This is a bad decision for business. The National Association of Manufacturers had filed an amicus brief in support of the company, and our Manufacturing Law Center entry explains the consequences of the ruling for business:

A rule that permits third-party retaliation claims would increase even more dramatically retaliation charges, which are the fastest-growing category of charges filed under Title VII, and would put employers in the untenable position of having to speculate about possible relationships an employee may have that could give rise to potential liability each time they contemplate disciplinary or other action against that employee.

This decision should — but won’t — put to rest the much-repeated claim from left-leaning pundits and bloggers that the U.S. Court, led by Chief Justice John Roberts, is a reactively pro-business court.

Ed Whelan, President of the Ethics and Public Policy Center, made the case at the National Review Online’s Bench Memos blog, “Those Sneaky Corporatist Justices”:

As I explained in my testimony at Elena Kagan’s confirmation hearing, “allegations that the Roberts Court engages in conservative judicial activism frequently involve a highly selective skewing of the evidence—drastically inflating the supposed importance of cases that fit (or that are distorted to fit) the desired narrative while simply ignoring those that don’t.”

The Court’s ruling today in Thompson v. North American Stainless is one that critics of the Roberts Court will do their best to ignore. In that case, Justice Scalia, writing for the Court, ruled that third-party retaliation claims are permitted by Title VII—specifically, that someone who contends that he has been fired (or otherwise punished) by his employer as retaliation for another employee’s complaint about job discrimination may sue the employer under Title VII. (In the particular case, plaintiff Thompson alleged that North American Stainless fired him in order to retaliate against his fiancée for her filing an EEOC charge of sex discrimination.)

That’s certainly not a pro-employer result from our supposedly “corporatist” Court.

Hans Bader at the Competitive Enterprise Institute has been following the court’s rulings that can reasonably be considered unfriendly to business. Blogging at The Examiner, he writes of the North American Stainless decision:

This is part of a long line of rulings against employers by the Supreme Court, which is not pro-business at all, contrary to the false claims of many liberal reporters who cover the Supreme Court. Many of these rulings against employers, like Lewis v. Chicago (2010), have been unanimous reversals of lower court decisions.

The noxious claim that the Supreme Court is pro-business has been used in Congress to justify passage of legislation that really does harm to the ability of employers to manage their workplaces, most notably through the Lilly Ledbetter Fair Pay Pact, which eliminated statutes of limitations for filing employment discrimination claims.

This document gives a partial snapshot of the current human rights situation in the United States, including some of the areas where problems persist in our society. In addressing those areas, we use this report to explore opportunities to make further progress and also to share some of our recent progress. For us, the primary value of this report is not as a diagnosis, but rather as a roadmap for our ongoing work within our democratic system to achieve lasting change.

The Administration believes that roadmap directs us to the Paycheck Fairness Act, legislation that would further inject the federal government into every hiring and pay decision in the private sector while opening employers to a new wave of pay discrimination lawsuits.

37. As one of President Obama’s first official acts, he signed into law the Lilly Ledbetter Fair Pay Act of 2009, which helps women who face wage discrimination recover their lost wages. Shortly thereafter, the President created the White House Council on Women and Girls to seek to ensure that American women and girls are treated fairly and equally in all matters of public policy. Thus, for instance, the Administration supports the Paycheck Fairness Act, which will help ensure that women receive equal pay for equal work.

The one thing the bill would help ensure is litigation. It allows unlimited punitive and compensatory damages in cases of suspected discrimination, while changing class-action suits from a system of “opt-in” to “opt-out,” giving trial lawyers additional leverage to pressure companies into huge settlements. (The National Association of Manufacturers has prepared a ManuFACTS sheet that details the legislation’s many anti-employer provisions.)

When each new employee is a potential lawsuit, why would a company hire anyone?

Senate Majority Reid filed cloture on the latest version of the bill, S. 3722, making its consideration possible in next week’s lame-duck session of Congress. The original Senate bill, S. 182, was introduced by Sen. Hillary Clinton in January 2009 before she became Secretary of State, a position from which she now promotes the same bad idea.

If jobs and the economy are truly a priority for the President and his Administration, he will ask Sen. Reid to make certain the Paycheck Fairness Act is removed from the Senate’s schedule and relegated to the vault of bad legislation.

