For the Week of March 8, 2010

KEY CASES

5thCir: Worker discharged for harassment could not bring ADEA suit

A 69-year-old employee who was discharged for noncompliance with his company's sexual harassment policy could not proceed with his ADEA wrongful discharge suit because he failed to create triable issues of fact as to whether the employer's stated reason for discharging him was a pretext for age bias, the Fifth Circuit ruled. The circuit court rejected the employee's reliance upon his own statements that he had not engaged in sexual harassment of a female coworker. His assertion of innocence could not alone demonstrate pretext since he presented no evidence suggesting that the employer's decision to trust the results of two investigations was unreasonable or in bad faith. The court also concluded that a statement purportedly made by a supervisor a year before the employee's discharge to the effect that he was an "old, gray-haired fart" was merely a stray remark and not evidence of age bias. The employee presented no evidence that the comment was proximate in time to his firing or related to the employment decision at issue (Jackson v Cal-Western Packaging Corp, March 2, 2010).

6thCir: No restitution for exec fired for refusing to take part in conspiracy

A former executive who alleged he was fired after refusing to participate in a $50.7 million conspiracy to suppress and eliminate competition by allocating packaged ice customers, and later blackballed for acting as a government informant, was not entitled to restitution under the Crime Victims' Rights Act (CVRA), held the Sixth Circuit, in a case of first impression. His employer pled guilty to the conspiracy and was sentenced to five years' probation and fined $9 million. The employee sought a writ of mandamus from the Sixth Circuit after a district judge rejected his bid for $6.3 million in restitution under the CVRA. Under that statute, to qualify as a victim of the conspiracy to violate the Sherman Act, the employee was required to show he was "directly and proximately harmed by the defendants' entry into a conspiracy or by the defendants' action in an unreasonable restraint of interstate trade," wrote the circuit court. The employee failed to meet that standard because the harm he alleged stemmed from his firing for refusing to participate in the conspiracy and blackballing from employment with ice packaging companies until he stopped cooperating with the government. These harms were not criminal in nature, nor were they "normally associated with the crime of antitrust conspiracy," held the court. Further, the harms were not direct, but rather "ancillary to the actions involved in forming a conspiracy and restraining trade." (In re Martin McNulty, March 1, 2010).

7thCir: ADA did not protect unlawful conduct of police chief fired for DUI

A police chief for an Illinois county forest preserve district failed to comply with workplace rules when he chose to drive while intoxicated and caused a crash that sent two people to the hospital, and thus, was not a qualified individual with a disability afforded protection under the ADA. Following the collision, he was placed on administrative leave and subsequently discharged. He claimed that the district violated the ADA by firing him due to his disability: alcoholism. Because of the accident, which constituted a violation of the district's standard operating procedure, and the resulting suspension of his driver's license, he was no longer qualified to perform his job as police chief, held the Seventh Circuit. "Violation of a workplace rule, even if it is caused by a disability, is no defense to discipline up to and including termination," the circuit court explained. Moreover, due to his suspended driver's license, he could not legally operate a motor vehicle, which was an essential function of his police chief position. Thus, he was fired as a consequence of his misconduct, not discrimination (Budde v Kane County Forest Preserve, March 4, 2010).

8thCir: Failure to respond to admission requests is fatal to disability claims

An employee's failure to respond to discovery requests from his employer resulted in the dismissal of his ADA and Minnesota law disability bias and reprisal claims. The employer served the employee several discovery requests, including 12 requests for admission pursuant to Fed R Civ P 36. The requests bore directly on the ultimate issue of the employer's liability, asking the employee if he had knowledge of any specific incidents in which he was discriminated against or retaliated against because of his claimed disability by any of the company's other employees. Shortly after serving the requests, his employer filed a motion to dismiss, or alternatively, for summary judgment, leaving the employee 30 days to respond to the requests for admission via a written answer or objection, which he failed to do. The trial court granted summary judgment to the employer, deeming the matters admitted after the employee failed to timely respond to the admission requests or to withdraw or amend the admissions. The Eighth Circuit affirmed, noting the employee made no filing with the district court that might be construed as a motion to withdraw or amend those "admitted" or "conclusively established" admissions, even after the trial court specifically directed him to file a motion and granted additional time for that purpose. "Without some filing by the [employee] aimed at withdrawing his admissions, it was not an abuse of discretion for the district court to consider the admissions in resolving the motion for summary judgment," wrote the circuit court (Quasius v Schwan Food Co, March 5, 2010).

