China Makes Great Strides in Labor and Employment Practices for Adults, but Fails to Protect Children

by Dana Dohn

The American Bar Association recently announced that it will be hosting a webinar on October 16, 2014, entitled “Best Practices for Labor & Employment Issues in China.”[1] During this event, China law expert James Zimmerman will be discussing and exploring many of the recent changes in the Chinese workforce, including the rise in unionization and wage and labor disputes.[2] Zimmerman will also be highlighting the best employment practices surrounding the recent overhaul and expansion of workers’ rights contained in China’s Labor Contract Law.[3] Since the beginning of the reform in 1994 with the first draft of the National Labour Law, adult employees in the People’s Republic of China have seen great change and gained substantial workforce protections.[4] Unfortunately, this large-scale overhaul has done little to increase the protection of children’s labor rights.[5]

Chinese laws set the legal working age at sixteen, which is above the standards set by the International Labor Organization for both developing and developed nations.[6] Despite these standards and the evolving reforms over the past twenty years, manufacturing giants, such as Samsung Electronics Co., are contracting with Chinese suppliers that illegally employ children.[7] An event from July of this year marks the third set of allegations against Samsung’s Chinese suppliers in only two years.[8] Although Samsung denies all allegations of illegal child labor, China Labor Watch stated that it had found numerous children who were employed without labor contracts and were only paid for a portion of the hours that they were working.[9] Previous allegations against other Samsung suppliers found minors as young as fourteen working in two different electronics plants.[10]

Unfortunately, China is not the only country in which the existence of child labor standards has not entirely curbed the child labor problem.[11] UNICEF, an international organization for children’s rights and emergency relief, reports that there are an estimated 246,000,000 children throughout the world who are laborers.[12] Additionally, almost 70% of these children work in dangerous working conditions, such as mines, chemical plants, and factories.[13] The Asia and Pacific region alone employs the largest number of child workers under the age of fourteen years old, totaling 127,300,000.[14] Child labor rates tend to be higher in countries that have limited access to education and high rates of poverty, despite the existence of laws and standards to protect children.[15] Although Chinese child labor standards are largely similar to those of the United States, the enforcement of Chinese standards for child laborers appears to be much more lax.[16] Hopefully, in time, the progress that China has made in updating and enforcing its labor contract laws for adults will catch up, and the government will better enforce its policies and regulations for children.

[1] James Zimmerman, Best Practices for Labor & Employment Issues in China, AM. BAR ASS’N., http://shop.americanbar.org/ebus/ABAEventsCalendar/EventDetails.aspx?productId=132934862&sc_cid=CE1410CLC-A (last visited Sept. 12, 2014).

[2] Id.

[3] Id.

[4] See Mary E. Gallagher & Baohua Dong, Legislating Harmony: Labour Law Reform in Contemporary China, UNIV. OF MICH. 2-3, http://www.erb.umich.edu/Research/Initiatives/colloquiaPapers/GallagherRevisedPaperJan08.pdf (last visited Sept. 12, 2014).

[5] See Baogang Guo, China’s Labor Standards: Myths and Realities, CHINA RESEARCH CTR. 4-5 (Feb. 7, 2003), available at http://www.academia.edu/165449/Chinas_Labor_Standards_Myths_and_Realities.

[6] Id.

[7] Geoffrey Smith, Samsung Distances Itself From Supplier After New Child Labor Uproar, FORTUNE (July 14, 2014), http://fortune.com/2014/07/14/samsung-distances-itself-from-supplier-after-new-child-labor-uproar/.

[8] Id.

[9] Id.

[10] Id.

[11] See Factsheet: Child Labour, UNICEF, http://www.unicef.org/protection/files/child_labour.pdf (last visited Sept. 12, 2014).

[12] Id.

[13] Id.

[14] Id.

[15] Causes of Child Labor, CHILD LABOR PUBLIC EDUCATION PROJECT. https://www.continuetolearn.uiowa.edu/laborctr/child_labor/about/causes.html (last visited Sept. 12, 2014).

[16] See Baogang Guo, supra note 5; see also Geoffrey Smith, supra note 7.

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Exploitation on the Deep Blue Sea

by Thomas S. Wolinetz

Last January, I took an amazing twelve-night cruise from New York to the Caribbean.  Recently, I found out that over twenty million people travel on cruise ships each year.[1]  I also learned that the cruise industry generated over thirty-seven billion dollars for the U.S. economy in 2013.[2]  During my voyage on the deep blue sea, I sparked up conversations with some of the cruise line’s wonderful employees.  At first glance, they seemed very happy. Unfortunately, I now know that the cruise lines are exploiting these employees.

Cruise line employees can be paid as low as eight hundred dollars per month, for a seven-day workweek.[3]  After learning that cruise line employees only make eight hundred dollars a month, I could not help but assume that salary is based off of a four- or five-hour workday.  However, I was surprised to learn that employees of a cruise line actually work at least ten hours per day,[4] and sometimes as much as fourteen hours each day.[5] That is about $2.63 per hour, for a ten-hour workday.  Furthermore, cruise line employees have to share a tiny cabin with at least two other employees.[6]  They are also not allowed to socialize with the cruise line guests outside of their work hours.[7]

All of this information leads me to wonder why a cruise line is allowed to pay their employees so little and treat them so poorly.  I also want to know why the Fair Labor Standards Act, which sets the minimum wage,[8] does not apply here.  Unfortunately, the answer is simple: a cruise line that registers its ships with countries such as the Bahamas, Panama, Liberia, or Greece[9] will not be required to follow United States minimum wage laws.  It is crazy to think that a cruise ship, that is spending more than half of its travel time docked in a United States port, is not required to follow United States minimum wage laws.  However, the time the ship is docked in a United States port is irrelevant.[10] Cruise ships are required to follow the guidelines set by the International Maritime Organization.[11]  The international guidelines state that a ship is required to follow the same laws and regulations of the country in which that ship is registered.[12]

Unfortunately, this level of exploitation is not illegal. It is even more unfortunate that people continue to take vacations on cruise lines, knowing that the employees are being exploited.  Next time you are sailing on the beautiful ocean, lying out by the pool, and sipping on a margarita, take a moment and look around at all of the hard working men and women that are making that moment possible.  Try to realize that you are having the time of your life, while they are being exploited.  I will leave you with a question to mull, next time you are thinking about booking that once-in-a-lifetime cruise: is it worth it?

