Ramble On: How Workplace Rights Depend On Employee Conversations

Dec 19, 2011 Matt Bodie

Matt Bodie

How and why do workers join unions?  These most basic questions remain the source of significant academic and policy debate.  Over the past two decades, unions, employers, and scholars have refocused on the importance of organizing and, in turn, the law relating to employee representational choice.  The Employee Free Choice Act—currently in legislative limbo—would dramatically change the current structure by allowing unions to collect signature cards from a majority of the workers to be represented.  Under the current system, however, unions must provide signature cards from at least thirty percent of the employees in order to move on to a secret ballot election.  In the campaign period before the election, both parties are allowed to press their case vigorously—within limits.  In a notable turn of phrase, the NLRB endeavors to establish “laboratory conditions” during the campaign period in order to determine the “uninhibited desires” of employees.  General Shoe Corp., 77 N.L.R.B. 124, 127 (1948).  As it turns out, establishing laboratory conditions is largely confined to a series of prohibitions: no threats, no bribes, no racially inflammatory speech.  There is no obligation to insure that employees have the information they need to make a proper decision.

In Communication Breakdown, Professor Hirsch takes a new and compelling angle on this regulatory approach.  While recognizing the importance of protections against coercion, he argues that the law has thus far overlooked the importance of positive employee discourse.  He makes his case systematically.  First, Hirsch marshals economic and psychological concepts to support the critical role of discourse in group cooperation.  Using the work of scholars such as Olson, Ostrom, Axelrod, and Bar-Tal, Hirsch convincingly demonstrates how communication of information between interested parties is a critical catalyst to collective action.  Without communication, parties cannot identify and evaluate collective interests or develop a plan of concerted action.  Information-packed communication exchange—which Hirsch calls “discourse”—must be protected and even encouraged in order for employees to determine whether they would benefit from unionization.

Communication Breakdown then analyzes the existing labor law doctrine on workplace communication and finds it mostly missing.  Hirsch has a real talent for explicating the work of the NLRB and courts in labor law.  Here, he first discusses the hurdles to employee communication posed by the modern workplace: increased employee mobility, lower job security, and increased workplace complexity.  He notes that while electronic communication can overcome some barriers to discourse, face-to-face speech is particularly important in establishing trust.  (He uses psychological research here to convincing effect.)  The law has largely failed to address these challenges, and instead has ignored them or made them worse.  Hirsch works through many of the doctrines surrounding employee speech and representation campaigns and finds that they fail to account for the role of discourse.  He takes on card-check certification and points out the weaknesses in that system’s ability to provide for information exchange amongst employees, employers, and unions.  He then evaluates several potential ways in which the NLRB might better foment and support employee discourse on workplace issues.  Indeed, the Board has already moved to implement one of Hirsch’s suggested reforms—a notice posting describing NLRA rights—through a proposed rulemaking.

There are many things to like about Hirsch’s approach in Communication Breakdown (even beyond the Zeppelin reference).  First, he begins his analysis with an interdisciplinary inquiry into the actual structure of employee cooperation and coordination.  He then moves from the economic and psychological models into doctrinal dissection, and he expertly shows how theory points up the weaknesses of the current regulation.  This blend of interdisciplinary and doctrinal analysis is in the best law review tradition, and it moves the ball significantly in the literature on employee representational choice.  Second, Hirsch is not afraid to go where the analysis leads him, even if it may transgress traditional ideological categories in the bar and academy.  For example, Hirsch points out some weaknesses in the card-check approach, even though that approach is extremely popular with academics.  His critique is nuanced, subtle, and balanced; that is his modus operandi.  But in a field that can be polarized and polarizing, Hirsch follows his scholarly lodestar.  Third, Hirsch opens up a new avenue for future analysis.  His definition and categorization of “discourse” provides a new way for scholars to approach the issue of employee choice.  Communication Breakdown demonstrates that innovation in labor law is alive and well, and need not be at the expense of rigor or pragmatism.

In this seemingly post-EFCA era, perhaps it is time for a new discourse between academics and policymakers on better ways to manage employee representational choice.  Communication Breakdown will be an important part of that conversation.

Understanding ADR in the Non-Union Workplace

Dec 9, 2011 Samuel Estreicher

Samuel Estreicher

Much has been written about arbitration of employment disputes in the nonunion sector.  Much of this literature is theoretical and declamatory, rarely involving an examination of actual institutional arrangements, outcomes and perceptions.¹ Some work has been done on outcomes in nonunion arbitrations, but these are hobbled by the inability to track the path different claims may take, including withdrawal and settlement.² Employee perceptions have been studied in the union sector, but almost nothing has been done in nonunion companies, and certainly nothing that is able to provide a direct measure of innovations in alternative dispute resolution (“ADR”)  systems in a given workplace.

Armed with a Ph.D. in Management from the Sloan School at MIT, his J.D. degree from Cornell, and management labor-side experience at Twentieth Century Fox and several  law firms,  Zev Eigen of  Northwestern University School of Law is uniquely positioned and likely to improve this state of affairs in the study of the nonunion workplace.   Eigen understands economics and the importance of revealed behavior but he is equally sensitive to the insights of psychologists like my colleague Tom Tyler. Perceptions of fairness affect behaviors, which have feedback effects for each other.

Eigen’s first work as a law teacher built on his dissertation, under Tom Kochan of MIT’s supervision.  It was a study of employee perceptions of the fairness of adhesive contracts, The Devil in the Details: The Interrelationship among Citizenship, Rule of Law and Form-Adhesive Contracts, 41 Conn. L. Rev. 381 (2008).

