Sep 5, 2023 Elizabeth C. Tippett
Deborah A. Widiss,
Privatizing Family Leave Policy: Assessing the New Opt-in Insurance Model,
Ind. Legal Stud. Rsch. Paper No. 506, available at
SSRN (June 13, 2023).
In this informative article, Professor Deborah Widiss guides us through a recent trend in “red” states towards authorizing employer-sponsored family leave insurance.
Unlike state paid family leave laws—which “mandate paid leave for new parents,” (P. 8), and are typically funded through a payroll tax—a privatized model permits insurance companies to offer paid family leave insurance policies to employers. Employers can then choose whether to offer coverage to their workers.
Widiss explains that paid family leave insurance is a relatively recent phenomenon. Because “the insurance market is tightly regulated,” state legislatures must first “authorize sale of the [insurance] product to individuals or companies within its jurisdiction.” (P. 16.)
In 2022, Virginia was the first state to authorize paid family leave insurance, followed by New Hampshire, Vermont, Florida, Tennessee, and Arkansas. Notably, these laws have attracted bipartisan support. Republicans present them as a choice-driven free market solution—what Vermont governor Phil Scott characterized as a “win-win-win” — while Democrats view “the opt-in approach as a step forward, even if they might prefer a truly comprehensive plan.” (P. 33.)
Professor Widiss provides a measured critique of the private insurance model. She acknowledges that they represent an improvement over the status quo, since many small businesses cannot afford to offer paid leave to their workers. However, a private insurance model can produce regressive results, where “employer take-up may be low, and…lower-paid and part-time workers will be particularly unlikely to receive these benefits.” (P. 6.)
Widiss argues that paid family leave mandates are preferable to a private model. Mandates make leave available to “virtually all workers” in those states. The laws also fund generous benefits at a lower cost than optional private insurance plans because they are funded through a modest payroll tax “typically ranging from 0.1 percent to about 0.4 percent of wages.” (P. 12.) This structure enables substantial wage replacement, which is particularly important for low wage workers who cannot afford to live on a fractional portion of their prior earnings.
However, in states where a paid leave mandate may be politically infeasible, Widiss shares some useful recommendations for policymakers considering the private insurance model. She argues that all such insurance policies should be required to offer a “meaningful amount of time off” for covered workers, rather than the Florida approach, which “might provide as little as just two weeks a year.” (P. 25.) She also recommends rules requiring private policies to offer wage replacement “sufficient to allow low-wage workers to take a reasonable amount of time off.” (P. 26.)
Employers should also be required to cover the entire cost of the insurance policy to reduce adverse selection and avoid “complicated questions around open enrollment policies.” (P. 28.) Lastly, Widiss recommends that policies cover a wide range of possible caregivers beyond a “child, parent, and spouse,” to include, for example, “nonmarital partners, siblings or grandparents.” (P. 29.)
Overall, this article is a nice contribution to the literature, with useful advice for policymakers on a topic that is increasingly gaining traction at the state level. I particularly appreciated Widiss’ decision to focus on innovation at the state level, which is where most of the legislative action is happening these days. It was also nice to learn about a practical reform that has gained bipartisan traction in red states.
Even if this privatized approach is not optimal, it is at least, as Widiss notes, “a viable step forward that can offer some real benefits to some new parents” and other family caregivers.
Jul 19, 2023 Michael C. Duff
Stephanie Bornstein’s illuminating article, Confronting the Racial Pay Gap, performs an almost shockingly useful math exercise for legal theorists. First, Professor Bornstein recounts statistics on the racial disparities between White families and families of color. “Recent estimates show the median net worth of an average White family is nearly ten times that of an average Black family” (in 2016, $171,000 compared to $17,100) “and nearly seven times that of the average Latinx family” (in 2019, $142,180 as compared to $20,765). (P. 1405.) She observes that “despite gains in the perceived social and economic status of Black and Latinx Americans, racial wealth gaps are worse than they were thirty years ago.” (P. 1416.)
Professor Bornstein then highlights the astounding details of the racial pay gap. Using the metric of comparing only workers who work full-time, year-round, in 2019, the average Black worker earned 73.5 cents and the average Latinx worker earned 74.6 cents on the dollar to the average White worker. While there was some improvement prior to 2000, these racial pay gaps are now larger than they were four decades ago. Before commenting upon some of the underlying findings in this global result, I want to pause here to consider what these two conclusions tell us in particular about the economic dynamics at play in White/Black relations in the United States. Here comes the math. White families have ten times the wealth that Black families possess and the gap cannot be closed with wages.
Professor Bornstein cites economic data and scholarship appearing to lay out the details of how we arrived at this point. “From 1950 to 1980 the Black-White pay gap shrank, due in part to the introduction of civil rights laws, but also to economic trends and increasing unionization that raised wages for low- and middle-income earners, among whom workers of color are disproportionately represented . . . In the 1980s, as unemployment rose and unionization rates fell, the Black-White wage gap increased. In the 1990s, with an increase in the minimum wage and strengthening labor markets generally, the gap declined for a period of time, stalling again in the early 2000s. In the two decades since, the Black-White wage gap has increased in all wage quartiles for workers of all education levels.” (Pp. 1409-10.)
It should come as no surprise that women of color are hit even harder by the racial wage gap because they are the victims of the dual suppression of wages related to gender and race (Professor Bornstein terms this a “double gap”). In 2019, Black women earned only 63 cents to the dollar of White men, and Latinx women only 55 cents. As Professor Bornstein notes, as shocking as these numbers are they actually reflect a modest improvement since 1979. More surprising to me was her observation that “[w]hen compared to the earnings of White women . . . the racial pay gap for Black and Latinx women has also increased. Black women went from earning 92.1% of what White women earned in 1979 to 80.1% in 2019 and Latinx women from 82.5% to 70.4%.” (P. 1411.)
I could go on repeating Professor Bornstein’s detailed summary of the relevant facts, but the argument is structured to unfold easily from there. In Part II of the article, Professor Bornstein argues for improvements to antidiscrimination law including buttressing of disparate treatment and disparate impact theories in Title VII litigation, and extending Equal Pay laws at the state level to include race as a protected classification (which improves plaintiffs’ chances given the legal burdens involved).
