Turn Out the Lights - MDV Against Power Company

Just down the road in the Bexar County Courthouse, a San Antonio jury on Friday returned a $5 million sexual harassment verdict against its own city owned power company, CPS Energy. Not a lot of details, but with a $2 million award against the company and a $3 million award against the alleged harasser, it is clear that the jury was less than happy with either of their conduct.

Yolanda Oliverri who worked as a meter reader for 23 years alleged that she had been subject to "unwelcome sexual advances, including comments and touching. ... [which]began in October 2000 and continued through February 2003, when she was transferred to another department." According to the story, even though other employees corroborated her story, the utility found her allegations were unsubstantiated.

That highlights one of the toughest parts of any workplace investigation -- the credibility assessment. Getting it wrong, or at least wrong as the jury ultimately sees it, which may be what happened here, can be an expensive proposition.

It was a 3 week trial, followed no doubt by a much longer appeal.

Deciphering Motive in a "Cat's Paw" Case - The First Circuit's Take

When an agent of the Puerto Rico Justice Department hacked off his superiors by telling a newspaper reporter that they had failed to protect him when he was threatened by a hit man, that drug busts were cancelled without notice and that an informant was engaged in misdealing, it perhaps came as no surprise that he was terminated. The wrinkle came that in addition to recommending that he be terminated for "leaks" to the press, the supervisors passed on a second recommendation based on an anonymous tip that the soon to be discharged agent had been convicted for striking his wife (a conviction that the recommendation conveniently failed to mention had been expunged following a completed rehabilitation program).

Still, the 1st Circuit accepted for purposes of its decision that the ultimate decision was made by the Secretary of Justice who received the recommendations and that he based his decision solely on the information about the prior conviction. Still a jury had found that the recommendations to the Secretary were in retaliation for protected speech setting up, although the term is never used here, the so called "cat's paw" theory which has been addressed recently by other circuit courts. See my earlier posts, including a prior 1st Circuit decision here, and also by decisions by both the 4th Circuit and the 5th Circuit.

The defendants relied on the Mount Healthy line of cases which allow a termination "where there was a permissible and impermissible ground for a firing, [and] the impermissible ground [is] ignored where the employee would have been discharged anyway based on the permissible motive." Not applicable, said the 1st Circuit:

The problem in this case is not one of a single actor with multiple motives, but of sequential actors having different motives–-the first actor's motive being unlawful and the second actor's motive at least permissible. In such a case, the first actor may be (and here was) a but-for cause of the firing. The question is whether the intervening step-–a final decision maker acting on a permissible ground-–should as a matter of policy (not lack of causation) insulate the wrongdoer from liability.

Turning to how their sister circuits had addressed the issue, they found them in "nominal conflict", although concluding that "whether any of these cases intends a wholly mechanical rule in all cases is open to doubt." In any event, "a rigid rule would not comport with sound policy."

Unfortunately, that leaves the question as to what is the rule -- about the best that can be determined is their holding that "this is not a case in which it offends public policy to sanction a defendant who, for improper reasons, revealed Tejada's earlier offense in order to prompt his discharge." Tejada-Batiste v. Morales (1st Cir. 9/20/05) [pdf]. From reading the facts of this case, not a decision one would quibble with; but unfortunately, for future litigants not a lot of guidance either.

The Long and Short of It - Will Change in Sweden Apparently

Or at least at the Volvo manufacturing plant following a Swedish Labor Court ruling that the company's height requirement (that employees must be between 5 feet 4 inches and 6 feet 5 inches) to work on its conveyor belt was "indirect gender discrimination." The AP story at the Business Week online site puts it, Volvo convicted of gender discrimination.

I am currently half-way through my annual September course for the University of Texas School of Law continuing legal education program, Essential Employment Law, and one of the areas that I discuss is the American equivalent theory of discrimination, known here as disparate impact. There have been fewer cases in recent years, so this is will be a good example of the doctrine's continuing relevance, even if it is overseas.

From Overseas - Employers Fight Domestic Violence

Societal problems have a way of becoming employers' problems. One on the horizon-- domestic violence. Employers in the UK are getting engaged according to the BBC story, Employers fight domestic violence. If this isn't on your radar screen, put it there.