[1] Cruise Ship Industry Statistics, STATISTIC BRAIN, http://www.statisticbrain.com/cruise-ship-industry-statistics (last updated Jan. 1, 2014).

[2] Id.

[3] Robert Morello, The Average Salary of Cruise Ship Workers, CHRON.COM, http://work.chron.com/average-salary-cruise-ship-workers-1932.html (last visited Aug. 30, 2014).

[4] Cruise Ship Employment Frequently Asked Questions, NORWEGIAN CRUISE LINE, http://www.ncl.com/about/careers/shipboard-employment/faq (last visited August 30, 2014).

[5] Life on board cruise ships, CRUISE SHIP JOBS, http://www.cruiselinesjobs.com/life-on-board/ (last visited August 30, 2014).

[6] Id.

[7] Id.

[8] Tom Streissguth, Minimum Wage on a Cruise Ship, CHRON.COM, http://work.chron.com/minimum-wage-cruise-ship-20834.html (last visited Aug. 30, 2014).

[9] Id.

[10] Id.

[11] James Walker, What cruise lines don’t want you to know, CNN (Aug. 30, 2014, 12:30 PM), http://www.cnn.com/2013/02/13/opinion/walker-cruise-ships/ (last updated Feb. 14, 2013, 3:21 PM).

[12] Id.

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The LGBT Community Wins a Massive Victory: Transgender Americans Gain Protection Under Title VII

by Kyle Barton

The LGBT community has been fighting increasingly vigorously over the last couple of decades to secure itself as a protected class. In particular, Americans who identify themselves as “transgender” have been battling for an end to discrimination. On July 21, 2014, President Obama signed Executive Order 13672, prohibiting any federal contractors from discriminating against employees because of their gender identity.[1] On August 19, 2014, the U.S. Department of Labor further supplemented that Executive Order with a directive to include “gender identity and transgender status” within the class of “sex” for discrimination purposes.[2]

While a variety of people can fall into the category of transgender, the term is used generally to define a person whose appearance or behavior does not conform to common social or cultural stereotypes.[3] The transgender community represents a substantial portion of Americans who have been frequently subject to employment discrimination. A study conducted by the National Transgender Discrimination Survey reported that as of 2011, the rate of unemployment of transgender Americans was twice as high as unemployment throughout the rest of the nation.[4] Ninety percent of transgender Americans reported having been harassed, mistreated, or discriminated against at work.[5] Half of the respondents in the study had reported being fired, or denied a job or promotion, because of their transgender status.[6]

A study from 2011 revealed that 700,000 Americans identify themselves as transgender.[7] American society has gradually begun to recognize the transgender movement. Over the last few months, Facebook, for example, has made a number of changes to its interface to give transgender users gender-neutral options in their profiles.[8] These simple modifications have allowed members of the transgender community to appropriately portray their gender identities to the public, outside of the previous realm of strictly male or female.

This victory for expanded rights under Title VII stems from a decision in 2012 by the Equal Employment Opportunity Commission, where the issue made its first breakthrough in the legal field.[9] In this case, the EEOC drew a line between biological sex and gender identity.[10] The agency recognized that Title VII of the Civil Rights Act of 1964 must protect more than when an employer prefers a man over a woman or a woman over a man.[11] Instead, the agency opined that Title VII was meant to prevent the discrimination of the social and cultural characteristics that are associated with each gender.[12] Those who identify their gender as different from the characteristics of their biological sex must have protection under the law.[13]

Although the direct impact of the more expansive Title VII is on federal contractors and subcontractors, the call for attention to the transgender discrimination issue may cause other jurisdictions to follow suit. In time, we may also observe a transition in which American employers in the private sector begin to take a more sympathetic approach towards transgender employees.

[1] Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity, 79 Fed. Reg. 42,971 (July 23, 2014), available at http://www.gpo.gov/fdsys/pkg/FR-2014-07-23/pdf/2014-17522.pdf.

[2] Office of Fed. Contract Compliance Programs, U.S. Dep’t of Labor, DIR 2014-02 (2014), http://www.dol.gov/ofccp/regs/compliance/directives/dir2014_02.html).

[3] Vic Munez et al., About Transgender People, Gender Identity, and Gender Expression 1 (2d ed. 2011), available at http://www.apa.org/topics/lgbt/transgender.aspx.

[4] Jaime Grant et al., Injustice at Every Turn: A Report of the National Transgender Discrimination Survey 3 (2011), available at http://transequality.org/PDFs/NTDS_Exec_Summary.pdf.

[5] Id.

[6] Id.

[7] Gates, Gary, How Many People are Lesbian, Gay, Bisexual, and Transgender? (The Williams Inst. 2011) http://williamsinstitute.law.ucla.edu/research/census-lgbt-demographics-studies/how-many-people-are-lesbian-gay-bisexual-and-transgender.

[8] Molloy, Parker, Facebook Adds Gender-Neutral Family Relationship Settings, ADVOCATE.COM, http://www.advocate.com/politics/transgender/2014/08/28/facebook-adds-gender-neutral-family-relationship-settings (last visited August 30, 2014).

