Right to Work in Michigan

originally appeared in The Wall Street Journal:

In November, unions lost big in Michigan when voters rejected Proposal 2, Big Labor's plan to canonize collective bargaining in the state constitution. Now they're facing a backlash with the happy possibility that Michigan could become the 24th right-to-work state.

Lawmakers have been preparing to introduce a right-to-work bill in the state legislature, and the labor cavalry is heading to the Wolverine state. According to the United Auto Workers website, the union will rally Thursday in Lansing to spook lawmakers out of going through with the bill.

Target No. 1 is Governor Rick Snyder, who held a press conference on Tuesday to say that right to work was on the agenda for "thoughtful discussion." That's a shift for Mr. Snyder, who has tiptoed around the topic since he was elected, saying it wasn't a battle he was looking for. Unions took his soft touch as a sign of weakness and pushed Proposal 2, which would have given them a virtual veto over all union-related legislation.

Meanwhile, the economy has languished. Michigan is the fifth most unionized state in the country and the birthplace of the UAW. According to the Mackinac Center for Public Policy, Michigan has lost 7,300 jobs since January, while next-door Indiana, which became a right-to-work state earlier this year, has been on the upswing.

According to the Indiana Economic Development Corporation, the state has a record number of businesses choosing to expand or set up in the state, including Amazon and Toyota. The 220 companies will create some 21,000 new jobs and invest $3.6 billion. The growth has come despite a decrease in the average tax incentives offered by the state to $8,900 from around $37,000 in previous years.

Republicans hold a 26-12 majority in the Michigan Senate and a 64-46 majority in the state House. According to a recent poll by Mitchell Research & Communications for a right-to-work advocacy group, 51% of Michiganders support a right-to-work law while 41% are opposed.

That's important because if a right-to-work law passed the legislature, unions could still try to repeal it on the ballot, as they did this year with the emergency manager law, which let the Governor appoint emergency financial managers who could redo collective-bargaining agreements. By the time a similar fight could be waged against right to work, voters could have had more than a year to see the law's economic benefits.

The AFL-CIO has said that politicians who oppose Big Labor would pay a steep political price, but it's not turning out that way. In Indiana, Republicans picked up nine seats after the right-to-work law passed and lawmakers who made the law a key part of their agenda won by wide margins. If that's the price they pay, Michigan's politicians should be all in.

Labor Law Changes in Mexico

story first appeared in New York Times

Mexico’s Congress has approved broad changes to the country’s antiquated labor law that will make it easier for companies to hire and fire workers, signaling the first major economic change in Mexico in more than a decade.

The law is also a test case for the incoming president, Enrique Peña Nieto, who has promised to push ahead with legislation that experts say would modernize the economy and invigorate its modest growth rate.

The labor overhaul, which the Senate passed late Tuesday, streamlines the cumbersome rules that analysts say discourage small businesses from hiring workers and instead push millions of Mexicans into the underground economy.

Mexico’s lower house, the Chamber of Deputies, passed the bill last week, and it will now go to President Felipe Calderón to sign. The bill’s passage was a victory for the president, who has tried repeatedly to pass economic changes only to see them watered down or languish in Congress. Minority left parties voted against the bill, arguing that it would remove protections for workers.

Although Mr. Peña Nieto, who takes office Dec. 1, supported the law, his own party managed to reverse some of the proposals in the original legislation that would have limited the control of Mexico’s union bosses. The country’s large public sector unions are a bulwark of Mr. Peña Nieto’s Institutional Revolutionary Party, known as the PRI.

PRI legislators initially stripped out all the language that would have required more democracy and transparency from union leaders, but in the end, the PRI representatives and legislators from the left formed an unusual alliance, and the PRI was forced to agree to union elections by secret ballot and require a yearly audit of union finances. However, other efforts to improve union transparency, including giving workers the right to vote on their own contract, remained out.

Such moves have raised questions about how far Mr. Peña Nieto will go to stand up to union leaders. He will have to negotiate with the bosses of the teachers’ and oil workers’ unions if he pushes ahead with promises to overhaul the country’s failing schools and open the state-run oil monopoly to private investment.

