While others have recognized that limitations on disclosure can have effects similar to NCAs, the authors are the first to provide a comprehensive treatment of the question, one enriched by an empirical study that is the first to explore how confidentiality clauses are deployed in the real world.

As indicated by the title, the main concern of the Article is agreements that reach beyond “trade secrets” to protect a broader category of “confidential information.. That means that the narrow definition of trade secrets is inapplicable. Worse, while an employee’s general knowledge, skill, training and experience are excluded from trade secret protection, a confidentiality agreement may seek to restrict not only disclosure of such information but even its use when acquired during the course of the employee’s job. That means that such an agreement may parallel an NCA in terms of employee mobility and constraints on innovation and, indeed, may be worse because it is not subject to the temporal and spatial limits that control formal NCAs.

Although Hrdy and Seaman prefer the term “confidentiality” to “nondisclosure” agreements (NDAs) in order to capture the common bar of employee use, nondisclosure is frequently the label affixed to these contracts, and the authors’ central point is that NDAs may have similar or worse effects than NCAs.

This is problematic because confidentiality agreements, at least historically, were usually treated as presumptively valid and the “common wisdom” is that they were not subject to those pesky public policy constraints applicable to noncompetes. Thus, a former employee may be enjoined from using protected information even if the effect of such a possibility is to restrict employee mobility comparably to an NCA but without the law’s preconditions in that context.

In the course of surveying various judicial and statutory approaches to the problem, one of the main contributions of the Article is identifying current authority requiring greater scrutiny of confidentiality agreements that amount to “de facto noncompetes.” Even short of that, some courts, according to Hrdy and Seaman, apply a “more nuanced” analysis of the anticompetitive effects of such agreement. But even these decisions do not doctrinally treat subject agreements as noncompetes so that failures to impose temporal or geographic limitation are not fatal. Instead, “[c]ourts tend to assess the degree to which the confidentiality agreement reaches beyond trade secrecy and whether the agreement—regardless of what it is called—has the effect of a noncompete.”

Another contribution is the authors’ empirical study of some 450 confidentiality agreements that have become public, typically in the litigation context. Although the Article recognizes the selection bias associated with this data gathering strategy, they have done a scholarly service in shining a light on how such agreements operate in at least some of the real world. The authors conclude that employers typically use broad confidentiality agreements as a backstop for trade secret protection, and that, facially at least, such agreements are more restrictive than NCAs: “And, contrary to noncompetes, “they almost never have geographic or temporal limitations, and they are usually written to last forever.”

The normative takeaway from Hrdy and Seaman’s article is a default rule of unenforceability for confidentiality agreements that go beyond trade secrecy but subject to the employer’s showing that such agreements “are reasonably related to the goal of protecting legitimately confidential information and are not acting as de facto noncompetes.” They claim that the result will not be to outlaw confidentiality contracts but rather to “weed out poorly drafted confidentiality agreements that have the effect of perpetual noncompetes.” Among the requirements for validity would be employer proof that the confidentiality agreement does not restrict employees from using their general knowledge, skill, and experience. While neither a specific duration nor specific geographic reach would be needed for validity, the information protected by the agreement must still be secret when the employee seeks to use or disclose it and the agreement must not reach information that is “public or generally known to persons in the employer’s industry” or which the employee already possessed prior to the employment relationship, or obtained lawfully from third party sources or was required by law to be enforced.

The authors’ proposal would substantially reduce the legitimate scope of confidentiality agreements, but Hrdy and Seaman are not uniformly hostile to them. They recognize a need for protection of confidential information, even beyond information that would qualify as a trade secret. Further, they do not believe that employees should be free to use such information merely because it could be (but wasn’t) acquired legitimately.