In the work under review, Eigen and his coauthor, Adam Litwin, have obtained access to a truly remarkable data set spanning more than 100,000 workers and more than 1,000 locations across the United States provided by a large nonunion company, which they have dubbed “Gilda”s, Inc.”   The authors use employee surveys commenced before the company introduced a four-step ADR system and continuing for several years afterwards—permitted ‘before and after” comparisons of employee perceptions.   The four steps of the ADR system were (1) employee initiation of a claim with management, (2) appeal to the HR department, (3) further appeal to either a peer review panel or unilateral determination by higher-level HR management, and (4) if still not satisfied, resort to final, binding arbitration.

Eigen and Litwin are interested in employee perceptions of voice and justice.  “Procedural justice” is a measure of how employees perceive the fairness of the procedures employed in a particular system; “interactive justice,” the authors tell us, is a measure of employee perceptions of how well their interests are being taken into account by management in making decisions. They find that the company’s introduction of a formal 4-step ADR system culminating in arbitration resulted in a decrease in “perceived formal procedural justice” but an increase in “perceived informal procedural justice” as well as an increase in “perceived interactive justice.”

One would expect, in theory, to find all three measures advancing in the same direction.   It is especially interesting that employees are able to distinguish between the quality of the formal procedural justice they are receiving in the employer’s decision-making process from the quality of the informal procedural justice of those procedures, but one would think that the direction should be other way—that perceptions of formal justice are increasing while perhaps the discretion of management and perhaps other informal processes are on the decline.  Moreover, the introduction of the new ADR system has no discernible impact on employees’ organizational commitment—another counterintuitive result.

Explaining these results will take further work. The authors suggest that employees are perceiving a kind of low-level resistance to the new program by their immediate supervisors: “Immediate supervisors might be incentivized to encourage their employees to trust them to resolve claims instead of allowing HR or Gilda’s as a corporate entity to do so.  Perhaps local managers are actively encouraging employees to trust them, which could be interpreted implicitly as being encouraged to distrust Gilda’s DRS or the company writ large.”  (p. 15) This dynamic is consistent with low-level supervision’s disquiet with the formal processes introduced by union contracts.

I applaud the coauthors, and especially Professor Eigen, for an important contribution to our understanding of ADR in the nonunion workplace.  I look forward to further contributions by Zev Eigen.

1. See Samuel Estreicher, In Defense of Theory : Notes on the Production of Legal Scholarship, 10 The Green Bag 2d 49, 51-53 (2006).
2. See Alexander J.S. Colvin, An Empirical Study of Employment Arbitration:  Case Outcomes and Processes; David S. Sherwyn, Samuel Estreicher & Michael Heise, Assessing the Case for Employment Arbitration:  A New Path for Empirical Research, 57 Stanford L. Rev. 1557 (2005).

Barking Up the Wrong Tree: The Antidiscrimination Project and Public Perceptions

Nov 23, 2011 Charles A. Sullivan

Charles A. Sullivan

One might question the wisdom of a young, not-yet-on-the-market, scholar basically arguing that most of us in her field—including me—have been wrong in important ways. But wise or not, Katie Eyer’s article, That’s Not Discrimination: American Beliefs and the Limits of Anti-Discrimination Law (forthcoming in the Minnesota Law Review) is a remarkable piece of research and exposition. She has an ability to deal with complicated issues in a lucid and spritely prose style. I almost enjoyed being informed how wrong I was!

Katie’s a Research Scholar at Penn and her piece starts with the conventional wisdom of 21^st century employment discrimination law: there’s a lot of bias out there, maybe mostly of the unconscious type, but, in any event, pretty pervasive. While scholars like myself have proposed ways to deal with this reality insofar as federal judges are concerned, Katie suggests a deeper problem: “most people in most factual circumstances are unwilling to make robust attributions to discrimination.”

The implications of this should be obvious, but haven’t been: even if various academic schemes successfully dodged the Scylla of judicial gatekeepers, plaintiffs would still run afoul of the Charybdis of juries being resistant to inferring discrimination – “[E]ven when there is substantial evidence of traditional invidious discriminatory intent (including so-called “direct evidence”), most people will decline to make attributions of discrimination.” In fact, the author finds judicial and lay attitudes remarkably similar as regards the likelihood of discrimination.

If true, this reality would certainly put pain to efforts to deal with cognitive bias or discriminatory workplace cultures, at least efforts that rely on traditional litigation for vindication. Not only are such efforts not likely to do any good but they may do harm “by further expanding the capaciousness of discrimination doctrine” and thus widening the chasm between it and popular perceptions.

And Katie makes a persuasive case. Although others have observed the increasingly reluctance of society to believe that remaining inequalities are the result of intentional discrimination, That’s Not Discrimination undertakes an in-depth discussion of the psychological literature. That research shows that both minorities and the majority are unwilling to attribute negative outcomes to discrimination. For example, she cites a study in which mock jurors were presented evidence of discrimination that plaintiffs’ attorneys would salivate over (including plaintiff’s boss saying that “women should only be in subservient positions” and that he wanted to replace women with men). Almost half the “jurors” nevertheless found against the plaintiff. Other studies show that subjects themselves attribute their failures to discrimination far less often than the evidence presented to them would seem to support.

The article explores possible reasons for this phenomenon, including the cognitive dissonance that would result from discrimination existing in nation widely thought to be a meritocracy. But I can’t do justice to her analysis in this short review, so I won’t try.

However, I do want to highlight her central normative argument. She concludes her descriptive discussion by arguing that “crediting the findings of psychology scholars, both of the most commonly suggested types of reform seem likely to have significant limitations as mechanisms for meaningfully improving outcomes for discrimination litigants.” I think this is euphemistic way of saying many of us are barking up the wrong tree.