9thCir: Panel revisits car alarm installers' off-the-clock work

In a panel rehearing of a putative class action wage suit, the Ninth Circuit reconsidered whether car alarm installers may be entitled to pay for their time commuting to worksites and performing postliminary activities. Commuting time is compensable under California law if the employee is subject to the employer's control during the commuting period. In its previous ruling, now withdrawn, the panel held the employee's time commuting to and from work in a company vehicle was not compensable. However, the panel now concludes the employee was foreclosed from doing the normal activities he could have done if he were driving his own car: Drivers could not run personal errands or take passengers, they had to drive directly from home to the job and back, and they were prohibited from using their cell phones—except to have the phone at the ready to answer calls from the company dispatcher. Therefore, the appeals court vacated its previous ruling affirming summary judgment to the employer on the state-law commuting time claim. In addition, the court now concluded that the installers' daily postliminary activity, in which they were required to upload information about the jobs performed that day, may be compensable. These transmissions were an integral part of the installers' principal activities and material issues of fact remained as to whether the time spent on these transmissions was de minimis. The court vacated summary judgment on this issue as well (Rutti v Lojack Corp, March 2, 2010).

10thCir: Dispute over rail maintenance work is within NRAB jurisdiction

A claim by railway workers that a state's takeover of the maintenance work on recently purchased rail lines violated the RLA and breached a collective bargaining agreement (CBA) between the workers and Burlington Northern (BNSF) was a minor dispute within the exclusive jurisdiction of the National Railroad Adjustment Board (NRAB), not a district court. As part of a plan to expand public commuter rail service, New Mexico purchased a portion of rail lines from BNSF, but the railway retained a freight easement on the lines. Under the agreement, the state would be responsible for maintenance of the rail line, a development that was challenged by the union whose members had performed the work. The district court properly found this was a minor dispute, the Tenth Circuit held. A dispute qualifies as minor when it is "arguably justified" by the express and implied terms of the bargaining agreement, the court noted, and it involves enforcement of contractual rights that arise under an existing CBA. Under the contract, BNSF arguably had the right to sell rail lines and to include in that sale the responsibility to maintain the lines. Moreover, given "the undisputed fact that the only source of their right to work is the CBA," the workers' claim involved enforcement of existing contractual rights. Consequently, the claim was a minor dispute to be resolved through binding arbitration before the NRAB. The district court properly dismissed the suit for lack of jurisdiction (Brotherhood of Maintenance of Way Employees v Burlington Northern Santa Fe Railway Co, March 2, 2010).

DAriz: Ledbetter Act did not save untimely Section 1981 claim

The Lilly Ledbetter Fair Pay Act could not save an otherwise untimely failure to promote claim brought under Section 1981. A financial services company employee alleged that the company violated Section 1981 when it failed in 2005 to promote him to a position he sought due to race bias. Under the applicable two-year statute of limitations, his claim, brought in 2008, was untimely. He argued the Ledbetter Act extended the statute of limitations for his claim because his salary would have increased had he received the promotion. The court stated that although the Ledbetter Act amended and modified several civil rights statutes, including Title VII, it did not amend Section 1981. Although courts use Title VII as a guide in resolving Section 1981 claims, the court determined it need not decide whether the legal principles from the Ledbetter Act apply to Section 1981 compensation discrimination claims because the employee in this case did not bring such a claim. To support its holding, the court cited the DC Circuit's recent holding in Schuler v PriceWaterHouseCoopers, LLP that alleging a failure to promote claim is not sufficient to state a claim for compensation discrimination, even if the promotion involves a higher-paying position. Accordingly, the untimely claim was not saved, and the court granted summary judgment to the employer (Ekweani v Ameriprise Fin, Inc, March 3, 2010).

EDCal: EEOC need not let mediator present settlement offer directly to plaintiffs

Defendants were not entitled to sanctions against the EEOC and intervenors' attorneys for refusing to permit a mediator to present settlement offers directly to the plaintiffs in a sex harassment case. The defendants failed to convince the court that "good faith" mediation "required the mediator to be able to directly persuade the plaintiffs to the wisdom of the defendants' position." No authority required counsel to permit mediators to speak directly to clients, and given that the mediator didn't speak Spanish, the plaintiffs' primary language, the court could not fault counsel for understanding how important it was for their clients to fully understand the terms offered and the risks of failing to settle. Further, the defendants failed to explain why, if they found it crucial for the mediator to have direct access, they did not obtain explicit agreement in advance as to the mediation ground rules. Finally, given the absence of any requirement to permit direct access, the court refused to impose sanctions under its inherent authority, stressing that "a primary reason that people hire lawyers is so that they are not pressured into doing something that may not fully serve their interests." (EEOC v ABM Indus Inc, March 3, 2010).