There’s more than a little in the article to chew on, and we can expect challenges to the authors’ analysis as going both too far and not far enough. This is a Jot, so any detailed criticism would be out of place but I do note that the notion of a “de facto noncompete” could use some fleshing out. While it is by no means clear that the more sweeping current challenges to NCAs will be successful, Hrdy and Seaman are to be praised for their effort to ensure that any reconsideration deals not only with formal NCAs but also functional ones.

Cite as: Charles A. Sullivan, Turning NDAs into NCAs, JOTWELL (October 3, 2023) (reviewing Camilla A. Hrdy & Christopher B. Seaman, Beyond Trade Secrecy: Confidentiality Agreements That Act Like Noncompetes, 133 Yale L. J. __ (forthcoming 2023), available at SSRN (Mar. 15, 2023)), https://worklaw.jotwell.com/turning-ndas-into-ncas/.

Are Family Leave Insurance Policies the Wave of the Future?

Deborah A. Widiss, Privatizing Family Leave Policy: Assessing the New Opt-in Insurance Model, Ind. Legal Stud. Rsch. Paper No. 506, available at SSRN (June 13, 2023).

In this informative article, Professor Deborah Widiss guides us through a recent trend in “red” states towards authorizing employer-sponsored family leave insurance.

Unlike state paid family leave laws—which “mandate paid leave for new parents,” (P. 8), and are typically funded through a payroll tax—a privatized model permits insurance companies to offer paid family leave insurance policies to employers. Employers can then choose whether to offer coverage to their workers.

Widiss explains that paid family leave insurance is a relatively recent phenomenon. Because “the insurance market is tightly regulated,” state legislatures must first “authorize sale of the [insurance] product to individuals or companies within its jurisdiction.” (P. 16.)

In 2022, Virginia was the first state to authorize paid family leave insurance, followed by New Hampshire, Vermont, Florida, Tennessee, and Arkansas. Notably, these laws have attracted bipartisan support. Republicans present them as a choice-driven free market solution—what Vermont governor Phil Scott characterized as a “win-win-win” — while Democrats view “the opt-in approach as a step forward, even if they might prefer a truly comprehensive plan.” (P. 33.)

Professor Widiss provides a measured critique of the private insurance model. She acknowledges that they represent an improvement over the status quo, since many small businesses cannot afford to offer paid leave to their workers. However, a private insurance model can produce regressive results, where “employer take-up may be low, and…lower-paid and part-time workers will be particularly unlikely to receive these benefits.” (P. 6.)

Widiss argues that paid family leave mandates are preferable to a private model. Mandates make leave available to “virtually all workers” in those states. The laws also fund generous benefits at a lower cost than optional private insurance plans because they are funded through a modest payroll tax “typically ranging from 0.1 percent to about 0.4 percent of wages.” (P. 12.) This structure enables substantial wage replacement, which is particularly important for low wage workers who cannot afford to live on a fractional portion of their prior earnings.

However, in states where a paid leave mandate may be politically infeasible, Widiss shares some useful recommendations for policymakers considering the private insurance model. She argues that all such insurance policies should be required to offer a “meaningful amount of time off” for covered workers, rather than the Florida approach, which “might provide as little as just two weeks a year.” (P. 25.) She also recommends rules requiring private policies to offer wage replacement “sufficient to allow low-wage workers to take a reasonable amount of time off.” (P. 26.)

Employers should also be required to cover the entire cost of the insurance policy to reduce adverse selection and avoid “complicated questions around open enrollment policies.” (P. 28.) Lastly, Widiss recommends that policies cover a wide range of possible caregivers beyond a “child, parent, and spouse,” to include, for example, “nonmarital partners, siblings or grandparents.” (P. 29.)

Overall, this article is a nice contribution to the literature, with useful advice for policymakers on a topic that is increasingly gaining traction at the state level. I particularly appreciated Widiss’ decision to focus on innovation at the state level, which is where most of the legislative action is happening these days. It was also nice to learn about a practical reform that has gained bipartisan traction in red states.

Even if this privatized approach is not optimal, it is at least, as Widiss notes, “a viable step forward that can offer some real benefits to some new parents” and other family caregivers.

