Monthly Archive: June 2017

IS A $15 AN HOUR WAGE GOOD OR BAD?


FROM HUFFINGTON POST,  JUNE 29, 2017

In an otherwise bleak landscape for progressive policy, the Fight for $15 has been one of a very few rays of light. Since the day in 2012 when 200 fast food workers in New York City walked out on strike, calling for $15 an hour and the right to join a union, cities and states across the country have raised their minimum wages, and several large private employers have increased pay for their low-wage workers. The National Employment Law Project estimated that as of last year, America’s lowest paid workers had won $62 billion in raises in conjunction with the Fight for $15’s demands.

Seattle is among the leaders in hiking its minimum wage, raising wages in a series of steps based on how many people a business employs, whether workers receive tips, and whether the employer contributes to workers’ health coverage. By the end of 2016, large Seattle employers who did not pay for insurance were required to pay workers a minimum of $13 an hour.

In a careful analysis of food service jobs in Seattle during the period of wage increases, researchers at the University of California Berkeley found that the wage hike succeeded in raising incomes for low-paid workers without impacting the number of jobs. These findings are in line with the bulk of research on the effects of raising minimum wages.

Yet there are powerful interests with a stake in halting the Fight for $15 movement in its tracks and continuing to pay rock-bottom wages. They are trumpeting a different studyreleased this week by researchers at the University of Washington. This research suffers from serious methodological flaws, yet purports to show, in the words of Fox News, that “Seattle’s first-in-the-nation $15 per hour minimum wage law is hurting the workers it aimed to help.”

The reality is that wages have stagnated over the past 4 decades for the vast majority of Americans, and inequality has skyrocketed. Raising the minimum wage is a proven and effective means to put more money in the pockets of working people and begin to close the gap. The Fight for $15’s other central demand—for employers to recognize workers’ right to join a union and bargain collectively—would lift up an even broader range of working Americans, but has been even harder to achieve politically.

It’s no surprise that the Fight for $15 has generated a substantial backlash, nor is it the first time that a poorly conducted study produced findings convenient to corporations and other low-wage employers. Seattle’s economy is booming. Thanks to the minimum wage hike, workers at the bottom of the labor market are able to share in a bit more of the gains.

SUPREME COURT SEES JUSTICE DEPT OPPOSE NLRB

FROM SCOTUS BLOG, 19 JUNE 2017

Murphy Oil’s law: Solicitor General’s office reverses course in arbitration cases, supports employers
It is rare for the Office of the Solicitor General to change its position in a case before the Supreme Court after a change in administrations, even when the party in control of the White House changes. But that is exactly what happened last week, when the Trump administration weighed in on an important arbitration case: The office urged the justices to affirm the same decision that, on behalf of the National Labor Relations Board, it had previously asked them to review and overturn.

The about-face came in National Labor Relations Board v. Murphy Oil USA, in which the justices have agreed to decide whether agreements to forgo class actions or collective proceedings and instead resolve employer-employee disputes through individual arbitration are enforceable under the Federal Arbitration Act. In its petition for review on behalf of the NLRB, filed in September 2016, the Solicitor General’s office had argued that such agreements are not, because the National Labor Relations Act protects employees’ ability to engage in joint actions regarding the terms or conditions of their employment. On January 13, 2017, just seven days before the inauguration of President Donald Trump, the Supreme Court granted the NLRB’s petition, along with two others filed by employers (Ernst & Young LLP v. Morris and Epic Systems v. Lewis), and consolidated the three cases for one hour of oral argument.

Under the briefing schedule ordered in the case, the employers in all three cases filed their briefs on June 9, with briefs from the employees and the NLRB to follow on August 9. But on Friday (the deadline under the court’s rules to do so), the United States filed a “friend of the court” brief supporting the employers. The petition for review had been signed by seven lawyers from the NLRB, including its general counsel. Those NLRB lawyers were conspicuously absent from Friday’s brief, which was signed only by lawyers from the Solicitor General’s office. Acting Solicitor General Jeffrey Wall acknowledged that his office had previously filed a petition on behalf of the NLRB, “defending the Board’s view that agreements of the sort at issue here are unenforceable.” But, Wall continued, “since the change in administration, the Office reconsidered the issue and has reached the opposite conclusion.” In particular, Wall explained, the NLRB had not given “adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the” Federal Arbitration Act.

