Rachel Arnow-Richman, Of Power and Process: Handling Harassers in an At-Will World, 128 Yale L.J. Forum 85 (2018).
One of my favorite pieces published in labor and employment law this year is Rachel Arnow-Richman’s Of Power and Process: Handling Harassers in an At-Will World, which is a not-to-be-missed call for an overhaul of the contracting practices deployed by employers, one designed to shift the calculus that employers use to police sexual harassers of various corporate ranks. This piece examines a rarely thought-about angle of the #Metoo movement and the changes that it has precipitated and is yet to still effect. Professor Arnow-Richman, a scholar in employment law and in contract law, exposes this angle thoughtfully and sets forth a laudable proposal.
Professor Arnow-Richman’s starting point is, appropriately, as she puts it, the “extreme power imbalance in the workplace” that engenders “a world in which high-level decision-makers wield unrestricted control over employees,” while the entity can turn a blind eye to the way in which this unfettered discretion may be abused. (P. 90.) Lower-level employees are not accorded such latitude, and they are typically expeditiously disciplined or otherwise dealt with in the face of their inappropriate behavior. The #MeToo Movement, Professor Arnow-Richman correctly points out, was the force that kicked up a lot of the dust that enabled us to see just how uneven this landscape has been. Specifically, she argues that as society begins to grapple with balancing aggressive policing of workplace harassment with ensuring that accused harassers are accorded fair treatment (rather than summary and automatic dismissal), it needs to address inequities among workers at different ranks in the workplace. Moreover, she notes, misconceived corporate responses have companies punishing sexualized actions, rather than policing sex-based harassment that is not sexual in nature. Having astutely pointed out that “employers are inclined to tolerate sexual harassment and other misconduct by top-level employees but aggressively police ‘inappropriate’ behavior by the rank-and-file” (P. 85), Professor Arnow-Richman then sets out to address this problem.
This piece is both important and timely. After decades upon decades of sexual harassment, abuse, and assault being covered up and shrouded in silence, the #Metoo movement is finally starting to bring light to these events—and real consequences to their perpetrators. However, with these actions has come an accompanying backlash, as accused men bemoan what they perceive as knee-jerk justice and a lack of process in their swift ousters. Celebrating the unearthing and remedying of abuse that has been kept underground for so long, while simultaneously navigating the legal landscape as complicated by the backlash is a contemporary issue of great proportion.
Recently, much attention has been paid by scholars and other legal observers to the disparity between the way in which high and low-level accusers are treated by their employers and by the law. The acknowledgment that high level and highly-valued accusers operate with a certain amount of privilege, whereas low-level employee accusers are more vulnerable to being disbelieved or retaliated against is not surprising. However, Professor Arnow-Richman examines the status of the accused with an eye toward their vulnerabilities, rather than just toward whatever privilege they enjoy. Professor Arnow-Richman astutely notes that low-level employees alleged to be sexual harassers or abusers, “share with their accusers a vulnerability to indiscriminate adverse action by those above them in the workplace hierarchy.” She posits that “[t]he very dynamics that make workers susceptible to sexual harassment in the first place put them at risk of excessive disciplinary action in the face of sexual harassment allegations,” and cautions that “in the #MeToo-inspired race to root out inappropriate sexualized behavior, workers with less power, engaged in less pernicious behavior, are likely to be swept up in the rush to judgment.” (Pp. 91-92.)
By getting into the details of the multitude of contractual benefits and protections enjoyed by these “top-level’ employees, professor Arnow-Richman is able to examine precisely how and by how much they fare better than lower-level employees when they are accused of sexual harassment. Job security and for-cause provisions are true game-changers, since employers do not want to incur liability as they respond to allegations of harassment or abuse. Lower-level employees, on the other hand, generally lack written contracts at all and can be summarily discharged at will. As Professor Arnow-Richman puts it, “In other words, if employers wish to cleanly remove high-level employees based on sexual harassment, they better be right about what happened.” (P. 93.)
The piece’s illustrative examples are rich and informative. It discusses, for example, the fact that Harvey Weinstein’s contract was crafted not merely to require that he be convicted of a crime or fraud in order for the “cause” standard to be met, but the fact that his prospective wrongdoings were explicitly contemplated by his contract’s language, which “not only created a safe harbor for Weinstein’s sexual misconduct, it anticipated and condoned an ongoing pattern of misbehavior, as long as Weinstein was willing to pay for the privilege.” (P. 95.) Given these extraordinary contractual protections, the reader gets a really clear idea of just what employers and accusers are up against in the face of alleged abuse by him and others like him at the highest levels of employment.
In stark contrast, the piece notes, the so-called “powerless harasser” affords his employer “every incentive to hedge against the risk of sexual harassment liability,” by getting rid of him, and this engenders gross disparities in the way in which these individuals are treated versus their higher-level counterparts. (Pp. 95-96.) This is true whether or not the allegation is ultimately proven to be true, because “[t]erminating an accused harasser is a surefire way of satisfying this element of the defense [to sexual harassment under Title VII],”and “[i]n cases of uncertainty, as when the employer is unable to verify whether harassing conduct occurred, it is safer for employers to err on the side of punishing the accused.” (P. 96.)
Of particular value in this piece is Professor Arnow-Richman’s informing her analysis and observations with her own experience reviewing labor arbitration awards. In her view, a legal backdrop against which employees at private workplaces have no actual Due Process rights and are owed nothing beyond what a contract might say encourages the enforcement of a “broad, antisexual norm against vulnerable workers” by employers. (P. 97.) Her analysis of labor awards bolsters her contention that employers are prone to “engage in overzealous disciplinary action in response to behavior that relates to or invokes sex or sexuality.” (p. 98.) So what is the law to do with the disparity in discipline and consequences that inures to the benefit of the top-level worker over the rank-and-file worker?
The piece concludes that increased job security and a greater ability to influence workplace terms and conditions would help redress this disparity. It calls for consideration of how this might be accomplished short of an overhaul of at-will employment, noting that “[t]he time is ripe for proposals.” (P. 100.) Professor Arnow-Richman answers her call with some thoughtful and provocative proposals of her own, all of which are worthy of consideration. Among them are employers: 1) continuing to create accountability for harassers at all levels of employment; 2) developing counter incentives to sexual harassment; 3) evaluating “wrongdoing with an informed understanding of what sexual harassment is and why it is harmful;” and 4) deliberately refraining from dealing with offensive statements in the same manner in which they deal with physical behavior that is repetitive or unwelcome.