Cite as: Elizabeth C. Tippett, Are Family Leave Insurance Policies the Wave of the Future?, JOTWELL (September 5, 2023) (reviewing Deborah A. Widiss, Privatizing Family Leave Policy: Assessing the New Opt-in Insurance Model, Ind. Legal Stud. Rsch. Paper No. 506, available at SSRN (June 13, 2023)), https://worklaw.jotwell.com/are-family-leave-insurance-policies-the-wave-of-the-future/.

Taking Seriously the Implications of the Racial Wage Gap

Stephanie Bornstein, Confronting the Racial Pay Gap, 75 Vand. L. Rev. 1401 (2022).

Stephanie Bornstein’s illuminating article, Confronting the Racial Pay Gap, performs an almost shockingly useful math exercise for legal theorists. First, Professor Bornstein recounts statistics on the racial disparities between White families and families of color. “Recent estimates show the median net worth of an average White family is nearly ten times that of an average Black family” (in 2016, $171,000 compared to $17,100) “and nearly seven times that of the average Latinx family” (in 2019, $142,180 as compared to $20,765). (P. 1405.) She observes that “despite gains in the perceived social and economic status of Black and Latinx Americans, racial wealth gaps are worse than they were thirty years ago.” (P. 1416.)

Professor Bornstein then highlights the astounding details of the racial pay gap. Using the metric of comparing only workers who work full-time, year-round, in 2019, the average Black worker earned 73.5 cents and the average Latinx worker earned 74.6 cents on the dollar to the average White worker. While there was some improvement prior to 2000, these racial pay gaps are now larger than they were four decades ago. Before commenting upon some of the underlying findings in this global result, I want to pause here to consider what these two conclusions tell us in particular about the economic dynamics at play in White/Black relations in the United States. Here comes the math. White families have ten times the wealth that Black families possess and the gap cannot be closed with wages.

Professor Bornstein cites economic data and scholarship appearing to lay out the details of how we arrived at this point. “From 1950 to 1980 the Black-White pay gap shrank, due in part to the introduction of civil rights laws, but also to economic trends and increasing unionization that raised wages for low- and middle-income earners, among whom workers of color are disproportionately represented . . . In the 1980s, as unemployment rose and unionization rates fell, the Black-White wage gap increased. In the 1990s, with an increase in the minimum wage and strengthening labor markets generally, the gap declined for a period of time, stalling again in the early 2000s. In the two decades since, the Black-White wage gap has increased in all wage quartiles for workers of all education levels.” (Pp. 1409-10.)

It should come as no surprise that women of color are hit even harder by the racial wage gap because they are the victims of the dual suppression of wages related to gender and race (Professor Bornstein terms this a “double gap”). In 2019, Black women earned only 63 cents to the dollar of White men, and Latinx women only 55 cents. As Professor Bornstein notes, as shocking as these numbers are they actually reflect a modest improvement since 1979. More surprising to me was her observation that “[w]hen compared to the earnings of White women . . . the racial pay gap for Black and Latinx women has also increased. Black women went from earning 92.1% of what White women earned in 1979 to 80.1% in 2019 and Latinx women from 82.5% to 70.4%.” (P. 1411.)

I could go on repeating Professor Bornstein’s detailed summary of the relevant facts, but the argument is structured to unfold easily from there. In Part II of the article, Professor Bornstein argues for improvements to antidiscrimination law including buttressing of disparate treatment and disparate impact theories in Title VII litigation, and extending Equal Pay laws at the state level to include race as a protected classification (which improves plaintiffs’ chances given the legal burdens involved).

She also embraces other antibiasing measures at the state level. Indeed, I noticed throughout the discussion that a great deal of law reform in this area can probably only be considered seriously at the state level. Increasing pay transparency so that applicants and employees have some basis upon which to comparatively assess their pay seems an obvious measure to improve the situation. Banning employer inquiry into applicants’ prior pay to reduce reflexive perpetual tethering of employees’ present pay to already disparate prior pay schemes seems an equally obvious tactic. Both measures have only experienced limited success at the state level.

