By Walter Olson
Adapted and updated from The Excuse Factory, Free Press, 1997
Over the past 45 years, legislators, regulators, and courts have invented and imposed on the
American workplace a vast and ambitious new body of law ranging from harassment and handicap-accommodation
law to age discrimination law to family leave to new common-law doctrines making employers liable
for "wrongful termination," "workplace defamation," and much more. Practicing lawyers refer to this new
field as employment law, and distinguish it from the earlier labor law associated with the New Deal.
It is mostly advanced not by unionsnor in fact by collective worker sentiment or action of
any sortbut by lawyers' threats to sue for large damages on behalf of some (often just one)
worker. It aspires to regulate not just hiring, firing, and wage-setting, but the whole range of working
conditions, very much including psychological intangibles of the sort summed up in a famous phrase from
harassment law, "hostile work environment."
The law turns a great many commonplace work situations into potential lawsuits. Not only is every
firing a potential source of legal trouble; so is every failure to hire or promote, as well as an
endless array of problematic working conditions, pay disparities, and criticisms or other remarks that
might have given pain. Pretty much all employee selection and evaluation methods, very much including
the subjective and word-of-mouth methods most in use, are legally suspect for one or another reason,
often because they show "disparate impact" against some protected group. Asking ambitious employees to
work overtime, or guessing wrong about what an adverse lawyer or court will consider to be "on-the-job"
time, has cost many employers huge sums following retroactive wage-and-hour class action suits.
Employers cannot knowingly and fully comply with the new employment law the way a wage earner can be
sure he has filed his income taxes by April 15. The new law is voluminous; much of it is vague, so that
employers cannot tell exactly what is asked of them but must find out after the fact when courts or
regulators rule; it changes constantly and often retroactively; and its dictates are often what
lawyers diplomatically call "in tension" with each other. No degree of good faith can keep employers
from being taken to court and sometimes losing. Nor can they be sure of victory by sinking any fortune
into compliance effortswhich does not keep them from trying.
Some employers react by documenting personnel decisions obsessively, while others put as little on
paper as they can get away with. Many hire squadrons of personnel and compliance specialists and in-house
lawyers, often yanking authority from front-line managers and professionals in the process. Some adopt
clever subterfuge, others resolve to live dangerously and hope they don't get sued, and yet others
cultivate ultra-progressive reputations for overcompliance which they hope will count in their favor
if they are ever put in the dock. One consistent feature of the new law is its propensity to usher in
personnel practices no one would have thought of adopting for any other reason, such as the
stylized "window buyout" in which a large group of employees are offered a short period, such as 30 or
60 days, to decide whether to accept a bribe in exchange for leaving without suing.
In the past decade, having taken a look into the abyss of universal and unending workplace
litigation, a number of influential courts have stepped back and signaled a retrenchment. The U.S.
Supreme Court in a series of high-profile rulings narrowed the previously ultra-broad application
to the workplace of the Americans with Disabilities Act. Courts in California, Michigan and elsewhere
have pulled back from wide-open theories of common-law wrongful termination.
And yet the plaintiff's bar, ever resourceful and inventive, has at the same time been opening
up extremely lucrative new fields of employment litigation. Employment class actions, which fell
largely into disuse after a heyday in the 1970s, were revived to great effect and resulted in
high-profile settlements on behalf of minority and female employees at many large corporations.
Wage-and-hour suits, a previously obscure holdover from 1930s labor law, have been rolled out
as big legal business (with help from the class action format) and may succeed in redistributing
billions of dollars in the years ahead, not infrequently in situations where employers had been
lulled by a lack of employee complaints into thinking there was no legal problem with their pay
policies. And lawyers are finding ways to rework and work around ERISA, the federal
pension statute, so as to turn discontents over pension fund management into potentially huge claims.