She also embraces other antibiasing measures at the state level. Indeed, I noticed throughout the discussion that a great deal of law reform in this area can probably only be considered seriously at the state level. Increasing pay transparency so that applicants and employees have some basis upon which to comparatively assess their pay seems an obvious measure to improve the situation. Banning employer inquiry into applicants’ prior pay to reduce reflexive perpetual tethering of employees’ present pay to already disparate prior pay schemes seems an equally obvious tactic. Both measures have only experienced limited success at the state level.
Professor Bornstein also explores—in Part III of the article—long term structural dimensions of disparate pay. She recognizes that closing such an enormous racially disparate pay gap may be a long endeavor and therefore focuses on two policies especially worthy of present attack. First, she discusses employers’ reliance on the prior criminal record of an applicant for employment. Then, she closely scrutinizes the phenomenon of “overskilling”—mismatching educational requirements to jobs.
These putatively neutral employment practices: “we only hire applicants without a criminal record;” or, “we only hire applicants with a master’s degree” can have the effect over time of screening applicants of color from desirable employment opportunities. At least at the state level, there have been some successes in regulating the practices, and Professor Bornstein advocates continuing social advocacy in these areas.
I think Professor Bornstein does a masterful job in identifying the racial wage gap and making proposals to reduce it. I was especially impressed by her discussion of “occupational segregation.” Wage gaps are often dismissed as a function of accidental “human capital” deficiencies—applicants should simply obtain more education or skills and develop a “work ethic.” But the article highlights that wage gaps occur across all wage levels—even Black workers with advanced degrees make less than White workers with the same degrees.
Occupational segregation—the distribution of workers by race and gender in different industries and occupations—calls into question original wage setting functions. I find it interesting when jobs are considered “good jobs” until women and people of color begin to obtain them. Somehow at that point they become less good. Occupational segregation causes me also to think about the extent to which Black workers have over time been shunted into dangerous work, even before the pandemic. Professor Bornstein’s article usefully makes me more suspicious of such “accidents” and additionally causes me to question the “neutrality” of all wage-based benefits systems.
Jun 23, 2023 Henry L. Chambers, Jr.
In Regulating Marginalized Labor, Professor Mary Hoopes discusses the Equal Employment Opportunity Commission’s (EEOC) innovative approach to protecting farmworkers. She focuses on two key factors – a decentralized, entrepreneurial structure of enforcement and aggressive collaboration with advocacy organizations – in explaining the EEOC’s success. Professor Hoopes then suggests the broader implementation of those ideas could help lead to the “robust enforcement of civil rights within [other] administrative agencies.” (P. 1045.) That is a story worth telling and worth reading.
Professor Hoopes explores the special difficulties inherent in protecting the rights of farmworkers before detailing how an under-resourced EEOC helped bring justice to many farmworkers. She notes our history of agricultural exceptionalism – the exclusion of farmworkers from the protections of specific labor and employment laws – is a prime barrier to justice. For example, the National Labor Relations Act (NLRA) excludes agricultural workers from protections provided to workers who attempt to unionize, and the Fair Labor Standards Act (FLSA) exempts farmworkers from its overtime provisions.
Professor Hoopes explains the employment rights farmworkers do have can often be violated by employers, with workers having little practical resort. Farmworkers are susceptible to wage theft, harassment (sexual and otherwise), and generally poor working conditions. Many farmworkers are undocumented workers, who generally have difficulty enforcing employment laws against their employers. Farmworkers who are allowed to work in the United States through the guest worker program may be especially vulnerable given they work for a single employer who may be in control of their immigration status. When coupled with isolated workplaces and the transience of the work, farmworkers can be poorly situated to protect themselves physically or legally.
Professor Hoopes notes that given the legal landscape and the EEOC’s reputation for tepid employment discrimination enforcement, the EEOC is a surprising venue for a success story about protecting farmworkers. Early in its existence, the EEOC was considered a “toothless tiger,” with little enforcement power to address discrimination in workplaces and few tools to compel employers to run appropriate workplaces free of discrimination. In the 1970s, the EEOC’s prosecutorial powers expanded, allowing it to bring suits against private employers. However, even now, the Commission primarily focuses on resolving problems between employees and employers through conciliation, litigating only as a last resort. Some scholars suggest the EEOC’s approach, coupled with resources insufficient to fully investigate complaints, has led the EEOC to not be considered “a meaningful force in combatting systemic discrimination.” (P. 1053.)
However, Professor Hoopes looked beyond the EEOC’s reputation. She analyzed the EEOC’s work protecting farmworkers by creating a database of sixty-four cases the EEOC brought on behalf of farmworkers over the last two decades, speaking to EEOC employees, and interviewing staff from farmworker advocacy groups. (P. 1047.) She uncovered consent decrees utilizing innovative terms to protect employees specifically and workplaces more generally. The consent decrees appeared to be tailored to the farmworker context or specific employers. Some included “very specific goals and metrics by which to judge the defendant’s compliance.” (P. 1071.) Others included provisions related to working conditions and the monitoring of the housing and transportation of workers that would appear to be outside of the EEOC’s enforcement authority. (P. 1072.)
Professor Hoopes linked the EEOC’s creative and effective results to its bottom-up approach to litigation and conciliation in protecting farmworkers, and its work with farmworker advocacy organizations. Rather than control litigation decisions from Washington, the EEOC allowed its regional attorneys to make litigation decisions from their local offices. That structure allowed each district office to control its litigation efforts under the EOOC’s broad mandate presented in a National Enforcement Plan adopted by EEOC leadership. As part of controlling litigation, regional attorneys directed staff to meet with advocacy organizations and create education and outreach programs what would inform workers and others in farmworker communities of their employment rights. That resulted in a flow of information that spurred and sustained cases in the area.
Professor Hoopes is balanced in her praise of the EEOC’s approach. She could only analyze the several dozen cases the EEOC has brought in this area. Consequently, how broadly successful the EEOC has been in changing behavior in a broad swath of the industry is not clear. Some growers may have acted differently and more proactively as a result of EEOC efforts. However, whether the EEOC’s actions touch the bulk of worksites or farmworkers is unclear. The inability to monitor workplaces after decrees were in place likely limits the EEOC’s ability to drive systemic change. (P. 1095.) Additional resources could be significant.
Nonetheless, Professor Hoopes notes the expansion of the EEOC’s approach to other agencies could lead to the improvement of more workplaces and the protection of more workers. The work of the Department of Labor (DOL) and the Occupational Safety and Health Administration (OSHA) in particular could be helped by the adoption of the EEOC’s innovative approach. Of course, unseen limitations may blunt the effect of the EEOC’s approach in the DOL, OSHA, and other agencies, but the article suggests the approach is worth trying.