Professor Arnow-Richman’s expertise in the fields of contracts, labor law, and employment discrimination well situate her to think through the problems created by the #Metoo movement and its subsequent backlash. This piece is thought-provoking, well-illustrated, and something that I found to be an excellent read this year.
The National Labor Relations Act (NLRA) prohibits employers and labor organizations from coercing others in several respects. Section 8(a) (1) prohibits employers from coercing employees with respect to their right to engage in concerted activity for mutual aid and protection and to refrain from such activity. Section 8(b)(1)(A) prohibits labor organizations similarly and Section 8(b)(4) prohibits labor organizations from coercing any person with one of four prohibited objects, the most significant being forcing that person to cease doing business with another person, i.e. engage in a secondary boycott. But the NLRA does not define coercion and the National Labor Relations Board (NLRB) and courts have made mostly intuitive judgments about what is coercive. In The Content of Coercion, Michael Oswalt seeks a path to an empirical basis for analyzing whether employer or labor organization conduct is coercive. Although I disagree with several of Oswalt’s conclusions for labor law doctrine, I admire this work for its path-breaking analysis.
Oswalt observes that the NLRA began as the union-supportive Wagner Act but was counterbalanced by the employer-friendly Taft-Hartley amendments. The result was a “fundamentally hybridized statute that protects the right to freely choose [whether to organize] as it also defends the right to freely meddle [in that choice], setting the stage for a conundrum that has haunted labor law ever since: how much free speech is too much for free choice?” (P. 1592.) The answer is when speech becomes coercive because coercion overcomes rational decision making. But, lacking a definition of coercion, the NLRB has resorted to analytical shortcuts. Threats over which a party has control are coercive but predictions of what could happen, absent other unfair labor practices, are not. Picketing is coercive but hand-billing is not.
In his quest for a more empirically-based approach to determining whether speech or conduct is coercive in labor law, Oswalt turns to the expanding study of the role emotions play in decision making. He provides a very useful account of the developing scholarship in the field and then applies it to labor law. He avers that the emotion most important in analyzing coercion in labor law is fear and urges that fear in the workplace is inherent in the employer’s authority over all employees. A prime antidote to fear, however, is a feeling of control. From this, Oswalt derives a two-step approach to determining the presence of coercion. First, there must be a showing that the “whoever was allegedly coerced credibly feared something relevant to the Act’s prohibitions.” (Pp. 1642-43.) The second inquiry is how much control did the allegedly coerced persons or parties have? Applying this approach to employer anti-union statements and actions, Oswalt finds that “every instance of employer anti-unionism is likely to be considered coercive because in the workplace, employees’ fear derives from employer authority and in an at-will environment employees have no control,” i.e. they must obey or risk their jobs. (P. 1647.) Oswalt realizes that finding every employer missive to be coercive “is not going to happen.” (P. 1648.) Indeed, it flies in the face of NLRA Section 8(c) which protects employer speech that contain “no threat of reprisal or threat or promise of benefit.” But he offers one area of employer conduct where his approach can change current doctrine without running afoul of statutory language. Oswalt argues that employer requirements that employees listen to employer anti-union messages either in one-on-one meetings with supervisors or in large scale captive audience presentations are prima facie coercive under his two-step analysis because employees will have credible fears of adverse consequences if they disobey or fail to heed the message. To counter this, at step two of his analysis, Oswalt argues the NLRB should require employers to give employees a right to opt out of such meetings, thereby providing employees with a sense of control that will serve as an antidote to their fear.
Turning to allegations of union coercion of employees, typically with respect to employees’ rights to refrain from union activity, Oswalt uses his two-step approach as a vehicle for distinguishing between illegal threats of violence and lawful threats of social ostracization. He then examines secondary boycotts and urges that picketing is not necessarily scary and should not be considered coercive per se. Rather, he would require the moving party to produce evidence that bystanders, customers or employees were credibly afraid of the picketing. That would move the analysis to step two, which is to ask whether the fear was necessarily uncontrollable or whether there were reasonable alternatives available to the allegedly coerced party, such as ignoring the picketers or other demonstrators or walking around them or, for a neutral employer, waiting for the demonstrators to leave.
Oswalt’s work raises many questions and is open to disagreement. For example, under current NLRA doctrine, giving employees a right to opt out is often not a defense to charges of coercing their exercise of their right to engage in union activities. For example, an employer may not directly ask employees to participate in an anti-union video even if it assures them that they may decline. Doing so is considered tantamount to an illegal poll of employees. Instead, the employer may only post a general invitation to employees to participate and wait for some to opt in. Should this approach be reconsidered in light of Oswalt’s analysis that an option not to participate instills a sense of control that serves as an antidote to a sense of fear, or does the existing doctrine undermine Oswalt’s basic analysis?
Oswalt urges that credible fear inherent in everything an employer says and does and employees lack a sense of control unless the employer provides it. But does this hold as universally as Oswalt suggests? What about during times of labor shortages? What about workers with skills that are in high demand? What about jobs that require considerable time in training and experience before new hires operate efficiently?
How, if at all, should the analysis apply to pro-union statements by an employer? Under current doctrine, such statements are lawful when phrased as statements of neutrality, such as, “the employer has a positive relationship with the union and is not opposed to you selecting the union as your bargaining representative.” Does the two-step analysis call such doctrine into question?
Oswalt’s analysis also raises questions with respect to union coercion of dissenting or reluctant employees. Why should we distinguish between instilling fear of physical violence from fear of being socially ostracized? Does the evolving science of human emotions support or counsel against that distinction?
With respect to secondary boycotts, the allegedly coerced neutral is not the consumer or employees but the neutral business. Although consumers might ignore a picket or demonstration in front of a retailer, the retailer cannot control the consumers’ reactions. How does this factor into the two-step analysis? And, under current doctrine, a union picketing a product produced by an employer against whom the union is on strike does not engage in a secondary boycott even when that picketing is at the consumer entrances to a neutral retailer. This is so as long as the union confines its boycott call to the struck product and the struck product does not comprise the overwhelming majority of the retailer’s offerings. Should this doctrine be reconsidered in light of the developing science of emotions? For example, might the retailer have a credible fear of the picketing even if it is confined to the struck product?