Although Mexico has recovered the jobs that it lost after the sharp recession of 2009, an increasing number are in the underground economy, where workers have no protection or legal benefits. Mexico’s statistics institute estimates that more than 29 percent of workers are informally employed.

Analysts said that the bill was an important step that could help workers and improve the country’s productivity.

The labor changes will have a positive impact on the quality of job creation, according to Luis Arcentales, an analyst with Morgan Stanley Research, in a report before the bill’s Senate passage.

Among the most important changes was a one-year limit on the back wages employers must pay a worker who wins a lawsuit over a wrongful dismissal. Under the old law, the suits dragged on for years and employers were liable for all back pay if they lost.

The law also introduces part-time jobs and temporary training contracts. It regulates some of the murky practices of outsourcing temporary workers without paying them benefits, a measure many employers had used to get around the 42-year-old labor law.

Indian Workers Kill Company President in Riots

Story first appeared in Forbes.

Workers at the Regency Ceramics factory in India raided the home of their boss, and beat him senseless with lead pipes after a wage dispute turned ugly according to Mumbai Labor and Employment Lawyers.

The workers were enraged enough to kill Regency’s president after their union leader was killed by baton-wielding riot police on Thursday. The labor violence occurred in Yanam, a small city in Andra Pradesh state on India’s east coast. Police were called to the factory by management to quell a labor dispute. The workers had been calling for higher pay and reinstatement of previously laid off workers since October. The union leader had been fired a few hours after the police left the factory.

The next morning, at 06:00 on Friday, the union leader went to the factory along with some workers and tried to obstruct the morning shift, local media reported. Long batons, known as lathis in India, were used by police who charged the workers, injuring at least 20 of them, including the union leader. He died on the way to hospital, according to The Times of India. Hundreds of workers gathered outside the police station and demanded that officers be charged with homicide.

Curfew and other civil orders were imposed in Yanam because of the uprising that ultimately lead to the murder of the Regency president a few hours after being attacked with led pipes. Police reported that rioters also torched several vehicles outside the police station. Eight Regency Ceramics workers were injured in police firing that followed; the condition of two of them is critical. More than 100 protesters have been arrested.

India’s factory workers are the lowest paid within the big four emerging markets. Per capita income in India is under $4,000 a year, making it the poorest country in the BRICs despite its relatively booming economy.

At Regency Ceramics, workers went on strike Jan. 1 over the wage dispute. The management had reportedly decided to slap a restraining order on five workers and managed to obtain an order from a high court saying that the striking workers should not come within 220 yards, more than the size of two football fields, from the factory.

Once news of the union leader's death spread, the factory workers allegedly destroyed 50 company cars, buses and trucks and lit them on fire. They ransacked the factory. Residents joined hands with around 600 workers, while others were enroute to the company president's house.


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Wal-Mart Caught by the Law Again

Story first appeared in The Washington Post.

The Labor Department on Tuesday ordered Wal-Mart to pay $4.8 million in back wages and damages to thousands of employees who were denied overtime charges, the latest in a string of embarrassments for the company over its business practices.

The department said its decision affects roughly 4,500 vision-center managers and asset-protection coordinators who worked at Wal-Mart between 2004 and 2007. Wal-Mart had considered those employees exempt from federal regulations requiring overtime pay but reclassified them in 2007. The government and the retailer have been negotiating the amount owed since then.

The company said asset-protection coordinators are entitled to receive an average of $290 under the agreement, while the average for vision center managers is $2,300. Wal-Mart was also fined $464,000 in civil penalties, according to Memphis Employment Lawyers.

The decision comes as Wal-Mart faces investigations into its Mexican operations after the New York Times reported that company executives turned a blind eye while employees allegedly bribed local officials to approve new stores.

The Justice Department has been conducting a criminal probe of the company since December to determine whether it violated the U.S. Foreign Corrupt Practices Act. Meanwhile, two Democratic lawmakers are looking into Wal-Mart’s lobbying efforts. The Post has reported that Wal-Mart executives sat on the boards of trade organizations that have sought to amend the FCPA. The company has said it did not directly lobby on the issue.

