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Abstract:
This article provides a wide-angle view of the looming crisis in retirement security. The impending confluence of a burgeoning retiree cohort and a diminishing resource base threatens to wreck havoc with the financial well-being of the coming generation of retirees. This article first reviews the current status of retirement security in the United States and finds that all three legs of the retirement stool - Social Security, pensions, and private savings - are projected to fall short of contributing adequate resources for future retirees. The article then turns toward a discussion of the possible responses for averting this potential crisis. After exploring various alternatives and reviewing the principal changes wrought by the Pension Protection Act of 2006, the article sets out a three-step reform plan that addresses each leg of the retirement stool. First, the article suggests that the Social Security system could be saved from insolvency through a mix of relatively small payroll tax hikes and benefit reductions, including a slight rise in the retirement age. Second, with defined contribution plans becoming the new pension norm, changes in setting account default options could encourage both greater plan participation and improved plan security. Third, the article recommends the adoption of a modest refundable tax credit designed to encourage low and middle-income earners to build their own supplemental next eggs.

Abstract:
This book chapter summarizes the preliminary findings of what may be the most comprehensive collection of discipline and discharge arbitration decisions ever subject to systematic analysis. Since the early 1980s, arbitrators on Minnesota's Bureau of Mediation Services (BMS) roster have been required to file a copy of their decisions with the BMS regardless of the source or sector of their appointment. The authors of this chapter coded information concerning 2,055 discipline and discharge cases decided between 1982 and 2005, as well information about the arbitrators who decided those cases. The size of the data base and the large variety of coded survey items permits empirical testing of many assertions in the arbitration literature about the nature of discipline and discharge decision-making. In some respects, our findings support the conclusions in the literature about arbitral decision-making and in the empirical studies on which some of those conclusions were based, but in other respects our results challenge those statements and studies.

These findings examine such issues as the impact of last chance agreements, burden of proof standards, the Seven Tests of Just Cause, and individual arbitrator characteristics, as well as the prevalence of reinstatement without back pay awards.

labor, arbitration, discipline, discharge

Abstract:
This article considers whether a successful employment discrimination plaintiff may be entitled, under current law, to receive an augmented award (a gross up) to neutralize certain adverse federal income tax consequences. The question of whether such a gross up is allowed, the resolution of which can have drastic effects on litigants, has received almost no attention from practitioners, judges, and academics. Because of the potentially enormous impact of the alternative minimum tax (AMT) on discrimination lawsuit recoveries, however, the gross up issue is now beginning to appear in reported cases.

The three principal federal anti-discrimination statutes - Title VII, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA) - generally confer broad equitable powers on the courts to devise remedies that will make the victims of discrimination whole in economic terms. The Internal Revenue Code (Code), however, sometimes operates to frustrate this make-whole objective by taxing a discrimination award more heavily than the components of the award would have been taxed had the components been earned in due course by the plaintiff. This excess taxation gives rise to what this article calls adverse tax consequences.

A discrimination plaintiff may suffer adverse tax consequences in two distinct ways. First, amounts recovered to compensate for back pay and front pay losses may be subjected to higher income tax rates than if such amounts had been earned as wages in due course. This increase in tax rates is typically due to the fact that the plaintiff's recovery is in a lump sum; as a result, a portion of the recovery may be subject to marginal rates higher than the plaintiff's typical marginal rate.

Second, an employment discrimination recovery could implicate the AMT. If so, the AMT may cause the recovery to be effectively taxed at rates significantly higher than the top marginal rate of 35 percent. In fact, in certain cases, the AMT may cause the tax on the recovery to exceed 100 percent - meaning that a victorious plaintiff would owe more in taxes than her recovery. This AMT trap is notoriously absurd as a matter of tax policy and undermines the national policy of encouraging the pursuit of meritorious civil rights claims. Yet, the trap persists, at least in most areas of the country.

The resolution of the gross up issue depends ultimately on whether the federal anti-discrimination remedial provisions permit judges to shift the liability for these adverse tax consequences from the plaintiff - on whom the Internal Revenue Code specifically imposes the liability - to the defendant - whose unlawful conduct necessitated the lawsuit that caused the adverse tax consequences. The potential vehicle for this shift is the broad equitable powers conferred upon courts to fashion relief in order to make victims of discrimination whole.

The issue of whether these broad equitable powers allow judges to shift a portion of the plaintiff's federal income tax liability to defendants is particularly interesting since both the plaintiff's tax liability and the defendant's discrimination liability arise from federal statutes passed by Congress. Thus, the resolution of the issue depends on which body of statutes, the Internal Revenue Code or the pertinent federal anti-discrimination statute, prevails over the other.