[9] Macy, EEOC DOC 0120120821 (2012), available at http://www.eeoc.gov/decisions/0120120821%20Macy%20v%20DOJ%20ATF.txt.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

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Canadian Toyota Employees to Undertake Potentially Historic Vote

By Brittany Uslaner

Next week, the workers of Toyota Motor Corporation’s Canadian plants will vote whether on whether to unionize.  This vote is potentially significant because if a majority of workers vote to unionize then it will be the first time North American plants fully owned by Toyota unionize.[1]  Toyota’s more than 6,500 autoworkers are expected to vote next week.[2]  Toyota Canada operates three plants with two plants in Cambridge, Ontario, and one plant in Woodstock, Ontario.[3]  The Canadian auto industry makes C$69 billion or $62.51 billion a year and Toyota’s Canadian plants are capable of assembling over 500,000 vehicles a year.[4]  Despite the seemingly positive profits and vehicle output of the Canadian auto industry, Canadian factory employment has actually “fallen by about 24 percent over the past ten years”.[5]

The union seeking to represent Toyota Canada’s workers is Unifor.[6]  Unifor already represents 300,000 workers and 39,000 of those workers are employed in the auto industry.[7]  Autoworkers represented by Unifor include the Canadian arms of General Motors, Ford, and Fiat Chrysler.[8]  For over a year, unions have been carrying out an organizing drive of Toyota Canada’s workers.[9]  The union drive gained momentum last September when the Canadian Auto Workers union and the Communications, Energy and Paperworkers union merged to form Unifor.[10]  Over 40% of Toyota Canada workers have signed union cards.[11]  This Monday, Unifor filed papers with the Ontario Labour Relations Board “to become the official bargaining agent for the Toyota’s Cambridge and Woodstock employees.[12]  Unifor asserts that the movement towards unionization was spurred by concern over poor health and safety standards as well as a Toyota Canada’s “decision to change shifts to 10 hours”.[13]  In addition, Unifor claims Toyota workers are unhappy with temporary contracts “which have reduced benefits and don’t allow participation in the company’s pension plan”.[14]  Only one fourth of Toyota Canada’s workers have a contract.[15]  Another issue is that last year Toyota Canada announced that “it would put new permanent hires on a defined contribution plan, versus a more costly defined benefit plan”.[16]  Whether these issues will be resolved hinges on the vote next week.

 

[1] Ari Alstedter, Toyota Canada Workers Seek First North American Union, Bloomberg, http://www.bloomberg.com/news/2014-03-31/toyota-canada-workers-seek-first-north-american-union.html ; Susan Taylor & Solarina Ho, Canada’s Toyota workers poised to vote on joining union, Reuters, http://www.reuters.com/article/2014/03/31/toyota-motor-unions-canada-idUSL1N0MS0JE20140331

[2] Dana Flavelle, Union seeks right to represent Toyota plants in Canada, Toronto Star, http://www.thestar.com/business/2014/03/31/union_seeks_right_to_represent_toyota_plants_in_canada.html

[3] Susan Taylor & Solarina Ho, Canada’s Toyota workers poised to vote on joining union, Reuters, http://www.reuters.com/article/2014/03/31/toyota-motor-unions-canada-idUSL1N0MS0JE20140331

[4] Id.

[5] Ari Alstedter, Toyota Canada Workers Seek First North American Union, Bloomberg, http://www.bloomberg.com/news/2014-03-31/toyota-canada-workers-seek-first-north-american-union.html

 

[6] Brent Snavely, Toyota workers in Canada to vote on union representation next week, Detroit Free Press, http://www.freep.com/article/20140331/BUSINESS0104/303310077/Unifor-labor-unions-Toyota-Canada

[7] Ari Alstedter, Toyota Canada Workers Seek First North American Union, Bloomberg, http://www.bloomberg.com/news/2014-03-31/toyota-canada-workers-seek-first-north-american-union.html

[8] Susan Taylor & Solarina Ho, Canada’s Toyota workers poised to vote on joining union, Reuters, http://www.reuters.com/article/2014/03/31/toyota-motor-unions-canada-idUSL1N0MS0JE20140331

[9] Brent Snavely, Toyota workers in Canada to vote on union representation next week, Detroit Free Press, http://www.freep.com/article/20140331/BUSINESS0104/303310077/Unifor-labor-unions-Toyota-Canada

[10] Avery Moore, Unifor Announces Unionization Effort For Toyota Workers, Blackburn News, http://blackburnnews.com/london/2014/03/31/unifor-announces-unionization-effort-for-toyota-workers/

[11]Dana Flavelle, Union seeks right to represent Toyota plants in Canada, Toronto Star, http://www.thestar.com/business/2014/03/31/union_seeks_right_to_represent_toyota_plants_in_canada.html

[12] Avery Moore, Unifor Announces Unionization Effort For Toyota Workers, Blackburn News, http://blackburnnews.com/london/2014/03/31/unifor-announces-unionization-effort-for-toyota-workers/

[13] Id.

[14] Susan Taylor & Solarina Ho, Canada’s Toyota workers poised to vote on joining union, Reuters, http://www.reuters.com/article/2014/03/31/toyota-motor-unions-canada-idUSL1N0MS0JE20140331

[15] Id.

[16] Id. 

