Results matching “card check”

Lyft v. Saint Louis - PointOfLaw Forum

Robert Panzenbeck
Legal Intern, Manhattan Institute Center for Legal Policy

On Monday, a Saint Louis Judge issued an injunction meant to stop the nationally popular Lyft ride share app from operating in the city and the county. The injunction came down two days after Lyft launched in Saint Louis, disregarding a cease and desist order from the Metropolitan Taxi Commission. On Friday, local police, in conjunction with MTC officers, issued summons and restraining orders to Lyft drivers, who were easily identified due to the conspicuous pink mustaches that adorn the front of their vehicles. Along with tickets, Lyft drivers were also given a list of licensed cab companies that were hiring.

Saint Louis is not the first city to confront ride share programs. Across the nation, regulators have expressed near unanimous concern that the growth of ride share programs might create a wild west scenario, where unknown, underinsured drivers flood the market, creating a public danger. Local governments, to be sure, have a vested interest in regulating the quantity and quality of drivers. Rideshare programs have often exacerbated the situation by refusing to play ball.

Apart from municipalities, taxi drivers have a bone to pick with ride share programs. In Chicago, cabbies have filed suit against the City for allowing Lyft and Uber to operate outside of the regulatory framework, alleging in their complaint that the states failure to enforce the taxi rules against these entities violates equal protection. The drivers also allege, quite reasonably, that allowing free riders like Uber and Lyft potentially devalues the 6800 cab permits in play in the Chicago market, whose aggregate value is estimated at 2.38 billion dollars. In states like New York, dual taxi medallions recently sold at auction for 2.5 million dollars.

Part of Lyft and similarly situated tech firms failure to comply with existing regulations stems from how these companies views themselves in the marketplace. Lyft maintains that they are not a traditional cab service, but a peer to peer ride sharing service, different from what's offered by a traditional cab. Instead of hailing, Lyft allows users to obtain a "Lyft" by connecting with drivers in the area via a mobile app. Users can track the driver on a map until they arrive; at the end of the ride, rather than charging a fare, Lyft suggests a donation. This is deducted from a credit card, and no cash is exchanged. At the end of the ride, both passenger and driver rate their experience. Riders that "under donate" are flagged by drivers and drivers that offer a low level of customer service will be disconnected from that particular passenger and less likely to pick up fares. Lyft drivers whose rating falls below a certain level are no longer permitted to provide "Lyfts," the equivalent of being fired.

Lyft and other ride share programs are part of what's being dubbed "the sharing economy," where individuals use internet applications like Lyft, Uber, and AirBnB to share excess goods and services. Rather than relying on professional cab drivers, Lyft and other sharing economy applications allow regular users to make optimal use of excess economic resources to serve a community need. In Saint Louis, the average Lyft driver is described as "someone who works during the day and drives at night to pay for beer or cover student loans." Advocates for such companies argue that the use of real time input by users incentivizes rigorous self-regulation, with real time feedback provides data that helps maximize the possibility of providing a positive customer experience. Lyft is a good example. Although it has so far refused to comply with the Saint Louis law that requires drivers to be vetted by the city, Lyft's website details its rigorous driver driver safety standards, including interviews, DMV and Criminal background checks, a zero tolerance drug and alcohol policy, and a robust insurance policy.

Whether or not this sort of self regulation will prove adequate, it's clear that applications like Lyft have been able to recognize what's important to their users, and adjusted their business model accordingly. In the process, they've sparked innovation in formerly stagnant marketplaces, placing regulators and existing firms at a disadvantage. Writing at Forbes about Lyft competitor Uber's struggles with regulators, Larry Downes sums it up rather well:

The benefits of closely overseeing ride services are obvious--or, at least, were obvious when rules went into widespread existence starting in the early 20th century. They include ensuring that drivers and their vehicles are safe and adequately insured, that passengers are charged reasonable and predictable fares, and that limits are placed to protect drivers and riders alike from having so many vehicles for hire on city streets that no traffic can actually move.

The costs of removing competitive pressures from industries are also significant. Chief among them: in the absence of market dynamics, there are few if any incentives to innovate. Why should the driver of my last cab ride spruce up his vehicle, when every taxi at the cab stand charges the same fare and goes whenever its turn comes up? When price is controlled and new entrants are prohibited, only a fool would spend money to differentiate their product or service.

Writing at nextSTL, Alex Ihnen notes that although Lyft is not complying with the current regulatory model, it hopes to work with Saint Louis supervisors to shape regulations that it believes are more suitable to its business model. However, Ihnen notes that the MTC has had problems reaching agreements with other ride share programs in the past. Uber departed the marktplace after dubbing the conditions unsuitable to their business model. New York based Carmel is currently the only mobile app driven service operating in compliance with MTC regulations.

One thing is certain: the popularity of these firms will force regulators and market participants to work together to establish a new regulatory framework that can keep pace with these rapidly developing technologies. Janelle Orsi, an Oakland based attorney and director of the Sustainable Economies Law Center, sums up the legal quandary that is the sharing economy quite well. Writing at Post Growth, she notes:

...for now, the sharing economy exists almost entirely in legal grey areas. Zoning, securities, public utilities, health and safety, and employment laws aren't usually barriers to feeding, housing, lending a hand, and giving a ride to our family and friends. But they are barriers when we engage in the same activities as commercial businesses, such as restaurants, hotels, or taxis. Everything happening in the sharing economy lands somewhere on a spectrum between what is regulated and what is not. I love that about the sharing economy. The fact that it defies legal classification is proof that the sharing economy is new and different

NLRB Grants Northwestern Players the Right to Form a Union - PointOfLaw Forum

Robert Panzenbeck
Legal Intern, Manhattan Institute Center for Legal Policy

Last week, the NLRB issued a ruling that could potentially transform the landscape of college sports. In a 24 page opinion, NLRB regional director Peter Orh recognized Northwestern football players as employees of the university with the right to form a union and collectively bargain. Ohr imposed a three-part test that considered the amount of time players spend on non-academic pursuits, the nature of control exerted by non-academic coaches over the players, and the non-academic nature of the scholarships themselves. If the decision is upheld by the NLRB in Washington, it would mean that players could choose a union to bargain with the university on their behalf. That union would likely be the College Athletes Players Association, a labor organization founded with a focus on allowing college athletes to bargain for basic scholarship and injury protections. Kain Colter, the former Northwestern quarterback who initiated the petition, is a founding member.

The media response has been mixed. During the hearings, Northwestern cited its rigorous focus on academics, and its 97 percent football player graduation rate as indicative of a commitment to student athlete education. Bloomberg economist Allison Schrager has defended the current model, noting in her recent piece "In Defense of the NCAA", that from an economic perspective, the current system is preferable to a minor league for most athletes, providing them with an education and the opportunity to earn a degree that is far more valuable than any compensation they would likely get participating in any minor league. NCAA President Mark Emmerich somewhat echoed this sentiment recently on CNBC, noting that while a change might benefit 3 or 4 percent of the players who make it to the NBA, the opportunity for an all-expenses paid degree provides a greater incentive than a paycheck to the vast majority of players.