In a press release published on the NLRB’s website, the NLRB indicated that Wall had authorized it to represent itself in the Supreme Court proceedings in this case, and nothing in the brief of the United States suggests that the NLRB has changed its position. This means that the NLRB is likely to file its own brief, reiterating its original position in the case, in early August. And if the United States seeks and receives permission to argue in the case, as it virtually always does in cases in which it files “friend of the court” briefs, a lawyer for the United States would argue against a lawyer for a U.S. agency – a phenomenon perhaps even more uncommon than a change in position following a change in administration.

EEOC MAY TARGET UNIVERSITIES FOR DISCRIMINATION

FROM REALCLEAR EDUCATION, 16 JUNE 2017

America’s colleges and universities are, with good reason, under attack for promoting an expensive postsecondary education “bundle” that is increasingly unmoored from the demands of the workforce.  Bipartisan legislation introduced by Senators Bennet and Rubio now aims to bust the accreditation cartel. But like the music and television industries, entrenched colleges and universities have, to date, fought the unbundling of a lucrative $500 billion revenue stream.

For the most part, progressives continue to defend the current system, with free college now core to Democratic Party orthodoxy. But in an ironic twist, the unbundling of higher education may be fueled less by private-sector pressure and would-be disruptors than by decades of progressive policies.

Since the Civil Rights Act of 1964, employers have been prohibited from engaging in “different rates” of hiring or promotion based on race, sex, or origin. Employment policies themselves need not be discriminatory; judges consider whether hiring practices have an adverse impact. Practices are deemed illegal if they result in a deviation of 20% or more, in relation to the advantaged group.

Each year, the Equal Employment Opportunity Commission sends tens of thousands of letters to employers charging them with adverse impact discrimination. Many result from complaints about background checks or assessments that may have an adverse impact on the hiring process. None, however, address college degree requirements, despite the fact that such requirements are increasingly common – including for jobs that may not have required them in the past. According to one estimate, although 65% of executive assistant positions now require bachelor degrees, less than 20% of current EAs have a degree. Across all sectors, similar “credential gaps” range from 10-40%.

On their face, college degree requirements invariably fail the 20% deviation adverse impact test: 42.9% of whites ages 25-29 have bachelor’s degrees compared with just 22.7% of African-American and 18.7% of Hispanics. So one would think college degree requirements in job descriptions would be ripe for EEOC action. According to Associate Dean Charles Sullivan, an employment law expert at Seton Hall Law School, “Remarkably, the answer is almost never. No one is interested in upsetting this apple cart.”

When an enterprising lawyer – or state’s attorney general – finally decides to bring such a case, employers will attempt to show that the ratios of new hires to applicants don’t diverge by more than 20% for any group. That’s true, but only because college degree requirements keep candidates without degrees from applying to good jobs. Proving adverse impact of college degree requirements will require the demonstration that employment policies actually keep qualified candidates from applying. According to Sullivan, “such a case will require experts to prove the statistical case. But it can be done.”

Employers will, in turn, argue that degree requirements are “job-related” and “consistent with business necessity.” One of the few cases on the topic, for example, found that a library’s requirement that applicants possess a Master’s degree in library science was appropriate. Although such an argument may have merit in the case of specialized and graduate degrees, recent data suggests that technical skills now outnumber all other skills in job descriptions across nearly all industries. At a time when university coursework hasn’t kept pace with the rapidly evolving technical demands of our modern workforce, it seems less and less likely that pervasive college degree requirements will withstand legal scrutiny.

As a final defense, employers may argue that they lack capacity to filter candidates in the absence of the objective degree requirement. But this fails to ring true when tens of thousands of American job-seekers are availing themselves of bootcamps and other degree alternatives. LinkedIn Learning recently reported that project management certifications are on the rise, resulting in as much as a 20% salary bump for the so-called “poor man’s MBA.” As an array of microcredentials and digital portfolios signal candidate competencies and Applicant Tracking Systems sort candidates using an array of criteria, alternative hiring measures abound.

And so American employers, committed to using the degree as a crude hiring filter, will be left with “convention” as last defense – a notably unsuccessful argument in anti-discrimination law.