Supreme Court Rules Severance Payouts are Taxable

By: Caitlin Esposito

Last Tuesday, the Court published its opinion in United States v. Quality Stores, Inc.  The unanimous opinion by Justice Kennedy held that severance payments to employees involuntarily terminated are taxable wages under the Federal Insurance Contributions Act (FICA).[1]  Prior to filing for bankruptcy in 2001, Quality Stores terminated thousands of its employees.[2]  All of these employees received severance payouts.[3]  Quality Stores reported these severance payments as wages on their W-2 Tax Forms and paid the employer’s required share of FICA taxes, but withheld employees’ shares of FICA taxes.[4]  The former employees granted Quality Stores permission to file FICA tax refund claims for them, resulting in Quality Stores filing for a refund of $1,000,125.[5]   The Internal Revenue Service (IRS) did not respond to the claim and Quality Stores initiated a proceeding in Bankruptcy Court seeking a refund of the amount.[6]  Quality Stores argued that severance payments do not qualify as wages and are therefore not taxable under FICA.[7]  The Bankruptcy Court granted summary judgment in its favor.[8]  The District Court and Court of Appeals for the Sixth Circuit affirmed, concluding that severance payments are not wages under FICA.[9]

FICA defines wages as “all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash.”[10]  Employment means “any service, of whatever nature, performed by an employee for the person employing him.”[11]  Under this broad definition, severance payments made to terminated employees are remuneration for employment.  Furthermore, the FICA provides specific exemptions from the definition of wages.[12]  These exemptions reinforce the broad nature of FICA’s definition of wages.[13]

The Court went on to examine sections of the Internal Revenue Code (IRC) to determine if income-tax withholding is a limitation on the meaning of wages.[14]  The IRC states that “any supplemental unemployment compensation benefit paid to an individual, shall be treated as if it were a payment of wages by an employer to an employee for a payroll period.”[15]  Wages are defined as “all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash.”[16]  The IRC contains specific exemptions that reinforce the broad scope of its definition of wages.[17]  Severance payments are not exempted and fall within the broad textual definition of wages for purposes of income-tax withholding.[18]

Since severance payments fall within these broad definitions of wages under FICA and the IRC, they are taxable.[19]  Any other interpretation of these definitions would “disserve the statutory text and the congressional interest in administrative simplicity.”[20]

 

[1]  See United States v. Quality Stores, Inc., No. 12-1408, 2014 BL 80719 (U.S. Mar. 25, 2014).

[2] See id.

[3] See id.

[4] See id.

[5] See id.

[6] See Quality Stores, 2014 BL 80719.

[7] See id.

[8] See id.

[9] See id.

[10] 46 U.S.C. § 3121(a) (2006).

[11] 46 U.S.C. § 3121(b) (2006).

[12] 46 U.S.C. § 3121(a).

[13] See id.

[14] See United States v. Quality Stores, Inc., No. 12-1408, 2014 BL 80719 (U.S. Mar. 25, 2014).

[15] 26 U.S.C. §3402(o)(1)(A) (2006).

[16] 26 U.S.C. §3401(a) (2006).

[17] See id.

[18] See Quality Stores, 2014 BL 80719.

[19] See id.

[20] Id.

Hofstra Law Hobby Lobby Panel

By: Michael Engle

On Monday, March 24, 2014, an all-star panel of Hofstra Law faculty members assembled for a panel discussion about the forthcoming Hobby Lobby oral arguments and decision.  Professor Robin Charlow, Professor Daniel Greenwood, Dean Ronald Colombo, and Professor Grant Hayden all lent their respective expertises and insights, drawing from fundamental constitutional law, corporate law, and labor law.  Highlights of the panel discussion are below:

 

Professor Robin Charlow

  • It is a “perpetually unresolved issue” as to a proper balance between government action and the free exercise of religion.  In fact, the upcoming oral arguments are a combination of Sebelius v. Hobby Lobby Stores, where the 10th Circuit granted personhood to a for-profit corporation, and Conestoga Wood Specialties Corp. v. Sebelius, where the 3rd Circuit declined to grant personhood to a for-profit corporation.  If the corporation is a person in this scenario, then the corporations will be able to withhold contraception from employees, by virtue of it being antithetical to the corporation’s Christian values.

  • As is, the Affordable Care Act (“ACA”) generally mandates that employer corporations provide health insurance to employees.  Small companies with fewer than fifty employees are exempted from this provision, and certain companies that had already provided non-ACA-compliant healthcare plans were afforded a transitional period by which the plans must be ACA-compliant.

  • The ACA also generally mandates that insurance plans must cover preventive services at no additional cost to employees.  It is unacceptable to shift these particular costs to employees, because women of childbearing age would incur substantially higher costs.  Among these “preventive services” are approximately twenty different FDA-approved forms of contraception, four of which interfere with the implanting of a fertilized egg in a woman’s uterus.  From this law, “religious employers” (which was initially understood to be limited to churches themselves) were exempt, while church-based charities and non-profit organizations were afforded an accommodation.  In this framework, whereby they would not directly have to pay for the contraception or make a necessary referral, employees would still be able to obtain contraception at no charge to them.

  • At issue is whether the government’s action are permissible via the Free Exercise Clause (only with respect to the Conestoga case) and the Religious Freedom Restoration Act (both cases).  In other words, is a for-profit corporation able to assert personhood?

    • With respect to the Free Exercise Clause:

      • Conestoga will assert that since the ACA provisions have many built-in exceptions, the laws cannot be considered to be neutral or of general applicability.

      • The federal government will assert that since for-profit corporations are not people, the government can restrict corporations’ behaviors without impinging on the free exercise of people’s religions.

    • With respect to RFRA (which Prof. Charlow anticipates to be the more likely source of law in the decision):

      • Corporations will assert that the government is forced to articulate a compelling interest, in order to be able to burden a person’s free exercise of religion.  If the ACA laws provide for so many exceptions, then it should be impossible for the government to legitimately assert that comprehensive health care is a compelling State interest.

      • The federal government will first assert that corporations should not be considered people in this scenario, that equality for women (by having access to contraception that they would use) is substantial, and that because corporations will not use contraception–employees will use them instead–the employer should not be found to be substantially burdened.