Even those who criticize the NCAA model are quick to point out the shortcomings of this ruling. Writing at Bloomberg, Megan McArdle writes that "given the realities, it's hard not to cheer the NLRB, but it isn't clear how much allowing football players to unionize will accomplish, as long as the NCAA is still allowed to make rules against paying them. Point of Law contributor Richard Epstein, who has in the past argued that "the NCAA enforces a cartel that denies earned benefits to college athletes," criticized the decision, noting Ohr's failure to examine the absence of the application of the common law standard for "employees" in any other labor related context, and takes Ohr's opinion to task for its notable vagary on issues like who is covered, the extent of negotiations, the conflict between choosing individual schools as bargaining agents and the coherent obligations of a league, and the chaos that might ensue.

Over the last decade, the NCAA has grown s to become a multi-billion dollar cash cow, driven primarily by lucrative television contracts related to BCS Football and March Madness. As the pot has grown without accompanying reform in the realm of player compensation, many have taken notice, and suits have been filed calling into question amateurism policies. The Northwestern ruling is the first to suggest a sea change is afoot. In February, U.S. District Court Judge Claudia Wilken allowed allowed a case brought by former UCLA player Ed O'Bannon challenging the NCAA's ability to profit off the likeness of current and former players without just compensation to move forward. Last week, anti-trust attorney Jeffrey Kessler filed suit against the NCAA seeking an injunction against enforcement of limits on financial aid available to athletes, which if successful would allow players to be paid for their performances. Even if NLRB in Washington should reverse the ruling, as some have suggested is likely, one thing is clear: this is just the beginning.

How the trial-lawyer tax is hurting hiring - PointOfLaw Forum

Charles Hugh-Smith and Jim Geraghty note that if an employee cannot generate revenue to cover his or her wages plus overhead costs, he or she won't be hired. This is absolutely true, but both understate the problem, and the degree to which the Obama administration has made it worse, and is planning on exacerbating it.

One of the biggest overhead expenses is the expected litigation expense of an employee. Employees have a wide variety of rights under federal and state law to sue their employer—not just for the hiring and firing decision, but for promotions or work conditions. A dishonest employee can impose a great deal of cost on an employer by bringing a meritless suit; whether the employer takes a hard line or pays the Danegeld, these are very real expenses. (For example, defending against the notorious meritless Jamie Leigh Jones suit cost KBR $2 million.) It's little surprise that California, where employees can sue for a variety of technicalities in a lawyer-friendly litigation environment, has a much higher unemployment rate than the rest of the nation, despite a dynamic technology industry and being so attractive to millionaires that the state thinks it can raise revenue rather than drive away taxpayers with a 13.3% tax rate.

That overhead cost isn't just awards to plaintiffs with meritorious, or even plaintiffs with unmeritorious, grievances. It's the lawyers, on both plaintiffs' and defense sides, who collectively receive more than employees take home from litigation victories and settlements. But it's also the (as-far-as-I-know yet-unmeasured) compliance costs: the vast human resources bureaucracy that keeps track of these laws and maintains the paperwork to protect the company in the event of future litigation. The compliance costs can have non-monetary effects as well. But take, for example, something as simple as employee appearance. Even something as simple as "It's not good for the corporate image to have someone with a Maori face tattoo interacting with customers" has an litigation minefield overlay, including EEOC litigation. That costs money, and that money comes at the expense of hiring.

So it's worth noting that these laws, on balance, hurt the average employee. Plaintiffs' attorneys' fees often outstrip the returns to the clients; add to that the defense attorneys' cost, and the cost of a human resources apparatus to ensure compliance, and the vast majority of the benefits of employment litigation is going to white-collar professionals, and most of that going to attorneys in the top decile, or even the top 1%. That overhead cost may add up to more than 10 percent of wages: a $30/hour employee is, instead of being paid $33/hour, getting a $3+/hour "benefits" package, most of which ends up in the pockets of people wealthier than him or her. Now, perhaps we as a society are willing to accept these costs to vindicate the relatively rare cases where a bigot or predator unfairly treats an employee and management acts against the company's interest in letting qualified employees be chased away. (One of the silliest things about the Wal-Mart employment litigation was the premise that the most aggressive cost-cutting company in the world would systematically choose to throw money out the window just to discriminate against qualified women in promotion decisions.) But these costs are rarely ever acknowledged in the policy debates in the first place.

And, even as structural unemployment rises to scary levels, this administration has sought to increase these overhead expenses to make hiring more expensive. The Lilly Ledbetter Fair Pay Act makes it easier to bring meritless suits by obliterating the statute of limitations. (Statutes of limitations are important for justice. Without a statute of limitations, someone can sue for very old alleged injuries, and a defendant would not have a fair chance to defend herself. (Ledbetter sued over her pay after she was retired!) Memories fade, evidentiary documents are discarded, people change employers. If an employee can wait until a middle manager of years ago died before accusing the company of discrimination, justice is impossible.) The EEOC has become increasingly intrusive. Though courts have largely rejected the move as arbitrary and capricious, Obama's NLRB appointments have sought to abolish arbitration agreements as an unfair labor practice. All in the supposed name of increasing workers' rights, but with the effect of exacerbating inequality and unemployment.

The State of the Union bodes more of the same. Not just the proposed minimum wage increase from $7.25 to $9, which will fall disproportionately upon unskilled workers who already have a double-digit unemployment rate. But the administration is reiterating its proposal for a "Paycheck Fairness Act that will surely increase unemployment as well. (More from Hans Bader.)

Activists complaining about credit card debt often singled out the shift in the credit card industry from 5% minimum payments to minimum payments of 2% a month. (See, e.g., this Frontline documentary.) The smaller minimum payments give customers more financial flexibility, but some small percentage of irresponsible spenders will find that they are in long-term debt to the credit card company because they're barely paying off any principal. So, in response to such complaints, and to reduce the risk it was facing during the credit crunch, JP Morgan (who issues Chase credit cards these days) raised the minimum monthly payment back to 5%.

This resulted in a class action. You see, lawyers said, it was unfair to credit-card customers who were planning on paying only 2% a month, and now faced higher fees and interest rates because they couldn't meet the higher minimum payment. After the district court certified a class, the case settled for $100 million, with the class attorneys—including the usual suspects of Lieff Cabraser and Milberg—seeking an oversized $27 million fee plus "expenses" that have not yet been disclosed; a preliminary approval hearing is scheduled for August 3. Press coverage doesn't mention that the class will end up with likely less than $70 million; existing court filings do not indicate the lodestar crosscheck or the approximate hourly rate the attorneys will receive for an MDL with only 337 docket entries and 14 depositions of defendants. Administration expenses will be artificially inflated because class members will be getting checks, when the ones with current Chase accounts could easily get an electronic credit.

