Monthly Archive: March 2016



If you believe the Silicon Valley sloganeers, we are in a “gig economy,” where work consists of a series of short-term jobs coordinated through a mobile app. That, anyway, is both the prediction of tech executives and futurists and the great fear of labor activists.

But anyone who cares about the future of work in the United States shouldn’t focus too narrowly on the novelty of people making extra money using their mobile phones. There’s a bigger shift underway. That’s a key implication of new research that indicates the proportion of American workers who don’t have traditional jobs — who instead work as independent contractors, through temporary services or on-call — has soared in the last decade. They account for vastly more American workers than the likes of Uber alone.

Most remarkably, the number of Americans using these alternate work arrangements rose 9.4 million from 2005 to 2015. That was greater than the rise in overall employment, meaning there was a small net decline in the number of workers with conventional jobs.

That, in turn, raises still bigger questions about how employers have succeeded at shifting much the burden of providing social insurance onto workers, and what technological and economic forces are driving the shift.

The labor economists Lawrence F. Katz of Harvard and Alan B. Krueger of Princeton found that the percentage of workers in “alternative work arrangements” — including working for temporary help agencies, as independent contractors, for contract firms or on-call — was 15.8 percent in the fall of 2015, up from 10.1 percent a decade earlier. (Only 0.5 percent of all workers did so through “online intermediaries,” and most of those appear to have been Uber drivers.)

And the shift away from conventional jobs and into these more distant employer-employee relationships accelerated in the last decade. By contrast, from 1995 to 2005, the proportion had edged up only slightly, to 10.1 percent from 9.3 percent. (The data are based on a person’s main job, so someone with a full-time position who does freelance work on the side would count as a conventional employee.)

This change in behavior has profound implications on social insurance. More so than in many advanced countries, employers in the United States carry a lot of the burden of protecting their workers from the things that can go wrong in life. They frequently provide health insurance, and paid medical leave for employees who become ill.

They pay for workers’ compensation insurance for people who are injured on the job, and unemployment insurance benefits for those who are laid off. They help fund their workers’ existence after retirement, at one time through pensions, now more commonly through 401(k) plans.

It’s true that the Affordable Care Act has made health insurance more easily within reach for independent contractors, for example, and temporary services firms can offer retirement benefits and workers’ comp. But over all, there’s little doubt that workers in these nonconventional work arrangements carry some of the burden of protecting themselves from misfortune that employers traditionally have carried.

That makes the question of why the shift has happened particularly important.

You could imagine a world in which more workers become independent contractors voluntarily, trading the social insurance functions of traditional employers for higher pay and greater flexibility. If the period from 2005 to 2015 had been one when workers had a lot of power in the job market, that might even be plausible.

It wasn’t. The unemployment rate was above 7 percent for nearly half of the period, from the end of 2008 to late 2013. Employers had the upper hand. That suggests it’s more likely that employers were driving the shift to these alternate arrangements.

But Mr. Katz and Mr. Krueger raise the possibility that something has changed beyond the weak job market of the last several years. And that’s technology.

When people working as a team need extensive experience working together, it can be tricky to contract out the work. But when there are clear, simple measurements of how successful each person is, and a company can monitor it, the employer now has flexibility.

“New technologies may allow some things to be shipped out and standardized and easily monitored,” Mr. Katz said. “Call center workers can be at home. Independent truck drivers can be monitored for the efficiency of their routes. Monitoring makes contracting more feasible.”

So Uber alone may not be a major force reshaping the nature of work. But the same technologies that made it possible could be making employers more interested in building a work force of nonemployees. A weak job market has probably given them more ability to make it a reality.

A big question for the next decade is whether this was a one-time shift or whether it will continue in the years ahead, even with a tighter labor market. The answer may determine if the employer-provided social insurance that was a staple of the 20th-century American economy will remain there in the 21st.




WASHINGTON — The Supreme Court on Tuesday sided with thousands of workers at an Iowa pork processing plant who had sought to band together in a single lawsuit to recover overtime pay from Tyson Foods.

