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Dark clouds blotting out Ford’s sunshiny forecast

November 9th, 2009  |  Matt Pavich

>In a classic good news-bad news situation, Ford Motor Company workers overwhelmingly rejected contract changes that would have allowed Ford to cut labor costs in the same week in which the company announced earnings of almost $1 billion in the third quarter of 2009.

Ford sought the deal to bring its labor costs in line with its automotive rivals Chrysler Group and General Motors, both of which won concessions from the union as they headed into bankruptcy protection earlier this year. But Ford’s relative comparatively good fortune worked to its disadvantage. Given that Ford avoided bankruptcy, and looking at the projected earnings, the automaker’s workers weren’t convinced they should make more concessions, essentially saying, “You want sacrifices from us? Show us why.”

It’s not as though Ford was offering nothing. The company was offering workers a $1,000 bonus if they ratified the contract. But the contract also would have frozen entry-level pay and limited workers’ ability to strike.

With UAW President Ron Gettelfinger’s previous statement that there wouldn’t be another vote if the contract changes failed, the question for Ford now has got to be, where does the company go from here?

Ford could offer a more lucrative incentive bonus package to try to lure in its reluctant workforce. It could diminish the level of concessions that it’s asking its workers to make. But the one thing Ford can’t do is sit idle. Industry analysts attribute part of the company’s earnings to the government’s cash-for-clunker program, not something that Ford can rely upon for sustained growth. And should things turn sour for the company, it’s highly unlikely that a government bailout would be an option.

One thing seems certain. If the automaker doesn’t do something to bring its labor costs in line with its competitors, it’s not going to have to worry about how its employees will react to future profit announcements.


Live in California, unemployed, need a discount?

November 6th, 2009  |  David Stephanides

>Responding to a very tough economic climate, many California businesses began offering discounts to state employees who had their salaries reduced when Gov. Arnold Schwarzenegger instituted reduced workweeks back in February of this year.

Several creative offers quickly sprung up: discounted museum admission; ten percent off on “Furlough Fridays” at various restaurants; and discounted resort passes.

Sensing some unfairness toward the private workforce, a San Diego area attorney sent demand letters in July threatening litigation against Sacramento area businesses. These letters claimed that providing discounts to state employees who have suffered reductions in employment is a violation of the Unruh Civil Rights Act. The attorney demanded statutory and actual damages as well as payment of his attorney fees.

Well, the California legislature responded in kind, passing a bill (S.B. 367) clarifying current law, and establishing that it is not a violation of the Act for a business to provide discounts to groups of people who have suffered a loss or reduction in employment. “Businesses should be able to confer these types of benefits without the fear of provoking litigation,” said Senator Negrete McLeod, the bill’s chief author.

On November 2, Gov. Schwarzenegger signed the bill into law. An odd law, but one worthy of note.


Will this bill be the first step towards a minimum standard of paid sick leave for employees?

November 4th, 2009  |  Deborah Hammonds

>Representative George Miller (D-Cal), chairman of the House Education and Labor Committee, and Representative Lynn Woolsey (D-Cal), chair of the Workforce Protections Subcommittee, announced the introduction of emergency temporary legislation November 3, 2009, that would guarantee a maximum of five paid sick days for employees sent home or directed to stay home because their employer believes they have symptoms of a contagious illness, or have been in close contact with an individual who has symptoms of a contagious illness, such as the H1N1 flu virus. The House Education and Labor Committee will hold a hearing on the legislation, called the Emergency Influenza Containment Act (H.R.3991), the week of November 16. President Obama declared the H1N1 flu a national emergency October 24.

“Sick workers advised to stay home by their employers shouldn’t have to choose between their livelihood, and their coworkers’ or customer’s health,” said Miller. “This will not only protect employees, but it will save employers money by ensuring that sick employees don’t spread infection to co-workers and customers, and will relieve the financial burden on our health system swamped by those suffering from H1N1.”

“To help control the spread of the H1N1 flu virus, workers who are sick should stay at home,” said Woolsey. “This bill will ensure that workers who are directed to stay home by their employers can do so without paying a financial penalty.” It is not clear whether the bill, which has seven cosponsors, is supported by the House leadership or Senate Democrats, according to media reports, but Miller will seek a vote on the bill as soon as possible.

Duration of leave. According to the bill’s provisions, the amount of paid sick leave will be calculated based on the employee’s regular rate of pay and the number of hours the employee would otherwise be normally scheduled to work. The Secretary of Labor will be tasked with issue guidelines to assist employers in calculating the amount of paid sick leave available to employees under the emergency proposed legislation. After the first workday (or portion thereof) an employee receives paid sick leave under the proposed bill, an employer may require the employee to follow reasonable notice procedures in order to continue receiving the leave.