EDCal: Lab technician with work restrictions can pursue ADA bias case

A lab technician could pursue her disability bias claims under the ADA and California's Fair Employment and Housing Act because she presented sufficient evidence that she was substantially limited in the major life activities of lifting and sleeping, was able to perform the essential functions of her job and her employer's alleged reasons for disciplining and discharging her were a pretext for discrimination. The technician, who suffered from pain in her shoulders, wrist, head, hand, elbow and neck, showed that she was substantially limited in the major life activities of lifting and sleeping where her injury prevented her from lifting her arm out laterally and applying pressure and she was unable to sleep more than 2-4 hours most nights of the week, leaving her routinely fatigued and exhausted during the day. The court rejected the employer's argument that the technician's disability left her unable to perform the essential function of conducting more than five echo exams a day because it failed to show this requirement was in her job description or that more than five exams were actually scheduled most days in previous months. The technician also sufficiently showed that the employer's alleged reasons for disciplining and discharging were a pretextual based on positive comments made in previous performance evaluations and the employer's apparent frustration with her requested accommodation as shown by its failure to investigate a supervisor's claim that she abandoned two patients. Refusing to bar the technician's claim for punitive damages, the court found sufficient evidence of malice or reckless indifference based on evidence that the employer was repeatedly hostile to her repeated requests for accommodation (Reese v Barton Healthcare Sys, March 2, 2010).

NDCal: Exempt status is determined by individual employee, not by position

A district court rejected an employee's claim that UPS was collaterally estopped from litigating the exempt status of two positions that he held because the positions were determined to be nonexempt in prior litigation. A prior judgment that a coworker who held the hub supervisor and preload supervisor positions was nonexempt lacked collateral estoppel effect because that ruling did not constitute a conclusive determination of the exempt status of the employee in the case at hand. In California, the question of an employee's exempt status turns on the individual circumstances of that person's employment. Consequently, a finding of exempt status for one person is not necessarily applicable to any other person, even one holding the same job. Rather, the analysis must focus entirely on the employee's individual circumstances, including the tasks he performed and how much time he spent on those tasks. In light of this individual focus, the prior judgment was not entitled to preclusive effect (Lopez v UPS, March 1, 2010).

DDC: Ledbetter Act did not apply to untimely ADEA nonpromotion claim

A university's failure to promote an associate professor to a full-time professor position was not a "discriminatory compensation decision or other practice" within the meaning of the Lilly Ledbetter Fair Pay Act, making her ADEA claim based on the nonpromotion untimely, held a federal district court in the District of Columbia, following the DC Circuit's recent holding in Schuler v PricewaterhouseCoopers, LLP. The district court further held that the associate professor could not proceed with her timely filed ADEA claims concerning other vacancies for which she was not hired because it was undisputed that she never applied for those positions and, even if she had, she failed to provide evidence to support her allegations of discriminatory intent; the professor never asserted that she was more qualified than the individual ultimately hired for the vacancies or that the university only interviewed young applicants for the positions. The court did allow her reprisal claim to proceed, however, because she produced evidence that the university's non-discriminatory reason for reducing her teaching load was false and because the record showed that the university reduced her teaching load at the first opportunity to do so (Barnabas v Bd of Tr of the Univ of the DC, March 1, 2010).

NDIll: Immigration status protected from discovery in wage suit

Employees in a class action suit for overtime pay under state and federal law were granted a protective order barring an employer from seeking discovery of their immigration status. Courts have uniformly held that immigration status is not relevant to a claim under the FLSA for unpaid wages for work previously performed, observed the court. Moreover, the broad general definition of "employee" included in the FLSA strongly suggests that Congress intended an all-encompassing definition of the term that would include all workers not specifically excepted. Because undocumented workers are not among the groups of workers specifically exempted from the statute, they plainly come within the broad definition of "employee," concluded the court. While the Seventh Circuit has not addressed this issue, district courts within the circuit have found that employees' immigration status is irrelevant to their FLSA claims for unpaid wages. Moreover, the federal immigration policy embodied in the IRCA did not conflict with the requirement that an employer compensate undocumented workers at the statutorily required rate for work that has already been performed. Further, allowing discovery of employees' immigration status would likely deter wage claims and eliminate the FLSA as a means of protecting undocumented workers from exploitation and retaliation (Villareal v El Chile, Inc, March 1, 2010).