The article is a “thing we like lots” because it finds a measure of justice in an unexpected place. This article is an in-depth investigation and analysis of the EEOC’s efforts to provide justice to farmworkers. Rather than writing another article suggesting the EEOC is broadly ineffectual, Professor Hoopes finds an area in which the agency appears to be surprisingly effective and forward-thinking in its approach to protecting workers and workplaces. She suggests expanding an innovative approach in a small corner of American workplaces could lead to good outcomes in other American workplaces that have been difficult to regulate. The article is hopeful and optimistic. That is a “thing we (should) like lots.”
May 24, 2023 Michael Z. Green
In the 2022 paper, Race in Contract Law, Professor Dylan C. Penningroth examines in great depth how race and slavery affected the development of modern contract law. Penningroth provides a unique historical perspective by reviewing a “sample of 9,113 cases from trial court dockets in twenty-two courthouses and five state archives.” (P. 1209.) What makes this paper one that I like a lot for work law scholars is how it unearths the unspoken use of race from Reconstruction to the end of Jim Crow in the development of contract law canons such as freedom of contract as well as analytical concepts reflecting voluntariness and consent that still affect or coerce Black workers today.
Penningroth seeks to address broad goals within this paper. This includes transforming the law school curriculum to train law students on the history of “racial thinking” related to ending slavery that also contributed to leading rules on how to regulate contractual behavior in a multiracial economy with newly emancipated slaves. Penningroth also encourages contracts casebook authors to reframe the evolution of those canons by using more cases that show Black people’s stories. Beyond those laudable pedagogical goals, this paper shows how the development of contract law after slavery responded to fears regarding an organized labor narrative that still divides all workers today based upon race.
While the #MeToo movement galvanized ongoing efforts at the state and federal level to limit contractual enforcement of non-disclosure and arbitration agreements, progress in reforming contract law to address an employee’s racial claims as a response to the Black Lives Matter (BLM) movement has stagnated. With respect to further efforts to provide fairness for Black workers in response to BLM, Penningroth’s paper provides some enlightenment in understanding the consideration of race in enforcement of employment contracts even when the matters involved do not explicitly refer to race. As a result, it serves as an excellent read for those seeking additional analytical tools to challenge non-disclosure and arbitration agreements as well as other coercive employment agreements by revealing how racism can be embedded in basic and colorblind canons of contract law.
Penningroth begins his tracing of the racial influence in the development of contract law by focusing on the Reconstruction era. Importantly, Republican antislavery proponents and abolitionists wanted a guarantee that slavery contracts would be unenforceable after the Civil War. Unfortunately, according to Penningroth, the focus on overt racism as an antislavery reform led to the expansion of contractual doctrine to encourage the imposition of coercive contract terms on laborers as long as their actions did not involve literal slave contracts.
This expansive approach to enforcing worker contracts arose from concerns that the emancipated slaves could unduly increase labor costs for employers seeking to hire them as workers in the southern states during the Reconstruction era. Businesses might face hiring difficulties if emancipated slaves adopted an organized labor mindset. These Black laborers could start to challenge basic employer labor practices similar to concerns being espoused by northern labor leaders who objected to the oppressive conditions faced by white workers.
Penningroth even highlights near the end of the Civil War how one white labor leader compared the harsh working terms for laborers in contracts with northern employers as resulting in situations where the “white working man was just ‘a slave without a master’” who was being forced “to ‘either work or starve.’” (P. 1218.) Antislavery and abolitionist interests needed to counter the northern white workers’ labor challenges by showing that this massive entry of emancipated slaves into the southern workforce would lead to their selection for jobs with fair pay for their labor, rather than shifting into a new system that just perpetuated slavery.
As business interests in the Reconstruction era began to employ the “[f]our million newly-freed Black people” (p. 1219), their fears about economic difficulties in attempting to hire emancipated slaves proved true as ”freedpeople viewed labor contracts not as divine salvation, but rather as practical tools to be handled warily, and that many freedpeople thought, like white northern workers did, that the labor contract threatened ‘a practical return to slavery.’” (P. 1219.) This pessimistic view of labor contracting also led emancipated slaves to pursue various options to improve their bargaining position, rather than blithely accepting offers by southern businesses for their labor.
Penningroth argues that the emancipated slaves’ “hard-nosed market behavior” led to the advancement of broad principles regarding freedom of contract that became “known as ‘Lochnerism.’” (P. 1219.) These developing contract doctrines ignored concerns about unequal bargaining power and enforced laborer contracts as long as some aspect of voluntariness remained, as opposed to the complete prohibition of choice or lack of free will associated with slavery. (P. 1220.)
According to Penningroth, the antislavery proponents’ first response to the labor contracting concern was led by the Freedmen’s Bureau, an agency created by Congress in 1865 to develop policies to assist emancipated slaves in integrating into the “free-labor society” within the former rebel states in the South. The Bureau helped by building schools and hospitals, providing food, seeking land redistribution, assisting families by legalizing marriages and locating lost relatives, and “negotiat[ing] labor contracts for ex-slaves and settl[ing] labor disputes.”
The Bureau also facilitated the development of the freedom of contract doctrine by coercing Black people to sign labor contracts and prohibiting “‘collective bargaining, strikes, land redistribution, and better jobs in towns.’” (P. 1221.) As a result, contract law was faced with a conundrum: “how ‘voluntary’ could a contract be when one of the parties was barred from any other way of making a living, ‘coerced by troops and Bureau agents if they refused to sign, and fined or imprisoned if they struck for higher wages?’” (P. 1221.)
The antislavery proponents’ second response to the labor contracting concern involved proposing that basic legal rules on contracting should be colorblind under a general rationale of freedom of contract. Under this focus, labor contracts could be considered illegal only when compulsion was targeted as a form of racism or an attempt to perpetuate slavery. This approach also established that any other forms of compulsion – including policies of the Freedmen’s Bureau or a state law’s baseline contractual principles such as protecting a business through freedom of contracting – could not serve as a basis to challenge enforcement.