The above questions demonstrate why I question some of Oswalt’s analysis but still admire the work. He has provided a fresh and potentially compelling approach to assessing coercion as prohibited by the NLRA. It is an approach that scholars, the NLRB, and courts should not ignore.
The current #MeToo movement is a powerful force in our society. It has inspired multitudes of women to come forward about hideous incidents of workplace sexual assault and harassment by powerful men such as Harvey Weinstein, the movie and entertainment mogul. As droves of women in the entertainment industry began making allegations about Weinstein’s sexually abusive behavior, actress Alyssa Milano sought to shine a national spotlight on it. In an October 18, 2017 tweet, Milano invited other women who had been sexually harassed or assaulted to respond by writing ‘me too’ as a method to capture the severity of the problem. There is no doubt that Milano’s tweet helped propel a juggernaut of a movement now referred to as #MeToo.
A recent Essay that I like a lot, What About #UsToo? The Invisibility of Race in the #MeToo Movement,” by Angela Onwuachi-Willig, criticizes #MeToo and the feminist movement more generally because its “essential woman” continues to be a “white woman.” Published in the Yale Law Journal Forum, Onwuachi-Willig’s Essay is one of twelve contributions to a symposium on “#MeToo and the Future of Sexual Harassment Law”; the entire collection can be found in the Yale Law Journal Forum and the Stanford Law Review Online.
Onwuachi-Willig’s Essay criticizes staunch feminist supporters of the #MeToo movement for ignoring women of color, starting with the omission of Tarana Burke, the black woman who coined the term, “me too” in 1997—before the use of hashtags—as part of a movement concerned with sexual abuse and mistreatment of women. In addition to highlighting the failure of the #MeToo movement to recognize Burke’s prominent original contribution, the Essay encourages us to consider how the lack of women of color playing a dominant role in the #MeToo movement warrants a scholarly response, which Onwuachi-Willig refers to as an #UsToo analysis. Further, the Essay provides an important discussion of the #MeToo movement’s failure to develop a cohesive strategy addressing the intersection of race and gender, especially for women of color.
In 16 pages with 62 footnotes, Onwuachi-Willig’s Essay offers a quick and cogent read. In reviewing the present day #MeToo movement’s tendency to downplay the contributions and experiences of women of color, Onwuachi-Willig reveals that women of color have been long similarly overlooked in both public discussions about sexual harassment, and in harassment law—even though women of color assumed key roles in harassment law’s development before and after the #MeToo movement. For example, the Essay compares the (lack of) response when the black actress and comedienne, Leslie Jones, and the black journalist and sportscaster, Jemele Hill, were harassed on Twitter, with the robust response to poor treatment of the white actress Rose McGowan. As the Essay shows, most reports failed even to recognize the gendered aspects of Jones’s and Hill’s harassment. Instead, their hostile treatment on twitter was wrongly considered to be primarily a racial matter rather than a matter of both race and sex.
The Essay also discusses Kimberle Crenshaw’s groundbreaking work on intersectionality. The Essay suggests that Crenshaw’s “intersectionality” framework supports the development of a new legal analysis for sexual harassment claims brought by women of color that should extend beyond the typical objective reasonable person standard; in other words, legal responses to #MeToo should accommodate #UsToo. Because of the intricacies of intersectional discrimination experienced by women of color, Onwuachi-Willig’s expanded reasonable person standard would require the consideration of a complainant’s different intersectional and multidimensional identities. The Essay acknowledges that other scholars have argued for a reasonable woman standard rather than an objective reasonable person standard. However, the Essay adds to that approach by also including intersectional and multidimensional identities in assessing the reasonable person standard for women of color.
The Essay’s greatest contribution lies in its call for intentional consideration of race within the dynamics of the #MeToo movement. Given the make-up of the current Congress and the courts, as well as the current President, I am less than sanguine about prospects for the adoption of a broader reasonable person standard that considers the intersectional and multidimensional identities of the complainant, as the Essay urges. To be sure, there are some hopeful signs. At least one recent successful congressional response to the #MeToo movement already occurred in December 2018, with the inclusion of IRS code provision Section 162(q), sometimes referred to as the “Harvey Weinstein” provision, in the Tax Cuts and Jobs Act. That provision prevents the tax deduction of money paid to settle or resolve sexual harassment or abuse claims and attorney’s fees related thereto, if the agreement contains a confidentiality or non-disclosure provision. Additionally, public pressure has led some companies and law firms to eliminate their arbitration policies, and some states have prohibited the use of non-disclosure provisions in settling sexual abuse or sexual harassment claims. But still, I think that a change in federal antidiscrimination law aimed at considering intersectionality is unlikely.
Whether or not Congress responds positively to Onwuachi-Willig’s call to action, her Essay offers a thoughtful starting point for further and more in-depth explorations into the intersection of race, including how black males may fit into this analysis. Whether Onwuachi-Willig pursues other remaining issues of race and sex intersections in her subsequent scholarly endeavors or leaves it to other scholars, her Essay resoundingly marks the #MeToo movement as deficient with respect to intersectional identity. Others should now respond to Onwuachi-Willig’s #UsToo analysis by centering race within the ongoing objectives of the #MeToo movement.
Jennifer J. Lee & Annie Smith, Regulating Wage Theft
, 94 Wash. L. Rev. 759
(2019), available at SSRN
How best to combat wage theft? In a new paper, Regulating Wage Theft, Jennifer Lee and Annie Smith join the debate with insights from an original hand-coded dataset of State and local anti-wage theft laws enacted from 2005 up through 2018. They know not only who enacted these laws and when, but also the strategies those laws use to combat wage theft. The upshot: Most such laws rely on worker complaints and other enforcement strategies that are less likely to succeed in preventing or redressing wage theft. But, in a few places here and there, the laws use strategies that may do a lot better, and thus are worth a closer look.
