The fastest-growing area of employment litigation in recent years has been wage-and-hour class actions, perhaps the biggest subset of which are lawsuits charging that white-collar employees have been misclassified as exempt from hourly wage and overtime calculations. Like many big employers, IBM has been hit with such suits from lawyers seeking to represent thousands of its employees. Information Week:
The good news for those workers is that IBM now plans to grant them so-called "non-exempt" status so they can collect overtime pay. The bad news: IBM will cut their base salaries by 15% to make up the difference, InformationWeek has learned.
The plan has been greeted with howls of protest from affected workers.
The payroll restructuring goes into effect Feb. 16 and applies to about 8,000 IBM employees classified as technical services and IT specialists, according to internal IBM documents reviewed by InformationWeek and sources at the computer maker.
The plan calls for a "15% base salary adjustment down across all units with eligibility for overtime," the documents state. The move is a direct response to the employee lawsuits -- at least one of which has apparently been settled.
"To avoid protracted litigation in an area of law widely seen as ambiguous, IBM chose to settle the case -- and to conduct a detailed review of the jobs in question," the documents state.
The giant tech company also intends to lobby for modernization of New Deal era wage-and-hour laws which might allow it to restore the previous compensation methods. Good luck with that -- even if it can show that most of the workers involved would themselves favor salaried rather than hourly status, the political clout of unions and trial lawyers has stymied efforts at legislative reform in the past. (Paul McDougall, Information Week/EETimes.com, Jan. 23)(cross-posted from Overlawyered).
Must they be written in bureaucratic legalese to protect the employer from litigation? Ted discusses at Overlawyered, as does Dan Schwartz at Connecticut Employment Law Blog. My book The Excuse Factory has a considerable discussion of how lawsuit incentives shaped the modern employee handbook; it's unfortunately not online, but you can get the gist of some of it in reviews like this one.
Daniel Schwartz has some thoughts on the employment-law aspects.
This relatively new blog has at least three recent posts of interest, right off the bat:
* A not very well known Connecticut law provides that privately employed persons who quit to assume elected public office must be taken back by their employers afterward, with benefits and seniority accumulated for the time off. Nice deal!
* Describing new employees as "probationary" might make it a jury question whether some sort of permanent tenure or right to performance reviews before firing had been promised to those who make it past that stage, according to a federal court interpreting Connecticut law.
* If you complain to your employer about discrimination, and then lose your job a year later, even a relatively liberal federal judge says you're not just entitled to establish a claim for retaliation -- you actually have to offer, like, evidence.
"Under a bill authored by the city's public advocate, Betsy Gotbaum, employees who are taking care of children, elderly relatives, or disabled family members would receive legal protections akin to those regarding race, gender, or religion." New York Sun reporter Benjamin Sarlin quotes me with critical comments on the idea. More on what is variously called "family responsibility discrimination" and "caregiver discrimination" can be found here.
A report from the Heritage Foundation impressively catalogs abuse of the FMLA reported in a recent request for information by the Department of Labor. Of note is this quote from the Chamber of Commerce:
[A]bsenteeism attributed solely to FMLA leave on any given day was estimated to be about 5 percent, and at least one employer overstaffed by 10 percent to accommodate the absence rate due solely to FMLA leave. However, many managers reported that certain types of days, including the day after Super Bowl Sunday or the first day of hunting season, had much higher absentee rates for those employees with an FMLA medical certification. There was a high degree of consistency in high absentee rates linked to specific holidays reported across companies and industries.
The Department of Labor also documents some stunning abuses, including an employer where 30% of the workforce has an active medical certification for FMLA leave, leading to disruptive unscheduled intermittent leave.
FMLA abuse during the holidays can be especially problematic for service industries that already have to restrict vacation usage during peak times; it means that dishonest employees are effectively stealing vacation time from honest employees.
In the much-discussed recent case of Currier v. National Board of Medical Examiners, Sophie Currier prevailed in the Massachusetts courts on a claim that the National Board of Medical Examiners (NBME) had not allowed her sufficient break time to pump breast milk during a medical licensing exam. At Concurring Opinions, visiting guestblogger Sarah Waldeck (Seton Hall) gets into the details of the case, and expresses concern "that Currier’s legal victory will ultimately undermine the goal of widespread accommodation of breastfeeding employees".
(Updated from original November 18 post.)
Thomas Geoghegan's See You in Court: How the Right Made America a Lawsuit Nation was, as Peter Lattman notes, reviewed favorably by Adam Liptak this weekend.
A working paper of my rebuttal is available on SSRN.
Other popular reviews that are more sympathetic than mine: Stephanie Mencimer and Chicago Reader.
Apparently one is guilty of helping prolong the Broadway stagehands' strike if one so much as allows a certain word to pass one's lips or keyboard.
Employers were alarmed this summer when a California appeals court ruled that workers can file actions on behalf of other workers under the state's Labor Code Private Attorneys General Act ("PAGA") without meeting class action requirements. The controversial law, which was enacted with union and trial-lawyer support and then scaled back somewhat following an outcry from employers, allows plaintiffs to sue over alleged employer infractions affecting other workers' interests -- a "bounty hunting" approach, as some have called it. Now the California Supreme Court has agreed to hear the case. Coverage: Epstein Becker & Green, Wage Law and earlier, UCL Practitioner and earlier, Class Action Defense Blog, Lord Bissell, BlogCabin CA.