July 2009 Archives

July 31, 2009

Supreme Court Decision May Lead to More Dismissed Cases

Employment law experts have been paying close attention to how federal courts are interpreting the 2009 Supreme Court case of Ashcroft v. Iqbal. In the Iqbal case, the Court held that a man who was arrested as a "high interest" detainee after 9/11 could not sue various government officials for the mistreatment and abuse he allegedly suffered in detention. The facts of the case have little to do with employment law (although Iqbal made claims of discrimination), but the court's holding -- which changed the standard for determining when a judge may dismiss a complaint -- will affect all kinds of civil cases, including those alleging employment discrimination.

For more than 50 years, the rule has been that federal judges may dismiss a complaint for failure to state a claim only if it is beyond doubt that the plaintiff could not prove any set of facts that would entitle him or her to relief. The complaint only had to include a "short and plain statement of the claim," according to Rule 8 of the Federal Rules of Civil Procedure. Unless it was clear that the plaintiff couldn't win -- for example, because the plaintiff filed the lawsuit well after the statute of limitations expired and gave no reasons for the late filing -- the judge would allow the case to proceed to discovery, where each side gathers facts and evidence to prove its claims and defenses. 

The standard announced in Iqbal is stricter: To avoid dismissal, the plaintiff must state a claim that is "plausible on its face." Although this might not sound like a tough requirement, the Court applied it in a way that requires plaintiffs to come forward with more facts at the outset to support their legal claims -- which may be very hard for plaintiffs to do before they have had a chance to conduct discovery.

In the two months since Iqbal was decided, it has been cited more than 500 times by lower courts, according to a recent New York Times article ("9/11 Case Could Bring Broad Shift on Civil Suits"). Joe Seiner, a law school professor at the University of South Carolina, recently posted on the Workplace Prof Blog that Iqbal and an earlier case that began changing the pleading standards have led to significant confusion in Title VII and Americans with Disabilities Act (ADA) cases, and have led to some claims being dismissed that should have been allowed to proceed. Even Congress will soon begin considering the ramifications of the Iqbal case: Last week, Senator Arlen Specter introduced a bill that would undo the decision and require federal courts to use the more liberal standards previously in effect when determining whether a complaint should be dismissed.   

July 21, 2009

No-Match Regulations Rescinded

Earlier this month, Janet Napolitano -- the Secretary of the Department of Homeland Security (DHS) -- announced that DHS was abandoning its regulations explaining what employers should do when they receive a no-match letter. As explained in a previous post, an employer receives a no-match letter from the Social Security Administration when the Social Security number submitted for an employee (usually on the W-2 form given to the IRS) doesn't match the government's records. 

The regulations laid out the steps employers had to follow after receiving a no-match letter, including checking for clerical errors or typos, asking the employee to provide corrected information, and asking the employee to present documents reverifying the employee's identity and authorization to work in the United States. An employer who followed these steps -- and terminated employment of anyone who couldn't come up with the goods -- was entitled to safe harbor protection from prosecution for knowingly employing an unauthorized worker.

The regulations never went into effect, however. A coalition of labor, immigrants' rights, and business groups filed a lawsuit in federal district court in San Francisco, asking the judge to issue a restraining order. The judge did so, and DHS was prohibited from enforcing the rules. Now, those rules have been rescinded. In the same announcement, Secretary Napolitano stated that all federal contractors, including those who will receive stimulus funds, will be required to use the government's E-Verify system to check work authorization status. And no-match letters aren't all DHS is thinking twice about: Last week, the Secretary announced that DHS would be reconsidering the color-coded threat advisory system.  

July 17, 2009

Senate Dumps Card Check Provision

According to news reports this morning, the Senate somehow found time -- while questioning Judge Sonia Sotomayor, working on health care legislation, and considering a controversial hate crimes provision to the Defense Authorization bill -- to drop the card check provision of the Employee Free Choice Act. The provision would have required the National Labor Relations Board to certify a union if the majority of employees in an appropriate unit have signed authorization cards. (Current law allows employers in this situation to either recognize the union or require an election.)

Employer advocates had claimed that card check would violate employee rights to a secret election, giving union leaders an opportunity to bully workers into providing union support. Union leaders counter that the election process gives employers too many opportunities to coerce workers into voting against the union, in part because employers have unfettered access to employees and can lobby them continuously in the days leading up to an election. 

Moderate Democrats apparently convinced the leadership to drop the card check provision. To assuage the concerns of union leaders, Senators are considering alternative provisions, including one that would shorten the time between when the signed authorization cards are presented and when the election is held. Currently, it can take months for an election to be held; the alternate provision would apparently shorten this period to five to ten days.

July 15, 2009

Involuntary Part-Timers Would Boost the Unemployment Rate

In the past few weeks, we've heard a lot about the unemployment rate. By the end of June, the jobless rate reached 9.5%, the highest it has been in more than 25 years. This data put the kibosh on all the talk from just a month earlier that things were looking up because the economy had lost fewer jobs than expected in May.

The unemployment rate counts only those who are able to work, available to work, looking for work, and not working at all. But what about all of those who are working less than they would like to be, whether because of losing one part-time job, being forced from full time to part time, or taking an hours cut? The New York Times crunched those numbers, and today told us just how high the jobless rate would be if these folks were included: 20% or higher -- that's one in every five workers -- in the states of California, Oregon, Rhode Island, South Carolina, and Michigan. The article said that the rate could reach 25% by the end of the summer in California. Ouch.

The problem of underemployment is highlighted by statistics showing that the aggregate weekly hours worked by private employees in this country has declined to the lowest level since 1964. In fact, most of us are working fewer hours per week now than we were a year ago, according to data from the Bureau of Labor Statistics.

One reason for this decline is that employers are cutting employee hours across the board -- in the form of temporary reductions or unpaid furloughs -- as a way to lower payroll costs and avoid layoffs. Most of the working stiffs I know have faced wage cuts, hour cuts, or both, and have accepted them gracefully, knowing that these measures are helping save jobs.

But employers beware: A recent spate of articles warns that there is currently some legal confusion -- and therefore, a stronger possibility of lawsuits -- over how furloughs can be implemented without running afoul of wage and hour laws. And that's assuming employees really aren't working during the hours for which they aren't being paid. Some experts even advise making sure employees can't work while on furlough by requiring them to leave their company-issued laptops, BlackBerrys, and phones at work. The web is sufficiently tangled that it makes sense for employers considering furloughs to consult first with an experienced employment lawyer.