The proposed cy pres recipient is "Consumer Action," which already receives funding from JP Morgan. One of the plaintiffs' firms is The Sturdevant Firm, based in San Francisco; the president of Consumer Action, with offices in San Francisco, is Patricia Sturdevant, but that could be a coincidence. Or perhaps not.

The case is In re: Chase Bank USA NA "Check Loan" Contract Litigation, No. 09-md-02032 (N.D. Cal.). [Reuters; class website]

The "Contains Peanuts" warning on a peanut jar - PointOfLaw Forum

Stuart Mauney laughs at the "CONTAINS PEANUTS" and "Manufactured on shared equipment in a facility that processes peanuts" warnings on a package of "Hand-Cooked Virginia Peanuts" (presumably manufactured by Jumbo Virginia Peanuts, by Mauney's description). This offends Max Kennerly, who calls it a "harmless warning," and correctly notes that this particular wacky warning is mandated by the Food Allergen Labeling and Consumer Protection Act (FALCPA), rather than by in-house counsel responding to the threat of suit.

But one should note that it's not a harmless warning. As I blogged on Overlawyered in 2007,

David Rossmiller blogs:
My experiences growing up in NoDak and later working as a crime reporter may not be typical, and perhaps the people I came to know were by some measures outside, shall we say, the social mainstream, but my first thought when I saw these purportedly wacky, useless warning labels was this: "I can see someone doing that!" Personally I've seen folks do much more ridiculous things many times.
The issue is whether people doing "ridiculous things" should have a cause of action for their own failure of common sense, or whether we require manufacturers to treat all of their adult customers like infants on pain of liability.

Such overwarnings have real social costs: as numerous studies have documented, if one's personal watercraft manual says "Never use a lit match or open flame to check fuel level," one's going to be less likely to slog through the whole thing and find the warnings that aren't so obvious. In many cases, the "failure-to-warn" is really just a Trojan horse to force the deep pocket to become a social insurer. In the Vioxx litigation, Mark Lanier has accused Merck of making too many warnings, and thus "hiding" its warning of VIGOR cardiovascular data. This effectively holds a manufacturer strictly liable for failing to anticipate with perfect foresight what risks will accompany which consumers, and tailoring its warnings on that micro-level--and if anyone regrets taking the risk later, they can always complain that the warning was legally insufficient for failing to be scary enough.

The wacky warning awards are often entertaining fluff, to be sure; the marginal harm from a "Do not iron" warning on a lottery ticket is infinitesimal, and is probably there as an anti-fraud device rather than as a product-safety mechanism. But ATLA, abetted by sympathetic law professors and credulous or disingenuous journalists, has engaged in a mass campaign to make equally silly warning cases--such as the McDonald's coffee case, where Stella Liebeck complained that the warning on her cup of coffee wasn't "big enough" to adequately warn her not to spill her coffee in her lap and sit in the puddle for ninety seconds--aspirational, rather than outliers. The wacky warnings are the canaries in that coal mine.

See also. The silly warning cases aren't just hypothetical, either. As we discussed just a few days ago, a warning of "KEEP AWAY FROM FLAMES, PILOT LIGHTS, STOVES, HEATERS, ELECTRIC MOTORS, AND OTHER SOURCES OF IGNITION" was insufficient to protect Blitz USA from liquidation in bankruptcy after David Calder inserted the nozzle of a $3.99 gas can into his wood-burning stove and successfully sued Blitz for the resulting catastrophe. And 117 people lost their jobs, and an untold number of people will be injured because they will be using substitutes for gas cans that are less safe.

Now, perhaps the benefits of having a simple-to-apply regulation that successfully protects people against allergens outweighs the marginal overwarning cost of this particular "contains peanuts" warning. But it's far from clear, and the reformers who warn of the problems of overwarning caused by our jackpot-justice product-liability regime are identifying a real public-policy problem that on balance makes us less safe.

Walter v. Hughes Communications - PointOfLaw Forum

A class action brought on behalf of California consumers alleging inferior speeds of Hughes Internet service and unfair charges of early termination fees. As most class actions do, this case has settled. Though the parties know who the class members are, there's a burdensome claims process instead of simply writing checks to class members: the parties mail a postcard to class members, the class members enter a claims number from the postcard into a website, and then fill out a claim form. So we have a settlement designed to benefit the attorneys while the defendant gets off cheap: even if 10% of the class makes claims, the attorneys' $630,000 fee will outstrip the class relief. And it's doubtful that 10% of the class will make claims. Ironically, the court had refused to approve an earlier iteration of the settlement, correctly viewing with skepticism an implausible valuation of the injunctive relief. it's hard to see how this settlement is much better.

The settlement class is "All persons and entities residing in the United States of America who, during any time between May 15, 2005 and March 2, 2012, were subscribers to any one of the one of the following satellite broadband internet service plans offered by Hughes: Hughes Home, Pro, Pro Plus, Small Office, Business Internet, Elite, ElitePlus, ElitePremium, Basic, Power 150, or Power 200 (together "Hughes Consumer Service Plans")." (Why do attorneys bringing a class action on behalf of California consumers get to settle on behalf of a national class? You tell me.) The case number is 09-cv-2136 SC (N.D. Cal.).

NYC lawsuit payouts: $560M in 2011 - PointOfLaw Forum

$560M, more than the budgets of many smaller cities, is a fairly shocking figure, since, at typical 33% to 40% personal-injury contingency rates, it means that it's a wealth transfer of about $30 per capita from every man, woman, and child in the 99% in New York City to the 1% who are trial lawyers. And the $560M figure doesn't include the litigation expenses of a 650-member Law Department (that's more than the number of lawyers in Dewey Leboeuf's New York office at its peak, though not all of those city lawyers are defending personal injury claims) or of non-legal workers whose jobs are interrupted responding to discovery.

But the focus of a NY Times story on the subject is the reporter's inconceivable shock that NYC defends itself in lawsuits instead of blindly writing multimillion $ checks. In particular, the story is critical of the city hiring a private investigator to double-check the claimed injuries of a plaintiff claiming (and eventually receiving) millions of dollars of damages from a tree accident: of course, surveillance of a personal injury plaintiff seeking a large sum for quality-of-life injuries is common, and can uncover fraudulent claims, though courts are inconsistent and relatively lackadaisical about punishing such fraudulent claims. But given how thoroughly wracked the status quo is with fraud, imagine how much a softer touch New York City taxpayers would be if it was known that they did not double-check for fraud? "If you build it, they will come," and that $560 million a year would quickly become $5.6 billion a year. The Times investigated "ten cases"; how were those picked? How many cases involving fraudulent claims that the City successfully beat back did the Times miss?