Among other provisions, the proposed Emergency Influenza Containment Act:

  • Guarantees a sick worker up to five paid sick leave days a year if an employer “directs” or “advises” a sick employee to stay home or go home due to a contagious illness. The term “contagious illness” includes influenza-like illnesses such as the novel H1N1 virus.
  • Covers both full-time and part-time workers (on a pro-rated basis) in businesses with 15 or more workers. Employers that already provide at least five days’ paid sick leave are exempt.
  • An employer can end paid sick leave at any time by informing the employee that the employer believes they are well enough to return to work. Employees may continue on unpaid leave under the Family Medical Leave Act or other existing sick leave policies.
  • Employees who follow their employer’s direction to stay home because of contagious illness cannot be fired, disciplined or made subject to retaliation for following directions; employers violating the act would be subject to the Fair Labor Standards Act.
  • Would take effect 15 days after being signed into law and sunset after two years.

The Centers for Disease Control (CDC) has confirmed that H1N1 influenza is widespread in 48 states, estimating that through July 23, between 1.8 million and 5.7 million cases of pandemic 2009 H1N1 influenza have hit the United States, resulting in 9,000-21,000 hospitalizations. Miller also cited CDC estimates that a sick worker will infect one in ten co-workers. As a result, the CDC and other public health officials have advised employers to be flexible when dealing with sick employees and to develop flexible leave policies that will allow employees to stay home without fear of losing their jobs.

Paid sick leave at the forefront. The H1N1 pandemic has raised the national debate over the necessity of paid sick leave in the United States. As it stands, paid sick leave is available to approximately two-thirds of US workers, according to the Bureau of Labor Statistics (BLS). It is startling to see the leave differential between private and public sector workers. Sixty-one percent of private industry workers receive paid sick leave, yet 89 percent of individuals employed by state and local governments have access to paid sick leave. However, both the private and the public sector have one thing in common, the lowest wage workers are far less likely to receive paid sick leave than the highest paid workers. Just 37 percent in the lowest 25 percent of wage earners receive paid sick leave, while 88 percent of the high wage earners receive paid sick leave.

The District of Columbia, San Francisco and Milwaukee are municipalities that have paid leave programs, but Milwaukee’s paid sick leave ordinance was declared unconstitutional. Nationally, the Healthy Families Act (S. 1152/H.R. 2460) would establish a minimum standard of paid sick leave for employees, allowing workers to earn up to seven paid sick days a year. It is currently under consideration in both by the House and Senate.

The Healthy Families Act would allow the paid sick days to be used to care for an employee’s own illness or physical or mental condition, to obtain a medical diagnosis, a related treatment, or preventive care, or to care for a family member for any of the above reasons. The provision would also allow employees using the paid sick leave to recover from or seek assistance related to domestic violence, stalking or sexual assault. Workers would accrue one hour of paid sick time for every 30 hours worked in order to earn up to 56 hours or 7 days of paid sick time. Employees would begin to earn paid sick time at the commencement of their employment, but would not be entitled to use the leave until after 60 days. Paid sick leave would carry over from year to year, but may not exceed 56 hours unless the employer permits additional accrual. Employers can require workers to provide documentation supporting any request for leave longer than three consecutive days.


Supreme Court to consider validity of two-member NLRB rulings

November 2nd, 2009  |  Lisa Milam-Perez

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The Supreme Court granted cert today in New Process Steel v NLRB to consider whether a two-member panel of the National Labor Relations Board has authority to hear cases and issue orders regarding unfair labor practice charges.

Dozens of Board decisions have been appealed to the federal courts of appeals on the two-member question. Decisions have been split; the current score is 3-1 in favor of Board authority. In New Process Steel, the Seventh Circuit held the plain meaning of the NLRA supported the NLRB’s delegation of authority to a two-member quorum. The First and Second Circuits joined the Seventh Circuit, holding in the Board’s favor, while the District of Columbia Circuit, in Laurel Baye Healthcare v NLRB, ruled the Board did not have statutory authority to act. Additional decisions on the issue are pending in several circuits.

The NLRB has asked the Supreme Court to settle the question. The U.S. Solicitor General filed a petition for cert in Laurel Baye on the Board’s behalf, seeking reversal of the DC Circuit’s holding. The Court instead granted cert in New Process Steel, consolidating Laurel Baye and several other petitions filed on rulings on this issue. The question presented:

“Does the National Labor Relations Board have authority to decide cases with only two sitting members, where 29 U.S.C. § 153(b) provides that `three members of the Board shall, at all times, constitute a quorum of the Board’?”