So what’s the right tree?  It’s here (as is often the case) that her critique flags. She argues for greater resort to “extra-discrimination remedies.”  No, that doesn’t mean even more discrimination. It means looking to “virtually any remedy for group-based inequality that are not founded in discrimination claims,” such as anti-poverty initiatives and just cause legislation. She then provides a laundry list of other examples, including the FMLA, school-based antibullying legislation, and common law claims. She believes that, while such situations would logically seem to also conflict with deeply-held notions of America as a meritocracy, such claims are not viewed as being as far-fetched as discrimination claims, which trigger “uniquely hostile responses.”

She does anticipate one objection to de-racing and de-sexing discrimination laws: “Most individuals who are deeply invested in the antidiscrimination enterprise  . . . care about discrimination because it is discrimination.”  But with a certain heartlessness she responds that it’s not like you guys are winning a lot of victories under the current regime.

It’s hard to disagree with either Katie’s observation or her rebuttal of the likely response, but I have another reservation: I’m not so sure that employee-leaning scholars and practitioners are doing so well in employment law read broadly. Actually just the opposite.

I hope the somewhat breezy tone of this review doesn’t suggest that I am not a very big fan of this article.  I am. Whether or not I agree with Katie, That’s Not Discrimination is a thought-provoking piece well worth a read. I anticipate that Katie will be an important, and welcome, new voice in the academy’s employment precincts.

Just Notice: A Paradigm-Shifting Solution to Economic Dismissals

Oct 31, 2011 Anne Marie Lofaso1 comment

Anne Marie Lofaso

For over a century, the default job-termination rule in the private sector of the United States has been at-will employment, under which an employer can discharge its employees for any reason, good or bad, or for no reason at all. Although the common law as well as state and federal statutory law has chipped away at this default rule, at-will remains the default standard in every U.S. state except Montana, which has adopted a just-cause discharge standard. These default rules—at-will and just cause—have framed the legal debate over what role the law should play in regulating individual job security.

Professor Arnow-Richman astutely observes that this debate has been framed too narrowly. She notes that a “just cause rule provides only a weak cause of action to … those workers who can prove in court that they were fired for purely arbitrary reasons.” After all, job insecurity has been on the rise. The unemployment rate for the past three or four years has risen dramatically from 4.4 percent in December 2006 to a high of 10.1 percent in October 2009, with a current unemployment rate hovering at 9.1 percent. Given the “profound” changes in the employment paradigm over the past half-century, which includes a rise in short-term and contingent labor, and given that today’s workers are most likely to lose their job for economic reasons—a good reason—then perhaps we need “a fundamental shift in the goals and focus of employment termination law.”

I will put it another way. The law has been good at eliminating some of the bad reasons for firing workers. The National Labor Relations Act prohibits employers from discharging workers because of their union or other protected concerted activity. Title VII prohibits employers from discriminatorily discharging workers because of race, color, national origin, religion, and gender. Other state or federal civil rights statutes prohibit employers from discharging workers because of age, disability, and sexual orientation, to name a few. Some states prohibit employers from discharging workers for reasons that violate a clearly defined public policy. Others forbid employers for firing workers in bad faith. But no state has ever prohibited an employer from discharging a worker for economic reasons, even though such termination, from the workers’ point of view, can be just as devastating as a job termination for any other reason. In each case, job loss results in lost income, lost self-esteem, and lost friendships, to name a few losses. And job loss resulting from a plant closing or mass economic dismissal can, in some ways, have even greater social costs than job loss resulting from discrimination. After all, a plant closing could ruin a town that depends on that plant for its livelihood—think Youngstown and the steel mill closures of the late 1970s. Mass economic dismissals can have rippling effects in communities—rises in crime rates, rises in divorce rates, and rises in poverty levels, just to name a few.

Professor Arnow-Richman’s solution is a universal ‘pay-or-play’ system of employment termination:

Under such a system, employers would be obligated to provide workers advance notice of termination or, at the employer’s election, continued pay and benefits for the duration of the notice period. This system would allow employees a degree of income continuity, enabling them to search for new employment or, in the event the employer elects severance pay, to invest in training.  (P. 37.)

Such a system focuses on a different set of goals, implied promises, and obligations from just cause. Whereas just cause focuses on the goal of job retention, pay-or-play focuses on job transition. Whereas just cause assumes a workplace paradigm that promises long-term employment, pay-or-play assumes a more realistic workplace paradigm that includes long-term employability. And whereas just cause imposes on the employer the obligation of justifying its discharges, pay-or-play imposes on the employer the obligation of supporting re-employment of its workers, either through just notice or severance pay.

This is a brilliant solution to the problem of unemployment. Professor Arnow-Richman has opened the door through which all of us must now peer. But the solution still does not go far or deep enough. Notice and its substantive analogue, severance pay, are but minor burdens to place on employers. As government studies on the WARN Act have explained, advance notice of a plant closure or mass economic dismissal has very little if any negative impact on businesses but does result in a salutary effects on those making the transition from paid job to job loss. And who, in these circumstances after all, is in a better position than the employer to give such notice?

While Professor Arnow-Richman’s article shifts the debate, much more reform is needed to the problem of job insecurity. We should be talking about many other procedural solutions—advance notice, information, consultation, negotiation, and even co-determination. Why not obligate employers to give workers financial information? Wouldn’t this help workers to understand that they may be fired or that they may be asked to take a pay cut? Perhaps workers would choose the pay cut over the mass termination. This is where consultation and bargaining comes in. Isn’t it more efficient to bargain over the problem than to allow employers to make unilateral decisions without input from those who have the most at stake—the workers who may lose their jobs?

More controversially, we must not fear the substantive solutions to these problems either. Currently, there is no claim-right to severance pay; there is no right to a job; and there is no right to a particular job. We—meaning those of us who have worked for long enough—have only a limited “right” to unemployment benefit of limited duration. If we truly care about job transition, then the logical extension of Professor Arnow-Richman’s argument is a right to “a” job, though not necessarily a right to “the” job that we want. Until we shed the fear that talk of rights to jobs necessarily entails an end to, rather than a bolstering of, capitalism, we will never have the debate we need to live in the kind of country that allows all of us become part authors of work lives—autonomous, dignified workers.