 

Professor Daniel Greenwood gave an impassioned policy argument rooted in corporate law.  At the core of corporate law, shareholders are not allowed to appropriate company funds.  Furthermore, insurance is a form of compensation, because it is assumed that workers were willing to accept health insurance as a portion of salary, in addition to their wages.  Essentially, a pro-Hobby Lobby decision would enable “a re-emergence of feudalism” in which corporations could compel workers to follow the corporation’s religion, as well as allow religious companies to be exempt from corporate law.  Shareholders would then be able to appropriate company money, by willfully offer a more expensive and less comprehensive health plan–while barring employees from being able to access free contraception–in what would otherwise be a clear violation of the law.

 

Dean Ronald Colombo, providing what turned out to be the contrarian point of view on the panel, intellectually sees no constitutional basis not to “connect the dots” and rule in favor of the corporations.  Corporations have been granted a right to contract via Dartmouth College v. Woodward (1819) and a right to similar 14th Amendment due process as a person would be afforded via Santa Clara County v. Southern Pacific Railroad (1886).  After SCOTUS further extended corporations’ right to 1st Amendment free speech via Citizens United v. Federal Election Commission (2010), Dean Colombo sees no reason why the court should disallow corporations from adopting 1st Amendment freedom of religion.

As Dean Colombo reasoned, churches, synagogues, and mosques most assuredly have religion, and they are organized as corporations.  Since incorporated non-profits like churches have free exercise rights, and unincorporated for-profit sole proprietorships also have free exercise rights, Dean Colombo cannot fathom why incorporated for-profit businesses should not be treated similarly.  According to Dean Colombo, this would be more consistent with tradition and history: traditionally, field workers would work close to home and stop and pray when church bells rang, but the Industrial Revolution yielded an unnatural separation of church and state.  Dean Colombo opined that a decision in Hobby Lobby’s favor would allow people of faith to be able to work according to their same religious values that govern their lives otherwise.

 

Professor Grant Hayden, speaking from the perspective of labor law, thinks a verdict in Hobby Lobby’s favor would be problematic.  Title VII works to generally prohibit discrimination on the basis of religion.  “Ministerial exceptions” allow religious groups narrow exceptions to discriminate on religion, so that, for example, a Catholic school can be assured that any staff member who is allowed to lead mass or teach a religious class does, in fact, comport with the beliefs of the Catholic church.  According to Professor Hayden, a pro-Hobby Lobby decision would result in overly broad discrimination.  By withholding contraception, not only would Hobby Lobby be imposing the primary shareholders’ religion upon all the employees, but it would be allowed to foster a disparate impact upon female employees, because they would be barred from obtaining contraception.

Furthermore, on the basis of individual free exercise of religion (which the Hobby Lobby owners hope to reflect through the corporation), Professor Hayden mentioned the Court’s low threshold on “undue hardship.”  Whereas a worker might choose to spread gospel on his employer’s campus without interference upon his free exercise of religion rights, another worker is equally entitled to be free from religious harassment.  In these cases, even an episode such as this one would qualify as an “undue hardship.”  Normally, an employer has to provide for a reasonable accommodation in employees’ free exercise of religion, but if the employer had to allow this proselytizer a forum on company property to impose his religion upon the other employees on company time, that would be an undue hardship.  Accordingly, employers would not have to accommodate this proselytizer.

As a final point, Professor Hayden postulated that a pro-Hobby Lobby decision would be deleterious upon society.  Whereas neighborhoods still tend to show discrimination, and whereas churches are “some of the most segregated, homogeneous populations you’ll ever see,” the workplace remains one of the few places where sexes, races, and religions are co-mingle.  Professor Hayden expressed concern that if corporations were to have official religions, this would undermine diversity and sabotage mutual understanding through heterogeneous interaction.  In addition, Professor Hayden reasoned that it would be unreasonably hard for a worker to not only have to find an employer in his region to hire him/her, but also to have to find a hiring employer that shares the candidate’s values.

 

 

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McDonald’s Employees: Not Lovin’ It

By: Victoria Stubbolo

McDonalds, one of the worlds biggest and most popular restaurant chains, has come under fire yet again.  The corporation, which by virtue of its worldwide notoriety is no stranger to controversy, is finding itself in the hot-seat again.  Workers all over the country are bringing suit against McDonalds for being idled without pay when work slackens in violation of the federal and state labor laws.[1]  Lawyers on behalf of the workers are calling this flagrant oversight in pay a “wage theft”. [2]

Additionally, employees of Detroit McDonalds have more egregious claims of wage deflation against the fast food conglomerate.  In addition to not being paid during times that managers deem to be overstaffed, the employees are also mandated to purchase their own uniforms.[3]  This mandate pushes their wages below the legal minimum wage, especially when combined with the seemingly arbitrary overstaff provision, stalling pay.[4]  The federally required minimum wage is $7.25 an hour, with some states mandating a higher minimum.[5]

Dozens of protests were planned in thirty cities across the country.[6]  Some of the more colorful protests, occurring in New York, had a Ronald McDonald being “arrested” while other protestors shouted, “every nickel, every dime, we deserve our overtime.”[7]

While McDonalds has pledged to thoroughly look into these allegations, it does bring forth a good issue to the national stage, the current state of minimum wage employees.[8]  McDonald’s recently released its own sample budget based on minimum wage pay, which came under severe scrutiny.[9]  Among many other assumptions that the economists behind this “proposed minimum-wage budget” took, was that the employees in question would have two jobs.[10] What started out as an apparent good-will project to help its employees live a budget-friendly lifestyle based on minimum wage, quickly highlighted the glaring oversights in the purported notion of one being able to survive on a minimum wage job.[11] While the actual monetary value of hourly pay is low enough to warrant concern given the cost of living, there is also the added problem of the insufficiency of hours being offered for these minimum wage workers to actually work.[12]

President Obama is pushing for Congress to raise the federal minimum wage to $10.10 an hour.[13]  Looking to McDonald’s as just one example of the overt unsustainability of minimum wage job to foster the ever-increasing cost of living, one can easily discern that a change needs to be made.  The federal minimum wage, which currently stands at $7.25 an hour, has been stagnant since July 2009.[14]  With startling statistics being released bringing to light the notion that, on average, a minimum-wage employee must work jobs in order to afford a decent 2-bedroom apartment without paying more than 30% of their income, it is clear that a change has to come about. The current plan that is laid out in the Miller- Harkins Bill, which is before Congress, brings about Obama’s desired minimum wage increase in three annual steps.[15]  Unfortunately, the current gridlock that has been plaguing Washington does not bode well for an effective compromise towards a higher federal minimum wage.