EDMich: EEOC must produce questionnaires, claimed victims' identities

A federal district court granted Cintas Corp's motion to compel production of the identities of the women on whose behalf the EEOC would be pursuing damages; the identities of the persons to whom the EEOC sent questionnaires; and copies of all completed questionnaires returned to the agency in its Title VII pattern or practice sex bias suit against the company. The court rejected the EEOC's contention that it could wait to identify those for whom it would be pursuing damages until the second stage of a bifurcated trial, finding instead that Cintas was entitled to the information at the first stage of trial. With regard to the identities of persons who had been sent a questionnaire, the court held that attorney-client privilege did not apply because the existence of the attorney-client relationship and the identity of the "client" are not encompassed within the privilege. As to the completed EEOC questionnaires, the court held that the attorney-client privilege was inapplicable since there was no evidence that the recipients took affirmative steps to enter into an attorney-client relationship with the EEOC. Nor were the questionnaires protected under the work product doctrine; the EEOC had waived this privilege when it produced identical questionnaires containing the responses of recipients who subsequently declined to participate in the action. Moreover, the EEOC offered no substantial justification for delaying production of the material beyond its desire to disadvantage Cintas in defending the case (Serrano v Cintas Corp, March 2, 2010).

NDNY: FMLA not violated by refusal to give trainee part-time work

An accounting trainee failed to make out an FMLA interference claim based on her employer refusing to give her a part-time schedule as intermittent leave in order to care for a family member. The employer offered the employee a cashier position to accommodate her proposed part-time schedule since the accounting training program required a full workweek to learn the job duties. The employee took full-time FMLA leave instead, but resigned only days after returning to work. The denial of a schedule accommodation and the offer of the cashier job were not interference, the court held, even though the employee viewed the cashier job offer as punishment. Temporary positions may be offered under the FMLA. The employee had been a cashier, and keeping her in a position best suited to her education was not required. The court also cited a DOL opinion letter indicating that an employee who refuses transfer in the absence of an adverse effect is not protected by the FMLA, and the employee here would have received the same pay and benefits. Moreover, it was undisputed that the employee was restored to her prior position. Finally, with no evidence that the employee's working conditions after leave were objectively intolerable leading to a constructive discharge, her retaliation claim also failed. The court granted summary judgment in favor of the employer (Claffey v Wegman's Food Market, March 2, 2010).

NDOhio: NLRB declines to seek injunction of "rat-and-banner" activity

A federal court denied a hospital's petition for a writ of mandamus compelling the NLRB to seek an injunction to stop a union's "rat-and-banner" activity in front of its entrance. A hospital officer inherited a nonunion heating and air conditioning company from her husband. The union wanted to unionize the company's workers and sought voluntary recognition. When the union's request was denied in favor of a secret-ballot election, the union placed the rat and banner at the hospital's entrance. In seeking the writ of mandamus, the hospital claimed that the Board was failing to perform its duty, created under NLRA Section 10(l), to address the union's rat-and-banner activity. However, the court noted that before the Section 10(l) nondiscretionary duty to seek an injunction is triggered, the Board must have both a reasonable cause to believe a charge is true and a reasonable cause to believe that a complaint should issue. Since the NLRB determined that the hospital's charge had "arguable merit," the hospital had a facially plausible claim that the Board had reasonable cause to believe the charge was true. However, the Board never reached a decision that a complaint should issue, but held the matter in abeyance pending the outcome of other rat-and-banner cases before the NLRB and other courts. Thus, the hospital did not articulate a viable claim for relief (Humility of Mary Health Partners v NLRB, March 3, 2010).

NDOkla: Discharge due to confidentiality breach, not cancer

An airline employee was discharged due to her confidentiality breach and failure to cooperate in the resulting investigation, not because she was diagnosed with non-Hodgkin's lymphoma three years earlier. The employee, who worked in the airline's payroll group, failed to demonstrate the airline's stated reasons for her termination – she improperly accessed confidential personnel files, including the files of other employees, and she refused to cooperate in the airline's investigation of those actions – were a pretext for disability bias. It was undisputed that the employee did not accidentally stumble upon this information: she decided to access a separate screen from the one she was originally viewing, and then further decided to view that screen for other employees. The employee also did not dispute that her supervisor found these actions to be a serious breach of confidentiality and evidence of poor judgment. Finding there was no evidence to support her side of the story, the court rejected her argument that management ignored her concerns that some of the entries in the files were discriminatory. Accordingly, the court granted the airline's summary judgment motion (McCully v American Airlines, Inc, March 3, 2010).