Professor Bornstein also explores—in Part III of the article—long term structural dimensions of disparate pay. She recognizes that closing such an enormous racially disparate pay gap may be a long endeavor and therefore focuses on two policies especially worthy of present attack. First, she discusses employers’ reliance on the prior criminal record of an applicant for employment. Then, she closely scrutinizes the phenomenon of “overskilling”—mismatching educational requirements to jobs.

These putatively neutral employment practices: “we only hire applicants without a criminal record;” or, “we only hire applicants with a master’s degree” can have the effect over time of screening applicants of color from desirable employment opportunities. At least at the state level, there have been some successes in regulating the practices, and Professor Bornstein advocates continuing social advocacy in these areas.

I think Professor Bornstein does a masterful job in identifying the racial wage gap and making proposals to reduce it. I was especially impressed by her discussion of “occupational segregation.” Wage gaps are often dismissed as a function of accidental “human capital” deficiencies—applicants should simply obtain more education or skills and develop a “work ethic.” But the article highlights that wage gaps occur across all wage levels—even Black workers with advanced degrees make less than White workers with the same degrees.

Occupational segregation—the distribution of workers by race and gender in different industries and occupations—calls into question original wage setting functions. I find it interesting when jobs are considered “good jobs” until women and people of color begin to obtain them. Somehow at that point they become less good. Occupational segregation causes me also to think about the extent to which Black workers have over time been shunted into dangerous work, even before the pandemic. Professor Bornstein’s article usefully makes me more suspicious of such “accidents” and additionally causes me to question the “neutrality” of all wage-based benefits systems.

Cite as: Michael C. Duff, Taking Seriously the Implications of the Racial Wage Gap, JOTWELL (July 19, 2023) (reviewing Stephanie Bornstein, Confronting the Racial Pay Gap, 75 Vand. L. Rev. 1401 (2022)), https://worklaw.jotwell.com/taking-seriously-the-implications-of-the-racial-wage-gap/.

The EEOC’s Innovative Approach to Protecting Farmworkers

Mary Hoopes, Regulating Marginalized Labor, 73 Hastings L.J. 1041 (2022).

In Regulating Marginalized Labor, Professor Mary Hoopes discusses the Equal Employment Opportunity Commission’s (EEOC) innovative approach to protecting farmworkers. She focuses on two key factors – a decentralized, entrepreneurial structure of enforcement and aggressive collaboration with advocacy organizations – in explaining the EEOC’s success. Professor Hoopes then suggests the broader implementation of those ideas could help lead to the “robust enforcement of civil rights within [other] administrative agencies.” (P. 1045.) That is a story worth telling and worth reading.

Professor Hoopes explores the special difficulties inherent in protecting the rights of farmworkers before detailing how an under-resourced EEOC helped bring justice to many farmworkers. She notes our history of agricultural exceptionalism – the exclusion of farmworkers from the protections of specific labor and employment laws – is a prime barrier to justice. For example, the National Labor Relations Act (NLRA) excludes agricultural workers from protections provided to workers who attempt to unionize, and the Fair Labor Standards Act (FLSA) exempts farmworkers from its overtime provisions.

Professor Hoopes explains the employment rights farmworkers do have can often be violated by employers, with workers having little practical resort. Farmworkers are susceptible to wage theft, harassment (sexual and otherwise), and generally poor working conditions. Many farmworkers are undocumented workers, who generally have difficulty enforcing employment laws against their employers. Farmworkers who are allowed to work in the United States through the guest worker program may be especially vulnerable given they work for a single employer who may be in control of their immigration status. When coupled with isolated workplaces and the transience of the work, farmworkers can be poorly situated to protect themselves physically or legally.