And drop the appeals to the United Nations. Employers in the United States have enough problems without having their own government imply they fall short when it comes to human rights. With this report, Administration sends a message, “We really don’t think very highly of business.”

(Hat tip: Nina Shea, director of the Hudson Institute’s Center for Religious Freedom, writing at National Review Online’s The Corner, a post, “The U.S. as U.N. Punching Bag.“)

Unfortunately, in its highlighting of the Paycheck Fairness Act, the White House’s messaging Thursday conflicts with the President’s overarching theme, that of economic recovery and jobs growth. At the same time, the messaging reminds the public of the political power of the litigation lobby.

The White House blog listed the Paycheck Fairness Act as No. 2 in its list, following Lilly Ledbetter Act Fair Pay Act, in its list, “10 Ways Our Economic Policies Benefit Women.”

It’s weird to be boasting about a bill that hasn’t passed yet. But more importantly, the legislation would lead to a more stagnant labor market, transfer more business wealth into the pockets of trial lawyers, and raise marginal costs of each new hire. A White House concerned about jobs should be renouncing the bill, not touting it.

The Paycheck Fairness Act would extend the federal government’s control over employers’ personnel decisions through rigid “pay equity” mandates and then expanding the grounds for litigation for even unintentional violations. In making hiring and salary decisions, an employer’s chief concern would not be whether the person is worth the price in the competitive labor market, but rather, “Am I going to get sued?”

As the National Association of Manufacturers’ 2009 “Key Vote” letter to the House explained:

By removing all limits to punitive and compensatory damage awards on claims made under the Equal Pay Act (EPA), the Paycheck Fairness Act (H.R. 12) would expose employers to increased threats of litigation – even when unintentional pay disparities may have occurred. Its passage would likely prompt many employers to purchase additional legal liability insurance, increasing their costs and decreasing their ability to raise wages, increase benefits or hire new U.S. House of Representatives workers. In fact, it is difficult to imagine a scenario in which the bill would not lead to lower wages and fewer jobs.

Senate Majority Leader Reid re-introduced the Senate version of the bill, S. 3722, in late September and filed cloture for possible Senate consideration in a lame-duck session of Congress. We tend to think the maneuvering is more about exciting the political base than actually pushing through the bill in a very crowded, riven post-election Congress.

Still, for employers it’s hard to ignore: A President campaigning on expanded economic opportunities for women by touting legislation that would diminish opportunities for men and women, both.

Union leadership has already shown itself out of touch with what union members want: Above all, it’s jobs. Officials with Big Labor have waged a full-scale battle in support of the jobs-killing Employee Free Choice Act, when most union families disagreed with the provisions of the bill, specifically the effective elimination of secret ballots. At the recent “One Nation” rally, union leaders associated their organizations not with the working man or woman, but with the hard-core political left on issues involving social policy and support for the military.

Here at the National Association of Manufacturers we’ve encouraged candidates and Members of Congress from all parties to rally together for a strategy to support manufacturing jobs – something employers and employees both can get behind. We hope that this election day will serve as a wake up call for union leaders and policy makers alike: We need to work together to strengthen our economy and develop policies that help employers create and retain jobs.

The National Association of Manufacturers has been urging Members of Congress not to poison a lame-duck session by pushing legislation that organized labor has been agitating for, of which the Paycheck Fairness Act is a prime example. It is disappointing that Senate leadership decided to queue up consideration of the Paycheck Fairness Act, a bill that will make it more difficult for employers to create and retain jobs especially in such trying economic conditions.

As Members of Congress head off on the campaign trail, we hope that they will understand that voters are primarily focused on two things: jobs and the economy. The efforts to bring up the Paycheck Fairness Act have been largely motivated by political considerations, not sound economic policy. Well, then, Senators should consider the politics: Voters are not inclined to support bills that threaten the fragile economic recovery. In fact, they may actively reject those policies comes Nov. 2.

It appears that Senate action was really not in the works, and politicians and their activist allies were just ginning up the stories to motivate the political base. Such is Cynical September in Washington.

And really, you can’t be for “jobs” — that is, new hiring and a lower unemployment rate — and seriously support the bill. The additional rules and legal liability the bill would create would substantially raise the marginal costs of every new hire.