Justice Anthony M. Kennedy, writing for the majority in the 6-to-2 decision, said the plaintiffs were entitled to rely on statistics to prove their case. The ruling limited the sweep of the court’s 2011 decision in Wal-Mart Stores v. Dukes, which threw out an enormous employment discrimination class-action suit and made it harder for workers, investors and consumers to join together to pursue their claims.

The Tyson workers performed tasks that were “grueling and dangerous” at a plant in Storm Lake, Iowa, Justice Kennedy wrote, slaughtering hogs, trimming the meat and preparing it for shipment. They sought to be paid for the time they had spent putting on and taking off protective gear to prevent knife cuts.

Tyson did not keep records, and the workers tried to prove their damages based on an expert witness’s statistical inferences from hundreds of videotaped observations of how long it took the workers to get ready.

The company objected, saying there was wide variation in how long the extra work took and that some workers were not entitled to overtime at all.

But Justice Kennedy said statistical proof was sufficient.

“A representative or statistical sample, like all evidence, is a means to establish or defend against liability,” he wrote. “Its permissibility turns not on the form a proceeding takes — be it a class or individual action — but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.”

The Wal-Mart decision did not help Tyson, Justice Kennedy wrote.

“Wal-Mart does not stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability,” he said, adding: “While the experiences of the employees in Wal-Mart bore little relationship to one another, in this case each employee worked in the same facility, did similar work, and was paid under the same policy.”

The workers should not suffer because Tyson failed to keep records, Justice Kennedy added, citing a 1946 precedent, Anderson v. Mt. Clemens Pottery. “Where the employer’s records are inaccurate or inadequate and the employee cannot offer convincing substitutes,” the court said in 1946, it is enough for workers to rely on “sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.”

In dissent, Justice Clarence Thomas, joined by Justice Samuel A. Alito Jr., said that approach “puts employers to an untenable choice.”

“They must either track any time that might be the subject of an innovative lawsuit,” Justice Thomas wrote, “or they must defend class actions against representative evidence that unfairly homogenizes an individual issue.”

Justice Thomas added that the Wal-Mart decision, rejecting evidence from about 120 women to show discrimination against 1.5 million employees, required a ruling against the Tyson workers.

“Just as individual managers inherently make discretionary decisions differently, so too do individual employees inherently spend different amounts of time donning and doffing” protective gear, he wrote. “And, just as 120 employee anecdotes could not establish that all 1.5 million class members faced discrimination, neither can” the Tyson workers’ evidence “establish that all 3,344 class members spent the same amount of time donning and doffing.”

The workers in the case, Tyson Foods v. Bouaphakeo, No. 14-1146, had won about $6 million. The money has not yet been distributed, and Justice Kennedy said the company remained free to challenge payments to workers who who were not eligible for overtime.

In a concurrence, Chief Justice John G. Roberts Jr. said that allocating the money could prove impossible. “If there is no way to ensure that the jury’s damages award goes only to injured class members, that award cannot stand,” he wrote.

The decision was the second victory for plaintiffs in the three class-action cases the court has heard this term. In January, in Campbell-Ewald Co. v. Gomez, No. 14-857, the Supreme Court on Wednesday ruled by a 6-to-3 vote that courts could not dismiss lawsuits simply because a defendant had offered to give the lead plaintiff everything he sought.

A third, Spokeo v. Robins, No. 13-1339, is yet to be decided. It asks whether Congress may authorize lawsuits by plaintiffs who cannot prove they suffered a concrete injury.

In a second development on Tuesday, the court said it had split 4-to-4 in Hawkins v. Community Bank of Raymore, No. 14-520. It was the first such tie vote since the death last month of Justice Antonin Scalia. The case was argued in October, and it had probably been headed for a 5-to-4 ruling with Justice Scalia in the majority.