Professor Hoopes notes that given the legal landscape and the EEOC’s reputation for tepid employment discrimination enforcement, the EEOC is a surprising venue for a success story about protecting farmworkers. Early in its existence, the EEOC was considered a “toothless tiger,” with little enforcement power to address discrimination in workplaces and few tools to compel employers to run appropriate workplaces free of discrimination. In the 1970s, the EEOC’s prosecutorial powers expanded, allowing it to bring suits against private employers. However, even now, the Commission primarily focuses on resolving problems between employees and employers through conciliation, litigating only as a last resort. Some scholars suggest the EEOC’s approach, coupled with resources insufficient to fully investigate complaints, has led the EEOC to not be considered “a meaningful force in combatting systemic discrimination.” (P. 1053.)

However, Professor Hoopes looked beyond the EEOC’s reputation. She analyzed the EEOC’s work protecting farmworkers by creating a database of sixty-four cases the EEOC brought on behalf of farmworkers over the last two decades, speaking to EEOC employees, and interviewing staff from farmworker advocacy groups. (P. 1047.) She uncovered consent decrees utilizing innovative terms to protect employees specifically and workplaces more generally. The consent decrees appeared to be tailored to the farmworker context or specific employers. Some included “very specific goals and metrics by which to judge the defendant’s compliance.” (P. 1071.) Others included provisions related to working conditions and the monitoring of the housing and transportation of workers that would appear to be outside of the EEOC’s enforcement authority. (P. 1072.)

Professor Hoopes linked the EEOC’s creative and effective results to its bottom-up approach to litigation and conciliation in protecting farmworkers, and its work with farmworker advocacy organizations. Rather than control litigation decisions from Washington, the EEOC allowed its regional attorneys to make litigation decisions from their local offices. That structure allowed each district office to control its litigation efforts under the EOOC’s broad mandate presented in a National Enforcement Plan adopted by EEOC leadership. As part of controlling litigation, regional attorneys directed staff to meet with advocacy organizations and create education and outreach programs what would inform workers and others in farmworker communities of their employment rights. That resulted in a flow of information that spurred and sustained cases in the area.

Professor Hoopes is balanced in her praise of the EEOC’s approach. She could only analyze the several dozen cases the EEOC has brought in this area. Consequently, how broadly successful the EEOC has been in changing behavior in a broad swath of the industry is not clear. Some growers may have acted differently and more proactively as a result of EEOC efforts. However, whether the EEOC’s actions touch the bulk of worksites or farmworkers is unclear. The inability to monitor workplaces after decrees were in place likely limits the EEOC’s ability to drive systemic change. (P. 1095.) Additional resources could be significant.

Nonetheless, Professor Hoopes notes the expansion of the EEOC’s approach to other agencies could lead to the improvement of more workplaces and the protection of more workers. The work of the Department of Labor (DOL) and the Occupational Safety and Health Administration (OSHA) in particular could be helped by the adoption of the EEOC’s innovative approach. Of course, unseen limitations may blunt the effect of the EEOC’s approach in the DOL, OSHA, and other agencies, but the article suggests the approach is worth trying.

The article is a “thing we like lots” because it finds a measure of justice in an unexpected place. This article is an in-depth investigation and analysis of the EEOC’s efforts to provide justice to farmworkers. Rather than writing another article suggesting the EEOC is broadly ineffectual, Professor Hoopes finds an area in which the agency appears to be surprisingly effective and forward-thinking in its approach to protecting workers and workplaces. She suggests expanding an innovative approach in a small corner of American workplaces could lead to good outcomes in other American workplaces that have been difficult to regulate. The article is hopeful and optimistic. That is a “thing we (should) like lots.”

Cite as: Henry L. Chambers, Jr., The EEOC’s Innovative Approach to Protecting Farmworkers, JOTWELL (June 23, 2023) (reviewing Mary Hoopes, Regulating Marginalized Labor, 73 Hastings L.J. 1041 (2022)), https://worklaw.jotwell.com/the-eeocs-innovative-approach-to-protecting-farmworkers/.

