248-409-1900 dburke@mi-worklaw.com
Next, Let’s Empower The Felons With Government Agency Support

Next, Let’s Empower The Felons With Government Agency Support

As A Movement Grows To Make Those With Criminal Records

A Protected Class, Let’s Consider The Abuses Employers Already Face

By:  Bill Pilchak – 6/10/14

           In business, we encounter a steady stream of jargon reflecting the latest trends: “synergy,” “24/7,” “value-added,” “aligned.” One vintage business term has been on my mind lately, as a movement gathers to protect those with criminal records: “Empowerment.”

          Empowerment is an ephemeral concept. Most of us learned its definition by its usage.  But what is it? It’s a word in search of an illustrative example.

          And I have one.

          For the best of motives, we passed civil rights statutes that protect employees on the basis of race, color, sex, religion, national origin, age, disability, marital status, whistleblower status and, in Michigan, on the basis of height and weight. Then, the FMLA gave job security to anyone who went to the doctor and got a prescription.

          Without question, the statutes have some benefit. HR departments now assure discharges are not motivated by discrimination. Those needing medical leave, get it.

           However, the statutes “empower” the 85% of workers with protected status[1] to financially strike back at their former employers when terminated. Their weapons are costly: a Charge of Discrimination or/and a claim filed in court. Even if the allegations have no merit whatsoever, an employer will spend several thousand dollars defending a Charge or between $50,000-$100,000 to have a court case dismissed. The ability to force one’s adversary to incur that kind of expense is true “power.”

          So, who have we empowered? Statistically, fired employees are more likely to have violated rules, shirked duties, skipped work, wasted time, or stolen time, property or the employer’s confidential data or have conflicts with authority figures, because those are common reasons for termination. Employers don’t run off employees who make valuable contributions and follow the rules. Some of these common reasons for discharge belie character issues. Would those characters be inclined to raise false claims?

          You bet. Nearly 100,000 Charges of Discrimination are filed per year at the EEOC, with another 50,000 Charges being filed with equivalent state agencies. As noted in a recent BLawg post, over the past ten years, the EEOC found “reasonable cause” to believe that discrimination occurred in only 4.8% of those Charges.[2] 10.2% of Charges are settled by employers, some guilty but some looking to minimize costs. Remarkably then, the EEOC has a “guilty until proven innocent” approach, where innocent employers are commanded to explain themselves, given deadlines and required to disgorge sensitive information that will later be provided to the employee upon request, while the EEOC holds the terminated employee’s information close to the vest.

          Imagine if other agencies operated like the EEOC. If the county prosecutor’s docket was made up of 90% innocent people, there would be outrage. If the health department falsely investigated 90% of local restaurants as unsanitary, the press would demand an explanation.

          One would think that an agency with a history of overwhelmingly meritless complaints would at least adopt a mechanism to dissuade them or expedite their dismissal to avoid the waste of resources and resulting loss of national competitiveness. After all, if 135,000 innocent employers only spend $2000 each to defend themselves, $270 Million is needlessly gushing out of businesses every year. That’s a lot of chaff for very little wheat. However, that volume of spurious Charges justifies a $360 Million (2012) budget for the EEOC. Why would they do anything to dissuade false Charges?

          Not only is there no mechanism to dissuade or dismiss meritless charges, but the EEOC has been known to press cases that investigators have acknowledged as frivolous.

          In one Charge defended by the author, a probationary employee in her first 90 days on the job was working in a customer’s plant and had been caught driving an electrical industrial vehicle without the required safety training. Just hours after being forbidden from driving the vehicles, she was seen driving again, but sped away before her supervisor could catch her. Moments later, she ran a stop sign, nearly hit a customer representative and proceeded to exchange heated words with the customer. After the customer banned her from the facility and took her security badge, she snuck back into the plant in violation of the customer’s security procedures.   When, after all that, she was fired, she was replaced by someone of the same race and sex. Amazingly, instead of these facts resulting in a quick dismissal, the investigator pressed for compensation for the Charging Party while admitting there was no case of discrimination, stating the Charging Party would likely not find work again.

          Other aspects of EEOC practice help give life to false claims. In the 4.8% of cases where the EEOC finds “cause” to believe discrimination has occurred, that finding is admissible into evidence against the employer, and the EEOC uses language that impresses the prospect of discrimination upon any jury later hearing the case. The employer gets no equivalent benefit, even if the evidence is overwhelming that no discrimination occurred. The EEOC’s language in that instance will generally be: “The EEOC is unable to conclude that the information obtained establishes violation of the statutes. This does not certify that the respondent is in compliance with the statutes.”