The paper’s core: a curated census of anti-wage-theft laws. Unlike past efforts, the paper covers enacted State and local laws over a longer time period. Lee and Smith searched generally in legal databases for laws regulating wage payment or information related to wage payment in every State, the District of Columbia, and the 30 most populous cities. They also scoured secondary sources and talked to worker centers and State departments of labor. They ignored such laws that only increased the minimum wage rate; addressed worker misclassification; required paid sick leave; made “only technical revisions” without “fundamentally” changing the enforcement regime; “would be considered pro-employer provisions”; only covered work performed pursuant to city contracts; or were “subsequently repealed, preempted by state statute, or otherwise invalidated” (Pp. 13-14).
The result: 140 laws (70 State laws and 70 local laws). In absolute numbers, California’s State legislature outpaced other States (19 laws). California had the most local laws, too (29 laws). And many States (the ones in grey) passed no anti-wage-theft laws at all, or at least none that have survived.
To figure out what these laws did, Lee and Smith coded each law based on whether it used one or more of 22 distinct legal strategies. Then, they assigned each legal strategy to one of six strategy types: (1) worker complaints; (2) anti-retaliation; (3) penalties; (4) expanded liability; (5) information requirements; and (6) other. Some jurisdictions enacted many strategies in a few pieces of legislation, while others adopted different strategies piecemeal over time.
Overall, the most common strategy type: penalties, that is, not only civil and criminal sanctions, but also license revocation, negative publicity, wage liens, and wage bonds. The least common strategy type: expanded liability, that is, provisions imposing joint and several liability, a broader definition of employer, and successor liability.
After laying out what the laws do, Lee and Smith explain their concern: “Many of the most common anti-wage theft strategies resemble popular and failed regulatory strategies in other contexts, such as rights claiming, command and control enforcement, and information disclosure,” and these strategies aren’t likely to do any better for wage theft (P. 22). Here, their analysis complements recent papers addressing similar concerns.
But their story isn’t all skepticism. Lee and Smith have more hope about the less-common strategies. And here, their attention to local law really pays off.
For example, consider Florida, which effectively got rid of its State department of labor over a decade ago. There, some localities have enacted anti-wage-theft laws that let “any entity” file complaints on behalf of their members, Broward County, Fla., Code § 20½-4(a)(3)(b), or let the local government contract with local NGOs to aid in enforcement, including help filing complaints, recording liens, and enforcing hearing officer orders, see St. Petersburg, Fla., Code §15-47(a). Provisions like these let local governments work with community groups to co-enforce labor standards.
Another promising strategy: burden-shifting. For example, Los Angeles County’s ordinance declares “a rebuttable presumption that an Employer violated this Chapter” if someone alleges that an employee is owed wages under that ordinance and either the employer doesn’t “maintain or retain payroll records required by” the ordinance, or doesn’t allow the county “reasonable access to such records.” Even for the strategy of imposing penalties, a few places go further and require surety bonds for licenses for certain kinds of businesses, such as farm labor contractors in Oregon and New York City car washes.
So, how much do these legal strategies actually reduce wage theft (individually or combined)? And why? To answer those questions, there’s a lot more to learn. Still, thanks to this paper, we now have a better map of where to go to figure that out.
Andrew Elmore, Franchise Regulation for the Fissured Economy, 86 Geo. Wash. L. Rev. 59 (2018).
An often forgotten area of employment law is the role played by millions of employees working for franchise stores across the country. In his new paper, Franchise Regulation for the Fissured Economy, Professor Andrew Elmore tackles this important area of the workplace, addressing the current standards that govern these workers. Professor Elmore notes the very serious problem of noncompliance in this area with basic employment law, and explains some of the causes that have resulted in this problem.
The franchisee/franchisor relationship is relatively straightforward, as franchisors generally license trademarks to the franchisees. Problematically, in the workplace context, the courts (as a general matter) have failed to consider franchisees as joint employers, which has done little to discourage individual stores from taking unlawful employment actions. While the existing scholarship has focused on the problem of addressing employment law issues arising from subcontractors under the joint employer doctrine, Professor Elmore’s piece takes a different approach. His work proposes that, with respect to franchisors, we should not look to the traditional joint employer test to enhance compliance with employment law. This test does not fit neatly with the construct of most franchise relationships, as the definition of control is currently applied far too narrowly to reach many of the individual stores. In light of this consideration, liability standards must be considered that identify the more unique role franchisors play in the current economy.
More specifically, Professor Elmore looks to other existing theories in the law that could hold franchisors liable for workplace violations. The existing law recognizes apparent agency and misrepresentation theories that could be applied to franchisor relationships. Professor Elmore notes that apparent agency could be used to enhance compliance where franchisors use an internal branding model that creates the perception of franchisor control over regulating employment issues in the stores. Available under the common law as well as certain state statutes, this theory of liability for employment law noncompliance could more specifically address this franchisor-type relationship.
Additionally, Professor Elmore notes that where franchisors adopt business tools or policies that tend to encourage employment law noncompliance, the franchisor may be liable under a misrepresentation theory. Franchisors could thus face liability under this theory if they have not taken reasonable measures to assure that their policies are adopted and applied by individual stores in a way that would not result in workplace violations. Looking at “the dependence and loyalty of franchisees,” the Article considers the “unique incentives in franchising” which can promote workplace wrongs (P. 145). The misrepresentation theory arises from state fraud and franchise laws, and could be directly implicated in the employment context.
Taken together, Professor Elmore sees substantial promise for promoting compliance with workplace laws through a more robust application of apparent agency and misrepresentation theory to franchise relationships. As he discusses, these theories “complement the joint employer test by accounting for the control, dependency, and loyalty measures that franchisors use to protect their brand in franchise stores, including in ways that can encourage employment law violations” (P. 145).
Professor Elmore’s paper is an important and superb piece for several reasons. First, workers who are employed as part of a franchise relationship often face uncertainty when pursuing employment protections. This group – which consists of almost ten million workers – can find themselves left behind when attempting to avail themselves of these basic workplace rights. Professor Elmore takes this problem head on, addressing how the franchise relationship impacts millions of everyday workers. Much of the existing scholarship tackles the more traditional working relationships in our economy, sidestepping this important group of employees. Second, this piece explains the inherent weaknesses of the control test that is so important to the question of the joint employer relationship. Professor Elmore identifies why this often-used test just simply is not a good fit – as currently interpreted – for the franchise economy. The Courts have applied “a narrow right to control test that excludes evidence of the indirect and remote measures that franchisors use to control franchise stores” (P. 105).