Identifying Racial Dimensions Within Contract Norms That May Coerce Black Workers

Dylan C. Penningroth, Race in Contract Law, 170 U. Pa. L. Rev. 1199 (2022).

In the 2022 paper, Race in Contract Law, Professor Dylan C. Penningroth examines in great depth how race and slavery affected the development of modern contract law. Penningroth provides a unique historical perspective by reviewing a “sample of 9,113 cases from trial court dockets in twenty-two courthouses and five state archives.” (P. 1209.) What makes this paper one that I like a lot for work law scholars is how it unearths the unspoken use of race from Reconstruction to the end of Jim Crow in the development of contract law canons such as freedom of contract as well as analytical concepts reflecting voluntariness and consent that still affect or coerce Black workers today.

Penningroth seeks to address broad goals within this paper. This includes transforming the law school curriculum to train law students on the history of “racial thinking” related to ending slavery that also contributed to leading rules on how to regulate contractual behavior in a multiracial economy with newly emancipated slaves. Penningroth also encourages contracts casebook authors to reframe the evolution of those canons by using more cases that show Black people’s stories. Beyond those laudable pedagogical goals, this paper shows how the development of contract law after slavery responded to fears regarding an organized labor narrative that still divides all workers today based upon race.

While the #MeToo movement galvanized ongoing efforts at the state and federal level to limit contractual enforcement of non-disclosure and arbitration agreements, progress in reforming contract law to address an employee’s racial claims as a response to the Black Lives Matter (BLM) movement has stagnated. With respect to further efforts to provide fairness for Black workers in response to BLM, Penningroth’s paper provides some enlightenment in understanding the consideration of race in enforcement of employment contracts even when the matters involved do not explicitly refer to race. As a result, it serves as an excellent read for those seeking additional analytical tools to challenge non-disclosure and arbitration agreements as well as other coercive employment agreements by revealing how racism can be embedded in basic and colorblind canons of contract law.

Penningroth begins his tracing of the racial influence in the development of contract law by focusing on the Reconstruction era. Importantly, Republican antislavery proponents and abolitionists wanted a guarantee that slavery contracts would be unenforceable after the Civil War. Unfortunately, according to Penningroth, the focus on overt racism as an antislavery reform led to the expansion of contractual doctrine to encourage the imposition of coercive contract terms on laborers as long as their actions did not involve literal slave contracts.

This expansive approach to enforcing worker contracts arose from concerns that the emancipated slaves could unduly increase labor costs for employers seeking to hire them as workers in the southern states during the Reconstruction era. Businesses might face hiring difficulties if emancipated slaves adopted an organized labor mindset. These Black laborers could start to challenge basic employer labor practices similar to concerns being espoused by northern labor leaders who objected to the oppressive conditions faced by white workers.

Penningroth even highlights near the end of the Civil War how one white labor leader compared the harsh working terms for laborers in contracts with northern employers as resulting in situations where the “white working man was just ‘a slave without a master’” who was being forced “to ‘either work or starve.’” (P. 1218.) Antislavery and abolitionist interests needed to counter the northern white workers’ labor challenges by showing that this massive entry of emancipated slaves into the southern workforce would lead to their selection for jobs with fair pay for their labor, rather than shifting into a new system that just perpetuated slavery.

As business interests in the Reconstruction era began to employ the “[f]our million newly-freed Black people” (p. 1219), their fears about economic difficulties in attempting to hire emancipated slaves proved true as ”freedpeople viewed labor contracts not as divine salvation, but rather as practical tools to be handled warily, and that many freedpeople thought, like white northern workers did, that the labor contract threatened ‘a practical return to slavery.’” (P. 1219.) This pessimistic view of labor contracting also led emancipated slaves to pursue various options to improve their bargaining position, rather than blithely accepting offers by southern businesses for their labor.