More generally, though, the issue concerns the courts' willingness to delve into federal income tax matters and focus on after-tax dollars, which are meaningful, rather than pre-tax dollars, which are meaningless. Courts typically have been reluctant to get their hands dirty with tax law if they can avoid it. Determining after-tax income can be a painstaking process and predicting future after-tax income even more so. Nevertheless, we conclude that courts have the authority to provide gross ups to discrimination plaintiffs and should exercise this authority whenever adverse tax consequences are substantial.

Abstract:
This article analyzes the contours of federal labor law preemption through the lens of the Ninth Circuit Court of Appeals recent decision in Chamber of Commerce v. Lockyer, 364 F.3d 1154 (9th Cir. 2004). This case involves a constitutional challenge brought by the U.S. Chamber of Commerce and several other organizations to California Assembly Bill 1889 (AB 1889), enacted by the California legislature effective in 2001. This statute prohibits certain public employers, state grant recipients, and state contractors from using state-provided funds or property to assist, promote, or deter union organizing efforts. The Ninth Circuit, in a decision issued in April 2004, ruled that the sections of AB 1889 at issue are "regulations" that do not fall within the market participant exception to labor law preemption and that AB 1889 is preempted by what is known as the Machinists strand of preemption.

The topic of federal labor law preemption presents one of the densest thickets in all of labor and employment law. The Supreme Court, for example, has decided more cases touching on federal preemption than on any other legal issue in the field of collective bargaining. These cases have yielded two distinct theories of labor law preemption. The Garmon strand of preemption precludes the states from regulating conduct that is arguably protected or prohibited by the National Labor Relations Act (NLRA). The Machinists strand, meanwhile, preempts state law that intrudes on areas that Congress intended to leave to the free play of economic forces. These preemption theories, in turn, are subject to a variety of exceptions, the most significant being the market participant exception. Under this exception, state and local governmental action is saved from preemption when the government entity acts in a proprietary rather than a regulatory capacity.

The Lockyer litigation stands at the cutting edge of today's labor law preemption jurisprudence. The case implicates both labor law preemption theories, as well as the increasingly important market participant exception. The significance of the case is underscored by the broad array of intervenors and amici that participated on each side of the case, including, most notably, the National Labor Relations Board's General Counsel, who argued in favor of the Ninth Circuit's preemption conclusion. The ultimate outcome of Lockyer, particularly if the Supreme Court chooses to review this case, likely will provide an important milepost in demarcating the proper boundary between federal and state interests in establishing labor policy.

This article undertakes a review and critique of the Lockyer litigation. In a nutshell, the Ninth Circuit erred in deciding that federal labor law preempts AB 1889. In one respect, the Ninth Circuit's analysis was correct: because AB 1889 imposes a blanket rule with respect to state-funded union avoidance activities, the statute acts as a form of regulation that likely does not qualify for the market participant exception. Nonetheless, the California statute does not violate the core principles and purposes of either the Garmon or Machinists doctrines. AB 1889 is not preempted under the Machinists doctrine because it does not regulate conduct in an area that Congress intended to be left to the free play of economic forces. The statute also survives Garmon analysis since AB 1889 does not interfere with or frustrate the primary jurisdiction of the NLRB. In conclusion, we urge the Supreme Court to take review of this case and to correct the Ninth Circuit's mistake.

Abstract:
In Sutton v. United Air Lines, Inc., the U.S. Supreme Court ruled that the impact of mitigating measures, such as medicine and assistive devices, must be taken into consideration in determining an individual's disability status under the Americans with Disabilities Act. By that ruling, the Court effectively invalidated a contrary EEOC interpretive guideline as an impermissible interpretation of the ADA. This paper, which will be published by Foundation Press as a book chapter in EMPLOYMENT DISCRIMINATION STORIES, chronicles the course of the Sutton litigation and dissects the landmark Supreme Court decision. The chapter also explores the story underlying the case and the long-term impact of the Court's decision. In terms of the latter, the Sutton decision leaves a dramatic legacy: stemming the ADA's litigation tide, narrowing the class of protected individuals in a questionable manner, undercutting the force of agency interpretation, and reshaping the focus of American disability discrimination law.

Abstract:
It is longstanding tradition for the Secretary of the ABA's Labor and Employment Law Section to prepare a summary of the labor and employment decisions issued during each Supreme Court term. This article summarizes seven labor and employment decisions issued by the Court during its 2003-04 term as well as two other decisions that, while not arising under a labor or employment statute, have potential implications for labor and employment law. The article also analyzes each of the decisions for their overall impact and significance within the field of labor and employment law.

The article goes on to discuss how the decisions of the 2003-04 term provide a snapshot of two ongoing trends in the labor and employment law field. The first concerns the growing importance of employee benefit matters relative to other labor and employment topics. As the baby boomer cohort ages, issues relating to health care and retirement income loom ever larger. In addition, ERISA's regulatory vacuum with respect to the substance of welfare benefit plans generates a steady stream of federal preemption disputes. Congressional inertia, not only specifically with respect to health care reform, but also more generally with respect to labor and employment law reform, likely will ensure that issues relating to employee benefits will continue to gain on the more traditional practice areas under the NLRA and Title VII in relative significance.