Finally, and perhaps most importantly, Professor Elmore looks beyond the traditional control test to other areas of existing law – agency and misrepresentation theories – that can be used to enhance workplace compliance for franchise relationships. Professor Elmore’s solution is particularly creative as it does not suggest a new legal theory or propose new statutory law that is unlikely to be adopted. Rather, Professor Elmore has identified practical ways of working within our existing legal confines to promote compliance with workplace laws for a wide swath of workers that are part of a franchise relationship.
Going forward, the courts should consider applying these theories to franchisors in a broadened way to help enhance the workplace protections of all workers in our economy. As Professor Elmore notes, “lawmaking can elaborate these doctrines to make them more effective in encouraging employment law compliance in franchise stores, particularly in jurisdictions in which these theories are limited by heightened reliance requirements” (P. 106). This creative solution to an existing workplace problem represents an innovative approach that could be broadly adopted. The courts, scholars and lawmakers should examine further the possibility of approaching franchisor liability in the way set forth by this groundbreaking paper.
Leora Eisenstadt, Data Analytics and the Erosion of the Work/Non-Work Divide
, __ Am. Bus. L.J.
__ (forthcoming 2019), available at SSRN.
Much has been written in recent years about how technology that is designed to make us all better connected has blurred the line between work and non-work time. For example, in an age in which many non-exempt workers check work email after work hours, on vacation, or on sick leave, defense lawyers have warned their clients about the potential for claims for overtime pay pursuant to the Fair Labor Standards Act (FLSA). Likewise, much has been written about the erosion of employee privacy in an age in which employers increasingly have the ability to use new technology to monitor their employees’ activities.
Professor Leora Eisenstadt’s forthcoming article, Data Analytics and the Erosion of the Work/Non-Work Divide, discusses these same issues, but with a focus on how the ability of employers to collect employees’ off-duty data impacts the erosion of the work/non-work divide. The article examines employers’ “non-transparent use of data analytics to monitor employee behavior, thoughts, and emotions when they are not working and [their ability] to use this data to make decisions about their workplace success” (P. 18).
Professor Eisenstadt provides several examples, including Project Comet, a program that mines data from employees’ social media accounts and then analyzes the information for use by the employer in developing better work teams. These types of programs obviously carry with them the potential for employer misuse. For example, a program that can gather information about an employee’s off-duty health-related internet searches can help an employer identify “which employees are contemplating becoming pregnant, which employees are concerned about developing diabetes, or those who believe they may need back surgery in the near future” (P. 22). While the authors of the Americans with Disabilities Act (ADA) could never have foreseen this type of scenario back in 1990 when the law was passed, the scenario involves the same concerns over disability discrimination that resulted in the ADA placing limits on the ability of employers to make health-related inquiries of employees and applicants.
While the article raises these types of immediate concerns, it also focuses more broadly on the extent to which programs like Project Comet weaken the traditional divide between work and non-work and the broader concerns this raises. The more employers are able to use data analytics to monitor employees’ off-duty activities for use in the workplace, the more muddy traditional employment law rules that are based on this distinction – like the going-and-coming rule in workers’ compensation or overtime laws – become in theory and practice. Moreover, the fact that employers are able to engage in extensive monitoring with only the most minimal level of employee consent raises concerns about the ability of modern workplace privacy laws to effectively deal with these practices. As Eisenstadt notes, several states have lifestyle discrimination statutes that prohibit adverse employment actions based on employees’ lawful off-work activities. However, the concerns raised by employers’ use of data analytics and facial scanning go beyond the concerns that initially motivated many of these statutes.
Ultimately, Eisenstadt’s survey provides the sort of overview that enables a reader to identify broad, big-picture concerns as well as more narrow, issue-specific concerns concerning employer practices in this area. At a time when concerns over the ability of employees to find a work-life balance are growing, Eisenstadt has written a thought-provoking piece about another way in which the work/non-work divide is increasingly crumbling.
Joseph E. Slater, Will Labor Law Prompt Conservative Justices to Adopt a Radical Theory of State Action?, 96 Neb. L. Rev. 62 (2017).
Late last year, in Janus v. AFSCME, the Supreme Court held unconstitutional all union-security clauses in public-sector collective-bargaining agreements. Union-security clauses are contractual provisions that oblige union bargaining unit members to pay agency fees – that portion of union dues that pays for collective-bargaining-related activities such as contract negotiations and grievance-arbitration. In finding that such clauses violate the First Amendment, the Court, in a 5-4 decision, overturned Abood v. Detroit Board of Education, a 41-year old precedent with no dissenting opinion. Many labor scholars (including Joseph Slater) and activists predict that Janus will have a large economic impact on unions because, under a doctrine known as the duty of fair representation, unions must represent employees whether those employees pay full dues, agency fees, or no dues. These thinkers thus predict that unions won’t be able to collect as much money to represent all employees. As a corollary, diminished union treasuries will foreseeably harm the Democratic Party insofar as unions tend to give more to the Democrats than to other political parties.
For these reasons, Professor Slater’s thoroughly researched, brilliantly analyzed, and well-written article, Will Labor Law Prompt Conservative Justices to Adopt a Radical Theory of State Action?, presents an important question: Given that the Court has unceremoniously disturbed stare decisis to declare all public-sector union-security clauses unconstitutional, will it find a way to declare all private-sector union-security clauses unconstitutional by adopting a broad theory of state action? Professor Slater correctly concludes that such a conclusion would be incoherent in theory and unworkable in practice. This is because to conclude that all such clauses in private-sector contracts are unconstitutional, the Court would have to adopt an unbounded theory of state action, which would effectively erase the state-action requirement from constitutional analysis and obliterate the public-private law distinction that is so fundamental to our constitution.
Why then is this such an important article? As Slater points out, there have been only two areas of private-sector law with which the Court has experimented in broadening the catchment area of state action: racial discrimination qua Shelley v. Kramer (finding state action in private, racially restrictive covenants) and union-security clauses qua Railway Employees’ Department v. Hanson (holding that union security clauses under the Railway Labor Act implicated the First Amendment, but failing to find a First Amendment violation). Until recently, courts had shut down both areas from further expansion. The concern then is this: Will a conservative court, which is hostile to unions, use this expansive theory of state action to declare private-sector union security clauses unconstitutional?