Tuesday’s unsigned ruling, saying only that “the judgment is affirmed by an equally divided court,” left in place an appeals court decision siding with a bank in a dispute over whether it could enforce a spouse’s loan guarantee.

Based on Justice Scalia’s questions at the argument in October, he was inclined to support the bank’s position, meaning it would have won the case either way. But the Supreme Court’s tie vote established no national precedent, and it left unresolved a legal question that had divided federal appeals courts.



March 14 — With a growing number of states having decriminalized marijuana, employers face some uncertainty on how to deal with the drug, attorney R. Scott Oswald, managing principal at the Employment Law Group, said March 14.

Speaking at the Society for Human Resource Management 2016 Employment Law & Legislative Conference in Washington, Oswald said an employer’s approach depends on many factors.

“All over the country we have different laws that are applying at the state level, and for a multi-state employer it is enormously challenging,” he said. While the national conversation may be moving toward an increase in legalization of marijuana, he said, federal law still prohibits it.

According to Oswald, the bottom line in the workplace is that employers can continue to terminate employees for failing a drug test. In states where marijuana use is legal, he said, “decriminalization is a defense to criminal prosecution and not an affirmative right to use.”

Considerations Under the ADA

Employers also will likely need to address whether they are willing to consider medical marijuana as a reasonable accommodation under the Americans with Disabilities Act, Oswald told conference attendees.

There are several medical conditions that are ameliorated or treatable with marijuana and qualify as disabilities under the ADA, he said. For example, he said, marijuana has proven effective for treating muscle spasms caused by multiple sclerosis; nausea from cancer chemotherapy; poor appetite and weight loss caused by chronic illness, such as HIV or nerve pain; seizure disorders; and Crohn’s disease.

“The key here is flexibility,” Oswald said, adding that employers will never have to allow for an employee who is impaired by drug use and can’t perform his or her job.

Best Drug-Testing Practices

For drug-testing policies in general, Oswald recommended the following:

  • Comply with state law. For example, some states require employers to use state-licensed labs for testing, and some states have banned random drug testing and blanket drug testing.
  • Have the policy in writing, distributed to employees and signed by employees.
  • Never take disciplinary action against an employee without confirming the drug test result via a second test of the same sample.
  • Review the legality and appropriateness of the drug policy on an annual basis.
  • Separate the organization’s drug policy from its alcohol policy.

Oswald noted that employers are generally free to set their own drug policies, whether zero tolerance or otherwise. If an employee contests the legitimacy of testing results, he recommended employers make sure they are partnered with an experienced and reputable drug-testing company so that all procedures are sure to be followed, including compliance with chain of custody, privacy and state and federal regulations.

Employers also should direct an employee contesting results to contact the third-party testing facility.

Question isn’t taboo in the workplace anymore


Are you gay? The question isn’t taboo in the workplace anymore, for better or worse.

JPMorgan Chase & Co.’s human resources department is asking employees for the first time this year if they’d like to disclose their sexual orientation or gender identity. Companies including Facebook Inc., Deutsche Bank AG, IBM Corp. and AT&T Inc. also collect the data. By one measure, nearly half of the largest U.S. businesses — under pressure to be inclusive as they compete for talent — seek to gather information on who on the payroll is homosexual, bisexual or transgender so better benefit plans can be designed and managers can consider diversity enhancing promotions.

“Collecting the data is not weird now,” says Gary Gates, a retired demographer from UCLA Law School’s Charles R. Williams Institute. With the U.S. Supreme Court having legalized same-sex marriage and the military abandoning its don’t ask, don’t tell policy, “there’s much less fear and stigma.”

That may be true, but there’s enough peril that Chevron Corp. decided not to pose the question after a review identified data-security risks. Many that have studied the issue opted not to proceed, says Michelle Phillips, a lawyer with Jackson Lewis in White Plains, New York, who advises companies on employment law. Phillips says one worry is that a rogue employee might leak the information about a colleague to do him or her harm.

