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By Richard A. Epstein

On Thursday, July 18, Texas Republican Congressman Jeb Hensarling will hold hearings on his "Protecting American Taxpayers & Homeowners Act." The PATH Act contains many forward looking proposals, on which I have no comment. But on this occasion, I want to focus on one key feature of the Act, which is only obliquely revealed by the statutory title. Mr. Hensarling shows great solicitude for American taxpayers and homeowners. But in a telling omission, he gives the back-of-the-hand treatment to the preferred and common shareholders of Fannie Mae and Freddie Mac, (commonly called Government Sponsored Entities or GSEs). In the interest of full disclosure, let me state for the record that I have advised several hedge funds on the merits of the PATH Act, and on the parallel bipartisan legislation that Tennessee Republican Senator Bob Corker called the Housing Finance Reform and Taxpayer Protection Act of 2013, both of which are designed to wind down the operations of Fannie and Freddie.

Liquidating Fannie and Freddie The source of my concern with Mr. Hensarling's proposed legislation involve sections 103 and 104 of the Act, which, according to its legislative summary provides for "Termination of Conservatorship," such that "Five years following the date of enactment mandates the appointment of the Federal Housing Finance Agency (FHFA) director to act as receiver for each Enterprise (i.e. Fannie Mae and Freddie Mac) and carry out receivership authority." Section 104 then provides for declining maximum amounts that GSEs shall be entitled to own over the five-year transitional period before these entities are liquidated.

In one sense, the demise of Fannie and Freddie should not be lamented, after the long and sorry history of massive government intervention in their internal affairs that created serious dislocations in the marketplace in 2008, including, most notably, the Congressional insistence in 2007 that Fannie and Freddie issue some $40 billion in subprime loans. As a result of these actions, both GSEs suffered major losses during the early part of 2008, not unlike those suffered by other private companies. The nature of these actions are outlined in a complaint attacking the various government actions filed in Washington Federal v. U.S. in June 2013.

Therein hangs the following tale, which leads to the Hensarling hearings. Although not widely known, both GSEs are as organized as corporations whose shares are privately owned and publicly traded. The independence of these corporations was effectively ended in July 2008 when Congress passed the Housing and Economic Recovery Act of 2008 (HERA), which forced both companies, while still solvent and flush with liquid assets that could be either sold or mortgaged, into a conservatorship that was overseen by an agent of the United States, FHFA. I have described much of the early operations of HERA in my Defining Ideas column Grand Theft Treasury. The title summarizes my deeply critical attitude toward this problem.

In September 2008, the FHFA, as conservator of these GSEs, entered into a deal with the United States Treasury to organize a bailout of these still solvent entities. First, FHFA issued to the Treasury a new 10 percent perpetual senior preferred stock for which Fannie and Freddie over time received in exchange about $187 billion in fresh capital. As part of the deal, the Treasury received warrants to purchase 79.9 percent of the common stock at a nominal price of $0.00001, effectively wiping out most of its value. The now junior preferred stock remained on the books but had sharply diminished value. Clearly, the net benefits from this initial bailout were set by the Treasury, which exercised its power to buy into these GSEs at prices highly favorable to itself. At no point did the former directors of either GSE have any say on the terms of the deal. Essentially, the United States was on both sides of the transaction in a clear breach of the standard rule that all self-dealing transactions must be scrutinized to determine whether the shareholders' conservator provide them with fair value.

The Dubious 2012 Amendments to the 2008 Agreement Fast forward now to August 2012, at the start of the housing market recovery. At this time, FHFA and the Treasury entered into their Third Amendment to the 2008 Agreement which provided that "all positive net income each quarter will be swept to the Treasury." It is important to understand the unprecedented magnitude of this Amendment. At the time, Fannie and Freddie had returned to profitability and were thus able to pay both the interest on the Treasury's senior preferred stock and return some of the $187 billion that the Treasury had contributed to the both GSEs. This Third Amendment in effect stripped all the cash out of these companies and gave it to the United States as a "dividend" on its investment, with no reduction in principal.