 

[1] http://www.bloomberg.com/news/2014-03-13/mcdonald-s-sued-with-franchisee-by-workers-making-claims-on-pay.html

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] http://www.forbes.com/sites/clareoconnor/2014/03/18/mcdonalds-reviews-wage-theft-claims-as-workers-in-30-cities-protest-for-overtime-pay/

[7] Id.

[8] Id.

[9] http://www.forbes.com/sites/laurashin/2013/07/19/how-she-lives-on-minimum-wage-one-mcdonalds-workers-budget/

[10] Id.

[11] See id.

[12] See id.

[13] http://www.bloomberg.com/news/2014-03-13/mcdonald-s-sued-with-franchisee-by-workers-making-claims-on-pay.html

[14] http://www.dol.gov/whd/minimumwage.htm

[15] http://www.delawareonline.com/story/opinion/contributors/2014/03/21/increasing-the-minimum-wage-not-perfect-but-useful-step/6698247/

Obamacare Battle 2.0: Hobby Lobby and Freedom of Religion for Corporations

By: Julia Elmaleh-Sachs

This Tuesday March 25th, the Supreme Court will hear oral arguments on two highly controversial appeals: Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius.  In both cases, the Court will review provisions of the Affordable Care Act that require for-profit employers of a certain size to offer insurance benefits for birth control and other reproductive health services without a co-pay.[1]  The central issue is whether companies like Hobby Lobby and Conestoga Wood can refuse to provide their employees with birth control pills and Plan B contraception by claiming that it would violate the company owners’ long-established religious beliefs.[2]  If the companies refuse to do so, the ACA could impose financial penalties of up to $100 per day, per employee.[3]

The justices will have to interpret a 1993 federal law called the Religious Freedom Restoration Act (“RFRA”) which requires the government to seek the “least burdensome and narrowly tailored means” for any law that interferes with religious convictions.[4]  Essentially, it prohibits the federal government from “substantially burdening a person’s exercise of religion” unless the government demonstrates that the burden is justified by a compelling interest and is the least restrictive means of furthering that interest.[5]

In an Amicus Brief to the 10th Circuit in June of 2013, the American Civil Liberties Union argued that the Federal Contraceptive Rule does not substantially burden the companies’ free exercise of religion under the RFRA.[6]  In Abdulhaseeb v. Calbone,[7] the Tenth Circuit had clarified that the party claiming a RFRA violation must first establish that the government policy at issue substantially burdens his or her sincerely held religious beliefs.[8]  Only after the plaintiff has established this does the burden shift to the government to prove that the challenged policy is the least restrictive means of furthering a compelling government interest.[9]

In June however, an all-male majority of the 10th Circuit ruled in favor of Hobby Lobby.[10]  Meanwhile the Third Circuit was not as easily swayed in Conestoga Wood and ruled for the government.  That court decided that neither the company, Conestoga Wood Specialties, nor its owners could claim First Amendment religious rights — because, it found, the corporation is incapable of doing so, and because the owners had chosen the corporate form for their business and it stands apart from their personal interests.[11]

In both its briefs, the government made the same points: profit-making businesses do not “exercise” religion at all, for purposes of either federal law or the Constitution; the mandate only applies to corporations and not to their owners and, corporations law treats the business separate from the owner; and, even if the mandate did have to satisfy a compelling government interest, it does so by assuring that female workers have access to an important health benefit as part of a comprehensive health insurance scheme.[12]

In passing the RFRA, the government argues, Congress did not intend to “uniquely disable the government by working a dramatic expansion” of the claims for exemption based on religious liberty.[13]  In addition, there has not been a single decision by the Supreme Court that struck down a federal law — or required an exemption to it — on the theory of protecting “the rights of a for-profit corporation or of the owners, managers, or directors of the corporation.”[14]

Adam Winkler, Professor of Constitutional Law at UCLA writes that “by asking the Supreme Court to let [the owners of Hobby Lobby] enjoy all the protections of this corporate form, but not all of its duties, Hobby Lobby’s owners want to have their corporate cake and eat it, too.”[15]  If the owners of Hobby Lobby, Conestoga Wood Specialties, and other corporations wanted to claim religious exemptions due to their strong religious beliefs they could have easily formed nonprofit organizations. “They wouldn’t be able to make the same kind of money, but they’d have a corporation with an explicitly religious mission.  And under the Affordable Care Act, they’d be exempted from the birth control requirement.  Hobby Lobby’s owners, however, formed a business corporation.”[16]

The oral arguments for each side will be presented on Tuesday by two familiar faces who are well acquainted with the intricacies of the Affordable Care Act since debating NFIB v. Sebelius two years ago: Washington attorney Paul D. Clement, a former U.S. Solicitor General, and the current Solicitor General, Donald B. Verrilli, Jr.  It will be interesting to see how they frame their respective arguments in their second Obamacare battle before the Supreme Court.