The Times does not question City taxpayers paying an unprecedented $350,000 to the estate of an elderly woman for what was, at most, a few seconds of pain and suffering (and was probably no pain and suffering at all, but we'll credit the jury's finding for the sympathetic grandmother against the deep pocket); it gives only lip service to the legitimate claim of the City's counsel, Michael Cardozo, that taxpayers are paying excessive amounts for injuries.

The Times story is part of a three-day series suggesting that the City should do more to prevent injuries from falling trees. Of course, creating excessive liability for damage caused by trees is a great way to incentivize a defendant into having fewer trees. Trial lawyers' proposed solutions sometimes involve pure social cost: this blogger argues for warning signs, though, of course, if every tree has a warning sign to avoid liability, citizens will simply ignore the millions of dollars spent on warning signs (and also ignore far more important warning signs). And trial lawyers will still argue that injured plaintiffs were inadequately warned, because, after all, the warnings didn't prevent the injury in hindsight.

Proxy Monitor: The Upcoming Annual Meeting Season - PointOfLaw Columns

James R. Copland
March 27, 2012

In 2012, we'll again be tracking annual meetings among America's largest public companies at the Manhattan Institute's Our 2012 Proxy Scorecard contains relevant proxy-ballot information on the largest 200 public companies, as ranked by Fortune magazine, including links to all shareholder proposals and executive compensation advisory votes. Our publicly available, easy-to-use database is sortable by meeting date, company name, type of proposal, proponent, and voting results. We will be adding companies' information to the scorecard throughout the year, as soon as ballots have been distributed to shareholders, and we will update the database with voting results after meetings occur and results have been reported to the Securities and Exchange Commission's Edgar website.

Although the corporate annual meeting season begins in earnest in mid-April, twelve Fortune 200 companies have already held their annual meetings, and 51 had mailed proxy ballots as of March 15. From this partial sample, we can already discern some trends of interest.

Of the 12 companies to hold meetings to date, three companies have seen shareholder proposals receive majority support:

• Johnson Controls, which at its January 25 annual meeting saw over 85 percent of its shareholders vote for a proposal by Gerald Armstrong calling on the company to declassify its board;

• Emerson Electric, which at its February 7 annual meeting saw over 76 percent of its shareholders vote for a proposal by the pension fund of the American Federation of State, County, and Municipal Employees (AFSCME) to declassify its board; and

• Apple, which at its February 23 annual meeting saw over 80 percent of its shareholders vote for a proposal by the California Public Employees' Retirement System to adopt a majority-voting standard for director elections.

That 2012's successful shareholder proposals have involved procedural rules such as board declassification and majority voting is in keeping with recent trends.

Such corporate-governance related proposals, not involving executive compensation or social or public-policy issues, thusfar constitute a majority of all shareholder proposals in 2012, a higher share than that seen recently. Proposals relating to executive compensation remain far less frequent relative to their levels before 2011, when executive compensation advisory votes became mandatory for all public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

2012's early returns involving such say-on-pay votes demonstrate the substantial role being played by the nation's largest shareholder advisory firm, Institutional Shareholder Services (ISS), in such voting. While no Fortune 200 company has seen shareholders reject executive pay packages in 2012, the four companies to have received the lowest percentage support--Johnson Controls, Navistar, Qualcomm, and Walt Disney--each received "no" vote recommendations from ISS on their executive pay plans. On average, these companies received 64 percent support from shareholders in say-on-pay votes, as compared to an average 94 percent support for other companies meeting by mid-March.

Since ISS's position almost certainly helped to influence the markedly different shareholder votes on pay packages, it would seem that an unintended side effect of Dodd-Frank-mandated say-on-pay votes is to give the proxy advisory firm a major "gatekeeper" role over executive pay. ISS's strengthened position might be enhanced further if institutional investors heed its newly promulgated advice to challenge management to respond whenever fewer than 70 percent of shareholders approve of board-proposed compensation packages--a position that would seem to be rather self-fulfilling given ISS's influence over the votes in the first place. Given that many of ISS's clients are labor-union pension funds and social-investing funds that may be motivated by issues other than maximizing shareholder value--and have respectively sponsored one-third and one-fifth of all shareholder proposals to date in 2012--I'll be watching the proxy advisory firm's role closely.

What else will I be watching in the upcoming annual meeting season? I'll be paying particular attention to certain classes of shareholder proposals in which union and social funds have taken a special interest:

• Proposals related to corporate spending on politics and lobbying (looming for Citigroup on April 17, Honeywell on April 23, BB&T and IBM on April 24, Johnson & Johnson on April 26, AT&T on April 27, and UPS on May 3), which have been increasing in number--though not getting majority support--in the wake of the Supreme Court's 2010 Citizens United decision affirming First Amendment protection for corporate political speech;

• Proposals calling on the company to separate the positions of chairman and CEO (looming for Bank of New York Mellon on April 10, Honeywell on April 23, General Electric on April 25, Johnson & Johnson and Lockheed Martin on April 26, and AT&T on April 27), which have been pushed hard by union funds and certain shareholder activists; and

• Proposals calling on the company to grant proxy access to shareholders nominating directors (looming for Wells Fargo on April 24), which are reappearing on this year's proxy ballots after the D.C. Circuit last summer rejected the mandatory proxy access rule proposed by the SEC.

Check Proxy Monitor during the annual meeting season for my ongoing analyses of these and other issues, as well as our up-to-date scorecard of scheduled meetings and voting results.

The rest of the story behind Obama's recess appointments - PointOfLaw Columns

Jim Copland

Published on 01/18/12

By now, others have well documented the extraordinary nature of President Obama's appointments to fill the National Labor Relations Board and head the new Consumer Financial Protection Bureau -- purportedly exercising authority under the Constitution's Recess Appointments Clause, but almost certainly acting outside the constitutional provision's scope.

But beyond the constitutional issues, the political and policy implications of the president's action has drawn insufficient attention. The president has, in an election year and without congressional oversight, assumed sweeping and virtually unilateral authority to make policy that will generate windfalls for his two most financially crucial campaign constituencies -- organized labor and the plaintiffs' bar. Just how important are trial lawyers and labor unions to the president's election? In the 2008 election, lawyers and law firms funneled over $45 million into Obama's campaign, more than twice as much as any other industry.

The Service Employees International Union spent over $31 million in independent expenditures to aid the president's campaign -- again, more than twice as much as any other outside group.

The organized plaintiffs' bar and various labor unions constituted a staggering 19 of the top 20 political-action committees' spending on behalf of Democrats in the 2008 campaign, doling out between $1.7 million and $3.2 million each.