Any sensible person would instantly realize that the unilateral variation in terms was not done to aid the private shareholders of Fannie and Freddie, but was intended to transfer all their wealth to the government whose crude contractual "amendment" violates the first principle of contract law: A and B may never enter into a contract that binds C without C's consent. What is truly amazing is the spin that Mr. Hensarling puts on this so-called Amendment in a document described blandly as PATH Act Questions & Answers:

Some are arguing that Fannie and Freddie have begun paying a financial benefit to taxpayers. While it's true that both companies had positive net income for the last three quarters of 2012 and have made $65.2 billion in dividend payments, these statistics don't give a complete picture of their financial situation. It is important to note that under the GSEs' contact with the federal government, these dividend payments cannot be used to offset prior Treasury draw, so that regardless of how much is paid out in dividends, the GSEs still owe taxpayers $187 billion in bailout funds borrowed And since their contracts with the federal government state that all positive net income each quarter will be swept into the Treasury as a dividend payment, in their current state the GSEs will never be able to repay that debt to the taxpayers.
His "complete picture" of the financial deal is replete with half truths. It would help if Mr. Hensarling noted that he was speaking of the August 2012 Third Amended Agreement, which was signed only by two government operatives, then acting director Edward J. DeMarco of FHFA and Timothy Geithner, then Treasury Secretary. "Their contracts" with the federal government are not "their" contracts. They are just "contracts" that the government has entered into itself. The simple point here is that neither government agency represented the GSEs's shareholders who assets were stripped bare by government actions. Of course, the companies cannot pay back the debt because the government has seized all the assets that would allow that result to happen.


The Four Lawsuits It is no surprise that this highhanded action has attracted four major lawsuits in recent weeks. In addition to the Washington Mutual case, plaintiffs filed suits in Fairholme Funds, Inc. v. FHFA, (with Charles Cooper as lead counsel), Perry v. Lew(with Ted Olson as lead counsel) and Cacciapelle v. U.S., (with David Boies as lead counsel), attacking these sweetheart agreements and administrative shortcuts.Taken as a unit, these four lawsuits highlight three fatal flaws of the corrupt government deal of August 2012.

The first involves the blatant breach of the FHFA's duty of loyalty to the GSE shareholders, for whose sole benefit this arrangement was imposed. No fiduciary, government or private, may engage in collusive self-dealing that results in a huge one-sided giveaway of all corporate assets. FHFA is not exempt from this bedrock rule. Second, the Treasury's major abuse involves its conscious disregard of the explicit protections for GSEs built into Section 1117 of HERA. For starters, that section gives the Treasury only "temporary authority to purchase obligations and securities" up to December 31, 2009. That authority certainly did not allow the Treasury to engineer its one-sided 2012 sweep, except on the absurd premise that the statutory authorization to "buy" before 2010 implicitly authorizes outright government expropriation of GSE assets after 2009.

To be sure, the Treasury's temporary authority instructs it to "protect the taxpayer," and so it should be. But the phrase must be read in context. This instruction is meant to prevent the GSEs from ripping off the U.S. with one-sided deals. By no stretch of the imagination does that phrase authorize the U.S., in the name of taxpayers, to rip off GSE shareholders. Explicitly, HERA's statutory mandate only invites the Treasury to determine such financial matters as the maturity and risk of these notes, with the eye to making deals that allow for "the orderly resumption of private market funding or capital market access." However, the Treasury has not uttered a single syllable to explain why it's necessary to wipe out GSE shareholders by sleight of hand when ample funds are available to repay, with interest, the full $187 billion advance to these GSEs. Its brief public comment to date has echoed the point that it advanced $187 billion to Fannie, as it were, to maintain the solvency of both GSEs and protect the broader economy. The Treasury's email said "We fully believe our actions have been lawful and appropriate," without of course referring to the details of the Third Amended agreement. The normal tradition of judicial deference to administrative decision only applies to cases where there was reasoned elaboration before the government. It does not attach to imperial actions that are taken without public notice or comment or reasoned explanations.