          Even worse, many of the false Charges go on to become expensive, frivolous lawsuits. Nothing prohibits an employee from filing a lawsuit, even if the EEOC found no evidence that discrimination occurred. Once upon a time, employers could count on market forces to protect them against frivolous lawsuits. Lawyers would not invest their time in a bad case, because it took away from more profitable endeavors. However, the system is overloaded with attorneys. 45% of new grads cannot find jobs in the profession and State Bar of Michigan statistics consistently show that 25% of its 34,000 practitioners (i.e.8500) make $45,000 or less annually. There are so many attorneys with time on their hands, that they take cases today that no lawyer would have accepted in the past, hoping that an employer will settle to avoid the $50,000-$100,000 in inevitable attorney fees.

          In case you haven’t noticed it, there is a movement underway to make those with criminal convictions a protected class. Many states already have statutes limiting an employer’s ability to consider convictions. Pennsylvania precludes employers from considering even felony convictions, unless the crime has some relevance to the felon’s ability to perform the job. Repeat sex offenders can and have used the statute to insist on their right to enter a workplace, raising interesting Constitutional issues in the nature of Freedom of Association. In 2012 the EEOC republished Guidance regarding the use of criminal convictions in hiring decisions, and there is now a nationwide “ban the box” effort underway to preclude employers from even asking about convictions until resources have been expended in the application process. Ten states have already passed laws.

          Empowering convicted criminals to sue employers would be a terrible move. The ban the box statute proposed in Michigan in 2013 was limited to prohibiting applications from including a question about convictions. The statute would waste precious resources by requiring employers to expend time, effort and possibly money on candidates that would have been excluded earlier in the process. However, thankfully, it doesn’t allow for much opportunity to fabricate claims: either the application asks the forbidden question or it doesn’t. Nevertheless, the subtle campaign to label convicted criminals as a protected class and the expansion of rights for convicted criminals, would empower people that cannot be trusted with the power.

__________________________________

 [1] The figure is drawn from Bureau of Labor Statistics data on the make-up of the workforce: 45.4% of females, 20.2% minorities and approximately 53.5% of “over-40” employees in the workforce. (100% – 45.4 – 20.2= 34.4% white males x .465= 15.996% white males under 40.) It’s reasonable to assume 1% of those younger white males can claim protected status on the basis of religion, disability, marital status, or non-tracked national origin (Eastern-European, Canadian, etc.).

[2] Moreover, for some of those years, the EEOC was in the habit of scouring employment applications and employee handbooks and finding “cause” regarding matters that had nothing to do with the issue set forth in the Charge. Without speculating on motive, that practice artificially inflated the figures.

NLRB to Review Its Joint Employment Standard

NLRB to Review Its Joint Employment Standard

By:  Dan Cohen – 6/5/14

          On May 12, 2014, the NLRB invited briefs from interested parties on the issue of joint employment under the National labor Relations Act. The NLRB’s invitation signals its intent to review and consider overturning established precedent. Under the Board’s current precedent (as stated in TLI, Inc., 271 NLRB 798 (1984)), joint employer status is based on whether each entity meaningfully affects employees’ terms and conditions of employment. The Board has requesting briefing on whether a new standard should be adopted and which factors should be considered, suggesting it may look to overturn this 30-year precedent. The case is Browning-Ferris Industries, Case No. 32-RC-109684.

          In TLI, Inc., Crown Zellerbach Corp. (“Crown”) leased drivers from TLI, a nation-wide company that furnishes truck drivers to companies. Crown chose TLI in order to have its expertise in dealing with labor-management relations in the trucking industry, as well as to provide a buffer between itself and the drivers in the event of labor disputes. For this service, Crown paid TLI $23 per week per driver in addition to all costs of employment of the drivers including health and welfare, pension, fringe benefits, actual wages, mileage, workmen’s compensation and the like. Once on the job, drivers reported daily to the Crown facility for instructions on deliveries and returned their trucks there when they were finished. Mechanical and other problems on the road were reported to Crown rather than TLI.  Crown notified drivers when they were required to work during their vacation. All driver logs and records were kept by Crown and only submitted to TLI for payroll purposes. Moreover, the drivers only worked for Crown and there had never been a transfer of a driver to another TLI job. The ALJ found that wages and other economic benefits were almost totally under Crown’s control because Crown attended collective bargaining sessions between TLI and its union and indicated that labor costs would have to be cut in order for Crown to remain competitive. Based upon these facts, the ALJ determined that Crown exercised operational control of the drivers and, therefore, shared with TLI the authority to make decisions regarding essential terms and conditions of employment as a joint employer.