The third and final response from the antislavery proponents, as described by Penningroth, focused on the Freedmen’s Bureau practice of resolving contractual cases in favor of emancipated slaves by treating them as needing special protection via equity including the extraordinary remedy of specific performance due to their ignorance. This consideration extended beyond the actions of the Freedmen’s Bureau to address certain “Black rights” through “traditional contract defenses: incapacity, duress and undue influence, inadequacy of consideration, and what would eventually become the law of unconscionability.” (P. 1224.)
As a result, ignoring concerns about compulsion due to a lack of bargaining power became embedded in the Freedmen’s Bureau policies and state laws deferring to a business right to freedom of contract. This general freedom of contractual doctrine would not be disturbed as part of the overall effort to show that labor and employment contracts with the newly emancipated slaves did not perpetuate slavery. More importantly for scholars invested in work law research, Penningroth captures how fears about labor organizing among emancipated Black workers led to a broad “antislavery idea of contract freedom” that ended up prohibiting most regulation of working conditions aimed at protecting vulnerable employees.
Penningroth also concludes that most contract cases leading to the development of strong freedom of contract protections during Jim Crow involved questions involving Black persons. As those bedrock contractual principles became commonplace, the courts and scholars involved failed to note that references to the Black plaintiffs bringing the claims had been dropped from the discussion. This colorblind removal of race also masks the racial implications involved.
Penningroth’s thoughtful and detailed analysis of the race-based origins of harsh and coercive contract doctrines offers attorneys and legislators a source to start restricting and prohibiting coercive contracts that limit the rights and negotiation options of Black workers. And for that reason, I like this paper a lot.
Apr 25, 2023 Kerri Lynn Stone
In Workplace Anonymity, Professor Jayne Ressler takes on the intersection of two critical workplace issues: toxic work environments and employee privacy. Citing workplace toxicity in the form of harassment, abuse, wage theft, and risk exposure among other things, Professor Ressler notes the failures of agencies like the Department of Labor, the Equal Employment Opportunity Commission, and the Occupational Safety and Health Administration, as well as government agencies and labor unions, to redress much of the toxicity that has fueled what has come to be known as the “Great Resignation” as the nation reeled from the pandemic.
The piece posits that fear of retaliation engenders a culture of silence around abuse and sets about examining reporting mechanisms. Ressler seeks to complement the suggestion of legal scholarship that employer access to certain private employee information be curbed, with a proposal “that uses information restrictions to report and document workplace misconduct ex post,” and proposes “anonymous reporting mechanisms concerning workplace misconduct” that would facilitate workplace redress and reform without the threat of retaliation. (P. 1497.)
I particularly enjoyed the organization and structure of this piece, proceeding as it does from the premise that work occupies a central role in the lives and identities of Americans. It then analyzes four categories of workplace misconduct: 1) wage theft, 2) invidious discrimination, 3) health and safety violations, and 4) challenges to high earning employees. Ressler argues that underreporting of workplace misconduct stems from victims’ or others’ fears of reprisal and demonstrates the inadequacies of both extant reporting mechanisms and retaliation law.
Finally, after the piece discusses current anonymity practices involving litigation plaintiffs, it posits its proposed solution: an expansion of anonymous reporting in the workplace to expose misconduct while protecting reporters. The piece rounds out and closes with a brief discussion of employers’ concerns about due process and principles of fairness and points to certain situations in which anonymity fails to be effective.
Overall, the piece presents a well-rounded and well-reasoned look at a somewhat intractable problem and injects some common sense solutions into the analysis, while being circumspect and realistic about the problem’s persistence. In doing so, Ressler provides an excellent discussion about the centrality of work in American life and culture. It raises issues and whole conversations about persistent workplace abuse and toxicity, and its analysis and proposal are thoughtful and worthy of serious consideration.
Significantly, the article combines personal anecdotes with well-researched documentation of trends to establish discussion points like pervasive employer misconduct, emotional and physical threats in the workplace, and the nature of victims’ often well-founded fear of reprisal when deciding whether to use reporting mechanisms.
Of particular note is the article’s section on employee concerns regarding retaliation and reprisal. This section lays bare the stark impact of the weaknesses in the law and the frailties of human nature that make this fear well-founded, documenting the phenomenon with both precision and humanity. “Approximately 60 percent of workplace misconduct remains unreported,” writes Ressler, “the driving reason for this silence is fear of retaliation.” (P. 1517.)
By breaking out the underreporting of various types of misconduct and going into depth in each, the piece exposes the specifics around so many types of hesitancy: that when it comes to reporting wage theft, health and safety violations, invidious discrimination, race discrimination, gender discrimination and sexual harassment, age discrimination, and what Professor Ressler terms “perils for the privileged” – and gives a comprehensive view of workplace underreporting. Professor Ressler’s ensuing exposure of the deficiencies of reporting mechanisms, safeguards, and whistleblower protections is equally eye-opening. Her discussion of anti-retaliation law is fresh and current.
Finally, the article’s main contribution to the literature is its review of the existing anonymity solution and Ressler’s proposal of a fresh, more comprehensive one. Current protocols that can protect the anonymity of litigation plaintiffs and provide for the extrajudicial reporting of misconduct provide the inspiration for the expansion into anonymity shields when reporting employer misconduct.
“Given the various hazards confronting the American worker, a robust system of anonymous reporting of workplace wrongdoing should be developed and implemented,” Ressler writes. “Furthermore, employees might fear alerting their employers about workplace issues that are not necessarily illegal misconduct but undesirable.” (Pp. 1545-46.)
Through a comprehensive discussion of extant protections, hypotheticals, and policy arguments, Professor Ressler makes a fine case in the context of each area of misconduct that she has previously identified and addressed. She also troubleshoots her own proposals by contouring and examining the limitations of anonymity and setting forth issues of fairness to employers that may pose problems, or at least countervailing concerns, as her proposals are implemented.
All in all, Professor Ressler, herself, summed it up perfectly when she wrote,
Broad categories of workplace misconduct surveyed in this Article, including wage theft, health and safety violations, and invidious discrimination, are all much more prevalent than what workers report. […] Under proper circumstances, and with adequate protections for employers in place, anonymous reporting could become a fundamental means to increase documentation of workplace misconduct–an essential first step toward needed workplace reform. (P. 1560.)
In this age, the intersection of workplace abuse remediation and workplace privacy seems a forward-thinking place upon which to set our sights.
Mar 22, 2023 Joseph Seiner
In Algorithms, Discrimination and the Law, Professor Michael Selmi performs an excellent analysis of the many controversial issues related to an employer’s use of algorithms in making employment-related decisions.