The NLRB has been operating with only two members for nearly two years. Rather than cease functioning, Chairman Wilma Liebman, a Democrat, and Member Peter Schaumber, a Republican, have continued to issue decisions in matters on which they can agree. The Board acted on the advice of the Justice Department’s Office of Legal Counsel, which concluded that “if the Board delegated all of its powers to a group of three members, that group could continue to issue decisions and orders as long as a quorum of two members remained.” The Board made such a delegation in December 2007, and since that time Liebman and Schaumber, acting as a quorum, have issued nearly 500 decisions.

A decision from the High Court will bring essential clarification to the issue, the two Board members noted. “We continue to believe that our position is correct, and hope that a decision from the high court will bring some finality to these cases,” said Liebman. Added Schaumber: “It is critical to the agency’s mission that this issue be decided.”

Meanwhile, Liebman is hoping the question will soon cease to matter going forward. Three Board nominees are currently awaiting Senate confirmation. The Senate HELP Committee cleared the nominees last month, approving Democrat Mark Pearce and Republican Brian Hayes in a unanimous voice vote. The more controversial nominee, SEIU associate general counsel Craig Becker, was approved by a 15-8 vote. Liebman said she is “hopeful that they will be confirmed soon and we can resume operations as a five-member Board.” But Senator John McCain (R-Ariz) has placed a hold on Becker’s nomination, delaying a full Senate vote on the slate. That means Liebman and Schaumber will be lonely, overworked, and in legal limbo for a while longer.


Could you put that plain language into the law, please?

October 30th, 2009  |  Pamela Wolf

>Isn’t it interesting that there have been so many “plain language” versions and explanatory materials for the various health reform proposals coming out of both chambers of Congress? Perhaps it’s easier to discuss “plain language” intentions rather than actual legislative provisions, especially when the text of the final product will be so massive that only the most determined (or paid to do so) among us would undertake the job of actually reading the text. Politically speaking, there is also obvious utility in providing explanatory material so that health reform can be understood by the general public. Doesn’t that seem a laudable goal for the actual bill text, too?

As pointed out in the Washington Post, there is a movement afoot to get government agencies to use language in the documents that they issue (other than regulations) that will be easily understood by intended audiences. A bill introduced earlier this year (H.R. 946) by Representative Braley (Iowa) attempts to accomplish just that – with regard to executive agencies.

But what about laws – wouldn’t it be better for laws to be written in plain language, also? I suppose that one could argue that laws are written for lawyers, but then again, everyone is presumed to know the law – “ignorance of the law is no excuse,” as they say.

The Affordable Health Care for America Act (H.R. 3962), unveiled by House Democrats on October 29, is a handy example. The 1,990-page bill was supplemented by a host of documents explaining what it says, what it means, how it’s different from earlier proposals and its intended impact.

Descriptions and summaries of this sort are necessary and informative. The average person, even assuming an intense interest in health reform, just doesn’t have time to sit down and read 1,990 pages of text. But, even so, one wonders if the bill text could have been fashioned to be as straight-forward and easily understood as the text of all the materials offered by proponents to explain it.

Section 212 is a great example. Subtitled, “Guaranteed Issue and Renewal for Insured Plans and Prohibiting Rescissions,” it states that:

The requirements of sections 2711 (other than subsections (e) and (f)) and 2712 (other than paragraphs (3), and (6) of subsection (b) and subsection (e)) of the Public Health Service Act, relating to guaranteed availability and renewability of health insurance coverage, shall apply to individuals and employers in all individual and group health insurance coverage, whether offered to individuals or employers through the Health Insurance Exchange, through any employment-based health plan, or otherwise, in the same manner as such sections apply to employers and health insurance coverage offered in the small group market, except that such section 2712(b)(1) shall apply only if, before nonrenewal or discontinuation of coverage, the issuer has provided the enrollee with notice of nonpayment of premiums and there is a grace period during which the enrollee has an opportunity to correct such nonpayment. Rescissions of such coverage shall be prohibited except in cases of fraud as defined in section 2712(b)(2) 15 of such Act.

This particular provision would fall under the “laws are written for lawyers” category – although the subtitle probably qualifies as “plain language.” The problem is that one must trust that the subtitle conveys the general meaning of the provision because there is no way to know what the provision actually means just by reading the text.

But perhaps we shouldn’t worry because, according to the explanatory material provided by the bill’s proponents, “the Affordable Health Care For America Act will stop insurance companies from denying coverage to Americans with pre-existing conditions such as heart disease, cancer or diabetes and from hiking up rates or dropping coverage for those who get sick.” Section 212 probably falls somewhere under this explanation – you just can’t take it to court.