[1] Bill Mears, Justices to hear ‘Hobby Lobby’ case on Obamacare birth control rule, CNN, (March 21, 2014), http://www.cnn.com/2014/03/21/politics/scotus-obamacare-contraception-mandate/

[2] Id.

[3] Id.

[4] Id.

[5] 42 U.S.C. § 2000bb-1.

[6] Brief for the American Civil Liberties Union, et al. as Amici Curiae Supporting Appellees, Hobby Lobby Stores Inc., v. Sebelius, 723 F. 3d. 1114 (2013) (No. 12-6294), 2013 WL 1291180.

[7] 600 F.3d 1301, 1315 (10th Cir. 2010).

[8] Id. at 1318.

[9] Id.

[10] Julia Mirabella and Sandhya Bathija, Hobby Lobby v. Sebelius: Crafting a Dangerous Precedent, Center for American Progress, (October 1, 2013), http://www.americanprogress.org/issues/civil-liberties/report/2013/10/01/76033/hobby-lobby-v-sebelius-crafting-a-dangerous-precedent/

[11] Lyle Denniston, Argument preview: Religion, rights, and the workplace, SCOTUSblog, (March 20, 2014), http://www.scotusblog.com/2014/03/argument-preview-religion-rights-and-the-workplace/

[12] Id.

[13] Id.

[14] Id.

[16] Id.

NCAA Hit with Another Lawsuit Regarding Student-Athlete Compensation

By: Jordan Silber

Big-time college athletics is a multi-billion dollar business in which the National Collegiate Athletic Association (“NCAA”), it’s “power-house” conferences, member institutions, and head coaches are handsomely compensated for their efforts.  Ironically, the only individuals left out from earning a piece of the pie are the very athletes who put their bodies on the line to compete in their respective sport.  As the money in the pot continues to get larger through television and sponsorship contracts,[1] the athletes are receiving a proportionally smaller and smaller share of that revenue.[2]  The images of these athletes are used to promote their institutions, as well as used directly in merchandise licensed by the institutions, without giving those athletes proper compensation.[3]  The institutions argue that the education they are providing to the athletes is more than just compensation, however, due to changing societal conditions, this compensation is becoming more and more inadequate.[4]

The debate over whether student-athletes should earn greater compensation for their hard work, extreme time commitment and the huge sum of revenue that they bring in to the university has gained considerable attention in the past year alone.  For example, recently, the Northwestern University football team has filed a petition with the NLRB in an attempt to recognize these athletes as employees of the university and permit them to form a union, thus providing them with protection under the NLRA.[5]  Now less than three months later another lawsuit has been filed against the NCAA and five of its largest conferences alleging violation of antitrust laws due to the capping of athletes compensation at the value of a scholarship for attending the university.[6]

Jeffrey Kessler, the attorney for the athletes, claims that the open market should set the athletes value.[7] He claims that the NCAA amateurism rules are “being used as a tool to strip the players of their fair market value”[8] and is seeking an injunction against the NCAA’s rules, which limit athlete’s compensation, labeling it “price-fixing”.[9] Under the current system players are limited to compensation mainly in the form of tuition, books, and room and board.  The NCAA has continued to stand behind the current systems amateurism rules in its Constitution which state that the “basic purpose of this Association is to maintain intercollegiate athletics as an integral part of the educational program and the athlete as an integral part of the student body and, by so doing, retain a clear line of demarcation between intercollegiate athletics and professional sports.”[10] However, this “clear line” separating college from pro’s has become extreme blurry in recent decades.  There are many aspects of today’s big-time college athletics that run counter to the noble idea of amateurism.

The tremendous rise in popularity among college athletics, particularly mens football and basketball over the past few decades has created an incredible revenue-generating resource for many universities.  For example, universities profit off merchandise that the sell, which represent their players name, likeness, and jersey number.[11]  Universities aren’t the only ones cashing in.  In 2011, the NCAA reached a deal with CBS Sports and Turner Broadcasting for the television rights to broadcast the Men’s NCAA Basketball Tournament.[12]  The fourteen year, $11 billion deal essentially exploits the name, image and likeness of the athletes competing in the tournament to generate enormous commercial benefit that March Madness has to offer.[13]

Through this lawsuit Kessler plans to change this system.  His main objectives are to “strike down permanently the restrictions that prevent athletes in Division I basketball and the top tier of college football from being fairly compensated for the billions of dollars in revenues that they help generate.”[14]  “What we are saying is that it is fundamentally unfair for there to be rules that prevent athletes who create all of this to receive nothing in return.”[15]

A change to this system is necessary and is most likely inevitable as the NCAA continues to find itself in several other lawsuits regarding the current compensation and medical care system in place.[16]  Without a change, the rules will continue to prevent student-athletes from benefitting off their own labor, name, and image while the NCAA will continue to bring in record profits on the back of the very individuals who put fans in the seats.


[1] Kurt Scott, Breaking Down Why the NCAA Absolutely Must Pay Exploited Athletes, Bleacher Report (Jun. 22, 2012), http://bleacherreport.com/articles/1231923-breaking-down-why-the-ncaa-absolutely-must-pay-exploited-athletes.

[2] Id.

[3] Tab Bamford, ESPN & the SEC: The Official End of Amateur Athletics, Chicago Now (May 2, 2013, 2:51 PM), http://www.chicagonow.com/daily-chicago-sports-tab/2013/05/espn-the-sec-the-official-end-of-amateur-athletics/

[4] Id.

[5] Robert H. Jordan, Jr., NLRB Holds Hearing on NU Football Players Union Petition, WGNtv.com (Feb. 2, 2014), http://wgntv.com/2014/02/12/nlrb-holds-hearing-on-nu-football-players-union-petition/.

[7] Id.

[8] Sara Ganim, ‘Amateurism is a myth’: Athletes file class-action against NCAA, CNN.com (March, 17, 2013), http://www.cnn.com/2014/03/17/justice/ncaa-student-athletes-payment-lawsuit/

[9] Id.