The use of algorithms in the workplace has garnered substantial academic discussion in recent years, as this type of technology has become more readily accessible to employers. The widespread use and reliance on technology to formulate employment-related decisions has created a host of workplace-related issues. At the forefront of these concerns is that the use of algorithms will discriminate against minority workers and applicants. These concerns are well-founded, and additional empirical work is needed to explore the parameters of this form of discrimination and to examine this important and emerging topic more broadly.
In his paper, Professor Selmi weighs in on the topic of algorithm use in workplace decision-making. His paper highlights the ways in which algorithm use could have a positive impact in the employment setting by reducing the role of human involvement in the process, which can be tinged with express or implied bias. Professor Selmi finds the failure of legal scholars to “eager[ly] embrace” these types of algorithms surprising, “[g]iven all that we know about human decision making, particularly its biased nature.” (Pp. 614-15.) In taking this critical approach to the existing scholarship, Professor Selmi addresses the two primary criticisms that are typically advanced about algorithms use: the potential that algorithms may themselves be discriminatory and the inability of the law to eradicate any discrimination associated with algorithms.
Professor Selmi approaches the first issue by asking the broad question of whether it is possible to construct these algorithms in a way where the results are less discriminatory than the traditional use of human review (which involves well-known biases). Examining and comparing traditional decision-making to a more technological-based approach, Professor Selmi concludes that “between an algorithm and a human, the smart money [on which will avoid discrimination] is likely on the algorithm.” (P. 617.)
Professor Selmi’s primary takeaway is that human decision-making has resulted in both express and implicit bias over the years and discrimination continues to pervade the workforce. Thus, while algorithms may still produce discriminatory results if they are flawed in their construction or use flawed data as inputs, there is also the largely unacknowledged possibility that these programs offer the potential to substantially curb discrimination if properly constructed. Essentially, there is no doubt that human decision-making results in discrimination. The use of algorithms, then, while not perfect, offers a potential opportunity to curb existing bias.
Professor Selmi further addresses the concern over the inability of the law to properly address discrimination where it occurs in this setting. He examines the frequent critique of disparate impact law, which addresses facially neutral policies or practices that have a discriminatory effect. He notes the existing academic concerns that the “inscrutable nature of algorithms will make any legal challenge ineffective.” (P. 618.)
Proessor Selmi responds to these concerns by distinguishing between two specific types of algorithms. First, he notes that where this technology is based on algorithms that are easily understood, there should be no new concerns about the application of disparate impact theory which has addressed these types of policies/practices for years.
The more challenging area is the second type of algorithm based on “black-box” formulations. Professor Selmi challenges the existing view that such black-box algorithms result in more difficult discrimination claims. Indeed, Professor Selmi notes that under disparate impact law, employers are required to establish that the algorithm is job-related and consistent with business necessity after a disparate impact is established. Thus, this theory is well-grounded in its ability to require employers to establish the validity of the algorithm. Additionally, Professor Selmi looks at the final step of disparate impact law; the ability of a plaintiff to articulate a less discriminatory approach. He surmises that there will be easily identifiable alternatives to many black-box algorithms that have a discriminatory impact.
Professor Selmi’s work is exceptionally well-researched and written, and the topic could not be more important as we see so many companies moving toward this type of decision-making model. Disparate impact law itself is an underexplored area of the law, and this piece further pushes the academic boundaries of the unintentional discrimination provisions. Professor Selmi’s willingness to take on directly the concern in this area is helpful in considering how employers should approach this topic. His novel and more nuanced view that “the concerns about the law’s impotency seem overstated,” and that workplace algorithms could be created in a way that result in “less discriminat[ion] than human actors” is critical in balancing the ongoing debate in this area. (Pp. 618-19.)
This piece is extraordinary in reframing this debate. It reimagines the role of algorithms in the workplace and the potential use of this technology to lessen any discriminatory effect. The essay pushes the boundaries of disparate law, applying it to the context of modern technology. There is far too little work in this area, and Professor Selmi’s piece is critical in opening an important dialogue in this important field.
Feb 13, 2023 Joseph Slater
Michael Z. Green,
Black and Blue Police Arbitration Reforms, 84
Ohio St. L.J. 1 (forthcoming), available at
SSRN.
Police unions are a contentious topic. Labor academics have debated whether limiting unions’ collective bargaining rights would reduce police misconduct, especially excessive force and racial discrimination. For example, compare Benjamin Sachs, Police Unions: It’s Time to Change the Law and End the Abuse, On Labor (June 4, 2020) with Martin Malin and Joseph Slater, In Defense of Police Collective Bargaining, Chicago Sun-Times (Aug. 12, 2020). Relevant here, a New York Times editorial called for abolishing labor arbitration in police discipline cases. To Hold Police Accountable, Ax the Arbitrators, N.Y. Times (Oct. 3, 2020).
These debates and the events that gave rise to them have already led to limits on police collective bargaining. For example, in 2020, the District of Columbia made discipline of police officers a management right not subject to negotiation. See Fraternal Order of Police, Metropolitan Police Dept. Labor Committee v. District of Columbia, 502 F. Supp. 3d 45 (D.D.C. 2020). Other states restricted who could act as an arbitrator in police discipline cases. See Washington State statute SB 5055 and Minnesota statute 626.892.
In this context, Michael Green’s article Black and Blue Police Arbitration Reforms makes a valuable and persuasive contribution. The article rebuts various attacks on labor arbitrators and police union arbitrations. It also offers reforms designed to give Black police officers a voice in a more transparent process. It suggests that police employers and unions negotiate agreements to consider public values in defining “just cause” disciplinary actions in which race matters.
The article begins with the tragic story of Derek Chauvin killing George Floyd. Notably, the local police union president, after Floyd’s death, suggested that Chauvin and other officers involved could see their discharges reversed by a labor arbitrator. Green cites a study that found that arbitrators sided with police officers in about half of all discharge cases in Minnesota. He asks whether this number seems intuitively wrong, especially given that unions tend to only arbitrate cases in which they think their side has a decent chance of winning.
Still, much scholarship and popular writing on this topic have argued that labor arbitration and labor arbitrators are a serious problem in this area. Throughout, Green makes powerful and nuanced arguments about what is, frankly, a problem with no easy and obvious solutions.