But the reports have rattled investors and reinvigorated Wal-Mart’s critics. New York City’s pension fund, which holds a significant stake in the company, plans to oppose the nomination of several directors to the company’s board. Meanwhile, union and activist groups recently protested the retailer’s efforts to expand in New York.

On Tuesday, Making Change at Walmart, backed by the United Food and Commercial Workers Union, said the Labor Department decision represented a troubling philosophy among company officials.

The fines Walmart must pay for its overtime violations are just another side effect of the company’s growth at any cost strategy. Walmart’s top executives and the heirs who own a majority of the company have shown they are willing to break the law and harm workers in the name of more profits.

This was not the first time Wal-Mart has run afoul of federal overtime laws. In 2007, the Labor Department ordered it to pay nearly $34 million in back wages to 87,000 workers — some of whom were owed more than $10,000 each.


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Trucking Harassment Lawsuit Backfires

Story first appeared in The Detroit News.
Cedar Rapids, Iowa— They were learning to become truck drivers but wound up in a nightmare. In detailed accounts to a federal agency, dozens of female employees of one of the nation's largest trucking companies told of being propositioned, groped and even assaulted by male drivers during cross-country training rides.  An Iowa Trucking Lawyer has been following the case.

But rather than leading to a workplace discrimination judgment, the Equal Employment Opportunity Commission's sexual harassment lawsuit against Cedar Rapids, Iowa-based CRST Van Expedited Inc., has backfired and put the agency on trial. The agency is coping with a court ruling that could make it harder and more expensive to pursue large discrimination cases against companies in the Midwest, if not nationwide.  A Labor Lawyer in Des Moines is concerned about the resulting lack of attention to the victims and their cases.

And dozens of women who described an ordeal of unwanted and aggressive sexual conduct may receive no compensation for lost wages or emotional distress because of judicial criticism of the agency's investigation.

A February ruling in the case sets a new standard for workplace class-action lawsuits in the federal court district that includes Iowa, Arkansas, Missouri, Minnesota, Nebraska and the Dakotas. Before filing a lawsuit on behalf of employees alleging similar discrimination, the agency will first have to investigate the merits of every worker's claim and attempt to reach settlements. If the agency doesn't, EEOC risks having the case dismissed.

The agency has argued that such a standard is impractical in cases involving hundreds or thousands of potential victims. At a minimum, the agency says, investigations would take longer and delay relief compared to other regions, where class-action cases can be filed with a lower standard. EEOC has a deadline next week to determine whether to appeal.

But businesses say the ruling could stop unfair legal tactics and prevent unnecessary and expensive litigation.

The ruling came as the agency has made systemic discrimination cases — those involving many employees — a larger enforcement priority. EEOC investigates 100,000 complaints of workplace discrimination annually, and recovered more than $450 million for employees last year.

The agency's tactics have rattled the business community, which says lawsuits can cost millions of dollars and destroy reputations. The U.S. Chamber of Commerce filed a friend-of-the-court brief in the CRST case denouncing EEOC's tactics and calling for the agency to be more cooperative with the industry.

The trucking company case was prompted by a December 2005 complaint from a female driver of Azle, Texas, who alleged she was paired with a driver who constantly made crude sexual remarks and advances. After she escaped his truck, she said, she was paired with another driver who demanded sex in exchange for a passing grade.

After failing to reach a settlement, EEOC filed a lawsuit in 2007 on behalf of all female drivers subjected to a sexually hostile and offensive work environment. After the company sent letters to thousands of female employees, about 150 gave depositions in which they described being alone for weeks in trucks with male drivers.

One woman said her trainer asked for oral sex every morning and told her if she slept with him she'd certainly pass. Another testified that her trainer put on pornographic movies daily and told her he wanted her to perform similar acts.

But some of their claims were barred for a variety of legal reasons. And EEOC's tactics infuriated the Judge, who said the agency used a 'sue first, ask questions later' litigation strategy.  She dismissed the case and ordered the agency to pay CRST an unprecedented $4.4 million in attorney's fees, acknowledging that dozens of potentially meritorious sexual harassment claims may now never see the inside of a courtroom.