The Impairment of Public Sector Collective Bargaining Agreements

Oct 5, 2011 Martin H. Malin

Martin H. Malin

The great recession has hit state and local governments nationwide very hard.  Many have turned to the unions that represent their employees for wage, benefits and work rule concessions in an effort to reduce expenditures.  When they have been unable to secure such concessions, they have resorted to unilateral action abrogating their collective bargaining agreements.  Their actions have taken many forms.  Some are redressable under the contract’s grievance and arbitration procedures or in unfair labor practice proceedings before the state public sector labor relations agency.  However, in many cases such redress is not available, leaving the only avenue an action alleging an unconstitutional impairment of contract.

Stephen Befort‘s article, “Unilateral Alteration of Public Sector Collective Bargaining Agreements and the Contract Clause,” tackles head on the extremely important and timely topic of when unilateral modifications of public employee collective bargaining agreements in response to fiscal crises constitute an unconstitutional impairment of contract.  Befort first provides a brief background on the development of public sector labor law and public sector collective bargaining.   He observes that where unilateral modification of public employees’ collective bargaining agreements is accomplished through legislation, public sector labor relations acts are of little utility because the legislature is not the employer.  Consequently, the only generally available avenue of contest is under the Contract Clause of the Constitution.  Befort then provides useful and detailed background to the development of Contract Clause jurisprudence in general.

Befort observes that “[w]hile the severity of the 2009-10 budget crisis is relatively unique, the existence of public sector budget crises are not.” (P. 9.)  He catalogues four periods of public sector budget crises over the past 30 years: 1982, 1991, 2003-04 and 2009-10.  He examines the Contract Clause challenges to legislative enactments that abrogated collective bargaining agreements during each cycle.  He provides detailed discussion of each case that arose in each cycle.  From this exhaustive description, he derives an array of what he finds to be the most significant factors used by the courts.  These include the severity of the fiscal crisis, foreseeability of the fiscal emergency at the time of entering into the contract, the substantiality of the impairment of the contract, the availability of alternatives to modifying the collective bargaining agreement, whether the impairment operates prospectively only or retroactively, and whether the burden of the fiscal crisis is spread among a large number of constituents or is disproportionately placed on the employees.

Befort critiques the courts’ approaches on three grounds.  First, he finds that many courts have been overly deferential to the judgments of state legislatures.  He persuasively urges that such deference is inconsistent with the Supreme Court’s decision in United States Trust Co. of N.Y. v. New Jersey, 431 U.S. 1 (1977), where the Court opined that deference must be circumscribed when a court is reviewing a state’s impairment of its own contracts because a state can always find uses for extra money where that money is obtained by impairing its contractual obligations instead of raising taxes.  The Court thus required state action which impaired its own contracts to be reasonable, in the sense that the parties did not foresee at the time of contracting the possibility of the changed circumstances, and necessary in the sense that there were no less drastic alternatives available.  Befort demonstrates how a number of courts reviewing impairments of public employee collective bargaining agreements have fallen short of the U.S. Trust standard.

Befort further critiques the courts’ approaches, discerning that some courts have treated collective bargaining agreements as less worthy of protection than bonds.  Befort argues that these courts too easily approve impairments that are prospective only, failing to recognize that a multi-year contract must be treated as an integrated whole.  Indeed, it is common for unions and employers to backload wage increases to reduce the immediate fiscal impact while ending up with an increased base by the end of the contract’s term.  Finally, Befort perceptibly points out that courts have inappropriately opined that public employees owe an extra duty of loyalty which commands from them greater sacrifice for the public interest than from other citizens.

Befort complements his critique with his recommended framework for analysis of impairment issues in public sector collective bargaining agreements.  He urges that courts be true to the Supreme Court’s analysis in U. S. Trust by undertaking a de novo review of whether the impairment was reasonable and necessary to serve an important government purpose. He urges that to be reasonable, the impairment must be in response to an emergency that could not have been foreseen at the time of contracting.  To be necessary, the state must demonstrate that it considered alternatives to impairing the contract and had reasonable grounds for rejecting the alternatives.   Finally, he calls on courts to determine whether the state has distributed the burden of responding to the fiscal crisis broadly and equitably.

Although public sector employment has received renewed attention nationally, legal scholarship in this area remains sparse.  Stephen Befort’s article provides a welcome scholarly analysis to an extremely timely topic.

New Governance, Decentring & Unionization as the Default Option

Jul 28, 2011 Michael J. Zimmer

Michael J. Zimmer

There is a cadre of terrific Canadian labor and employment scholars, many of whom have received insufficient recognition in the U.S. As a group, these scholars bring interesting and sharp insights into the general problems of employment law not only in Canada but also around the world. They are much better versed in U.S. law than we generally are about Canadian law. Their insights are particularly useful for us since Canada and the U.S. share the basic “Wagner” model of union-management law. Among a long list of Canadian scholars, I want to focus on David Doorey, Professor of Labour and Employment Law, York University. His current piece on decentring workplace law is clever, bold, and interesting. He synthesizes a considerable range of theory, from the U.S. and elsewhere, to support a very provocative proposal.

The background for his article is the continuing decline of union membership which, with only a couple of exceptions–the Scandinavian countries and, curiously, China–is a worldwide phenomenon. With economic globalization reducing the significance of separate national economies and the laws of nation-states tied to the regulation of those economies, the decline should be no surprise because unionism and labor law are paradigmatically national. Other factors, especially the ideological rejection of unionization by management, also play an important role in the decline. There is, of course, a tremendous amount of interesting and valuable scholarship addressing the situation and frequently calling for reforms aimed at reversing that trend. The now failed Employee Free Choice Act (“EFCA”) was considered to be justified on the basis that it would help shift the momentum away from decline. The EFCA has been the subject of considerable scholarship, much of it aimed at evaluating its potential for turning momentum towards greater union density. (For what it is worth, my view is that EFCA would make only a marginal difference because, the decline in unionism being worldwide, it has to be based on much more than the weaknesses of the NLRA to protect the right of workers to organize.)