The Washington Post knocked the legislation today in an editorial, “Fair-pay misfire.”

It also mandates that the business necessity defense “shall not apply” when the employee “demonstrates that an alternative employment practice exists that would serve the same business purpose without producing such differential and that the employer has refused to adopt such alternative practice.” But what if the employer has refused because it has concluded that the alternative is — contrary to the employee’s assertion — more costly or less efficient? What if the employee and employer disagree on what the business purpose is or should be?

This approach also could make employers vulnerable to attack for responding to market forces. Take an employer who gives a hefty raise to a valued male employee who has gotten a job offer from a competitor. Would a court agree that the raise advanced a legitimate business purpose or could the employer be slammed unless he also bumps up the salary of a similarly situated female employee?

Discrimination is abhorrent, but the Paycheck Fairness Act is not the right fix.

The National Association of Manufacturers had key voted against the House version of the bill when it was considered in January 2009. So the Senate had 20 months to consider it but only now it’s being talked about?

On Tuesday, Labor Secretary Hilda Solis and Lilly Ledbetter, the plaintiff in the Ledbetter Supreme Court decisions and political activist who has lobbied for the legislation named in her honor, hosted what was billed as a Department of Labor webcast. Usually Labor Department webcasts are a forum for the public to ask questions of senior Department officials on key issues like the Department’s budget requests and regulatory agenda. Tuesday’s event was much different. This “webcast” was a streaming video feed of a discussion by the Secretary and Ms. Ledbetter on their support for the Paycheck Fairness Act. There were several participants in the audience, assumingly there upon the invitation of the Department. Our invitation must have been lost in the mail. It appeared that most in the room were supporters of the legislation who tossed softball questions to the Secretary.

If I were in the room there would’ve been many questions that I would’ve liked to ask, such as:

1. Ms. Secretary – you expressed the need to gather more data about the alleged pay gap, however it appears as though the Department of Labor has removed an important analysis of pay equity issues as the Obama Administration transitioned into effect. Wouldn’t it be helpful for the Department to analyze existing research it commissioned?
2. Ms. Secretary – the Administration continues claim that women’s wages only constitute 77 percent of men’s wages. However your Department recently published updated data that shows that the pay gap is narrowing. Why do you continue to use outdated information?
3. Ms. Ledbetter- You claim that the Paycheck Fairness would allow employees to freely discuss their paychecks. However isn’t this employee right already protected in the National Labor Relations Act as one of many “protected concerted activities”?
4. Ms. Secretary – Data from the EEOC shows that 95 percent of discrimination claims against employers do not have grounds. Even though most of these claims are meritless employers still need defend themselves against these costly allegations. Are you concerned that passage of the Paycheck Fairness Act may encourage more suits to be filed against employers that may not have merit?

While the specifics of the alleged pay gap can be debated ad nauseum by economists, we understand why the White House felt it necessary to offer an op-ed to the Post the paper soundly rejected the proposal in an editorial in January 2009.

While we don’t always agree with the Post’s ed board on many issues, we strongly concur with their position on the bill. The Paycheck Fairness Act will not prevent actual instances of illegal pay discrimination. It will, however, allow the Federal government to second-guess almost all employee wages and encourage lawsuits that expose employers to unlimited damage awards. The bill substantially restricts employers’ ability to base pay decisions on legitimate factors such as professional experience, education, training, employer need, local labor market rates, hazard pay, shift differentials and the profitability of the organization. The legislation could  expose employee wages or salaries to peers, family, friends and competitors.

That’s bad news for employees, as employers are already facing tremendous amounts of uncertainty in today’s economic conditions.

It’s unfortunate that the White House and Senate leaders are pushing this type of legislation before the midterm elections for what looks to be political reasons. Congress should instead focus on getting the economy back on track and not make it harder for manufacturers to create and retain jobs.

We cannot do this work alone. So today, I thank the House for its work on this issue and encourage the Senate to pass the Paycheck Fairness Act, a common-sense bill that will help ensure that men and women who do equal work receive the equal pay that they and their families deserve. Passing this bill is one of the Task Force’s key recommendations, and I hope Congress will act swiftly so that I can sign it into law.