Since assuming office, Obama has worked to repay these campaign benefactors. The auto-company bailouts propped up unions by undercutting the clear legal rights of secured debt holders, and much of the "stimulus" spending was designed to protect public-sector unions by shielding them from budget cuts made by strapped state and local governments.

Trial lawyers avoided any serious tort reform in Obamacare, and they got legislation that gutted statutes of limitation for employment-discrimination lawsuits and expanded the scope of private litigation against government contractors.

That said, Congress has frustrated the president's most ambitious plans to help labor and lawyers. Even with large majorities in both houses of Congress, Obama was unable to muster support for the Employee Free Choice Act -- the deceptively labeled "card check" bill that would have allowed unions to form without secret-ballot elections and empowered federal bureaucrats to make sweeping changes to private labor contracts.

Similarly, the most sweeping reform bills on the tort bar's wish list also never came to pass, including legislation designed to make it easier to file baseless claims in federal court; a bill to expand securities litigation by allowing lawyers to sue customers and suppliers for companies' alleged frauds; and a trial-lawyer tax break that would have allowed plaintiffs' lawyers to treat contingency-fee loans as immediate expenses.

With his recess appointments, however, Obama is now in a position to avoid such congressional obstacles and help unions and lawyers through fiat. With three of the five NLRB members slipped into power in the dead of night -- and two of these three were nominated only two days before the Senate's Christmas break, hardly stalled by congressional inaction -- the president's labor-friendly cronies will be well-positioned to make rulings advantageous to unions.

Expect to see more along the lines of the Obama NLRB's extraordinary effort to thwart a Boeing plant's construction in right-to-work South Carolina. As CFPB director, Cordray will be positioned to green-light state tort litigation previously blocked by federal regulation and to "delegate" enforcement to state attorneys general, who in turn will farm out lawsuits to the plaintiffs' bar.

Cordray himself leveraged the Ohio state attorney general's office into a powerful campaign fundraising mechanism, when his election pulled in over $800,000 from out-of-state plaintiffs' law firms and he then hired many of those same firms to sue on the state's behalf.

The president's NLRB and CFPB appointments should be understood not only as an affront to the Constitution's system of checks and balances, but also as an aggressive move to energize his deepest-pocket electoral supporters. Sadly, American law and policy will be the likely casualty of this Chicago-style campaign gambit.

In an interview with Jim Blasingame of The Small Business Advocate radio program, Jim Copland, director of Manhattan Institute's Center for Legal Policy, addressed the Consumer Financial Protection Bureau in light of the Senate's recent rejection of an up-or-down vote for Richard Cordray's confirmation as the director of the CFPB.

In one of several segments, Jim tackled the question, "How will the CFPB affect small business? He replied:

Credit has really dried up for small businesses. This is really the lifeline for small business; small banks making small loans to small businesses to go and invest. Of course, some of these small businesses are going to keep going, individuals will take out their personal credit lines, their credit cards. People running small businesses will find ways to get credit. But, the unavailability of low-cost credit for small businesses is one of the biggest, if not the biggest, problem right now in the economy.

The concern the Republicans have is that this bureau, while in concept defensible, was written into this law where there is basically no check on the power of the person running the bureau.

...And this person can effectively make unilateral decisions. No question that person is going think that these are intended to help consumers, but, they also might have massive implications for the broader economy, the ability to generate credit and the ability to generate financing mechanisms. This could have dramatic ripple through effects on the broader economy.

So I think that their concerns are well founded and what they're basically saying is, before we take one of these up for a vote, we've got to restructure this so that it is structured more like most of these federal agencies. Where there is some congressional oversight, some sort of bi-partisan commission, something so that you don't have one individual acting basically as a czar for the country's consumer finance because that's very, very dangerous if you get the wrong person in there. And I'd argue that Richard Cordray is exactly the person you have to worry about.

Jim wrote an op-ed piece published in the Washington Examiner on this topic months before the rejection of Cordray's confirmation, expressing similar views with a focus on Cordray's record as Ohio's Attorney General.

Around the web, October 19 - PointOfLaw Forum

  • Wouldn't you know, those foreclosure moratoria have effects on people other than people who haven't paid their mortgages. [WaPo]
  • The libertarian challenge to Obamacare. [Epstein]
  • Maryland high court upholds damages caps. [Fisher]
  • Paycheck Fairness Act will put small businesses out of business. [NLJ]
  • NY court rejects product-liability theory when no alternative design offered. [WLF]
  • Possible sanctions for lawyers who misrepresented facts to court in getting unconstitutional prior restraint on reporter in POM case. [NLJ]
  • A couple of Wisconsin attorneys are skeptical of civil Gideon proposals in that state. [Wisc. LJ; Petrie Stocking]
  • South Carolina high court to decide if "poker is a game of skill" loophole will permit home poker games without state interference. [Post and Courier]
  • Democrats' glass house on foreign money. [Hayward @ NRO]

President Obama on Saturday announced his intention to make 15 recess appointments, including two Democratic lawyers to serve on the National Labor Relations Board: Mark Pearce, a Buffalo, N.Y., labor lawyer, and Craig Becker, a law professor and SEIU and AFL-CIO counsel. Becker had drawn vehement opposition from business groups, not just for his union affiliations -- he becomes the first NLRB member to have actually been a union employee -- but for his writings* that argued employers have no legal standing when unions attempt to organize a workplace. (We've been covering the nominations for months in posts at, the blog of the National Association of Manufacturers.)

Two former NLRB members today predicted serious consequences of the Becker and Pearce appointments, which makes the NLRB's current make-up four Democrats to one Republican. Peter Kirsanow, a Cleveland attorney who served on the NLRB from 2006-2007, commented at National Review Online's The Corner:

[The] Board could adopt rules recognizing minority unions, implement "quickie" elections, grant unions greater access to employees for organizational purposes, restrict employer options during union campaigns and elections, recast supervisors' roles during election campaigns, leverage neutrality/card-check agreements by overturning certain Bush Board decisions, and increase the use of mail-ballot elections.

John Raudabaugh, a board member from 1990-93, issued an analysis from his law firm, Nixon Peabody, arguing that, among other steps, a "reenergized, partisan" NLRB might shorten the time span for representation elections and reverse a series of major decisions, which he lists. Also:

Additional targets. "Quickie" elections in less than the traditional 42 days from the filing of an election petition; limitations on employer speech; liberal findings to justify re-run elections, bargaining orders, special damages, and full back-pay awards; liberal interpretations of information requests to "facilitate" bargaining; and upending the common-law of contract interpretation to require bargaining and/or prevent unilateral management implementation of anything not clearly and unmistakably waived by the union by express contract language in the applicable collective agreement.