SDTex: "Snubbing" of paralegal after OT complaint was not retaliation

A paralegal who complained about a law firm's failure to pay overtime did not raise a genuine issue of material fact for trial on his FLSA retaliation claim, since actions taken by the firm's principal attorney did not create intolerable working conditions that forced the paralegal to resign, After hearing of the paralegal's overtime complaint, the attorney stopped talking to him and threatened him with job loss. This treatment did not involve a reduction in job duties, humiliation, or the like—it was "snubbing" at most, which did not rise to the level of constructive discharge. The paralegal chose to resign, he was not compelled to resign; he could easily have chosen to remain in the position, working with his supervising attorneys, and remedy the situation with the principal attorney. Concluding he suffered no adverse employment action, the court granted summary judgment to the employer on the retaliation claim. However, the underlying overtime claim survived, with disputes over the amount of overtime worked and whether the firm knew he was working overtime set for trial (Jones v Willy, PC, March 1, 2010).

WDTex: Supervisor's declaration supporting workers' wage suit is admissible

A supervisor's declaration supporting employees' summary judgment motion in their overtime pay suit was based on his personal knowledge of the employer's pay practices; therefore, a federal district court denied an employer's motion to strike the supervisor's declaration as inadmissible hearsay. According to the records he prepared, the number of hours that an employee was paid was less than the number of hours the employee reported working, and the employee was not paid for any hours in excess of 40 per week. Whether the supervisor had personal knowledge of the actual number of hours that employees worked was irrelevant, concluded the court. The declaration was relevant evidence that the employer had notice that employees were reporting that they worked more than 40 hours in a workweek. Further, the declaration was admissible as a business record, since the supervisor was in charge of recording the employees' work hours. Finally, the declaration served the nonhearsay purpose of showing that the employer had notice of employees' overtime pay complaints. Therefore, the supervisor's declaration could be considered for purposes of evaluating the parties' motions for partial summary judgment (Escobedo v Dynasty Insulation, Inc, March 3, 2010).

OhioSCt: Penalties are mandatory for prevailing wage law violations

In a 5-2 ruling, the Ohio Supreme Court held that in an employee-initiated action to enforce the prevailing wage law, an award of penalties is mandatory and must be imposed against the party that violated the law unless exceptions apply. The majority, following legislative intent, ruled that the statutory phrase "may recover" doesn't mean the penalty is discretionary; rather, it means the underpaid employee has the choice to enforce the right (i.e., to commence an action) to recover underpayment. In any case, statutory penalties are mandatory, both to the employee and to the director of commerce, when the director has determined there has been an underpayment. Exceptions apply when the law has been misinterpreted or there has been a payroll error that has been corrected by restitution. The dissent argued that the statutory language does not support the majority's interpretation and that it has long been held that "may" means permissive while "shall" means mandatory (Bergman v Monarch Construction, March 2, 2010).

AGENCY DEVELOPMENTS

NLRB: Conduct witnessed by only five workers doesn't warrant new election

Although several acts of unlawful conduct occurred during the critical period before a union election, they involved and were witnessed by a total of only five employees, thus the NLRB would not set aside an election in which a union lost by 32 votes. All the violations involved antiunion statements unlawful under Section 8(a)(1) of the Act. Significantly, there was no evidence of dissemination regarding any of these statements that affected only five employees in a unit of 474 employees. Three of the five violations occurred several weeks before the election and not during the critical period. Under these circumstances, the Board found it impossible to conclude the violations affected the election's outcome; thus it certified the election results (PPG Aerospace Indus, Inc, 335 NLRB No 18, March 4, 2010).

DOL issues final rule implementing H-1C nonimmigrant nurses program

The DOL's Employment and Training Administration and Wage and Hour Division have issued a final rule implementing the Nursing Relief for Disadvantaged Areas Reauthorization Act, which allows certain health care facilities to file, and authorize the DOL to review, approve and enforce, attestation applications to employ foreign workers as registered nurses in health professional shortage areas on a temporary basis under the H-1C visa. Eligible hospitals file attestations with the DOL's Office of Foreign Labor Certification which, if approved, will support nonimmigrant worker petitions filed with US Citizenship and Immigration Services. The Act (and its reauthorization in December 2006) allows qualifying hospitals to employ temporary foreign workers as RNs for up to three years under the H-1C visa. Although the application period for H–1C visa petitions has now expired, H–1C visa holders are allowed to work in the United States until the expiration of their authorized stay, which may be as many as three years after the petition was authorized, said the DOL.