David Doorey takes a very different tack. His piece is provocative because he takes as given the decline of unionism and the lack of political will to do anything to directly counter that decline. Instead, he focuses on the role unionism would be able to play in an employment system that is generally non-union and where compliance with labor standards is low. He starts by discussing what we call “new governance” theory and what he calls “decentring” or “legal pluralism” theory. The starting point for decentring is that traditional, top-down, control-and-command legal regulation has failed to be efficacious. Decentring theory looks instead to how those subject to regulation operate and how legal regulations can be framed to create incentives for the regulatees to voluntarily comply. In other words, regulations should, to the extent possible, align the interest of the state in having its employment law implemented with other incentives to the firm. He rejects the critique that the new governance or decentring theories are a pollyannaish call for purely voluntary compliance that simply turn “hard” into “soft” law which equates to no enforcement. For Doorey, decentring theory focuses on constructing regulations that do lead to private actors conforming their conduct to the goals of the law but doing so by figuring ways in which the regulations can be structured to enhance voluntary compliance.

Looking at the role unionization can play in a world of much reduced union density, Doorey devises a regulatory scheme that has unionism operate as a default position available to workers unhappy with their treatment by their employers. What differs from the present system in the U.S. is that Doorey’s proposal would create a dual regulatory system. One track would be for “good” employers and would remain unchanged from the present law. The change would occur in the second track for employers found to be “bad,” based on their failure to comply with a defined set of employment standards–“targeted employment laws.” His proposal for the new track applicable to bad employers essentially channels the Employee Fair Choice Act–card check recognition and first contract interest arbitration–but adds more elements, including requiring employers to provide more information to unions, mandating unions access to workers at the workplace, and assigning a labor official to each organizing campaign by a union at one of these bad employers. Since he acknowledges the fierce resistance management has toward unionization, he utilizes the risk of unionization as the primary incentive for employers to comply with these targeted employment laws. Management’s antiunionism is the driving force pushing the employer to comply with the law to avoid being categorized as a bad employer that faces an increased risk of unionization. In other words, his proposal relies on “risk as labour law.” Management’s risk analysis should lead them to increase compliance with labor standards, despite the burdens of compliance because of their desire to avoid an increased risk of unionization. Incorporated into that risk analysis would be the fact that workers generally favor unionization or at least some sort of independent representation vis-à-vis their employers. What I like so much about this article is that it is a concrete application of decentring theory. It avoids the rather abstract scholarship that has been all too common among its theorists.

Doorey’s intriguing proposal raises several questions. First, would such a dual regulatory system have any greater chance of enactment than the Employee Free Choice Act has had?  Employers would still prefer managerial slack, but perhaps it would be harder for them to mount opposition because the question of unionization or not would depend on their compliance with the law. Raising the risk of unionization for lawbreakers but not law abiders is quite a different situation from increasing the general risk of unionization by, for example, adopting card check recognition that gives employers the argument that workers should hear the employer’s side before deciding whether or not to support a union. In other words, Doorey’s proposal would undercut the high road argument that card check recognition interferes with employee free choice. Second, if adopted, Doorey’s system would essentially turn the right to organize into an instrumental rather than a basic right. While increasing the chance of employees of bad employers to get union representation, it would consign the workers of good employers to the diminished chance to exercise their rights that the present woefully inadequate laws provide. Third, traditional enforcement techniques would seem to be required to establish which employers were bad and which are good. While it might be possible to rely on data about employer compliance to establish which ones were bad, employers would presumably fight long and hard to avoid being characterized as bad employers and so the system might be hard to get into operation.

In sum, David Doorey is inventive and knowledgeable in his scholarship. His approach in his decentring article should stimulate new and interesting avenues for scholarly and political debate and development. His proposal essentially bridges the gap between new governance theorists and more traditional labor law scholars. He is just one example of the Canadian labor law scholars who can enrich our own, all too often, parochial vision of labor and employment law.

Context Matters in Systemic Disparate Treatment Theory

Jun 27, 2011 Marcia L. McCormick

Marcia L. McCormick

On June 20, 2011, the Supreme Court issued a decision in what has been billed as the largest employment discrimination case in U.S. history: Wal-Mart v. Dukes. The case was a class action against Wal-Mart, the country’s largest private employer, for pay and promotion decisions that discriminated on the basis of sex, and the class consists of every woman who currently works for the company or who formerly did, going back to 1998. Estimates of the number of class members range from about 500,000 to 1.6 million. The numbers are what tended to make headlines, were to some extent the focus of Wal-Mart’s defense, and played a large role in the Court’s decision. But those numbers were driven in large part by the sheer size of the company. Some have suggested that Wal-Mart is arguing that it is “too big to sue,” the newest variation of “too big to fail.” To the extent that Wal-Mart’s size contributed to the Court’s conclusion that the causes of any injuries were too complex for those allegedly injured to constitute a class, the Court agreed.

What was at stake in the case was more than just the interests of the women or the interests of Wal-Mart. At stake was the future of class actions to redress harm from mass injuries and the future of systemic discrimination cases. That is why Tristin Green’s article, The Future of Systemic Disparate Treatment Law, 32 Berkeley Journal of Employment & Labor Law __ (forthcoming 2011), currently available on SSRN, is such a welcome addition to the discussion of the theory of systemic discrimination. Tristin, Noah Zatz, Richard Ford, Melissa Hart, and Michael Selmi will all contribute articles to a symposium issue on the subject, but Tristin’s was the first article to be made publicly available.