Third, by stripping the GSEs of their assets by these verbal machinations, the Treasury and FHFA have taken the property of the shareholders--the corporate assets--without paying a dime in constitutionally required compensation. Remember, both Fannie and Freddie were solvent at the time of the August 2008 takeover, notwithstanding their previous run of losses. If the United States is allowed by fiat to throw solvent firms into government receivership, the Treasury's tortured logic would routinely allow the government to force any profitable corporation into receivership, thereafter to force a one-sided renegotiation of contracts that offers it huge dividends on nonexistent investments.

This logic holds even on the dubious assumption that that the GSEs got fair value for their perpetual 10 percent preferred stock. If so, proper accounting procedure requires the Treasury to first credit distributions to its 10 percent interest on the unpaid balance, using the remainder to pay down principal. By rough calculations, about $50 billion of the money paid to the Treasury should have paid down the debt, which would then decline from about $187 billion to approximately $137 billion. In effect, the desired remedy only requires courts to take the unexceptional position that the government cannot escape all of its fiduciary, statutory and constitutional obligations by re-labeling a return of capital as a dividend.

Ominous Long Term Implications The availability of a simple account fix to government overreaching lays bare the inexcusable workings of the Treasury's one-sided deals. Ironically, Mr. Hensarling's conscious effort to undermine property rights works at cross-purposes with his larger, laudable objective of trying to rid housing markets of their past, massive irregularities in order to encourage more private investment. What private fund will invest in projects when their cash can be siphoned off by dubious contractual liberties and administrative shortcuts that make a mockery of the rule of law? Why force hedge fund investors to bear losses created by a government money grab that wipes out all of the shareholders' legitimate anticipated returns? Prompt action is needed to stop Mr. Hensarling before his populist express gives us a rerun of the Chrysler and General Motors political bankruptcies about which I have written elsewhere. But if courts don't invalidate the government's contractual gimmicks and administrative shortcuts, this is exactly what will happen.

Richard A. Epstein is a professor of law at NYU Law School, a Senior Fellow at the Hoover Institution, a Senior Lecturer at the University of Chicago and a visiting scholar with the Manhattan Institute's Center for Legal Policy. His forthcoming book is "The Classical Liberal Constitution," from Harvard University Press in 2013. He has consulted for several hedge funds not involved in the ongoing litigation on the issues discussed in this Op-Ed.


On Thursday, July 18, Texas Republican Congressman Jeb Hensarling will hold hearings on his "Protecting American Taxpayers & Homeowners Act." The PATH Act contains many forward looking proposals, on which I have no comment. But on this occasion, I want to focus on one key feature of the Act, which is only obliquely revealed by the statutory title. Mr. Hensarling shows great solicitude for American taxpayers and homeowners. But in a telling omission, he gives the back-of-the-hand treatment to the preferred and common shareholders of Fannie Mae and Freddie Mac, (commonly called Government Sponsored Entities or GSEs). In the interest of full disclosure, let me state for the record that I have advised several hedge funds on the merits of the PATH Act, and on the parallel bipartisan legislation that Tennessee Republican Senator Bob Corker called the Housing Finance Reform and Taxpayer Protection Act of 2013, both of which are designed to wind down the operations of Fannie and Freddie.

Liquidating Fannie and Freddie The source of my concern with Mr. Hensarling's proposed legislation involve sections 103 and 104 of the Act, which, according to its legislative summary provides for "Termination of Conservatorship," such that "Five years following the date of enactment mandates the appointment of the Federal Housing Finance Agency (FHFA) director to act as receiver for each Enterprise (i.e. Fannie Mae and Freddie Mac) and carry out receivership authority." Section 104 then provides for declining maximum amounts that GSEs shall be entitled to own over the five-year transitional period before these entities are liquidated.

In one sense, the demise of Fannie and Freddie should not be lamented, after the long and sorry history of massive government intervention in their internal affairs that created serious dislocations in the marketplace in 2008, including, most notably, the Congressional insistence in 2007 that Fannie and Freddie issue some $40 billion in subprime loans. As a result of these actions, both GSEs suffered major losses during the early part of 2008, not unlike those suffered by other private companies. The nature of these actions are outlined in a complaint attacking the various government actions filed in Washington Federal v. U.S. in June 2013.