For example, he stresses the political power of police, which exists even where police unions lack collective bargaining rights. He notes that politicians have incentives to blame arbitrators. He emphasizes the important role of police employers: for example, their frequent inability or unwillingness to correctly discipline officers who engage in bad acts. He rebuts suggestions that professional arbitrators attempt to “curry favor with both sides.” He analyzes why arbitrators, using standard “just cause” analysis, reverse some employer discipline in cases involving police and other types of employees and finds no significant differences based on occupation. He explains that police receive protections in discipline from “Police Officer Bill of Rights” and civil service statutes independent from collective bargaining rules. He stresses the role of arbitrators in enforcing the rules to which the employer and union have agreed.
Green also offers positive proposals. He calls for more input from Black police officer groups and individuals (e.g., those affiliated with the National Black Police Association) in developing reforms, along with a greater focus on hiring Black officers from the communities they serve. He calls for promoting community policing and diversity. He gives examples of Black police officers and some police departments taking these approaches in various contexts. While these do not involve labor arbitrations, Green argues that the perspective of Black officers regarding arbitrations “would, at minimum, represent a nice next step to seeking some sustaining changes.” (P. 49.) He does not underestimate resistance to reform among many police union leaders, but he predicts that recent changes limiting police union disciplinary arbitrations may create incentives to compromise.
Green also praises negotiations in Philadelphia that created a Police Arbitration Board to ensure arbitrators are trained on implicit bias and that its arbitration roster consists of forty percent women and people of color. This contract also put a civilian on the police department’s disciplinary panel for the first time and provides for civilian participation in all aspects of discipline. He describes the pros and cons of making prior police disciplinary records open to the public. He also positively cites calls for more union-management partnerships in this area. The bottom line is that unions, police departments, and politicians need to work out solutions. The problem is not labor arbitrators.
I have some reservations about one suggested reform: making police labor negotiations and/or arbitrations open to the public to further transparency. While this proposal has been made elsewhere as well, in my view, the history of public-sector laws that required bargaining to be done in public meetings does not suggest that this will be useful. Nor do I think that making police discipline arbitrations public would be an effective mechanism for change. In neither situation would members of the public have any power to affect decisions (although Green does cite an example in Austin in which an advocacy group was able to encourage some reforms). While we have public trials, I wonder whether there would be pressure to make public negotiations and arbitrations for other types of employees, with the inherent additional costs and inefficiencies of doing so.
That aside, I have nothing but praise for this article. Too often, those debating these issues lack a sophisticated understanding of how labor arbitrations in general and in the police context actually work. Professor Green understands the law, the process, the problems, and the politics, and does an excellent job analyzing an extremely important issue. I liked this a lot.
Jan 11, 2023 Matt Bodie
Sanford Jacoby has achieved a truly rare feat: taking a narrow, specialized, and somewhat obscure topic and shaping it into a magisterial narrative that provides true understanding of the players and the drama involved. Labor in the Age of Finance is a tour de force that captures the labor movement’s efforts to muddle through during the ascendance of corporate finance without losing its way. This story has been told in bits and pieces, but never so comprehensively and never so completely. Jacoby marshals a mammoth number of news events, legal theories, political struggles, and vivid characters to recount how unions and their associated pension funds sought to advance their interests in a world hostile to–yet dependent upon–their participation.
For many decades now, the narrative for the labor movement has been one of pessimism and desolation. Since the 1960s, unions have represented a smaller and smaller percentage of private-sector employees, now hovering around six percent of the workforce. The fields of labor law and labor history have ruefully captured the movement’s downfall, with macro analyses and small portraits alike portraying the twilight of labor’s role in society.
At pretty much the same time, corporate shareholders began their ascendancy, as finance theory, corporate law, and a restive investor class combined to buoy shareholder fortunes. The notion that a corporation exists to maximize shareholder wealth went from a somewhat tawdry economic idea to the organizing principle of corporate governance. It should not be a surprise that workers’ wages and corporate profits have diverged significantly ever since, despite ongoing gains in workplace productivity.
In the 1980s, labor unions took a fairly pro-management and anti-shareholder approach to corporate governance issues. Labor supported the passage of state constituency statutes, which gave corporate leaders the freedom to consider the effects of their decisions on all company stakeholders, rather than just their shareholders. But in the 1990s, labor approached corporate and securities law with a new perspective. And that is the story that Jacoby tells in his book.
It’s impossible to provide a succinct and complete overview of Labor in the Age of Finance, as the accumulated material is truly astounding. Jacoby begins in the late 1800s, touching on the nascent labor movement’s relationship to finance and investing, and moves steadily but comprehensively through the New Deal, the birth of corporate governance, the Wall Street of the 1980s, and then on to the last 30 years, which occupies the bulk of the book. Jacoby situates unions and their affiliated pension funds within the evolving landscape of contemporary corporate governance, including mutual funds, private equity firms, shareholder consulting firms, and government regulators. He explains how unions attempted to find their footing as corporate governance advocates, wending their way through existing debates and starting new ones.
Between the early 1990s and the early 2000s, labor perspectives on finance took an almost 180-degree swing: from defending management against shareholder primacy and corporate raiders, to siding with shareholder activists who policed executive malfeasance and pursued shareholder value. Labor groups and pension managers switched sides to lend their support to pro-shareholder policies such as majority voting, non-staggered boards, say-on-pay, and proxy access. Jacoby documents the shift with incredible thoroughness. He brings alive the ideological debates, the internal struggles, the policy successes and failures, and the ultimate result: an approach to corporate governance that cracked down on executive misbehavior but also put shareholders in the catbird seat.
Labor in the Age of Finance is a comprehensive primer on the role that the labor movement and union-backed pension funds have played in shaping corporate governance over the past thirty years. It is jam-packed with so much information that at times, the narrative of a particular chapter can get lost in the details. But Jacoby is also careful to use certain concepts as organizing devices, especially the so-called corporate governance “cookbook:” a set of reforms that labor leaders supported during the 2000s as a series of scandals and crises rocked corporations and the economy. This idea of a policy cookbook assists in understanding labor’s change in perspective, as well as illustrating the limitations of that approach as it drifted further away from labor concerns and deeper into shareholder value.