Tristin’s article focuses on the fundamental underpinnings of individual disparate treatment theory and the unintended consequences of importation of that theory into systemic cases. She describes quite perceptively how focusing on individual decisionmakers distorts analysis of entity liability for discrimination. And it was this trap that the majority fell into.

Tristin begins her analysis of systemic disparate treatment with a discussion of the Supreme Court cases that fleshed out the theory, and the view of systemic disparate treatment liability proposed by one of the dissenters to the Ninth Circuit’s en banc decision to affirm the class certification. Judge Ikuta would have held that in order to demonstrate a systemic disparate treatment claim, plaintiffs would have to show a company-wide policy of discrimination, in other words, that the managers at the top imposed their policy with the intent that the policy injure women. The Supreme Court essentially agreed that plaintiffs needed to show a company-wide policy of discrimination for this class to be certified.

It is this view of entity liability as fundamentally vicarious that poses the greatest threat to systemic disparate treatment theory. If the policy view of entity liability is required for systemic disparate treatment, then systemic disparate treatment will, in operation, be limited to express official policies, regardless of how widespread the disparities are or how strong the correlation between protected status and injury.  This view of entity liability also focuses too much attention on individual decisionmakers, ignoring the role of the systems in place in causing or perpetuating disparities of treatment for members of a protected class.

Tristin proposes using a context model of organizational wrongdoing as the theoretical underpinning for systemic disparate treatment. In her words,

A context model of organizational wrongdoing helps make clear why entity liability for systemic disparate treatment is direct rather than vicarious. The employer is being held responsible for something that it has done. The employer‘s responsibility under this model turns not on identification of a single instance or even multiple instances of disparate treatment; rather, its responsibility turns on its own role in producing disparate treatment.

Changing the focus this way holds entities responsible when disparate treatment is the regular practice within the organization. When disparate treatment is the regular practice, it is unlikely that the disparities are being caused by a few “rogue” individuals acting on biases uninfluenced by the norms of the organization. It is the entity itself that is exercising disparate treatment, and it is not only vicariously liable. When disparate treatment exists, but is unusual rather than regular, individual disparate treatment is the appropriate approach, and the employer may be vicariously liable for the acts of its agents. Tristin goes further to operationalize the way that this theoretical underpinning would play out in a systemic disparate treatment case.

The analysis is thorough and the arguments provocative. Certainly, those who view liability of entities as principle-agent problems will resist the notion that entities can ever be responsible other than vicariously except in limited circumstances. The view that an organization is in anyway independent of the people who run it, that it can act without the fully self-aware, conscious volition of actors, that protected status rather than individual motive can cause discrimination, is not something that large groups of lawyers, judges, or legal scholars wholeheartedly accept. And that was clearly the view of the majority in Wal-Mart. Despite that limitation, Tristin’s contribution illuminates much about the principles that underlie systemic disparate treatment and the challenges to full implementation of Title VII that remain.

Rethinking the Giant Mess that is Employment Discrimination Law

May 27, 2011 Alex B. Long

Alex B. Long

Employment discrimination law is a big, confusing mess.  That probably doesn’t come as a shock to most readers of this site.  The discrimination literature is filled with attempts to vilify, clarify, or unify the existing law in this area.  In her forthcoming article, Rethinking Employment Discrimination Law, Professor Sandra F. Sperino displays little interest in doing either of the latter.  But she’s also clearly interested in doing more than just vilifying the existing state of affairs.

Sperino begins by noting the development of the familiar frameworks or rubrics that courts use to evaluate discrimination claims.  Of course, we are talking about McDonnell Douglas, Griggs, et al.  She argues that “discrimination analysis has been reduced to a rote sorting process,” with the result being that “the key question in modern discrimination cases is often whether the plaintiff can cram his or her facts into a recognized structure and not whether the facts establish discrimination.”  (P. 2.) This approach raises at least two problems.  First, it results in a huge expenditure of (arguably wasted) time and effort on the part of judges, lawyers, and litigants. Second – and the problem Sperino primarily focuses on – is that the approach results in courts failing to recognize or even consider new theories of discrimination.  In other words, by focusing so heavily on the frameworks themselves, courts have lost sight of what discrimination law is supposed to be about and what the frameworks were theoretically designed to accomplish.

Sperino provides a few examples of this approach, including the unwillingness to even consider the possibility of recognizing a claim of negligent discrimination.  The courts’ unrelenting focus on fitting a claim within existing frameworks, Sperino argues, has blinded courts to the possibility that discrimination occurs in a variety of ways.

Similar problems exist with respect to workplace retaliation law.  There, courts spend too much time trying to define a plaintiff’s conduct by reference to the statutory terms used to define protected conduct (opposing unlawful conduct, participating in a proceeding, filing a complaint, etc.) rather than looking to the underlying concerns that led to the prohibitions on employer retaliation in the first place.  All too often, the results are the unnecessary expenditure of effort on the part of all parties involved and the dismissal of claims involving employer conduct that should clearly be prohibited.  But at least in the retaliation context, the courts’ tendencies are driven by the need not to stray too far from the statutory text.  In the discrimination context, however, the fault lies primarily with the courts, which are responsible for having devised the existing frameworks to begin with.  Congress certainly bears its share of the blame for its failure to unify the law in the field.  But the frameworks were initially developed by the courts, and it is the courts’ rote application of these frameworks that is Sperino’s primary concern.