EBSA issues final rule on disclosure requirements for multiemployer plans

The Employee Benefits Security Administration issued final regulations last week on the obligation of multiemployer plan administrators to disclose actuarial and financial information to participants and others. The final rules reflect the disclosure requirements mandated by the Pension Protection Act of 2006 (PPA) in ERISA Sec. 101(k) and are substantially the same as proposed rules issued in 2007. ERISA, as amended by the PPA, requires administrators of multiemployer pension plans to furnish upon written request certain documents to plan participants, beneficiaries, employee representatives, and employers that have an obligation to contribute to the plan. The final regulations clarify that the plan administrator must furnish copies of the requested documents not later than 30 days after the date the written request is received, but the administrator is not required to furnish the requestor more than one copy of the same document within a 12-month period. The administrator also is permitted to charge the reasonable cost of providing the requested documents. The regulations do not require disclosure of information that a plan administrator reasonably determines to be either "individually identifiable information" with regard to a participant, beneficiary, employee, fiduciary, or contributing employer, or "proprietary information" regarding the plan, any contributing employer, or entity providing services to the plan.

DOL finds overtime violations upon refinery's switch to 12-hour shifts

Husky Energy Corp, a petroleum refinery located in Lima, Ohio, paid nearly $970,000 in back wages to 173 workers after a two-year investigation by the Wage and Hour Division found the company violated the FLSA's overtime pay provisions. After the company changed from eight-hour shifts to 12- hour shifts for some of its workers, resulting in alternating workweeks of 60 and 24 hours, it never paid time and one-half the employee's regular rate for any resulting overtime. Instead, the company simply "established an ‘adjusted' rate whereby all hours were compensated at the same rate. A second violation was found based on the employer's failure to include a shift differential in its overtime pay calculations. While employers are not required by law to provide a shift differential, if one is paid then it must be included as part of the employee's regular rate of pay for purposes of computing overtime. In addition to payment of back wages due, the company has agreed to establish bona fide rates upon which time and one-half for overtime will be calculated going forward and to include the shift differentials in the regular rate.

ICE serves audit notices to 180 businesses in five states

Immigration and Customs Enforcement (ICE) issued Notices of Inspection to 180 companies in Louisiana, Mississippi, Alabama, Arkansas and Tennessee, alerting business owners that the agency will inspect their hiring records to determine whether they are in compliance with employment eligibility verification laws and regulations. The ICE announced the audits on March 2 but did not release the names and locations of the businesses targeted due to the ongoing, law enforcement sensitive nature of the inspections. In April 2009, ICE implemented a comprehensive strategy to reduce the demand for illegal employment and to protect employment opportunities for the nation's lawful workforce. Under the strategy, ICE is focusing its resources on the auditing and investigation of employers suspected of cultivating and knowingly employing illegal aliens in the workplace.

LEGISLATION

President urges action on jobs, unemployment and COBRA benefits

President Obama signed the Temporary Extension Act of 2010 (H.R. 4691) last week, just hours after the Senate approved the legislation in a 78-19 vote and following five tumultuous days during which a hold was placed on the bill by Sen. Jim Bunning (R-Ky). The legislation temporarily extends unemployment benefits through April 5 and extends eligibility for the COBRA premium subsidy through the end of March. He urged Congress to pass H.R. 4213, a measure that would extend these protections through the end of the year. Obama also encouraged lawmakers to complete action on a jobs bill that includes payroll tax relief to employers who hire new workers. The House approved an amended version of the Senate-passed Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847) on March 4 after making minor changes to the legislation. The Senate passed its version of the jobs bill on February 24 and is expected to take action on the latest House version this week. In remarks on the House floor, House Speaker Nancy Pelosi (D-Cal) said the measure would begin creating jobs just as soon as the Senate passes it and the president signs it.

NAFTA repeal bill introduced in House

The United States would withdraw from the North American Free Trade Agreement (NAFTA) under a bill introduced in the House by Rep. Gene Taylor (D-Miss) and co-sponsored by a bipartisan group including former presidential candidate Dennis Kucinich (D-Ohio). Within six months of enacting H.R. 4759, President Obama would be required to provide written notice to leaders of Canada and Mexico, the pact's two other signatories, of the United States' plan to withdraw from the treaty. Organized labor has long been opposed to the trade pact; Obama criticized NAFTA during his 2008 presidential campaign and threatened to withdraw absent agreements by Canada and Mexico to revamp its labor and environmental provisions. Since then, labor has continued its critiques. Teamster president James Hoffa praised the recent House bill. "We were sold a bill of goods about NAFTA," Hoffa contends in a recent statement. "We were told it would create export jobs. None of that happened. Instead we lost nearly 600,000 manufacturing jobs. Our $1.7 billion trade surplus with Mexico in 1993 turned into a $64.7 billion deficit in 2008."