[10] NCAA Constitution.

[11] Tab Bamford, ESPN & the SEC: The Official End of Amateur Athletics, Chicago Now (May 2, 2013, 2:51 PM), http://www.chicagonow.com/daily-chicago-sports-tab/2013/05/espn-the-sec-the-official-end-of-amateur-athletics/ (nothing that university bookstores generate substantial revenue from jersey sales of their top athletes, while the individual athlete doesn’t see any profit).

[12] Kristen R. Muenzen, Weakening Its Own Defense? The NCAA’s Version of Amateurism, 13 Marq. Sports L. Rev. 257, 260 n. 16 (2003) available at http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1276&context=sportslaw

[13] Id.

[15] Sara Ganim, ‘Amateurism is a myth’: Athletes file class-action against NCAA, CNN.com (March, 17, 2013), http://www.cnn.com/2014/03/17/justice/ncaa-student-athletes-payment-lawsuit/

[16] Robert H. Jordan, Jr., NLRB Holds Hearing on NU Football Players Union Petition, WGNtv.com (Feb. 2, 2014), http://wgntv.com/2014/02/12/nlrb-holds-hearing-on-nu-football-players-union-petition/.

The “Dopest” Labor & Employment Blog Post: Literally

By: Steven DeSena

The intersection of medical and/or recreational marijuana and employment law is a relatively new and evolving area, as the split between federal and state law creates uncertainty for employers and employees.[1]  The medical marijuana industry has grown rapidly since 2009, when the federal government announced that prosecuting people complying with state medical marijuana laws is a law priority;[2] and 2011, when the Department of Justice issued a memorandum reiterating the position that it is not “an efficient use of federal resources to focus enforcement efforts on individuals with cancer or other serious illnesses” and their caregivers when they comply with state law.[3]

With the gradual softening of marijuana laws all across the country, including legalization for recreational use in Colorado and Washington, employers will be faced with tough decisions regarding employee usage of marijuana due to its illegality at the federal level.  Therefore, employers could potentially still fire employees for their legal use of the controlled substance.[4]  In Colorado for example, where both medical and recreational marijuana is legal by state law, many employers still consider marijuana a controlled substance, and discriminate against its users.[5]  Urine analysis tests are frequently used to determine employment status, whether it is passing a pre-employment THC check or a random drug screen on the job.  Testing positive for any amount of marijuana is legally grounds to prevent employment or for immediate termination.[6]

However, changes are on the horizon.  The next time a marijuana dispensary gets a visit from the feds, it might not be from drug enforcement agents looking to shut down an operation, but rather workplace regulators making sure that labor laws are being followed.[7]  The National Labor Relations Board (NLRB) has agreed to hear claims by the United Food and Commercial Workers Union (UFCW) of various unfair labor practices of a union organizing campaign at a medical marijuana dispensary in Maine, called the “Wellness Connection of Maine”.[8]  Organized labor already has a significant presence in the medical marijuana industry,[9] and although the case was settled, the NLRB’s willingness to hear the claims was a tacit acknowledgement of the industry’s legitimacy.[10]  Medical marijuana employees are a logical organizing target for the 1.3 million member UFCW, which represents workers in grocery and retail stores, as well as food-processing and meatpacking facilities around the country.[11]

Kenneth Dau-Schmidt, professor of labor and employment law at Indiana University, believes federal courts and agencies such as the NLRB face a quandary because federal laws are in conflict.[12]  He states, “[t]he conflict is federal labor law, which has a broad definition of employees, and we have to accommodate that with federal criminal law, which makes working with marijuana a crime … [and] that is some recognition that federal law may give these employees rights even though federal law may also say what they’re doing is illegal.”[13]  Further, Dau-Schmidt believes that these issues are going to arise not only in banking, labor, and employment law, but that we will see similar conflicts in other areas such as tax implications.[14]  Although the federal government considers marijuana illegal, whether for recreational or medical use, new state laws legalizing marijuana have forced federal authorities to address a variety of conflicts.  Notably, the Justice Department has agreed to help banks, barred by money laundering statutes from working with drug dealers, to find a way to do business with marijuana merchants in Colorado and Washington.[15]


[1] Matthew D. Macy, Employment Law and Medical Marijuana – an Uncertain Relationship, Colo. Law., Jan. 2012 at 57, 61.

[2] Id. at 57

[3] Id.

[4] Prof. Kabrina Chang, How Will Employers Handle Medical Marijuana? New Rules Could Prove Tricky in the Workplace, Boston University Public Relations: Professor Voices, Feb. 26, 2014, http://www.bu.edu/professorvoices/2014/02/26/how-will-employers-handle-medical-marijuana-new-rules-could-prove-tricky-in-the-workplace/.

[5] Travis Khachatoorian, Special Report: Marijuana Discrimination in the Workplace, NewsChannel 5, Feb. 21, 2014, http://www.krextv.com/story/special-report-marijuana-discrimination-in-the-workplace-20140221.

[6] Id.

[7] David Jamieson, Medical Marijuana Workers Have the Same Labor Rights as Everyone Else, Feds Say, Huffington Post, Feb. 27, 2014, http://www.huffingtonpost.com/2014/02/27/medical-marijuana-unions_n_4860793.html.

[8] Id.

[9] Id.

[10] Joshua Rhett Miller, Union Gripe Brings Federal Labor Agency Into Marijuana Debate for First Time, Fox News, March 5, 2014, available at http://www.foxnews.com/us/2014/03/05/federal-labor-agency-enters-medical-marijuana-debate-for-first-time/.

[11] Jamieson, supra note 7.

[12] Miller, supra note 10.

[13] Id.

[14] Id.

[15] Id.

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