Inside Higher Ed also reports that a newly active board could reverse a 2004 decision that held Brown University graduate students could not unionize. Unions like SEIU would love another opportunity to unionize grad student teaching assistants.

* University of Minnesota Law Review, 1993, "Democracy in the Workplace: Union Representation Elections and Federal Labor Law." (Via FrumForum)

New teeth for federal contractor regulation? - PointOfLaw Forum

Most large firms do some sort of contract business with the federal government, which means they might want to brace for possible new executive orders and regulations in lieu of labor law reform, as well as stepped-up affirmative action requirements administered through the Office of Federal Contract Compliance Programs [OFCCP]. Related, on new agency leadership, here.

Labor "myths" that happen to be true - PointOfLaw Forum

Around the web, February 3 - PointOfLaw Forum

  • "Obama's Stealth Push for Card Check" [Chris Brown, Frum Forum, Bret Jacobson/Roll Call, ShopFloor coverage of yesterday's Craig Becker confirmation hearing]
  • "We're not finished with Toyota," says transportation secretary LaHood [Stoll, earlier; Reuters via Robinette]
  • Powering New England at permanent recession levels? Pollution suit seen as bid to close Salem Harbor coal-fired utility plant [Boston Globe] Opponents seeking immediate closure of Vermont Yankee nuclear plant [WCAX]
  • More on SEC global warming disclosure guidance [Carter at ShopFloor, earlier]
  • "Game-changing day at the SEC": now it can use cooperation agreements and deferred prosecution agreements [FCPA Professor]
  • That's what happens (well, at least sometimes) when you let nonlawyers write legal blogs [Turkewitz]

Around the web, February 1 - PointOfLaw Forum

Around the web, January 18 - PointOfLaw Forum

  • Massachusetts Senate race could give Republicans the added vote they need to block EFCA [Cal Labor Law] New poll shows union members opposing card check [Workforce Fairness Institute via Eric B. Meyer]
  • ObamaCare demonstration projects: "Oregon Seeks $300,000 Tort Reform Grant" [Lund Report]
  • Employers advised to make staff "sign and acknowledge receipt" of not-so-favorable performance reviews [Schwartz]
  • Any and all tactics? Website of Center for Justice and Democracy offers "kudos" for disruption of Detroit Auto Show [Pop Tort]
  • Market for directors' and officers' insurance on the rise in Europe as lawsuit risks mount [Kevin Lacroix]
  • Kirk Hartley of the Global Tort blog, a key stop for coverage of asbestos and bankruptcy issues, is switching law firms.

Around the web, December 16 - PointOfLaw Forum

  • Someone leaked SEIU's Employee Free Choice Act "cheat sheet" [Big Government via @Eric_B_Meyer]
  • "Shameful" prosecutorial misconduct, lack of evidence: judge tosses charges against last two defendants in Broadcom backdating case [AP, Ribstein]
  • "Date set for 'apartheid' class action" [Daily Dispatch, South Africa]
  • Chicago class action firm KamberEdelson has filed secondhand smoke suits against Wynn, Caesar's Palace casinos in Nevada [Las Vegas Sun]
  • "Qui Tam Suit Against University Nets $78.5 Million Settlement" [University of Phoenix; The Recorder]
  • A trend? Federal Circuit issues a third mandamus order removing patent case from E.D. Tex. [Alison Frankel, AmLaw] Update: et plus encore.
  • "UMass Trustees Approve Plan for Public Law School" [Above the Law, earlier]
  • Don't hesitate to donate food generously at this time of year, Congress and most states have enacted Good Samaritan liability immunities that should stand up [Matti Neustadt Storie, Food Liability Law]

Around the web, November 14 - PointOfLaw Forum

Canada's Labor Law: An Example for the U.S.? - PointOfLaw Columns

John Endean

What if America's labor law were more like Canada's? Were our Congress to enact into law a more union-friendly legal code of the sort long familiar to our northern neighbors, what sorts of consequences would we expect? At present, 29.4 percent of workers in Canada are represented by unions, as contrasted with 12.4 percent of workers in the U.S. Would adopting a more "Canadian" legal regime close much of that gap, or only a little of it? And what would be the consequences for employee well-being, for managerial efficiency, and for the health of the U.S. economy generally?

These questions are not new ones among those who follow labor policy, but they have taken on fresh interest given the enormous stir in Washington over the proposed Employee Free Choice Act (EFCA). The top legislative priority of organized labor, and potentially the most significant piece of labor legislation since the Wagner Act of 1935, EFCA consists largely if not entirely of policy initiatives that follow a "Canadian" path:

* "Card check". Today, in most cases, installing a union to represent workers at a place of business requires a majority vote of the workers by secret ballot. EFCA's best-known and most controversial provision would require recognition of a union upon its presentation of signatures on union cards from a majority of the workers in a proposed bargaining unit. (1) The card-check system has a long track record in Canada.

* Imposed arbitration of first contracts. Once organization is accomplished, EFCA would compel management to reach a first contract with the new union, by providing for mandatory arbitration and imposition of a contract by a government-appointed arbitrator should negotiations not result in a contract by a certain point. Some Canadian employers both public and private are subject to imposed arbitration at negotiation impasse; in the United States up to now, such requirements have ordinarily been imposed only on some public employers.

* "Quickie" elections. As the unpopularity of eliminating the secret ballot has become clear, organized labor and its supporters have begun to cast around for "compromise" EFCA provisions aimed at bolstering unions' organizing efforts in other ways. One such idea is to speed up greatly, perhaps to 10, 12 or 15 days, the holding of elections following a union petition, which currently in the U.S. are held a median of 39 days later. In Canada, by contrast, there is usually only a five-day window before elections. Shorter periods before a vote are generally considered unfavorable for employers because it gives them little time in which to assemble a case against unionization and make it known to workers; the union, by contrast, will ordinarily have had weeks or months to make its case to workers in private persuasion before it surfaces with its election demand.

Quickie elections, in contrast to card check, are often thought to have "moderate appeal". Thus, William B. Gould IV, an influential legal scholar, former counsel to the United Auto Workers, and former chairman of the National Labor Relations Board (NLRB), supports EFCA in general principle but has criticized card-check and recently proposed quickie elections as part of a "better approach" that might command bipartisan support:

Secret ballots to resolve union representation rights are the way to go, and Obama should meet the Republicans halfway by saying so - and then add this all-important coda: Elections should continue only if the law ensures that voting is conducted expeditiously - for instance, within one or two weeks of the filing for a union's petition seeking recognition. This is the case in Canada, whereas in the United States, the resolution of union drives currently takes months and sometimes years. Quick elections are the key to meaningful reform because delay is the principal way in which labor law stacks the deck against employees. It allows employers to engage in one-sided anti-union campaigns of intimidation and coercion, with little possibility for remedy. (2)

Of all countries that might provide examples for labor law reform, Canada is the most similar to the United States culturally and politically. It is also the most familiar to American managers (many of its firms, especially in the industrial heartland of Ontario, are owned by or affiliated with American corporations, the well-known cross-national integration of Big Three auto manufacturing being only one example.) How relevant is the Canadian labor experience, and what can it teach us about the achievability of EFCA's constituent parts and the costs and benefits they might bring? (3)

Not one but multiple systems. In contrast to our system of labor law in the U.S., in which the federal government occupies most of the field and sharply limits the 50 states' scope for divergence, Canada genuinely shares the regulation of labor relations and union certification between Ottawa and the provinces, with the provinces given the lead. (4) About ten percent of the total Canadian workforce is covered by federal labor law. This includes federal government workers as well as private workers in certain industries deemed national, which include banking, shipping, telecommunications, and inter-provincial trucking.