Slater’s argument is cogent in its simplicity: “union security clauses in the private sector do not implicate the First Amendment because there is no state action.” This is true under modern theories of state action, which are restrictive, and some historical but experimental theories suggested under Hanson, grounded in the National Labor Relations Act’s (NLRA) and Railway Labor Act’s (RLA) exclusive representation model, and under Keller v. State Bar of California. Hanson’s theory – that the RLA involved state action because it preempts state right-to-work laws – is incorrect because “federal preemption of state laws, regarding voluntary provisions in employment or other private contracts, does not create state action.” If this were true, then Title VII preemption of discriminatory contract clauses, for example, would create constitutional as well as statutory causes of action. Similarly, exclusivity – the NLRA and RLA principle that majority unions represent all employees in the bargaining unit, not only those who voted for the union – does not implicate state action because those labor statutes do not mandate union formation, require union-security clauses, or reward parties for adopting such clauses. In other words, there is no forced-association problem. This argument was articulated most prominently in Justice Black’s dissent in Machinists v. Street, where the majority avoided the constitutional issue by deciding the case on statutory grounds. Finally, in Keller, where the Court analogized attorney bar association fees to union dues and bar activities to union activities, the Court held that compulsory bar dues may not be used for political expenditures but may be spent on “activities connected with disciplining members of the bar or proposing ethical codes for the profession.” Slater also debunks the corollary to this argument, that unions are state actors insofar as the state grants them monopolistic powers. Slater not only explains that unions have limited power but also points out that “a government grant of monopoly powers to an otherwise private party does not make that party into a state actor even if the government also heavily regulates that party” (P. 84.)
Once again, if these arguments are so obvious, then why is this article so important? Slater suggests that the cases that might be used as precedent – Shelley and Steele– are better understood as occurring at a time when advocates and courts were willing to “ben[d] state action theory beyond any bounds that were previously recognized or would be recognized later, in an attempt to address the fundamental evil of racism in private economic transactions before statutes barred such discrimination” (P. 90). Accordingly, in these highly polarized times, were conservatives tempted to “ben[d] state action theory beyond any bounds that were previously recognized or would be recognized later, in an attempt to address [what they view as] the fundamental evil of [forced unionism] in private economic transactions,” Slater’s extensive research lays bare all the reasons that private-sector union-security clauses do not amount to state action. Accordingly, if an anti-union plaintiff attempts to put forward these arguments, reviewing courts will not be tempted to follow plaintiffs down this path, for fear of creating a greater evil – the elimination of state action once liberals recapture the Court. For example, an affirmative-action clause such as the one at issue in Steelworkers v. Weber, might not only create a statutory cause of action under Title VII but also a constitutional cause of action under the Fifth and Fourteenth Amendments.
In any event, Slater’s argument is important because the National Right to Work Foundation and other conservative or anti-union groups continue to argue that union-security clauses in the private sector are unconstitutional. In short, these cases remind us to be careful for what we wish. We might get it and much more.
Tristin Green and Angela Onwuachi-Willig are interested in the act of narration, and the power that lies in the choice to include or exclude. Green explores these themes in her recent essay, Was Sexual Harassment Law a Mistake? The Stories We Tell. As Green recounts, the U.S. Supreme Court recognized hostile work environment as an actionable form of sex discrimination in Meritor Savings Bank v. Vinson. In doing so, the Court seemed to reject the prior view of such harassment as mere “‘personal’ advances of a man toward the singular woman to which he is attracted,” and to adopt a structural view, recognizing that “others in the organization and the organizational structure itself [can be] causes of ongoing hostile environments.”
However, Green excavates the Meritor record, as well as the records of four other major Supreme Court decisions on sexual and racial harassment, and uncovers substantial evidence of structural problems in those workplaces that the Court excluded from its factual recitations and legal reasoning. She finds the stories of the plaintiffs’ co-workers who were also harassed, but whose testimony barely figured in the Court’s telling, and evidence that men other than the individuals accused participated in the same or separate acts of harassment. She also notes the unacknowledged role of the organization in each of these stories. Many of the workplaces she examined were highly segregated by sex, with “leaders . . . [who] did little to nothing to learn about the culture or behaviors in their workplaces,” and in fact exacerbated cultural and structural problems by failing “to change things about which they were aware.”
As Green shows us, when stories like these are absent from the official narrative, the law’s conception of the true nature and causes of sexual harassment re-narrows, and returns to the earlier “personal advances” view. In adopting this limited view, courts shut down those who try to tell broader, structural stories, and miss opportunities to make real change.
Green pushes us to adopt a broader view, to engage with culture and structure. And in her feminist rewriting of Meritor, Angela Onwuachi-Willig does just that. Writing as Justice Onwuachi-Willig, she takes the role of narrator, and places culture and structure, as well as history, squarely at the center of the story she tells.
For a reader accustomed to the Supreme Court’s own narrative choices in Meritor, and the similar choices of courts since then, Onwuachi-Willig’s deliberate inclusion of a different set of stories stands out. She describes Vinson taking a job as a bank teller, adding, almost casually, that Vinson then became “one of the more than 80 percent of women who worked as bank tellers nationwide.” This reference to the background occupational segregation in the banking industry jumps off the page, precisely because it is so different from the usual sexual harassment story-telling. So does her telling of the larger story of the power imbalance between Taylor, “a bank vice president, a church deacon, and the father of seven,” and Vinson, “a high-school dropout and divorcée,” who was married by age fourteen to an older man. Justice Onwuachi-Willig also tells the stories of the other women whom Taylor harassed, and the willful inaction of the men who ran Meritor Savings Bank. Finally, she adds race to the narrative, engaging with the stereotyping of African-American women as sexually available – even legally unrapeable – and African-American men as sexual aggressors.
Onwuachi-Willig’s story is dramatically, powerfully different from the one told by the white, male-dominated Meritor Court, and accomplishes what Green asks us to do: to recognize harassment in its full context, and to stop telling stories of individual aggressors and individual victims. Drawing on this story, Onwuachi-Willig develops a different sort of sexual harassment law from what we are used to, including strict liability for the employers of harassers. Strict liability is an important device, because it gets at structure, holding the employer – the entity that regulates the workplace – accountable for the environment it creates.