The appeals court largely sided with her in a 2-1 ruling, but threw out the fee award and reinstated two claims.  The court ruled that EEOC should have done more investigation and informal mediation before filing suit.

CRST is expected to renew its request for compensation for legal fees. The company said it took disciplinary action such as banning offenders from riding with females.

But one case that reached a jury — a California woman who opted out of the EEOC process and filed her own lawsuit — resulted in a $1.5 million verdict against the company.

For more law related news, visit the Nation of Law blog.

Republican Election Gains May Stall Business’s Immigration Push

Bloomberg

 

Intel Corp., Hilton Worldwide Inc. and other companies seeking a larger number of legal foreign workers through changes to immigration law likely will find their push thwarted by the Republicans’ sweeping election gains.

Lawmakers who will lead the debate in the new Republican- controlled U.S. House say they want to focus on securing the border and cracking down on illegal immigration, rather than other matters. Only after it is shown that fewer illegal immigrants are coming across the U.S.-Mexico border will they consider the revisions to immigration law sought by businesses, they say.

Representative Steve King, an Iowa Republican slated to head the House Judiciary Committee’s immigration policy subcommittee, said in an interview that he opposes lifting visa caps for lower-skilled foreign workers because doing so would depress U.S. workers’ wages. He said he would support increasing the number of visas for higher-skilled workers only if the potential employees meet criteria to boost the U.S. economy.

That means they should be young, well-educated and be able to speak English, King said. “That’s the indicator of whether they can assimilate into the broader society,” he said.

The business agenda calls for increases in worker visas for skilled and unskilled labor, along with more employment-based “green cards” -- proof of permanent residency in the U.S.

Political Change

Corporate officials and lobbyists must deal with midterm election results, in which the Republicans have won a majority of seats in the House, according to network projections.

“We’re as anxious as anyone else to see how it shakes out and whether this will be on the agenda next year,” said Peter Muller, director of government relations at Intel Corp.

Technology companies such as EBay Inc. and Cognizant Technology Solutions Corp. want Congress to lift the cap on H-1B visas for skilled workers. Since the start of the 2004 fiscal year, when a three-year temporary increase in the cap to 195,000 expired, the annual limit has been at 65,000. In fiscal 2010, the cap was reached in nine months.

Companies also want to lift the limit on employment-based green cards, now set at 140,000.

At Intel, about 6.5 percent of the company’s 40,000 U.S.- based employees hold temporary visas granted foreign workers, and the company helps those workers apply immediately to get green cards. “We want to keep them ideally for their entire career,” Muller said.

Still, the wait often is eight to 10 years, causing uncertainty both for the workers and for their employers.

Lower-Skilled Workers

The agenda for restaurant and hotel industries is focused on seasonal, lower-skilled workers. Jonas Neihardt, a lobbyist for McLean, Virginia-based Hilton, is pushing for a simpler system to verify the legal status of workers and a boost in the number of H-2B visas for non-farm seasonal employees, now capped at 66,000. Neihardt is urging that changes be made before the economy improves.

“We’re anticipating when things get better we’ll need more of those types of workers,” he said.

Senate Democrats in April outlined a rewrite of immigration law that, along with proposing a crackdown on drug trafficking and illegal immigration at the U.S.-Mexico border, sought changes that included a pathway to permanent legal residency for some of the estimated 11 million undocumented people in the U.S. It also called for a new three-year visa for temporary, low- skilled workers with an annual limit that adjusts with the economy, as well as immediate green cards for foreign students who get advanced degrees in engineering or math from a U.S. university.

The effort was hamstrung when Senator Lindsey Graham, a South Carolina Republican, stopped working with Democrats on a compromise, urging them to wait until 2011.

Latino Vote

Corporations are holding out hope that the importance of the Latino vote in the 2012 presidential elections will cause congressional Republican leaders to support a broad bill next year.

“It will be an uphill battle, but it could be that the Republicans would see that it’s to their advantage to get this issue behind them,” said Randy Johnson, vice president for labor policy at the U.S. Chamber of Commerce.