          The NLRB disagreed. According to the Board, although Crown exercised some control over the drivers, Crown did not affect the terms and conditions of employment to such a degree that it may be deemed a joint employer:

“The Crown foreman instructs the drivers as to which deliveries are to be made on a given day; however, the drivers themselves select their own assignments, on a seniority basis. The record indicates that Crown neither hires nor fires the drivers and, contrary to the judge’s finding, Crown does not discipline the drivers. When a driver engages in conduct adverse to Crown’s operations, Crown supplies TLI, not the employee, with an ‘incident report’ whereupon a TLI representative investigates. Disciplinary notices, or necessary actions, are issued by TLI. In addition, although accidents on the road are reported to Crown, it is TLI which investigates and determines whether or not the accident was preventable and whether further action is necessary. Our dissenting colleague would find that Crown’s participation in the daily operational activities of the drivers constitutes sufficient control over terms and conditions of employment to establish that Crown is a joint employer with TLI. We find, however, that the supervision and direction exercised by Crown on a day-to-day basis is both limited and routine, and considered with its lack of hiring, firing, and disciplinary authority, does not constitute sufficient control to support a joint employer finding.”

          For the next 30 years, to establish joint employment in proceedings before the NLRB, there had to be a showing that the two entities “meaningfully affect[ ] matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.” Subsequent decisions clarified that an employer receiving contracted labor services will not become a joint employer by exercising authority to make routine directions such as where to do a job or what delineated tasks the subcontracted workers are to perform. Nor has the Board considered it determinative that the contracting employer witnessed misconduct and requested the end of a subcontracted workers assignment. These actions have been viewed as those of an owner exercising the right to protect its own premises.

          The Browning-Ferris case threatens to modify this standard. In Browning-Ferris, the Teamsters sought to represent a unit of employees made up of Browning-Ferris employees as well as subcontracted workers employed by Leadpoint. The Regional Director found that the unit could only include Leadpoint employees because the two companies were not joint employers. The current Obama Board seeks to revisit the “meaningfully affects” standard that has been utilized extensively throughout the staffing industry to stave off bargaining units of both contract workers and the workers employed by the employer receiving the contracted services. My question is this: What is wrong with the current standard? The Board’s re-visit appears all too predictably designed to modify a standard in favor of one that will increase union membership.

 

What Gaylord Fokker’s 9th Place Medal Means To The Legal System

What Gaylord Fokker’s 9th Place Medal Means To The Legal System

HEAVEN FORBID THERE SHOULD BE WINNERS AND LOSERS IN LITIGATION

By:  Bill Pilchak

Who can forget the scene in Meet the Fokkers when Gaylord’s (aka, “Greg’s”) dad, Dustin Hoffman, reveals the Wall of Gaylord to Greg’s new father in law, played by Robert DeNiro?  There, among the framed stuffed animals are Greg’s “awards,” prompting DeNiro to observe, “I didn’t even know they made ninth place ribbons.” When flower-child Hoffman observes that all participation should be rewarded, DeNiro states that a competitive drive is what made America the last remaining superpower.

Apparently in today’s society, parents believe that their child will be devastated if only the fastest three children in the 100 yard dash are recognized. I can state categorically that no Pilchak known to me has ever been on the podium in any race, ever. I don’t remember being crushed. My children shrugged off the fact that they weren’t fast, agile or athletic, knowing that they excelled in academics and the arts.

The “everybody’s a winner” and “reward me for showing up” mentality has already crept into adult society in several ways. Employers everywhere tell us and discuss in business forums that the incoming generation expects a six figure income before proving him/herself to be worth the money.   In a highly-competitive occupation, such as management-side labor and employment law, not everybody cuts the mustard. That “I deserve $X00,000 because I am here” mentality is a subtle expression of the participation award phenomenon.

However, a much more pernicious example is found in Michigan’s “case evaluation” system.   By Court Rule, every litigation case in Michigan must be evaluated by a panel of three lawyers, who place a “settlement value” upon the case. Either party must accept or reject that settlement value. If both accept it, the case is resolved for that amount. If a party rejects the award, that party must pay their opponent’s attorney fees unless the party betters its position by 10%.

Of course, innocent employers are not terribly inclined to settle. They want dismissal. As any client of ours who has gone through litigation knows, “summary disposition” (summary judgment in federal court) is the point where the plaintiff has laid all his/her cards on the table, and the defense can say: even if those facts are true, the case should be dismissed because the facts do not satisfy the law.