Taken together, Green’s and Onwuachi-Willig’s re-tellings of sexual harassment stories produce a very different kind of sexual harassment law than what we have now. In this age of #MeToo and Time’s Up, both are highly recommended reading to help us critique the stories we tell, and to begin to learn to tell – and understand – new ones.
Cite as: Charlotte S. Alexander, How to Tell Other Sexual Harassment Stories
, JOTWELL (Feb. 22, 2019) (reviewing Kristin K. Green, Was Sexual Harassment Law a Mistake? The Stories We Tell
, 128 Yale L.J. Forum
152 (2018); Angela Onwuachi-Willig & Kristen Konrad Tiscione, Rewrite of Meritor Savings Bank v. Vinson, 477 US 57 (1986)
, in Feminist Judgments: Rewritten Opinions of the United States Supreme Court
, Kathryn M. Stanchi, Linda L. Berger & Bridget A. Crawford, eds., Cambridge University Press (2016).), https://worklaw.jotwell.com/how-to-tell-other-sexual-harassment-stories/
Naomi R. Sunshine, Employees as Price-Takers, 22 Lewis & Clark L. Rev. 105 (2018).
In Employees as Price-Takers, Naomi Sunshine defines employees as workers who lack “significant input into the prices charged to customers and their own pay rates.” (P. 110.) Sunshine’s proposal comes amidst a blizzard of articles, court cases, tribunal opinions, legal briefs, and white papers all examining this critical issue. It stands out amidst the snow drifts because of its simplicity, and because it provides a creative and intuitive insight. Her price-setting definition of employment has the potential to reorient current debates around this new metric.
There are several competing definitions of “employee,” and Sunshine carefully surveys the landscape. She discusses the dominant “control” test with its different variations, as well as the “economic realities” test, the “entrepreneurial opportunities” test, and the relatively new “ABC” test used in California and elsewhere. She illustrates these tests with the example of an HVAC worker as the paradigmatic independent contractor and examines how the test would categorize such a worker. Sunshine’s quiet unpacking of the entrepreneurial opportunities test is particularly deft, as she works her way down to the test’s foundational focus on the opportunity for profit or loss. She shows how the test renders the most vulnerable workers even more vulnerable, as it leaves them bereft of employment protections even when the potential for profits is merely illusory.
Employees as Price-Takers also examines the idea of an intermediate category between employee and independent contractor. The article looks at academic and policy proposals like Harris and Krueger’s “independent worker” delineation, as well as laws such as Canada’s “dependent contractor” statutes. She questions whether a third category is necessary if such workers could appropriately be defined as employees. Her analysis raises important questions, such as: What would the purpose of this third category be? Which “employment” protections would be extended, and which would be withheld? As Sunshine points out, the Fair Labor Standards Act has an expansive definition of employee similar to the Canadian dependent contractor—and thereby may sneakily cover the intermediate category itself. And yet many of these “third way” proposals do not extend minimum wage or hour protection to this middle category.
The primary innovation of the article is its new definition of employment. Sunshine nicely sets out the case for making control over price and pay the critical component of employment—the one that renders employees economically vulnerable. She contends: “If the company controls prices vis-à-vis the customer . . . . the worker is really just a representative of the company—the customer has sought a service from the company, and the worker is the one fulfilling that service.” (P. 149.) Sunshine here keys in on the critical difference between working independently and working as part of a firm. Employees work for an economic firm, and the firm is the economic actor within the relevant marketplace. As Ronald Coase recognized in The Nature of the Firm, firms replace markets when they can operate more efficiently as a collective outside of the market. Independent contractors, on the other hand, are not part of the alleged employer—they work as sole proprietors, or as part of a different firm. In the words of the Restatement of Employment Law, “individuals provide services as independent businesspersons if they are able to serve their own economic interests through entrepreneurial control over a significant part of their costs or opportunities for profit.” This differentiation is a fairly basic economic one, and it should be a basic legal one, as well. However, reducing the differences between markets and firms to easily discernible factors has proven quite difficult. This is where Sunshine’s ingeniously simple test comes in: who sets the price? A worker who controls the pricesultimately charged to consumers for an end-product or service is an independent contractor; a worker who does not is an employee.
Sunshine does not resolve every theoretical and doctrinal issue related to this new test, nor would one expect her to do as much in a single article. She makes clear from the beginning that her test is best addressed to workers who interact directly with the customers, forming a triangular relationship between firm, worker, and customer. (Pp. 111-12.) In a bilateral relationship, the employee will always have a say over her pay, as it is (in theory) negotiated between the two parties. This distinction is why I initially found her reference to price and pay, rather than just price, to be confusing. However, her insights into the nature of control over contracting might also apply, in some ways, to bilateral relationships. Sunshine should go back to her HVAC example and think through how her insights on price might apply there.
One other wrinkle for Sunshine’s “price-pay” test is the algorithm used by Uber and other platform companies. Uber claims that it is not a transportation company, but rather an information services company that connects riders with drivers. The argument has some intuitive appeal: no one argues that eBay is a retailer when it provides a marketplace for goods. But Sunshine’s new test resolves this nicely, because the eBay sellers and buyers set their own prices. Uber, on the other hand, has established a metric for price-setting that drivers and customers do not control. If Uber were truly a marketplace, it would allow the drivers and riders to individually “bid” for rides using their own prices. But Uber’s control over prices means that it acts as the employer.
In creating a new price-oriented test for triangular employment relationships, Sunshine offers a more straightforward path through rocky terrain for judges, advocates, and workers themselves than now exists. As she recognizes, there may be a category of non-employees who nevertheless are dependent enough and vulnerable enough to deserve certain employment protections. But we harm the coherence of the “employee” category if we try to jam these workers in there. Employment is a category relating to the legal and economic context in which the worker labors. Sunshine’s article goes a long way in helping us conceptualize and define this category.
Ewan McGaughey, Democracy in America at Work: The History of Labor’s Vote in Corporate Governance
, 42 Seattle U. L. Rev.