Penningroth argues that the emancipated slaves’ “hard-nosed market behavior” led to the advancement of broad principles regarding freedom of contract that became “known as ‘Lochnerism.’” (P. 1219.) These developing contract doctrines ignored concerns about unequal bargaining power and enforced laborer contracts as long as some aspect of voluntariness remained, as opposed to the complete prohibition of choice or lack of free will associated with slavery. (P. 1220.)

According to Penningroth, the antislavery proponents’ first response to the labor contracting concern was led by the Freedmen’s Bureau, an agency created by Congress in 1865 to develop policies to assist emancipated slaves in integrating into the “free-labor society” within the former rebel states in the South. The Bureau helped by building schools and hospitals, providing food, seeking land redistribution, assisting families by legalizing marriages and locating lost relatives, and “negotiat[ing] labor contracts for ex-slaves and settl[ing] labor disputes.”

The Bureau also facilitated the development of the freedom of contract doctrine by coercing Black people to sign labor contracts and prohibiting “‘collective bargaining, strikes, land redistribution, and better jobs in towns.’” (P. 1221.) As a result, contract law was faced with a conundrum: “how ‘voluntary’ could a contract be when one of the parties was barred from any other way of making a living, ‘coerced by troops and Bureau agents if they refused to sign, and fined or imprisoned if they struck for higher wages?’” (P. 1221.)

The antislavery proponents’ second response to the labor contracting concern involved proposing that basic legal rules on contracting should be colorblind under a general rationale of freedom of contract. Under this focus, labor contracts could be considered illegal only when compulsion was targeted as a form of racism or an attempt to perpetuate slavery. This approach also established that any other forms of compulsion – including policies of the Freedmen’s Bureau or a state law’s baseline contractual principles such as protecting a business through freedom of contracting – could not serve as a basis to challenge enforcement.

The third and final response from the antislavery proponents, as described by Penningroth, focused on the Freedmen’s Bureau practice of resolving contractual cases in favor of emancipated slaves by treating them as needing special protection via equity including the extraordinary remedy of specific performance due to their ignorance. This consideration extended beyond the actions of the Freedmen’s Bureau to address certain “Black rights” through “traditional contract defenses: incapacity, duress and undue influence, inadequacy of consideration, and what would eventually become the law of unconscionability.” (P. 1224.)

As a result, ignoring concerns about compulsion due to a lack of bargaining power became embedded in the Freedmen’s Bureau policies and state laws deferring to a business right to freedom of contract. This general freedom of contractual doctrine would not be disturbed as part of the overall effort to show that labor and employment contracts with the newly emancipated slaves did not perpetuate slavery. More importantly for scholars invested in work law research, Penningroth captures how fears about labor organizing among emancipated Black workers led to a broad “antislavery idea of contract freedom” that ended up prohibiting most regulation of working conditions aimed at protecting vulnerable employees.

Penningroth also concludes that most contract cases leading to the development of strong freedom of contract protections during Jim Crow involved questions involving Black persons. As those bedrock contractual principles became commonplace, the courts and scholars involved failed to note that references to the Black plaintiffs bringing the claims had been dropped from the discussion. This colorblind removal of race also masks the racial implications involved.

Penningroth’s thoughtful and detailed analysis of the race-based origins of harsh and coercive contract doctrines offers attorneys and legislators a source to start restricting and prohibiting coercive contracts that limit the rights and negotiation options of Black workers. And for that reason, I like this paper a lot.

Cite as: Michael Z. Green, Identifying Racial Dimensions Within Contract Norms That May Coerce Black Workers, JOTWELL (May 24, 2023) (reviewing Dylan C. Penningroth, Race in Contract Law, 170 U. Pa. L. Rev. 1199 (2022)), https://worklaw.jotwell.com/identifying-racial-dimensions-within-contract-norms-that-may-coerce-black-workers/.