The second trend illustrated by this term's set of decisions is the Supreme Court's continued efforts to redirect employment law claims away from the federal court system. By virtue of its interpretation of arbitration agreements, the Eleventh Amendment, and the ADA, the Court has diverted a growing number of employment disputes to arbitral and state court forums. As a result of these efforts, and barring the enactment of Congressional reforms, the Court's labor and employment law agenda likely will remain lean for the foreseeable future.

Abstract:
This article addresses issues of accommodation and time with respect to the American worker time crunch problem. On the former issue, I concur in Professor Arnow-Richman's observation that an accommodation approach to addressing the competing pressures of work and family is prone to resistance from the courts. Experience under the ADA illustrates a judicial reluctance to go beyond a traditional equal treatment view of discrimination to embrace a more affirmative different treatment model of discrimination. But this does not mean that the ADA's reasonable accommodation framework has been a failure. To the contrary, while the reasonable accommodation requirement may have fallen somewhat short of expectations on the substantive law front, it has launched a procedural revolution in fostering an interactive process by which employers and employees cooperatively work to identify suitable workplace accommodations. The impact of this procedural device is not as readily noticeable as the courts' substantive law limitations, but it may serve as the ADA's most significant contribution to this point.

Turning to the second issue, American workers, quite simply, do not have enough time to tend to caregiving and other non-work needs. While this is a particularly acute problem for caregivers, the American worker time crunch is a problem of pandemic proportions. American workers of all stripes are required or pressured to spend ever-increasing amounts of time at work. The ADA model represents one possible format for accommodating non-work time demands. The first decade of experience under the ADA suggests that judicial and employer resistance would temper the substantive law advances of such an approach without necessarily conferring the procedural advantages of the ADA's interactive process. A more specific legislative approach is preferable. Given the pervasive nature of the American worker time crunch problem, a broad legislative solution is in order. This article suggests one possible approach in the form of a proposed amendment to the FMLA that would enable employees to take paid leave for two of FMLA's twelve-week leave period financed in a manner similar to that used for unemployment compensation purposes. The proposal also would permit employers to opt out of the new mandate by providing a minimum of four weeks of leave per year that may be taken by employees for care, sickness, or personal leave/vacation purposes.

Abstract:
The legal landscape with respect to constructive discharges resulting from sexually harassing conduct has been mired in confusion for the past two decades. Courts generally have applied a multi-step analysis that requires plaintiffs to establish both the existence of severe or pervasive sexual harassment as well as additional aggravating factors warranting an employee's resignation. The courts, however, have had a difficult time in defining the contours of the separate harassment and constructive discharge tests. The Supreme Court has weighed in on several occasions, but rather than opt for clarity, the Court has created new tests and new terminology that have compounded the confusion. The recent Pennsylvania State Police v. Suders decision is a case in point. In that 2004 decision, the Court ruled that an employer is strictly liable for harassment that results from a supervisor's official act, but is subject to liability for other types of supervisor harassment only if employer negligence is established. The Court's use of the "official action" and "constructive discharge" concepts in that case sets an unpredictable course and fails to correct the unfairness of the current multi-tiered analytical framework.

This article attempts to simplify and recalibrate the sexual harassment/constructive discharge standard. We propose a Unitary Constructive Discharge Standard that would provide a single mode of analysis applicable to all claims of constructive discharge resulting from workplace sexual harassment. The proposal merges elements of the current strict liability and negligence tests and asks a single question: did the employer fail to redress sexual harassment of which it was or should have been aware such that quitting was a fitting response for the employee subjected to the harassment? The proposal jettisons two of the most unfair elements of the current calculus, namely the requirement that the harassment victim must always utilize formal complaint procedures and the requirement in some circuits that an employee quit is actionable only if the employer subjectively intended that result. While thereby removing the necessity for employees to make out a case of "aggravated" harassment in the constructive discharge context, the Unitary Standard nonetheless protects employer interests by ensuring that no liability will ensue in the absence of causal fault attributed to an agent of the employer. The result is a test that is both more simple and fair.