There is already a wealth of scholarship devoted to exploring how McDonnell Douglas can be reconciled with Price Waterhouse and Desert Palace and Gross and Griggs and, oh yeah, where do the ADEA and ADA fit in to all of this?  Some of it is quite good.  But I increasingly find myself caring less about employment discrimination law primarily because the area increasingly seems to be less about employment discrimination.  Instead, it seems to be more about what Sperino calls “litigating by frameworks.”  (P. 27.) Sperino’s article represents a much-needed call to return to first principles.  Instead of trying to make sense of the jumble of law that we call employment discrimination law, Sperino suggests a simpler approach that would refocus courts on what should be the fundamental question in every case:  whether an employee suffered an adverse employment action because of a protected trait.

New Governance of the Transnational Variety: Can Transnational Domestic Labor Regulation Harness the Power of Private Legal Regulation?

Apr 25, 2011 Paul M. Secunda

Paul M. Secunda

In his new paper, In Defense of Transnational Domestic Labor Regulation, Professor David Doorey has written a meticulously footnoted and researched article on an important issue that is increasingly facing modern democratic economies: to what extent should such countries seek to use their influence to improve labor practices in economically-developing countries?  As Doorey explains, the answer is not as simple as merely deciding you want a labor side agreement to the latest free trade agreement.  No, in addition to more formal legislative enactments, Doorey thoroughly explains the developing trend of using techniques which exist outside of formal state action, but nevertheless serve to influence and regulate working conditions and employer-employee relationships in third-world countries.  Examples of this “de-centered legal orientation” range from nongovernmental organizations (NGOs) monitoring and investigating multi-national corporations (MNCs), industry-led initiatives seeking to eliminate sweatshops, and consumer boycotts of MNCs that employ abusive labor practices.  Doorey explains that these types of non-state activities are here to stay and the central issue is whether these informal practices can be put to good use to advance progressive labor policies in third-world countries.

The topic is complex and Doorey should be congratulated for bringing his impressive transnational labor law knowledge to bear on this area of law.  It is certainly a must-read paper for anyone who is seriously engaged with workplace issues in the global economy.  For instance, Doorey exhaustively reviews the literature in favor of, and against, using legislation that harnesses the power of these more informal practices to push foreign third-world countries to develop more worker-friendly labor policy in their countries.  Nevertheless, one is left with at least two compelling questions after reading this thoughtful paper:  (1) Will the more informal, new governance-influenced practices which Doorey seeks to harness really lead to the necessary workplace changes that workers’ rights advocates seek in developing countries?; and (2) Given the troubling labor situation in “developed” countries, should such countries not focus more on their own shortcomings when it comes to workers’ rights in order to gain more credibility with nations around the world?

As to the first question, it interesting that Doorey decided to title his paper: In Defense of Transnational Domestic Labor Regulation.  Transnational domestic labor regulation (TDLR), as described by Doorey, is “unilateral” regulation introduced by a government to influence labor practices in foreign jurisdictions.  He certainly does discuss TDLR in much detail, but the more interesting and provocative part of the paper, I believe, involves his discussion of how TDLR can harness the power of private labor regulation (PLR), with the aim of improving foreign labor practices.  As Professor Kevin Kolben has aptly explained: “[PLR] in the context of transnational labor encompasses a broad range of practices, generally outside of the strict purview of the State, that serve to regulate working conditions and the employer-employee relationship.”

In short, PLR represents a cluster of de-centered and reflexive legal approaches consistent with the new governance school of workplace governance. Professor Cynthia Estlund has described new governance theory in her recent and equally provocative book, Regoverning the Workplace (Yale Univ. Press 2010):

[New Governance theory has] two interlocking themes: the idea of “decentering the state” and elevating the regulatory role of other nongovernmental actors, including regulated entities themselves; and the idea of “reflexivity” in law—of replacing direct regulatory commands with efforts to shape self-regulation and self-governance within organizations. (Regoverning the Workplace at 136).

As I wrote in review of Regoverning the Workplace, Estlund’s embrace of “regulated self-regulation” or “co-regulation” in the workplace may inevitably lead to further employer domination of the workplace. This is because United States history is replete with examples that limitless employer power, constrained only by market forces and reputational costs, leads to the worst forms of employer opportunistic behaviors and employee abuses.  So, my fear is that just like de-centered or new governance schemes are unlikely to have their intended effect in the labor context in the United States, PLR-centered strategies in foreign countries will also lead to problematic outcomes.

I am highly skeptical that PLR initiatives and campaigns will be able to effectively focus “on empowering workers at the factory level and building a climate in which the governments of host states and factory owners are prepared to recognize labor rights.” (P. 1006.) Instead, such an approach is more likely to “to perpetuate a dysfunctional model of labor governance in which disproportionate power rests in the hands of corporations and employers who are unmotivated to effect any real, sustainable change that empowers workers.” (P. 976.) Consequently, I tend to side with those who believe that, “an effective industrial relations system ultimately requires a strong local government prepared to bolster and control worker power through protective labor legislation that facilitates independent union representation and other labor standards.” (P. 976.)

This all leads me to my second point: who are we, the developed countries of the world, to think we know what’s best for these other countries? First, as Doorey himself points out, these third-world countries have their own complex cultural, political, and economic systems and we might do more harm than good through TDLR employing PLR strategies (think unions in China). But additionally, shouldn’t we first focus on our own shortcomings in the labor area before preaching to others? I mean just consider labor and employment law in the United States and the question of whether those laws do nearly enough to protect the interests and rights of the average worker.

Traditional labor law is failing workers in the United States in providing adequate voice in the workplace through union representation (private sector union density is now down to 6.9%).  Its de facto replacement, “employment law,” is a multi-headed hydra made up of a confusing array of minimum labor standards and workplace rights where many times employees choose to accept employer abuses rather than to negotiate the legal landscape.  Moreover, the ability of private litigation in the labor and employment area to secure rights for United States workers has been substantially diminished by a United States Supreme Court seemingly set on an anti-litigation agenda in the civil rights context.  Now, I am in no way suggesting that we should ignore the worst types of worker exploitation in the world like oppressive child labor and sweat shops, but wouldn’t developed countries have more credibility internationally on the labor relations front if they did not treat their own workers so abysmally?