Healthcare Costs - In (Shocking) Perspective

This statement by Howard Schultz is breathtaking:

Starbucks Corp. will spend more on health insurance for its employees this year than on raw materials needed to brew its coffee, the company's chairman said Wednesday.

Thanks to the T(om)P(eters) wire service for the link to the AP story, Starbucks CEO: Health costs out of control

No one doubts that health care costs are a major issue, nor that access to health care is also critical. But putting it like this -- somehow makes it seem more real. Kudos to Starbucks as well for providing healthcare benefits to part-time employees. Makes me feel a little less guilty about spending $3+ for a cup of coffee.

Nickel and Dimed Goes White Collar

Employment related books aren't normally found near the top of best seller lists and I am not sure quite how high Barbara Ehrenreich's latest book, Bait and Switch, reviewed in the NYT, Investigative Adventures in Unemployment, will make it. To the reviewer, her latest exploration - the search for a white collar job - doesn't have the "cathartic indignation" of her prior volume about the world of minimum wage work, but it sounds as if it will still make a worthy edition to the bookshelf for those whose work is about work.

Easing Back Into Posting and the Perils of Davis-Bacon

Modern medicine having had its opportunity to work its magic through antibiotics, today seemed like a good day to ease back into posting. Unfortunately, my tour through today's Circuit court opinions found nothing of note.

However, one item that was much commented on in the labor blogs was President Bush's emergency suspension of the Davis-Bacon Act for certain counties in Mississippi, Louisiana, Alabama and Florida. Nathan Newman at the Labor Blog has this post, Bush: Let's Keep Louisiana Poor Poor. The New York Times has also weighed in, A Shameful Proclamation.

Some of the comments in the blogosphere misunderstand what Davis-Bacon does. It is only applicable to federal government construction, so the suspension of Davis-Bacon has no impact on private sector reconstruction projects. It is a 'prevailing wage' statute, so it has nothing to do with the Fair Labor Standards Act, so that basic minimum wage and overtime laws are untouched.

Under Davis-Bacon, the Department of Labor periodically does labor surveys for various construction trades and publishes a wage determination as to the prevailing wage-rate that must be paid on federal construction projects in that area. There are several different classifications depending on the type of construction being done, but "building" rates for New Orleans are found in this determination. The rates range from $22.09 plus $6 an hour in fringe benefits to electricians (meaning an employer has to pay the base rate and either $6 an hour in the fringes found by the DOL, or the cash equivalent, $28.09 an hour), to $9.55 plus $1.05 in fringe benefits for laborers.

Davis-Bacon has been criticized as being originally passed to protect union jobs, often at the expense of minority workers. That comment has been made over the years, The Davis-Bacon Act: Let's Bring Jim Crow To An End, a 1993 article by David Bernstein, published by the Cato Institute, and today at the Investors Business Daily website, Bringing Home the Davis-Bacon. That article sums up that point:

The "prevailing wage" is arbitrarily calculated based on a formula of previous union and nonunion wages in a given locality. But in major urban areas it is usually the union wage and usually high enough to price the poor and unskilled out of the labor market.

That is its effect and, though union leaders deny it, that was its intent. And it was targeted directly at minority workers.

There are other criticisms on the way the rates are calculated, on restrictive work practices that are required as workers must only work within their classified rate etc.

As with most issues, there are arguments on both sides, unfortunately, as seems to be our current mind set, every decision, including this one, ends up being characterized in the most mean spirited way. Probably a good warm up for hearings on Supreme Court nominees.

Post Labor Day 2005

A lost New Orleans, a new Chief Justice, a split AFL-CIO. The world is certainly different Labor Day 2005 than before. Of course, that can be said every Labor Day, but somehow these changes seem much more significant. Although not directly relevant to the world of work, the tragedy of Katrina and how we as a country react, not this week or month, but over the long haul may ultimately be the most significant.

Postings have been lacking due to work travels to New Mexico and then a sinus infection (almost like clockwork it seems with the turning of the calendar to September). Still under the weather, but, hopefully, back to regular posting soon.