The message that many business owners will hear from the President is not “common-sense” and “fairness” but rather, “Get ready for more government rules to micromanage your business, along with an increased risk of lawsuits, no matter how honestly and fairly you treat your employees. The more jobs you create, the more the risk!”

Now, please invest and help our economy grow.

The National Association of Manufacturers has prepared a ManuFact, that is, a summary sheet of the legislation, H.R. 12 and S. 182. It states:

Manufacturers strongly support equal employment opportunities for American workers and oppose any form of unlawful discrimination.  Remedies available under existing law prohibit discrimination to protect
men and women working under similar conditions from pay disparities in jobs that require equal skill, effort and responsibility. 

The proposed Paycheck Fairness Act (H.R. 12, S. 182) would alter the existing Equal Pay Act to allow unprecedented penalties of unlimited punitive and compensatory damages in cases of suspected discrimination. This exposes manufacturers of all sizes to increased litigation and a spate of frivolous class-action suits even when they act with a reasonable belief that their pay policies are lawful.

Under this legislation, equal pay class-action suits would change significantly from a system of “opt-in” to “opt-out.”  This provision would encourage frivolous class-action suits.

If enacted, this bill would change current law to require employers to justify pay disparities through “bona fide” factors (education, training and experience). It would also require gender-based pay disparities to be
substantiated as a “business necessity” and would curtail pay differences based on market factors, previous salary history and geographic location.

This bill would allow for the disclosure of confidential salary information, require employers to report wage data through the re-introduction of a flawed mandatory survey and expand the eligibility to file claims beyond employees to include job applicants.

]]> http://shopfloor.org/2010/07/how-do-wage-dictates-lawsuits-foster-business-certainty/12950/feed 2 http://shopfloor.org/2010/06/disclose-the-100-years-falsehood/11971 http://shopfloor.org/2010/06/disclose-the-100-years-falsehood/11971#comments Thu, 17 Jun 2010 12:55:34 +0000 Carter Wood http://shopfloor.org/?p=11971 Read the Rest...

]]> Rep. Chris Van Hollen (D-MD) and Rep. Mike Castle (D-DE) start their Washington Post op-ed today on the DISCLOSE Act by misrepresenting the facts and go from there:

On Jan. 21, 2010, the Supreme Court threw out 100 years of established law and legal precedent that protected the integrity of our political process against direct campaign expenditures by big-money special interests.

That’s not true. The Heritage Foundation’s Robert Alt and Hans von Spakovsky, a former FEC commissioner, have already debunked the spurious claim of 100 years of precedent. From “The Liberal Mythology of an ‘Activist’ Court: Citizens United and Ledbetter“:

The claims by some, including President Obama, that the Supreme Court’s Citizens United decision overturned 100 years of precedent are simply untrue. While Congress implemented a statutory ban on direct corporate contributions to federal candidates in 1907, a ban that Citizens United did not disturb, it did not impose a ban on independent political expenditures by corporations and unions until 1947 when it passed the Labor Management Relations Act. Congress overrode President Truman’s veto of the Act even though he “warned that the expenditure ban was a ‘dangerous intrusion on free speech.’” The constitutionality of such a ban was not reviewed by the Supreme Court for almost three decades after its passage, although the Court expressed its doubts about the act in more than one case.

Former FEC Commissioner Bradley Smith has also addressed the anti-speech talking point in The American Spectator:

[One] would never guess from the left’s hysteria that even prior to Citizens United, 28 states, representing roughly 60 percent of the U.S. population, already allowed corporations and unions to make expenditures promoting or opposing candidates for office in state elections; in 26 states, such corporate and union expenditures were unlimited. Moreover, while the first bans on corporate spending were enacted more than a century ago, prior to the 1990 Austin decision, the Supreme Court had never upheld a ban, or even a limitation, on independent expenditures supporting or opposing a political candidate. It was the misleading contention that the decision overturned “100 years of law and precedent,” that appears to have evoked Justice Alito’s “not true” response to the president’s State of the Union comments.

Today’s Washington Post op-ed from the two sponsors of H.R. 5175, the DISCLOSE Act, is headlined, “The Disclose Act is a matter of campaign honesty.” Honest debates should start with honest descriptions of the facts.

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