TWITTER UPDATES

SUPREME COURT

High Court to consider constitutionality of background checks on contract workers

The Supreme Court will consider whether the First Amendment protects workers who work for the government under contract, rather than as regular employees, against indepth government background checks. NASA and the Department of Commerce have appealed a Ninth Circuit injunction against requiring a group of "low risk" California Institute of Technology employees working under contract at NASA's Jet Propulsion Laboratory to submit to indepth background investigations. Although the government asserts the information obtained by the background investigations is protected under the Privacy Act, the worker's argue the information requests nevertheless violate their constitutional right to "informational privacy." (NASA v Nelson, Dkt No 09-530, cert granted March 8, 2010).

HEALTH CARE REFORM

President to Congress: finish the job

"Everything there is to say about health care has been said, and just about everybody has said it," President Barack Obama told an audience of medical practitioners in the East Room of the White House on March 3. He then pressed Congress to act quickly in passing health reform legislation through the reconciliation process.

March 18 is next deadline

March 18 is the next deadline for health care reform, according to White House press secretary Robert Gibbs, speaking at a March 4 briefing. Gibbs noted that, "based on conversations that I've had in the building... we're on schedule" to pass the Senate bill through the House, and a reconciliation bill would come shortly thereafter.

Cap on tax exclusion of employer plans would ease disruption

Capping the tax exclusion for employer-provided health insurance would not only increase federal and state income and payroll tax revenues, it would be much less disruptive to existing insurance arrangements, according to a recent National Bureau of Economic Research working paper.

State health care reform update

States have been leading the way toward more comprehensive health care coverage to ensure that more people have or can obtain health insurance. This ongoing activity potentially impacts employer-provided health insurance benefits. Here's a look at recent health reform developments in the states.

Pro-reform rally set for Tuesday

AFL-CIO President Richard Trumka will lead a large union contingent to participate in a mass rally March 9 at the Ritz-Carlton Hotel in Washington during the meeting of America's Health Insurance Plans, an industry group. The rally is intended to show unified union opposition to insurance company efforts to "scuttle" health care reform legislation.

INDUSTRY TRENDS

In-house counsel are ready to hire

In-house counsel are ready to focus on internal hiring, according to the results of the Association of Corporate Counsel's 10th annual Chief Legal Officer Survey. Despite the recession, 29 percent of respondents plan to hire staff for their in-house legal departments in 2010, up from 23 percent in last year's survey. But even with this uptick in staffing, the recession has impacted legal department workloads, budgets and outside counsel spend.

Second quarter looks promising

Twenty-six percent of executives surveyed said they expect to add legal professionals in the next three months and none anticipate declines, according to the Robert Half Professional Employment Report. "Hiring in the legal profession is likely a result of unusually large-scale downsizings by many law firms in the early months of the recession," said Brett Good, Robert Half International district president. "Consequently, a number of firms are now in a position where they must hire to keep pace with client demands. The downturn also has had a stimulative effect on certain practice areas, such as bankruptcy and foreclosure law, fueling hiring by law firms focusing on these specialties."

Market plunges for new lawyers

Now for the bad news: It's definitely not the time for law students to make their way into the legal market. The median number of offers extended for summer 2010 positions dropped dramatically to only seven in 2009, according to the National Association for Law Placement (NALP)—down from 10 in 2008 and 15 in 2007, and by far the lowest offer rate since NALP began collecting the data in 1993. Also, analyses of law school survey data and law firms suggest that thousands of first-year associates have had their start dates deferred. "This represents an enormous interruption in the usual recruiting and employment patterns that we have come to expect," said NALP executive director Jim Leipold.

Large firms are "over-partnered"

America's top 100 law firms reacted quickly with staff cuts and cost controls when they found themselves harder-hit by the economic downturn than smaller law firms. But more cuts are needed, according to the 2010 client advisory by Hildebrandt Baker Robbins and Citi Private Bank—and partner ranks should be thinned to achieve the savings. Law firms are "over partnered," according to the report, featured in the ABA Journal.