‘Totally Contrary’
There are a host of concerns — including that it’s legal in 28 states, from Montana to Virginia, to discriminate against anyone who isn’t heterosexual. The issue is more urgent for people who work in or travel for work to the more than 76 countries where homosexuality is a crime. Companies are careful: American Express Co., which has been collecting sexual-orientation specifics in the U.S. for 10 years, is adding a question about gender identify only in countries where that’s legal, says Chris Meyrick, the chief diversity officer. Businesses that do ask the questions make it clear it’s voluntarily to answer.

For former Ford Motor Co. Chief Financial Officer Allan Gilmour, who came out as gay in the 90s after twice being passed over for chief executive officer, it’s a pleasant surprise that employers are interested. “I never would guessed 20 years ago that questions of this kind would be asked,” he says. Back then, it was best to operate as though “this is nobody’s business except mine.”

Tom Barefoot, a strategic planning manager and senior vice president at Wells Fargo & Co. in Charlotte, North Carolina, was one of the employees who encouraged the bank to adopt the self-identify policy in 2011. “When I finally clicked that one field on my sexual orientation, it was just like time had stopped,” he says. “I’m actually putting into our HR system that I’m gay? It felt really good.”

JPMorgan began posing the question in 2007 in anonymous surveys, and LGBT workers approached management about making it part of the human resources system. They wanted “to make themselves visible,” says Therese Bechet Blake, head of diversity for the corporate sector. But at EY, “there was some outrage” when after five years of the anonymous approach the consulting firm in 2014 put the query on human resources paperwork, says Chris Crespo, the inclusiveness director.
The most concerned were those who travel to countries where their lifestyle is a crime, she says. “There were very mixed feelings.”

Michael Elliott, an executive director in Dallas for EY’s consulting practice, says his initial worry was that “we didn’t make people feel like we were forcing them out.” And Elliot says that when he checked the not-straight box last year it was anti-climactic.

Few Objections
“It totally amazes me that the mindset has started to shift,” he says. “As little as 10 years ago, at smaller companies, you could either be easily fired or they were following the military idea of don’t ask, don’t tell.”

About 2.1 percent of EY workers reported being LGBT in the anonymous surveys. The HR data collected is too new for comparison, Crespo says, though EY estimates 2.1 is half the actual percentage. At EY and many other companies, she says, about 4 percent of people prefer not to answer, saying they don’t trust the question or consider it inappropriate.

“Voluntary self-identification is something that seems innocuous at first blush, and generally could be a good idea, but it’s actually much more complicated,” says Phillips, the lawyer. “No question, everything being equal, it’s better to collect than not collect. The problem is that everything isn’t equal.”




HOLLYWOOD ( — Hooters is known for their attractive servers and tasty wings, but two men who worked at the establishment claim their male boss sexually harassed them for years.

“Repeated, intense acts which were intended to cause mental harm to the plaintiffs, to humiliate them, to undermine them,” said Jason Oliver, an attorney who is representing both men.

Oliver’s clients PJ Cagnina and Scott Peterson filed a lawsuit Tuesday alleging multiple instances of harassment.

One of those instances accuses their boss of throwing one of the men “down to the parking lot ground” and forcibly engaging in simulated sodomy, according to the suit.

They also claim the defendant would “touch male employee’s buttocks when standing behind them.”

Oliver says both his clients were Hooters’ managers at multiple locations around the Southland, including downtown Los Angeles, Costa Mesa, and Hollywood.

They claim they confronted their boss about the behavior and the company investigated him. Within months, he was fired with no explanation as to why.

But soon after, Peterson was also let go, which his attorney argues was in retaliation.

“When they stood up to him, they paid the price. They were punished even more in terms of other types of mistreatment,” Oliver said.

Hooters released a statement that said: “This matter involves a franchised location and its employees in California. We have no independent knowledge of the facts and are therefore unable to comment.”

Neither men work for Hooters anymore and could not speak with CBS2 on-camera Wednesday night, but Oliver says this is not just about money, but is to want to make sure this kind of behavior doesn’t happen again.