Canada's federal labor code is a card check system with first-contract mediation and binding arbitration. There are no secret ballot elections. Instead, if more than 50 percent of the workers in a proposed bargaining unit sign cards, the union is certified by the Labour Relations Board. In short, this system does prescribe something a lot like the EFCA's proposed regime for a tenth of the Canadian workforce.

What about the ninety percent of workers not covered by Canada's federal labor law? They are subject to the labor laws of the provinces in which they reside. Up until 1976, all of the provinces used card check. Beginning in that year, however, changing political and economic circumstances have led some provinces to rethink the methods of union selection.

Today, six of the ten provinces - Alberta, British Columbia, Newfoundland and Labrador, Nova Scotia, Ontario, and Saskatchewan - require a secret ballot. The four others - Manitoba, New Brunswick, Prince Edward Island, and Quebec - use a card check system. Six provinces also mandate in some form first contract mediation and binding arbitration: British Columbia, Manitoba, Newfoundland, Ontario, Quebec, and Saskatchewan. Overall, of workers in industries covered by provincial labor law, about 68 percent of the Canadian work force lives in provinces with a mandatory secret ballot, and the other 32 percent in provinces with card check.

The numbers fluctuate because card check can be a political football in provincial politics. New Brunswick, for example, first adopted a secret ballot and then reverted to card check as contending political parties succeeded each other in office. Similarly, British Columbia adopted secret ballot elections in 1984, returned to card check in 1993, then readopted the secret ballot in 2001.

There is thus no single "Canadian" model for union organization. If there is a "median" or "most typical" law among the diverging Canadian examples, it is probably the "expedited secret ballot" system that prevails in six provinces including the most populous, Ontario.

Ontario's expedited secret ballot. Ontario switched from card check to a five-day secret ballot certification process in 1995. This change was part of a larger program of tax, budget, and regulatory reforms called the Common Sense Revolution by its architect, Mike Harris, Ontario's conservative Premier.

Upon a showing that 40 percent of the workers in a proposed bargaining unit have signed cards expressing an interest in joining a union, a secret ballot vote must occur within five business days. That's not a lot of time, especially since unions have the initiative in triggering the process and can choose the time and circumstances they consider most favorable. Businesses may not even know an organizing effort is in progress until the union, having secretly obtained the number of signatures necessary to force an election, files its application for certification.

Once a union submits an application, companies must submit a formal response, including a list of relevant employees, to the Labour Relations Board and to the union within two business days. This mandated response can itself be a costly legal scramble and paper chase, and makes it even more likely that managers will be distracted during the few days that will be their only formal chance to make their case on the organization vote.

In that latter task, managers are far more limited by what they can say about the impact of unionization than are their American counterparts, a fact that often comes as a surprise to American companies with Canadian subsidiaries. In one notorious case, for example, from 1996, disgruntled employees of a Wal-Mart operation in Windsor, Ontario, approached the United Steelworkers of America seeking representation. Enough cards were signed to force an election. In the election, however, 79 percent of the employees voted against the union. The Employee Labour Relations Board proceeded to uphold union objections to Wal-Mart's American-style interference with the unionization process. Bizarrely, at least from an American perspective, the Board based its finding in part on Wal-Mart's silence when employees asked if the store would be closed if the unionization drive succeeded. The Board found the company's lack of comment to have had a "chilling effect" upon the union campaign. (5) By way of remedy, it did not (as one might have expected) merely throw out the election results that had gone against the union: it ordered the union installed to represent the workers, majority vote or no.

From a management standpoint, the Ontario system does have some mitigating features. For example, if a union loses an organizing vote, it must wait a year before trying to organize the same company again. The one-year ban applies not only to the losing union but to all other unions as well.

More important, Ontario no longer imposes mandatory arbitration automatically if a company and union cannot agree on a first contract. The 1995 legislation that supplanted card check with the five-day vote also modified the then-existing mandatory arbitration provision by putting in place a four-part test for evaluating first contract negotiations. This four-part test comes close to a bad-faith bargaining hurdle. In effect, if a company can show that it is bargaining with the union in good faith, it can avoid mandatory arbitration.

Accustomed as they are to campaign periods of about a month before an organizing election, most American managers would likely regard the Ontario secret ballot system, with its abbreviated, five-day campaign period, as a thumb on the scale in favor of union organization. According to a labor lawyer in Canada interviewed for this note, Ontario managers are not in revolt against the five-day system because "you get used to it." The possibility of quick organization becomes just one more "crisis management" issue, with all the transaction costs that crises inevitably entail.

Union "density" and the legal background. Union density - the percentage of total workers who belong to unions - is greater in Canada than in the United States. According to Statistics Canada, about 29.4 percent of all Canadian workers belong to unions. In the United States, the equivalent figure is about 12.4 percent.

In both countries there is a sharp disparity between union density in the public and private sectors. In Canada, 71 percent of public sector workers belong to unions, while only about 16 percent of workers in the private sector are organized. A similar ratio prevails, but at lower rates, in the United States, where union density is about 39 percent in the public sector and 7.6 percent in the private. The comparatively robust presence of unions in the public sectors of both countries reflects the disinclination of government managers to contest unionization, in part because the costs of organization - higher wages, expensive benefits, and restrictive work rules - are indirectly spread among the public at large. (6) It is also worth noting that the public sector employs a significantly higher percentage of the workforce in Canada than it does in the United States.