When a case challenging rampant college degree requirements is finally brought – and won – it will not only be a civil rights victory, it will also propel the ‘Great Unbundling’ of American higher education – a major victory for champions of economic mobility and economic growth as more Americans are considered for employment according to their capabilities rather than their pedigrees.

DOL MOVES A RULE THAT COULD FAVOR FRANCHISORS

FROM THE ORLANDO SENTINEL, JUNE 8

Fanchise companies, including many restaurants in the Orlando area, are applauding a move by the Trump Administration’s Department of Labor on Wednesday that could reduce lawsuits against franchisors.

It could also mean less money for employees or customers who sue franchise businesses.

Franchise companies, such as McDonald’s Corp., faced more pressure regarding problems including workplace discrimination or injury in recent years. Under the Obama Administration, the labor department issued guidance that viewed such companies as “joint employers” with their franchise locations.

Wednesday’s labor announcement was terse, just three sentences. It reverses attempts by the department under the Obama Administration to attach greater liability to franchisors or contractors, referred to as joint employers.

The department announced “the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors.”

“It is a favorable thing that the franchise industry would be happy to hear,” said Biff Godfrey, an Orlando attorney who previously served as general counsel for TGI Fridays restaurant chain.

Franchises like TGI Fridays are typically owned and operated by small, local businesses. There can be some exceptions to that situation, including if a franchisee owns dozens of locations. But suing a large corporation like McDonald’s is a much more wealthy target.

“It’s an attempt to reach into the deep pocket of the franchisor, rather than the company you actually work for,” Godfrey said. “That concept could potentially end the whole franchise business model.”

He said franchise companies offer basic advice to franchisees about the need to have policies addressing discrimination, harassment and other problems. But the big corporations generally don’t get involved in telling the smaller operators what they should do about such issues.

The news release from the Labor Department said it would continue enforcing the law, though: “Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction …”

CHIPOTLE IN MAY BE IN CLASS ACTION OVERTIME SUIT

FROM USA TODAY, JUNE 7

A lawsuit seeking class-action status was filed against Chipotle Mexican Grill alleging the fast-food chain failed to adequately compensate some employees for overtime work under a federal rule that went into effect late last year.

The lawsuit, filed this week in U.S. District Court in New Jersey, alleges the company failed to pay overtime to employees under the new overtime rule issued by the Labor Department last year — and that it’s not the only one. Joseph Sellers, a partner at Cohen Milstein Sellers & Toll, who represents the plaintiffs, said the issue may apply to other companies as well.

“For conscientious employers, a suit like this reminds them that the rule is in effect and that they should be paying overtime,” Sellers said. “I don’t fully understand the mind-set that has given rise to this broad belief that companies are not bound by this.”

At the core of the suit is the rule that made more employees eligible for overtime pay. It required employers to pay overtime to any worker who earned up to $47,476. Previously, the companies only had to pay overtime to workers making $23,660 or less. But in late November, shortly before the rule went into effect Dec. 1, a Texas court put enforcement of it on hold so employers didn’t have to pay overtime to workers who had the higher salary threshold. The lawsuit says Chipotle should be required to continue to pay overtime despite the injunction of enforcement of the rule by the Texas court. It contends the Texas injunction did not apply to private employers and the overtime rule would stay in effect until the court issues its final ruling.

The lead plaintiff is a worker named Carmen Alvarez, who was training to become a general manager at a Chipotle restaurant, known as an “apprentice” within the chain. She was working about 10 overtime hours a week and was earning a total of about $43,082 a year, but was denied overtime pay when the injunction was issued.

Chris Arnold, a spokesperson for Chipotle, said the company doesn’t discuss pending legal actions. He added, however, that Chipotle’s employment practices are compliant with applicable laws and specified that “a lawsuit is nothing more than allegations, and the filing of a suit is in no way proof of any wrongdoing.”

Tim Trujillo, a human resources consultant who founded Focus HR in Tehachapi, Calif., said even if the lawsuit was to win in court, it might not be around for much longer if the Trump administration chooses to roll back the rule.

The Labor Department “will probably be reviewing and deciding whether they want to go forward with the same regulations” that came during the Obama administration, Trujillo said.