__ (forthcoming 2019), available at SSRN
Like everybody else, I’ve been thinking a lot lately about democracy. How can we nurture faith in democracy when significant segments of the working class feel so disempowered that they either don’t vote at all or turn to nihilist, xenophobic, racist, or hateful visions of American life offered by speakers who seem to have less interest in governance than in nurturing grievances? Although turn-out in the mid-terms was high, as mid-term elections go anyway, still many people who could have voted did not vote. This invites the question about what law can do to build institutional structures and a culture that convinces the disaffected that they can join together to build a better world. One of the very few things on which one can find agreement between the right and the left today is that a lot of poor people and working people have been left behind by the elites that seem increasingly to control their work lives, their economy, and politics. But the agreement stops there, and the sense of polarized stalemate only breeds cynicism and despair.
I found an antidote to despair in reading Ewan McGaughey’s forthcoming paper, Democracy in America at Work: The History of Labor’s Vote in Corporate Governance. It is a perceptive, broadly synthetic, and snappily-written account of the past and possible future of labor’s role in corporate democracy. The paper enriched my thinking about re-linking democracy in political life with democracy in work life. It bubbles over with ideas about how law could create a more accountable form of capitalism. Based on an admirably succinct survey of the history of labor involvement in corporate governance, McGaughey articulates a bold, provocative, and exciting thesis: “Democratic voice in the economy is embedded in American tradition, efficient, legitimate, and (even without federal law reform) could be written into state laws today.” (P. 3.)
The paper opens with the father of modern American corporate law, A.A. Berle, who (according to McGaughey) had quite a bit to say in favor of democracy in the economy; giving labor rights to limit the “power of corporate managements with respect to wages and labor relations” would strengthen political and economic democracy because “democracy in the economy would follow the ‘corporate’ revolution,’ just as democracy in politics followed the industrial revolution.” The paper then name-checks a variety of bills recently introduced in Congress (with no hope of passage, of course) that would require things like employee election of 40% of the board seats in $1 billion companies, or 33% of board seats in listed companies, or 50% of seats on boards of single-employer pension plans. (P. 2.) McGaughey’s task in this paper is to normalize these proposals – to show they are not unprecedented in history, or inefficient or otherwise outrageous as a matter of corporate law. Along the way he suggests reasons why labor and progressive scholar-activists should pay more attention to whose money is on Wall Street (the modest retirement savings of a lot of working people) and the legal rules affecting who has a say over what Wall Street financiers do with Louis Brandeis famously, and still accurately, called “Other People’s Money.”
McGaughey recounts many examples of labor’s involvement in corporate governance from the nineteenth century through the twentieth. Along the way, he finds examples of many of the labor law reforms being proposed today, including tripartite wage boards, sectoral bargaining, works councils promoted by the National War Labor Board during World War I, and union membership on corporate boards. A cigar manufacturer in 1879 settled a strike by creating a tripartite board to resolve disputes over wages and working conditions. The UAW negotiated, successfully, to have a labor representative on Chrysler’s board of directors from 1980 to 1984. In between, he examines some isolated examples of tripartite systems for setting working conditions and numerous examples of labor involvement in pension plan administration. And he gives sustained attention to a Massachusetts law enacted in 1919, signed by then-governor Calvin Coolidge and still on the books today, that allows “a manufacturing corporation [to] provide by by-law for the nomination and election by its employees of one or more of them as members of its board of directors.” Boston’s famous clothing store, Filene’s, had four of its eleven board members chosen by employees in 1922.
The historian in me wanted much more on each of these examples – what they actually accomplished for labor, what conditions gave rise to them, whether they reflected actual power for workers, and why they disappeared. But that would, of course, make a pithy article into a tome. But what they suggest about what might be done today is more significant to McGaughey than what they achieved and why they failed. He uses them as contrast for the narrative that has become so familiar since Thomas Picketty, and others before and since, have charted the rise of inequality against the decline of unions. McGaughey points out that it’s not just that, when workers had unions, unions were able to negotiate that the fruits of capitalism were shared more equitably (though never even close to equally) between the top 1 percent and everyone else. Rather, it’s that without unions, capitalism has been more undemocratic – more autocratic – than at any time in modern American history because corporate leadership, financial analysts, and the leaders of elite financial institutions make all the decisions about other people’s jobs. Even more appalling, however, is that they do so using the pension investments and savings accounts of ordinary people; they run the economy using other people’s money.
McGaughey then explodes the myth that shareholder primacy in corporate law means shareholder democracy, or even any real form of corporate accountability to the majority of shareholders. Rather, he explains, the only accountability that the modern law and theory of “shareholder primacy” delivers is to the financial advisors who work with a small handful of large institutional investors. As he says, “Asset managers control shareholder voting rights with other people’s money.” (P. 42.) And this is not a system that emerged out of a natural search for an efficient system of corporate governance. “The monopolization of shareholder votes by asset managers is not a system that emerged in a competitive environment, but one backed by the coercive power of federal law, and the unequal bargaining power of captured capital.” (P. 43.) These advisors have, he points out, such deep and strong conflicts of interest that it’s a myth to imagine they are acting in the interest of shareholders at all. And the results, he argues, are not even efficient, or productivity-maximizing, or wealth maximizing in economic terms.
Finally, McGaughey explores ways that states, through their corporate law, could lead the way in adopting legal reforms that would create the conditions for actual democracy at work. He asserts that law of three blue- or blue-leaning states (California, New York, and Delaware) account for the vast majority of incorporations. (P. 45.) He argues that there are no federal legal barriers to these three states enacting laws requiring labor representation on the corporate board of directors. (This assertion may vastly overstate Delaware’s willingness to jeopardize its position as a leader of corporate law by doing anything at all that would upset corporate leadership, and it may also underestimate the seriousness of the race-to-the bottom problem if states were to try to regulate membership on corporate boards.) He proposes how states could play a role in creating a more accountable form of capitalism by requiring the creation of truly independent works councils, along the lines that the United States occupying force wrote for Germany in 1946. (P. 45.)
This is a relatively lean article for all that it aspires to do (47 double-spaced pages in manuscript). Much of it is suggestive rather than exhaustive. But that means it’s suggestive of future work rather than exhausting to read. I hazard no opinions on McGaughey’s analysis of corporate law. But I appreciate the ambition to think of ways that capitalism could be made more democratic. And in this time of political alarm or malaise, I welcome creative ideas about how law could provide tools to enable the working class to feel more empowered at work and in the economy.