Around the web, August 27 - PointOfLaw Forum

  • Intel CEO: US legal environment so hostile that it will cause tech decline. [CNET]
  • $2.2 million for the lawyers, $2080 for the class in California state Wells Fargo class action. [Schonbrun @ HuffPo]
  • WSJ posits that criticism of Feinberg comes from lawyers upset that they're not gettting a bigger slice of the $20B BP fund. [WSJ ($)]
  • The trial bar heads to Iraq. [WSJ ($)]
  • Lawyer recommends disbarment for Judge Joseph Bamberger in Kentucky fen-phen scandal four years after he resigned from bench over it. [Courier-Journal]
  • More on California $21M predatory pricing verdict. [Wright]
  • Eleventh Circuit amicus brief in Cappuccitti v. DirecTV cites Andrew Trask's must-read class-action blog. [WLF; earlier at POL]
  • New York Domestic Workers' Bill of Rights passes in slightly less onerous form than first proposed; includes mandatory overtime for live-in workers. [NLJ]
  • Two BigLaw firms sanctioned $2M for their role in meritless litigation filed by Ron Perelman against his in-laws. Appeals pending. [American Lawyer]
  • Renegade Republican Michigan Supreme Court Justice Elizabeth Weaver resigns shortly before election, which may give benefit to Democratic candidate who can now claim incumbency. [Free Press]
  • The hypocrisy of MoveOn.org. [IJ]
  • Was Blagojevich jury deliberately hung by career Dem as a political move? And did prosecutors decide not to strike this obviously problematic juror for fear of Batson problems? [Ace; Patterico]

The Supreme Court today unanimously ruled that plaintiffs cannot insist on California jurisdiction for lawsuits against national corporations just because those corporations do more business in the populous state than in any other state.

California employees of Hertz have sued for alleged unpaid overtime and vacation pay. Hertz has tried to remove the suit to federal court on the ground that it was not a citizen of California, but of New Jersey, where it is headquartered. A 9th Circuit panel had ruled that the lawsuit should remain in California state court because Hertz did more business in California than anywhere else.

The Supreme Court, via Justice Breyer, said a company should be considered a citizen of the state where its corporate "nerve center" is located. "In practice it should normally be the place where the corporation maintains its headquarters." But Justice Breyer referred the case back to lower courts to determine whether this means New Jersey or some other state.

This decision unfortunately won't affect product liability cases much, since plaintiffs can always avoid diversity removal to federal court by joining an in-state defendant (typically a local retailer). But it's good news on the contract front.

Andrew Trask at Class Action Countermeasures (McGuire Woods) has details on Hamm v. TBC Corp.

"Is a worker an employee or independent contractor? The legal distinction between the two often is clear as mud, but the consequence for guessing 'independent contractor' when the answer is 'employee' can be a huge bill to employers for back wages (especially overtime) and back taxes." And states, just like class action lawyers, stand to make a fortune through aggressive efforts to convince courts that employers have guessed wrong [Workplace Prof, Slate "BizBox"]

Around the web, June 8 - PointOfLaw Forum

Around the web, March 23 - PointOfLaw Forum

  • "The Duty to Avoid Wrongful Convictions: A Thought Experiment in the Regulation of Prosecutors" [Fred Zacharias/Bruce Green SSRN paper via Perlman, Legal Ethics Forum]
  • Wage-and-hour class action on behalf of CBRE property management maintenance workers seeks overtime for time spent carrying Blackberry at employer's wish to stay in touch during off hours [Business Journal of Milwaukee]
  • "International human rights law" an elastic and ever-expanding thing: now it's said to ban life-without-parole as too harsh a penalty for the worst killers [Volokh]
  • Wyeth v. Levine just one more source of good news for big, prosperous and cohesive Philadelphia trial bar [Inquirer courtesy U.S. Chamber]
  • Dominion Transmission class action: lawyers' fees cut to a mere $2,130/hour [WV Record]
  • Florida Engle/Hess "mini-trials" against tobacco defendants probably unconstitutional, says Cardozo lawprof Anthony Sebok [FindLaw "Writ" via Childs]

Around the web, January 26 - PointOfLaw Forum

All labor- and employment-law edition:


  • Flying under the radar, Healthy Families Act would extend scope of FMLA paid leave [Kirsanow, NRO "Corner"]
  • Jeff Hirsch: Oh, go ahead and nationalize workplace law [WorkplaceProf]
  • "Obesity as Disability: An Imperfect Fit" [Pulver via Bales, WorkplaceProf]
  • International Union of Manhattan Drawbridge Operators? Make sure you're following Mickey Kaus on the EFCA debate [Kausfiles, multiple posts]
  • Idea of "time theft", though rather weird and artificial, comes up on both sides in employment disputes [George Lenard]
  • Those wicked, wicked conservatives: institutes at UC Santa Barbara (Nelson Lichtenstein) and UCLA collaborate to sponsor conference demonizing those not on board with new labor measures [program via Workplace Prof]

'Free choice' versus binding arbitration - PointOfLaw Forum

Peter Kirsanow, a Cleveland attorney and member of the U.S. Commission on Civil Rights, has turned his attention recently to the Employee Free Choice Act, the legislation that would allow labor organizers to dragoon employees into a union bargaining unit via public collection of signature cards, eliminating a secret-ballot election supervised by the National Labor Relations Board.

In several posts at National Review's The Corner (one previously noted by Walter), Kirsanow focuses on the binding arbitration provisions of the law, which until recently have received much less scrutiny then the "card check" provisions. In short, if a new bargaining unit and employer cannot reach a first contract after 120 days, a federal arbitrator will impose contract terms on them for two years. Sometimes you can't even agree on the size of the negotiating table in that period of time, Kirsanow notes from his own experience. And is it really a contract?

Under EFCA, the terms set by the arbitrator will be the furthest thing from a "contract." It won't be an agreement between management and labor. Rather, wages, hours and terms and conditions of employment will be dictated by a government appointed arbitrator. The mandate will be binding on the parties for two years. Neither the company nor the employees can reject it...

Currently, if employees don't like the tentative agreement negotiated between union leaders and management the employees can vote it down and instruct their leaders to go back to the bargaining table to get a better deal. Not so under EFCA. If the employees don't like the arbitrator's decree of a 2% wage increase, they're stuck. Similarly, if the company can't afford the arbitrator's command to pyramid overtime, the company's stuck. The consequences aren't difficult to imagine.


Right. Imagine being in an industry where five or six businesses are engaged in fierce price competition, and where labor decides to organize you first. An arbitrator's terms could kill your operation altogether.

Kirsanow's posts, which also include some illuminating comparisons to Canadian employment law:

Around the web, October 24 - PointOfLaw Forum

  • If you think the card check provisions in EFCA are outrageous, wait till you hear about the mandatory arbitration [Kirsanow, NRO Corner]
  • "Prohibition of Excessive Overtime in Health Care Act will Exacerbate Nursing Shortage" [Pennsylvania Labor and Employment Blog]
  • Suppose plaintiffs win Wyeth v. Levine and Vermont juries can second-guess FDA on medication's labeling for IV use. What then? [ER Stories]
  • Other pre-emption issues are bustin' out all over [Beck & Herrmann (U.S. Supreme Court, food regulation), NLJ (NHTSA, seat belts), Mundy/WSJ, Carter/ABA Journal (various federal agencies), Cal Biz Lit (autos, California court of appeal)]
  • Must be those awful deregulators at work: workplace injuries decline for sixth consecutive year [Henke, Next Right via Friedersdorf]
  • Emergence of Delaware as favored asbestos plaintiff's forum could dull the state's edge in corporate law, gee thanks Senator Biden [Bainbridge, WSJ edit, SE Texas Record]
  • Annulling credit default swaps as void: could this be Ben Stein's worst idea yet? [Salmon]

Around the web, October 22 - PointOfLaw Forum

Around the web, April 18 - PointOfLaw Forum


Around the web, March 14 - PointOfLaw Forum

All-employment-law edition:

  • Wage-and-hour suits keep perking away: 75,000 Wal-Mart employees in Washington state [Post-Intelligencer]; $100 million demanded for tip-sharing Starbucks baristas [The Recorder]; Canada has it too as in huge overtime suit against Bank of Nova Scotia [CP/AsianCanadian.net]
  • California managers heave sigh of relief as state high court, 4-3, spares them personal exposure in retaliation claims [The Recorder]
  • Speaking of retaliation, before departing Gov. Spitzer passes into private life, spare a moment to recall one interestingly aggressive legal position he took as AG: that employees' walking off job to march in immigration-amnesty demonstrations was protected activity immune from employer discipline [Malkin]
  • Local governments across England obliged to "remortgage their town halls and raid reserves" to meet sweeping L2.8 billion retroactive comparable-worth order [Guardian]
  • EEOC "acutely disappointed" by court decision last fall curbing its quest for punitives in "pattern and practice" sex harassment charges [ChiTrib/TradingMarkets.com]
  • No age discrimination charge was ever more credible ["Speed Bump" cartoon]

"IBM responds to overtime lawsuits with 15% salary cuts" - PointOfLaw Forum

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).

Around the web, November 21 - PointOfLaw Forum

  • "Remarkable consensus ...in legal academia today" that most securities suits don't benefit investors [Parloff]
  • Daniel Solove's new book The Future of Reputation: Gossip, Rumor, and Privacy on the Internet, reviewed [Anne Reed, first and second posts; Amber Carson]
  • A doc's apology [Memphis Commercial Appeal via Day on Torts]
  • EU ministers promise: consumer laws "won't go US route" [Scotsman]
  • An introduction to employer liability for violence in the workplace [George Lenard, first and second posts]
  • One year on, Calif. bar still grappling with whether to require lawyers who lack malpractice insurance to tell clients [The Recorder; earlier]

Business Week on wage/hour, overtime suits - PointOfLaw Forum

Those who've followed the past coverage on this site won't be all that surprised by last week's cover story on the fastest-growing area of employment litigation, but it's a good introduction to the subject for those new to it, with some nuggets worth memorializing:

No one tracks precise figures, but lawyers on both sides estimate that over the last few years companies have collectively paid out more than $1 billion annually to resolve these claims, which are usually brought on behalf of large groups of employees....Wal-Mart Stores is swamped with about 80 wage and hour suits, and in the past two years has seen juries award $172 million to workers in California and $78.5 million in Pennsylvania.

"This is the biggest problem for companies out there in the employment area by far," says J. Nelson Thomas, a Rochester (N.Y.) attorney, who, like [Reno attorney Mark] Thierman, switched from defense to plaintiffs' work. "I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will." ...

While violations appear widespread, employees themselves rarely think to make wage and hour claims. Instead, they usually have it suggested to them by lawyers. "Ninety-five percent of our wage and hour cases are a result of someone coming to us complaining about something else," says Thomas. "I can't tell you how many people have come into our office with employment disputes that are meritless and would be thrown out of court and walk out with an FLSA claim."

San Diego courts hit with overtime suit - PointOfLaw Forum

Pretty much everyone is vulnerable to wage-hour litigation these days, it seems, and "everyone" includes the courts themselves.

High court upholds home care overtime exemption - PointOfLaw Forum

By a 9-0 margin, the U.S. Supreme Court declined to upset Department of Labor regulations that exclude home health care workers from wage-hour coverage (earlier). Much of the news coverage, as usual, proceeded as if the question were simply: do we think exempting these workers is a good idea, or not? Fortunately, the court itself did not mistake its role for that of a surrogate legislature, and recognized that the legal issue before it was whether DoL acted within its authority in issuing the rule, which it clearly did.

Around the web, May 16 - PointOfLaw Forum

Special employment-law edition:

  • Brazilian beer taster wins worker's comp claim after developing alcoholism [WaPo]

  • In Rockwell case, Supreme Court led by Scalia somewhat tightens up on False Claims Act whistleblower lawsuits [NLJ, Workplace Law Prof]; House holds hearing on expanding such suits [Workplace Law Prof again]

  • Pharmaceutical sales reps are latest growth area for overtime lawyers [NLJ]

  • Lack of mentoring proves expensive: Morgan Stanley sets aside $46 million to settle gender-bias employment charges [AP/Law.com]

  • Reason for Alvin Lurie to smile: another court rejects "cash-balance" pension plan challenge [Workplace Law Prof yet again]

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