Jacoby’s book should be considered essential reading for scholars in both labor and employment law, and corporate and securities law. It makes an excellent companion piece to David Webber’s 2018 book, The Rise of the Working-Class Shareholder: Labor’s Last Best Weapon. Webber makes a much more optimistic argument for the role of union-side pension funds in corporate governance, pointing out labor’s successes in fighting Wall Street fraud, reining in CEO power and pay, and blunting the power of hedge funds and private equity. His book demonstrates how labor’s capital fought against entrenched executives and short-sighted speculators to make a meaningful difference in policy. Even Webber must admit, however, that some pension funds adopted the “shareholder primacy” ideology too blindly, disregarding the interests of their own members to ensure stronger financial returns. Jacoby is more neutral on this point, concluding that unions adapted to a harsh climate to make the best of a bad situation. “The financial turn wasn’t heroic,” he acknowledges, leading to troubling tradeoffs and “the messy compromises of realpolitik.” (P. 224.)
This past year has been one of the most promising for the labor movement in quite some time, with strong popularity in public opinion polls and organizing successes at Starbucks, Amazon, Chipotle, and high-profile media companies. The ideology of shareholder primacy has taken significant flak, as millennial investors assert their interests in climate change, racial justice, and other social concerns beyond short-term wealth maximization.
It’s important to understand where we have been going for the last thirty years and how we’ve gotten to this point. I strongly recommend Labor in the Age of Finance and its compelling exploration of the labor movement’s efforts to stay afloat during more difficult and complicated times.
Nov 30, 2022 Anne Marie Lofaso
In Text Is Not Enough, Anuj Desai analyzes the Supreme Court’s 2020 decision in Bostock v. Clayton County, which held that it is unlawful for employers to fire individuals merely because they are gay or transgender, to raise several points about the Court’s favorite interpretative tool, textualism. Professor Desai shows that—contrary to the “conventional wisdom” that the Bostock majority and dissenting opinions showcase “dueling examples of textualism”—textual analysis is insufficient to decide the question whether the term “sex” includes sexual orientation for purposes of Title VII. (P. 1.) Accordingly, “in difficult, contested cases, statutory interpretation is unavoidably a multimodal enterprise that involves consideration of, at least, text, semantic context, statutory purpose, history (statutory, legislative, social, and political), social context, precedent, moral judgment, and consequentialist reasoning.” (P. 3.)
Bostock comprises three consolidated cases, only two of which Professor Desai examines: Bostock itself, where the county employer discharged Gerald Lynn Bostock, a Child Welfare Services Coordinator, when his co-workers discovered that he played for a gay recreational softball league; and Altitude Express v. Zarda, where a skydiving company fired one of its instructors when a customer complained that he was gay. Both cases raise the legal question of whether employment discrimination because of sexual orientation constitutes discrimination “because of…sex” within the meaning of Section 703(a)(1) of Title VII. Justice Gorsuch’s majority opinion says yes; Justice Alito’s and Justice Kavanaugh’s dissenting opinions say no. All three Justices claim that the text answers the question to support their distinct conclusions.
Professor Desai sets up his argument in Part I. Part I.A. faithfully characterizes the textualist arguments of the majority and dissenting opinions. Part I.B. reviews the basic tenets of textualism: (1) judges must glean the “ordinary public meaning” of statutory text to determine the text’s communicative content from the reader’s vantage point; (2) textualism employs deductive reasoning—once judges determine the text’s objective, semantic meaning, they must apply that meaning to the facts. Accordingly, the deductive legal reasoning used in textualism is fundamentally distinct from the inductive legal reasoning of the common law, which compares the facts of a current case to those of previous cases to determine the outcome.
Professor Desai makes his crucial point in Part II: “Bostock shows that, notwithstanding the textualist rhetoric that pervades the case, cases involving statutory interpretation that reach the Supreme Court will inevitably require multiple modes of analysis.” (P. 13.) To support that conclusion, Part II.A shows how Title VII’s text cannot resolve the disagreement between the majority and dissenting opinions. Both sides use a comparator. Justice Gorsuch uses a straight-woman comparator: If Bostock were a straight woman, he would not have been fired. Therefore, Bostock was fired because of his sex. Justice Alito uses a gay-woman comparator to draw the opposite conclusion: If Bostock were a lesbian, he would have been fired. Therefore, Bostock was not fired because of his sex. Desai explains why neither comparator “depend[s] on the semantic meaning of Title VII’s language” (P. 18.):
Neither opinion appeals to the definition of any word or set of words to defend its comparator against the competing comparator. Both make a claim about the semantic meaning of the words; both depend on a claim that “because of” embodies but-for causation. Yet, to go from one argument to the other requires almost a gestalt shift in thinking. Nothing in the structure of the sentence or the definition of “sex” or “because of” or “discriminate” or even “individual” helps us choose which of the two comparators (straight woman v. gay woman) to select. In other words, even the comparator argument, the one that everyone seems to agree is a “textualist” argument, cannot be resolved with text.
Because the text cannot tell us which comparator is superior, judges must interpret the text using context. As Desai explains (II.B.), the majority and the dissents agree that they need not limit their interpretive analyses to linguistic context, but may instead review the social context, “ranging from statutory purpose to the broad moral, political, or social assumptions that drafters and readers would have shared at the time of the statute’s passage.” (P. 22.) For Alito, this means the societal norms in 1964, at which time it would have been “unimaginable” for anyone to think that Title VII protected gay individuals from discharge. Desai criticizes this view, not for going back in time but for
conflat[ing] the distinction between linguistic drift and drift in readers’ moral, political, or social assumptions about what the statutory language could possibly mean. His claim about 1964 seems stronger because of the unexpected real-world consequences of the plaintiffs’ comparator argument. The semantic meaning of the words has not relevantly changed since 1964, but social understandings of the world have. (P. 26.)
Desai spends the remainder of Part II explaining how “choos[ing] between the two comparator arguments…requires deciding about the appropriateness of particular analogies, the bread and butter of the common law.” There is no way to be a textualist in a case like Bostock, Desai claims, because in difficult cases judges must resort to common-law, analogical reasoning to illuminate meaning. He adds that the sex-stereotyping argument (II.C)—that the county fired Bostock because he failed to conform to gender norms—is logically equivalent to the comparator argument but grounded in precedent, not text. He also adds that the associational argument (II.D)—discriminating against Bostock for being gay is no different than discriminating against the Lovings for being in an interracial relationship—is itself another comparator argument. While we have a word for people involved in same-sex relationships (e.g., gay, lesbian, homosexual) we have no equivalent word for people involved in interracial relationships (e.g., heteroracial?). Similarly, we have a not-so-nice word for interracial relationships (miscegenation) but no such equivalent word (miscegenosexual) for same-sex relationships. These linguistic gaps mask the true force of the associational argument—that it is not truly textual but analogical.