IN OTHER NEWS

Walmart settles bias suit for $11.7 mil

Walmart will pay $11.7 million in back wages and compensatory damages to settle a Title VII systemic sex bias suit filed by the EEOC alleging a Wal-Mart distribution center denied jobs to female applicants from 1998 through 2005. Walmart regularly hired male, entry-level applicants for warehouse positions but excluded female applicants who were equally or better qualified and used sex stereotypes in filling entry-level order filler positions, the EEOC alleged. The consent decree entered on March 1 requires Walmart to provide order filler jobs, as they become available, to eligible and interested female class members, as determined by a claims administrator.

American Airlines facing strikes

American Airlines is facing massive strikes, according to the unions that represent the airline's flight attendants and machinists. The Association of Professional Flight Attendants (APFA) and Transportation Workers Union (TWU) both say they will strike if their current contract demands are not met. The airline has been negotiating with APFA for the past 21 months and the union announced in February that if the sides fail to reach an agreement during a recent lockdown session it would ask the National Mediation Board to begin a 30-day cooling-off period. American also faces a potential job action by TWU members, which have threatened to seek immediate release from mediation if its demands are not met by the end of a bargaining session scheduled for today.

Wall Street bonuses up sharply in 2009

Wall Street bonuses rose 17 percent to $20.3 billion in 2009, according to estimates released by New York State Comptroller Thomas P. DiNapoli. The average taxable bonus rose to $123,850, a 25 percent increase over 2008, when the average bonus was $99,200. In 2008, the industry lost a record $42.6 billion, but in 2009, total compensation at these firms exceeded an unprecedented $55 billion, nearly three times greater than the previous all-time record. The estimate is based on state tax collections and reflects cash bonus payments and deferred compensation for which taxes have been prepaid. The estimate does not include stock options that have not yet been realized or other forms of deferred compensation.

Board orders election among rival health care unions

Rival unions looking to represent thousands of California healthcare workers will compete at the ballot box: An NLRB regional director has ordered elections between the two unions to be held at about 31 health care facilities in the state. The Service Employees International Union/United Healthcare Workers-West (SEIU-UHW) and the National Union of Healthcare Workers (NUHW)—an upstart union formed by dissident leaders who were ousted from SEIU-UHW—are both seeking representation rights. However, 32 elections are still being blocked as the NLRB's Office of the General Counsel reviews allegations made by the SEIU-UHW against the NUHW.

Small business leaders head to Congress

A group of small business owners from eight states headed to Capitol Hill last week to meet with elected officials as part of the US Chamber of Commerce's "Workforce Freedom Airlift." Business leaders from Arkansas, Colorado, Delaware, Indiana, Louisiana, North Carolina, Pennsylvania, and Virginia went to Washington to share their views on EFCA and on the nomination of labor attorney Craig Becker to the NLRB. "Main Street job creators want the Card Check job-killer off the table once and for all," said Steven J. Law, chief legal officer and general counsel for the US Chamber.

Unemployment skyrockets among older workers

Unemployment for Americans 55 years of age and over skyrocketed 331 percent over the last ten years, according to a new analysis of BLS data by the AARP. "The last decade has spelled disaster for millions of older workers who have lost their jobs, seen their retirement savings diminish, and had their health care costs continue to skyrocket," said Nancy A. LeaMond, AARP executive vice president. In related news, 47,000 charges of age discrimination were filed with the EEOC during the most recent fiscal year —the largest number in any two-year period.

Chicago pension burden up 400%

Each resident of Chicago is saddled with $5,821 in unfunded pension promises to Chicago and Cook County public employees—up from $1,189 in FY2000, according to a Civic Federation annual report on the finances of 10 Chicago-area public pension funds. The report shows the city and county aggregate funding deficit reached $18.5 billion in FY 2008. Pension pledges made to government employees grew by 68.9 percent between FY1999 and FY2008, while the funding for those promises rose by only 26.4 percent. The total difference between assets and liabilities, the unfunded liability, grew by 444 percent as a result. The economic downturn is not to bame, the Federation contends, outlining numerous reform measures.

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Lisa Milam-Perez, JD

About CCH WorkWeek

This weekly newsletter provides corporate counsel and law firm practitioners with need-to-know employment and labor law information in a timely, yet manageable manner. Benefit from news and information in a broader context, with deeper analysis of recent developments and corresponding trends. Delivered to you every Monday, CCH WorkWeek offers timely coverage of breaking legislative developments, regulatory activity, state law changes, key case law and expert commentary by CCH editors.