Without question, statistically, the vast majority of cases against employers should be dismissed. No matter how one gauges it, the overwhelming percentage of claims against employers lack merit:

  • If there is even a suspicion of discrimination, the EEOC finds “cause” to believe discrimination has occurred. Year after year, the EEO’s statistics consistently show that only 3.5% to 5% of Charges filed against employers result in a cause finding. Plus, 10% of Charges are typically settled before any cause finding. Since employers have an economic motive to get rid of meritless cases with a nominal payment at the agency level, that 10% figure does not equate with merit. Let’s presume 5% (50% of 10%) of those Charges have merit. Thus, in approximately 90% of claims handled by the EEOC, there is not even a suspicion of discrimination. (So, why their guilty-until-proven-innocent system? That’s a topic for another day.)
  • Though we don’t have precise statistics, every day, the Michigan Bar publishes appellate (and federal trial court) opinions to every lawyer by e-mail or app. Each of our attorneys read the labor and employment decisions daily. Certainly at least 60% of the summary disposition/judgment cases sustain dismissal. The figure could easily be 75% or even 80%. All I know is reading the E-Journal consistently provides me with more ammunition than it does concerns. That 60% to 80% employer appellate win ratio must be considered in the context that a large percentage of dismissals are not appealed by plaintiffs. So, the percentage of legally meritless cases is likely higher than the 60-80% figure shown in the cases.

So, how does the legal system treat those 60-70-80-90% innocent employers?

Does the system knock out those cases, so innocent employers aren’t pressured to settle and don’t needlessly pay an attorney to write a “Case Evaluation Summary” and attend and argue the case? No, actually. In fact, if an employer files its dismissal motion the moment discovery ends, so that it might avoid Case Evaluation, judges typically delay the hearing until after Case Evaluation, to see if the case might “settle.” If the case settles, Gaylord gets paid.

Do Case Evaluation awards reflect the fact that 60-90% of cases have no merit? If they did, that would translate into a high percentage of nuisance award evaluations. Nuisance value awards would discourage attorneys from taking bad cases. Well, nuisance awards virtually never occur at case evaluation. The mentality at the Mediation Tribunal Association is that if an attorney has filed a case, he/she deserves a pay day. The case evaluation system not only fails to dissuade attorneys from taking bad cases, it rewards them for not screening their cases or looking at the law. Just like in Meet The Fokkers, everybody gets rewarded for participating.

Recently, P&C presented a case where the plaintiff, a supervisor, was told he would get in trouble if he broke a certain rule. The plaintiff was obligated to enforce that same rule upon the union-member employees he supervised, and admitted that he could not discipline his employees for doing something that he did himself. The rule is of paramount importance in the operation. Nobody, and certainly no supervisor, had ever broken the rule before. When Plaintiff did, he was fired. The lead case we cited to the case evaluators was our 2010 appellate victory and opinion involving that very same employer, where a previous supervisor had also been warned that engaging in an act would violate the rules, proceeded to do so anyway, and was fired.   The Court of Appeals held in 2010 that where a supervisor is warned against action and engages in it anyway, he is not similarly situated to other employees who may have merely violated even the same rule. As many know, lack of a similarly-situated comparable employee is typically the death knell for a discrimination case.

As if that were not enough, the 2014 plaintiff admitted at deposition that he has been physically unable to perform the job since 2010. The inability to do the job is a complete defense – someone can’t get wage loss damages for a job they couldn’t have performed anyway.

What did the Case Evaluators do with the case? After mocking the attorney for bringing the claim, they still placed a $45,000 settlement value upon it. If that award were accepted, it would provide the attorney a $15,000 pay day. It would reward an attorney who didn’t even bother to look up the law and see that this very same employer had created precedent that when a supervisor is warned and still violates the rule, he has no case.

Frustrated with the $45,000 evaluation, when I returned to the office, I had the 2010 case pulled from the storage racks. What did the case evaluators do with that case – which was quickly and promptly dismissed at the trial court level and easily affirmed in the Court of Appeals? The 2010 award evaluated at $175,000!

I suppose that I should be thankful that the 2014 award is only 25% of the 2010 award. But I’m not. The litigation system in Michigan, and I daresay across the nation, is broken. My brethren and sistren of the bar are serving their self-interests and not the interests of justice. Innocent employers are being marauded by the system that rewards lawyers and victimizes business. The State Bar of Michigan touts a quote from its first president: “No organization of lawyers can long survive which has not for its primary object the protection of the public.”   The primary purpose of the current system in Michigan is assuring that attorneys get a pay day on worthless cases.