That hope belies the views of some of the Republicans ascending to power.

In the House, King is in line to replace Representative Zoe Lofgren as immigration subcommittee chairman. Lofgren, a California Democrat and one-time immigration lawyer, supports the comprehensive approach to rewriting policy.

King, 61, said he favors a piecemeal approach, with the initial spotlight on border security. He also wants to help draft legislation that would revoke birthright U.S. citizenship for so-called anchor babies of illegal immigrants.

Business Deductions

His priorities for business include a measure that would boost taxes on employers found by the Internal Revenue Service to have hired illegal immigrants. Those companies wouldn’t be able to treat the illegal workers’ wages and benefits as a deductible business expense, and they would also pay a penalty.

“It takes a $10-an-hour illegal and turns them into a $16- an-hour illegal,” King said.

Representative Lamar Smith, a Texas Republican expected to become chairman of the Judiciary Committee, said in an interview that while he would favor holding hearings about foreign worker visas and other immigration issues, next year he wants to draft legislation dealing only with border security.

“I’m still of the mind we have to secure the border first,” he said in an interview.

In 2007 Senator Jon Kyl of Arizona, the chamber’s No. 2 Republican, worked with Democrats on a comprehensive immigration bill that failed. He said in an interview that he won’t support anything beyond border security until the fight against illegal immigration improves in parts of his state.

“There has to be more of an effort to actually secure the border -- not just to spend money, not just to say we have more resources than ever before,” he said.

Kyl also said companies must realize that the recession -- which became the nation’s worst since the Great Depression -- changed the immigration debate.

He said labor unions are more opposed to expanding the pool of foreign labor now than before. “The temporary-worker program has gone backwards in terms of a consensus,” Kyl said.

Massachusetts: Legislation Tackles Pay Equity

Worcester Business Journal

 

 

It sounds like a legal word problem. If women who work in a school’s cafeteria are on their feet all day, lifting 50-pound bags of potatoes and working with hot ovens, while men at the same school’s custodial department are on their feet all day, lifting 50-pound boxes of detergent and working with harsh chemicals, is it okay to pay the janitors significantly more?

According to the Massachusetts Supreme Judicial Court, under current law the answer is yes. But some state legislators are out to change that. They say that regardless of whether they’re traditionally held by men or women, jobs that require comparable skill, effort, responsibility, and working conditions ought to command the same pay.

To others, though, the proposed change would create an unfair burden on employers.
 

Family Wage

State Rep. Anne Gobi, D-Spencer, said she signed onto the bill because she’s worried about the fortunes of working women and their families.

“Of course there’s a lot of women who are the sole breadwinners of their families,” she said.

The notion of equal pay for comparable work is not a new one. A 1945 Massachusetts law requiring equal pay for women includes the concept. But supporters of the new bill say because “comparable work” was never defined, the language was unenforceable.

In 1996, the Supreme Judicial Court struck down a $1 million award to cafeteria workers in Everett, arguing that they weren’t treated illegally because the “substantive job content” of cafeteria work is different from what janitors do.

Since then, supporters of equal pay have worked to add a definition of comparable work to state law. This year, the Commission on the Status of Women made the bill a central issue for its legislative agenda. And according to Marisa DeFranco, a Peabody lawyer who serves on the commission, this March was the first time the bill has been voted out of the committee where it started. It’s now in the Senate Ways & Means Committee.

Joseph T. Bartulis Jr., head of labor and employment law practice area at Worcester’s Fletcher, Tilton & Whipple law firm, said it makes sense to let each employer decide what jobs are most valuable to it, as they can under current law.

“You could say that having a jovial, friendly, gregarious receptionist is more valuable than someone who brings the mail around,” he said, adding that a different company might make the opposite decision. “It’s a judgment call, because what is important to one employer may not be important to the other.”

To DeFranco, though, the legal change could be good for companies that might have trouble determining a fair way to set pay.

“It helps you to define what the job is, what are the responsibilities,” she said. “Then you have a very neutral way of defining wages and salaries.”