Abstract:
This article proposes a new analytical framework for determining the reach of subordinate bias liability under antidiscrimination statutes. The current jurisprudence on this topic is in a state of disarray. A majority of federal circuit courts have adopted a relatively lenient standard which imposes liability whenever a biased subordinate influences an adverse action made by an ultimate decision-maker. Meanwhile the Fourth Circuit strictly limits liability to the situation where the biased subordinate is the de facto actual or principal decision-maker, and two other circuits adopt intermediate approaches that focus more closely on causation and on whether the employer has undertaken an independent investigation into the underlying circumstances. Rather than endorsing any of these existing standards, we propose a new test that draws on the various strengths of the current formulations. We believe that a plaintiff should be recognized as making out a prima facie case of subordinate bias liability by showing that a supervisor or other employee with delegated authority influences an adverse employment action to the extent that discrimination was a motivating factor in that outcome. Once such a showing is made, an employer should be liable unless it can establish the existence of either of two affirmative defenses. First, borrowing from sexual harassment jurisprudence, an employer should not be liable where it has taken reasonable measures to prevent and correct such bias, such as by the implementation of an anti-bias policy, and the plaintiff unreasonably has failed to use the opportunities provided. Alternatively, where the plaintiff has utilized such a policy or where no policy exists, an employer should be able to avoid liability only if it has dissipated the taint of subordinate bias by undertaking a fair and independent investigation into the circumstances underlying the contemplated employment action. We believe that this new test appropriately would encourage employers to protect themselves by preventing discrimination in the workplace while still providing plaintiffs with a reasonable opportunity to obtain redress for such discrimination that nonetheless may occur.

subordinate bias liability, cat's paw liability

Abstract:
Surveys show that American workers want more "voice" in the workplace. For the past century, unions have served as the principle voice mechanism for workers, but with the decline of unions, employee voice also has diminished. Section 8(a)(2) of the NLRA compounds this problem by prohibiting most employer-supported programs by which employees "deal with" employers concerning terms and conditions of employment.

Both the East and the West offer possible alternative voice mechanisms. Over the past two decades, American employers increasingly have looked to the Japanese experience in adopting quality circles, work teams, and other employee involvement programs. But the growth in these programs has fallen short of expectations due, in part, to the reluctance of some employers to cede managerial discretion. Further, even if the Section 8(a)(2) bar is removed to permit more EIP's, additional employee voice will occur only if individual employers choose that result.

Europe provides a different model in the form of works councils. Works councils are elected bodies of employees that meet regularly with management to discuss establishment level problems. Most countries in Western Europe legislatively mandate the formation of works councils for plants in excess of a certain minimum size. In addition, works councils are undergoing a continent-wide boom as the expanding European Union has adopted a series of directives that require a near universal establishment of works councils over the next few years.

This article proposes the framework for a new American Works Councils Act. Such legislation not only would enhance employee voice, but also would link the United States and Europe in effectively establishing what hopefully would be the first of many new global labor norms.

Abstract:
The validity or invalidity of the core provision raises a substantial question of whether there should be a Restatement of Employment Law at all at this time. Certainly, the action of a reputable organization such as the ALI issuing a document that this particular statement of the at-will rule is the law, if in fact it is not accurate, would be damaging to the long-term common law process of refining rules by evolution. This is especially true in this circumstance, where only after a long period of judicial inaction while the rule had fallen into virtual desuetude, from the late nineteenth century to the late twentieth century, forty-nine state supreme courts have begun again to work out new rules in the evolutionary process which is the common law. Thus, the ALI’s assertion that the at-will rule “is” the law today, if, in fact, the law is in considerable flux, would be inaccurate. State judicial acceptance of the assertion would be counterproductive to the common law process. There are circumstances where the best tradition of the Restatement, out of respect for the developing common law, would be to forebear from attempting to restate a law that is still changing. From a close reading of the cases of many jurisdictions, this is one of those circumstances.

ALI, Restatement of Employment Law, employment at will, common law, contracts

Abstract:
Nearly half of large, employer-sponsored group health plans in the United States do not cover prescription contraceptives used by women. This exclusion contributes to unintended pregnancies, higher out-of-pocket expenses, and adverse social consequences. The federal courts currently are split on whether this exclusion violates Title VII as amended by the Pregnancy Discrimination Act (PDA). In a recent decision that is of first impression at the circuit court level, the Eighth Circuit ruled in In re Union Pacific Railroad Employment Practices Litigation that the lack of contraception coverage in an employee health insurance plan that covered Rogaine and Viagra for men did not violate the PDA because contraception is not related to pregnancy.

This article reviews the pertinent legislative history and case law and proposes a two-part strategy for expanding the availability of prescription contraceptives in employer-sponsored health plans. First, employers that exclude prescription contraceptives from employee health insurance plans should be held to violate the PDA. Such a violation occurs because the failure to provide insurance coverage for prescription contraceptives necessarily affects a sex-related medical condition since only women can become pregnant. This article additionally urges the adoption of an amendment to ERISA – the Equity in Prescription Insurance and Contraceptive Coverage Act – which would mandate all group health plans to include prescription coverage as a matter of federal law. Such an enactment would avoid ERISA preemption and serve to require prescription contraceptive coverage in both insurance-based and self-insured employer health plans.

discrimination, employee benefits, health insurance, contraception, pregnancy