No one factor explains the overall density "gap" between Canada and the United States. Unquestionably card check has facilitated unionization north of the border, which tends to confirm the feeling of labor leaders in the United States that it would prove helpful to them here. (7) One often-quoted study, by Professor Susan J.T. Johnson of Wilfrid Laurier University, estimated that the greater use of card check in Canada accounts for somewhere between 17 to 24 percent of the difference in union density between Canada and the United States. (8)

Available evidence suggests that the adoption in some provinces of a secret ballot, even when accompanied by a relatively brief campaign period, has made organization more difficult. Perhaps the most striking example is in New Brunswick where the success rate of union organizing fell 19 percent when the secret ballot was put into place and rose by about the same amount when the card check regime was later restored. (9) A study of organization in Ontario found that "the overall proportion of successful certification applications [was] substantially lower under the mandatory vote than it had been under the card-check system." (10)

Note that there is surprisingly little backing for the sometimes-heard assumption that Canada (in supposed contrast with the U.S.) is a country where unionism is simply uncontroversial and popular with the broad populace. With a favorable legal framework in place for many years, a union movement that represents only 16 percent of private sector workers cannot exactly claim a decisive mandate from the Canadian working public. The Canadian experience following many provinces' introduction of secret ballot elections also suggests that when workers are allowed to vote on whether to join a union - when, in other words, they regard joining a union as a matter of individual choice in which competing considerations are brought to their attention - they are measurably less inclined to join. This is a difficult point for unions to accept.

The flagging spirit of Canadian unionism. Unionism in Canada's public sector appears for the moment to be secure. But only the growth in public sector unionization has kept Canada's overall density rate near 30 percent; Canadian private sector unions are struggling, by contrast, with what growth there has been in union membership outstripped by the greater proliferation of nonunion jobs. Pradeep Kumar of Queen's University, a sympathetic observer of the Canadian labor movement, has argued that in general "the data appear to portray a picture of a stagnant labour movement with declining density in a wide range of areas, particularly in private service industries with expanding employment, and with a false sense of security due to continuing union strength in the public sector." (11)

Even the most visible instance of new private unionization in recent years is indicative of this weakness. The giant auto-parts supplier Magna International, which had long resisted unionization, reached a 2007 agreement with the Canadian Auto Workers (CAW): in order to achieve this long-sought goal, however, the CAW gave up the right to strike, amended its grievance procedures, and permitted the company to screen candidates for union representative - so-called "employee advocates" -- at each plant before they are ratified by employee vote.

Some in Canada's labor movement are preoccupied with the hope of turning around this trend by prevailing on provincial governments to restore card check. (12) New Brunswick aside, they have had scant success. When the Liberals returned to power in Ontario in 2003, there were rumblings about restoring card check across the board. That did not happen, and instead the old system was restored in 2005 only for workers in construction workers (a move, oddly enough, condemned as "sexist" and an "atrocity" by one union because the construction industry has "a predominantly male workforce"). (13) Although Canadians are famously prickly about their social and cultural independence from the United States, it is probably true that the best boost for a return to card check in Ontario and other provinces would be the adoption of card check by the United States, Canada's largest trading partner.

In this context, calls for a return to card check may be a distraction from the more important matter of making union membership relevant for a new generation of Canadians who may not see belonging to a union as self-evidently desirable. Perhaps there is a lesson here for American labor unions as well.


(1) In the first half of 2008, the union win rate in NLRB private sector elections was 66.8 percent. This win rate has been tracking upward, with one exception, for the last five years. In 2003 the union win rate was 58.3 percent; in 2004, 58.6 percent; in 2005, 61.3 percent; in 2006, 61.4 percent; and in 2007, 60.5 percent. See "Union Win Rate in NLRB Elections Increased Substantially in First Half 2008," BNA Daily Labor Report, 217 DLR, January 28, 2009, pp. C-1 - C-2.

(2) William B. Gould, IV, "How Obama Could Fix Labor Law," Slate, August 28, 2008.

(3) Recently three American companies sympathetic to labor law reform - Costco, Starbucks, and Whole Foods - formed an organization called the "Committee for a Level Playing Field for Union Elections." The Committee has as its centerpiece the maintenance of secret ballot elections with a shortened campaign period, along the lines of what Gould identifies as the Canadian model.

(4) Before 1925, collective bargaining legislation was the responsibility of Canada's federal government. In 1925, the United Kingdom Privy Council, in Toronto Electric Commissioners v. Snider established priority of provincial rather than federal jurisdiction over most labor and employment issues. Subsequently, the Constitution Act of 1867 delineated the separation of powers between the federal and provincial governments.

(5) See Douglas Gilbert and Brian Burkett, "Canada's Labor and Employment Laws," June 2001. Gilbert and Burkett are Canadian management-side labor lawyers and their piece can be found at

(6) In addition, government employment is by nature fairly static and captive in the sense that it cannot be "offshored." Unlike private sector workers, government employees are not buffeted by the pressures of international competition, mergers and acquisitions, technological change, or bankruptcy. Organizing government workers and bringing new members on board is thus fairly routinized and predictable. It is, in other words, easier.

(7) In addition, unlike the United States, Canada permits mandatory union membership in collective agreements as a condition of employment. And in contrast to so-called "right-to-work" states in the U.S., Canada also permits mandatory dues payments, again as a condition of employment. Jason Clements, Niels Veldhuis, and Amela Karabegovic, "Explaining Canada's High Unionization Rates, Fraser Alert, August 2005. This piece can be found at:

(8) Susan Johnson, "The Impact of Mandatory Votes on the Canada-U.S. Union Density Gap: A Note," 43 Indus.Rel. 356 (2004), quoted in Anne Layne-Farrar, "An Empirical Assessment of the Employee Free Choice Act: The Economic Implications," The Alliance to Save Main Street Jobs, March 3, 2009, p. 16.

(9) Chris Riddell, "Union Certification Success Under Voting Versus Card-Check Procedures: Evidence from British Columbia, 1978 - 1998," Canadian Journal of Economics, vol. 34, no. 2, quoted in Jason Clements, Niels Veldhuis, and Amela Karabegovic, "Explaining Canada's High Unionization Rates," Fraser Alert, op. cit.

(10) Sara Slinn, "The Effect of Compulsory Certification Votes on Certification Applications in Ontario: An Empirical Analysis," Canadian Labour and Employment Law Journal, vol. 10, no. 3.

(11) Pradeep Kumar, "Whither Unionism: Current State and Future Prospects of Union Renewal in Canada," June 2008, available online at: See also Pradeep Kumar, "is the Movement at a Standstill?", Our Times, vol. 27, issue 5, October-November, 2008.

(12) See, e.g., Bruce Allen, "On and After the Magna Vote," New Socialist, See also, Mine Mill598/CAW Organizing Report, April 27, 2005,

(13) The "sexist" and "atrocity" language can be found in a draft advocacy letter to members of the Canadian Parliament that is included in the "Labour Law Reform - Lobby Kit" created in 2005 by the United Steelworkers District 6. Available at:

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John Endean is the president of the American Business Conference, a Washington, D.C.-based coalition of leaders of midsize growth companies. This paper, original to Point of Law, was commissioned by the Manhattan Institute as the first in a planned series of Institute papers on labor policy. It was published November 9, 2009.

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