This leaves us with a completely new narrative. While Justice Scalia convinced even Justice Elena Kagan that “we’re all textualists now,” that narrative is misleading. Sure, we always start with the text in statutory-interpretation cases. But language is nuanced, and judges are not trained linguists. Accordingly, judicial temperament and values will always inform judicial disagreements over text. Professor Desai gives us pause to rethink the textualist paradigm and the force of its rhetoric—the claim that it is apolitical—by showing us just how political textualism really is. Bostock is a perfect vehicle for revealing the political side of textual interpretation.
Nov 9, 2022 Charles A. Sullivan
Keith Cunningham-Parmeter,
Discrimination by Algorithm: Employer Accountability for Biased Customer Reviews, 70
UCLA L. Rev. __ (forthcoming 2023), available at
SSRN.
Among the things I like a lot are articles that make me question my original take on a topic. That is certainly true of Keith Cunningham-Parmeter’s Discrimination by Algorithm: Employer Accountability for Biased Customer Reviews. Some of his points are familiar (customer biases are pervasive and, employers, while paying lip service to antidiscrimination values, don’t deploy meaningful strategies to counteract such biased reviews). Others are increasingly accepted (such biases threaten to have more and more concrete employment consequences as technology allows them to be aggregated and acted upon in real time).
But I found most interesting Cunningham-Parmeter’s arguments as to how an employer might be liable for acting on customer reviews it knows (or could know) were discriminatory. And how an employer could avoid such liability but still retain the benefits of customer feedback. I’m not sure I’m totally persuaded on either point, but I gained a much better understanding of the dimensions of the problem and doctrinal challenges dealing with it under current law.
Discrimination by Algorithm’s paradigm case is the gig driver whose overall rating is hovering just over the platform’s automatic cut-off when a low customer review pushes the driver off the platform (although presumably any other low review factored into the rating would also be a but-for cause of the termination). Assuming a given “one star” review is biased, what does Title VII say about this situation? Prior scholarship noted possible disparate impact challenges to the use of customer reviews with such effects, but, as the author notes, a stumbling block is the business necessity defense.
Cunningham-Parmeter focuses instead on whether disparate treatment can be invoked. Under a disparate treatment theory, the customer would furnish the requisite intent to discriminate, and the employer would bear responsibility if it knows or could reasonably know about such bias.
However, agency law presents a challenge to employer liability. Since customers are not employees, how can any of their biases render the employer liable? Discrimination by Algorithm argues that “employer liability for biased customer ratings should depend on the level of delegated authority that customers receive when firms ask them to rate workers.” Cunningham-Parmeter draws a distinction between “action managers”–customers with the “functional authority to fire workers,” by virtue of the rating algorithm–and “advisory clients who provide input on a worker’s performance.” He argues that companies should be strictly liable for biased decisions by “action managers.” Liability can also follow in the “advisory client” context, but only for the firm’s failure to deal appropriately with the bias of such clients.
The latter is perhaps the easier to reconcile with current doctrine. Indeed, in the sexual harassment sphere, employers are often held liable for the actions of third parties, or, more accurately, for failing to deal appropriately with the actions of third parties such as customers. It doesn’t seem a huge jump to apply the same principle to biased customer reviews resulting in adverse actions. Further, the piece also explores “cat’s paw” cases and customer preference cases that, at a greater level of generality, arguably point in the same direction.
But strict liability for a biased customer review that tumbles a worker off an “algorithmic cliff” is harder to justify. Cunningham-Parmeter argues that “action managers are company agents not because firms employ them but because action managers possess the actual and apparent authority to deactivate workers.” While such a view has much to commend it from a theoretical perspective, Discrimination by Algorithm goes further to argue that adoption of this scheme is not such a “doctrinal leap” as some (including me!) might think.
Looking to Title VII’s language defining an “employer” to include “agents,” he explores the “agency theories of actual authority, apparent authority, and ratification [to] help courts analyze the delegated powers that action managers now possess.” I found ratification most plausible. Regardless of potential doctrinal limitations on authority, ratification applies when a principal agrees to be bound in return for receiving a benefit, which arguably embraces the benefit the employer obtains from the customer review.
As for the article’s critical last point–that employers can know, and, therefore, address the biases of customers submitting reviews–the problem is obvious once we’re past the “easy” (and probably rare) cases when the customer uses explicit racist or sexist language. The harder cases involve reviews that simply award a low rating with little or no comment or detail. Discrimination by Algorithm argues that firms could validate customer ratings either “by requesting additional information from users or by comparing negative ratings to objective performance criteria.” On the former point, he suggests asking customers to provide descriptive feedback along with numerical ratings. He makes a good case for the efficacy of such techniques in some cases, but clearly the value of some soft variables (e.g., “friendliness” as opposed to “oversharing”) will often limit this kind of monitoring. And, in many settings, it’s precisely such soft variables that distinguish good workers from bad ones.
That leaves us with “auditing” reviews to identify those that might be biased. This seems to be pretty much a statistical game: has the customer reviewed sufficient workers to make a statistical case of bias? The answer will often be no but maybe, contrary to my initial intuition, frequently yes: a customer who routinely uses, say, Uber or Door Dash will soon have a robust history of reviews and a pattern of under-rating (compared to other customers’ ratings) of protected class members might be easily ascertainable by the very technology that permits the rating to begin with. Excluding such reviews from the overall rating would be relatively easy and, given the small stakes in removing any given rating, largely cost-free.
I was, however, left with some puzzling questions that might be addressed in a later article. For example, does vicarious liability apply even if the auditing and other mechanisms don’t identify bias in a particular review but the worker somehow proves it to have operated? And, speaking of worker identification of a biased review, how is that to happen if, as is usually true, employers shield the identity of reviewers from their workers?
Bottom line: a very provocative read, which I liked a lot.
Cite as: Charles A. Sullivan,
When Customers Become Bosses, JOTWELL
(November 9, 2022) (reviewing Keith Cunningham-Parmeter,
Discrimination by Algorithm: Employer Accountability for Biased Customer Reviews, 70
UCLA L. Rev. __ (forthcoming 2023), available at SSRN),
https://worklaw.jotwell.com/when-customers-become-bosses/.