Doorey’s comprehensive TDLR discussion provides important food for thought in how to use current trends in the global workplace for the benefit of workers throughout the world.  And to that extent, we certainly agree that workers’ rights continue to be a human and civil rights issue that requires substantial attention from governments around the world. Yet, we split company over the utility of new governance methods in assuring pro-employee outcomes in foreign jurisdictions. I believe Doorey is simply overly optimistic with regard to PLR’s utility in developing labor rights in third-world countries.  We also part ways perhaps on where labor reform energies should be directed (and I do believe that developments in one of these areas necessarily diminish the possibility of development in the other).  In short, I worry that focusing prematurely on labor rights in foreign jurisdictions gives the false impression to our own citizens that our own “labor house” is in order.

Surveying the Damage

Mar 17, 2011 Kerri Lynn Stone

Kerri Lynn Stone

In Consider the Source: When the Harasser is the Boss, Professor Susan Grover and Kimberley Piro raise a crucial point that should inform the always-evolving jurisprudence of sexual harassment. They argue that the identity of a sexual harasser as a supervisor or a coworker should be, but is currently not, a central consideration in the determination of whether actionable sexual harassment occurred. The article recounts the Supreme Court’s requirement that actionable harassment needs to be, among other things, “sufficiently severe or pervasive ‘to alter the conditions of [the victim’s] employment and create an abusive working environment.’” Despite this requirement, the article observes, most sexual harassment jurisprudence fails to factor in the distinction between supervisory and other types of harassment, like coworker harassment, when ascertaining whether a victim’s abuse is grave enough to warrant being deemed actionable harassment.

Courts adjudicating sexual harassment cases are required to factor in the totality of the circumstances surrounding the interactions at issue, focusing on the “frequency of the discriminatory conduct; its severity; whether it is physically threatening or humiliating, or a mere offensive utterance; and whether it unreasonably interferes with an employee’s work performance.”  Lower courts nationwide, however, have repeatedly refused to find actionable harassment where the abuse was quite severe or quite pervasive. The article notes insightfully that “[t]he crucial question of the harasser’s supervisory status has been one casualty of the courts’ disinclination to apply a true totality of the circumstances test.” (P. 507.)

To be sure, the delineation between supervisors as harassers and coworkers as harassers is clear and marked in the context of agency liability determinations. Supervisory harassment engenders automatic employer liability, absent the availability or applicability of an affirmative defense, whereas coworker harassment only does so where there is employer negligence in identifying and correcting the problem. However, the article incisively points out, the initial determination that the complained-of abuse qualifies as actionable harassment should take its source into account, but fails to. Most useful is a survey the authors provide of cases in which supervisory harassment that should, by all accounts, be deemed severe or pervasive, is not. While the facts in these cases are most egregious, the result of their being deemed nonmeritorious is apparently commonplace. Moreover, the courts’ indifference to the identity of the perpetrator of the harassment is evident as they do things like relying upon precedent that deals with coworker harassment cases when adjudicating the issue of severity or pervasiveness in supervisory harassment cases.

The point raised here is powerful and wholly logical—and yet it has been overlooked by judges over time and across jurisdictions. The same taunting and abuse that may fall short of demonstrably and sufficiently altering a plaintiff’s terms and conditions of employment almost invariably intones an additional message of threatening hostility when it comes from a supervisor. Even more compelling, but overlooked by courts, is the critical difference in severity between being physically assaulted by a coworker and being physically attacked by a supervisor.

Structuring their argument around what they term the three primary sources of exacerbation of supervisory, as opposed to coworker harassment – power differential, authority/fiduciary factors, and locus in the hierarchy – Grover and Piro submit that ultimately, the ability of a supervisor to assess, evaluate, reward, and discipline a subordinate invariably tinges any abuse that he inflicts with a level of perniciousness not found in coworker abuse. Considering a supervisor’s unique and demonstrated ability to have an impact upon both a subordinate’s reputation and professional self image, coupled with the subordinate’s need to have regular and positive contact with his or her supervisor, conspire to further render a harasser’s identity crucial in discerning the severity and the pervasiveness of abuse. The authors further posit that because a supervisor sets the tone in a given workplace, abuse at his hands will likely be emulated by others and viewed as ratification of others’ mistreatment of his target. Again, the ubiquity of one’s supervisor renders his abuse more pernicious than it would otherwise be. As an assumed fiduciary and role model in the workplace, each of the supervisor’s words and actions is imbued with magnified significance and power.

Moreover, both research data and common sense bolster the assertion that victims experience harassment at the hands of a supervisor differently than they experience it at the hands of a coworker, with most supervisory harassment victims left feeling more debilitated and more reluctant to confront the perpetrator and protest the treatment. The authors conclude that charged with evaluating the totality of the circumstances in ascertaining the presence of actionable harassment, the only way truly to assess a victim’s total experience is to factor in the “special power that supervisors possess to harm subordinates.” (P. 513.) In terms of pervasiveness, a supervisor’s influence and control over the physical workplace and over an employee’s terms and conditions of employment render his abuse nothing short of pervasive to his employee target, who cannot escape or ignore the reach of his words and actions, in both a literal and a figurative sense.

Thus, the article submits, harasser identification should be given a central role, if not primacy, in both the analysis as to whether actionable harassment occurred and that as to whether liability may be properly imputed to the defendant employer. It is scholarship like this article that makes the sharp and nuanced points needed to refine and advance jurisprudence in the always-evolving area of employment discrimination jurisprudence. All too often, poor results are reached in cases because blanket assumptions about the content of relevant frameworks or analyses rest unchallenged or unexamined. Provocative exhortations like those contained in this article are needed to impel judges to be more thoughtful and to come to more just determinations.