Today’s News & Commentary — July 11, 2017

As reported by the New York Times, the Trump administration (the Department of Homeland Security) announced that it would delay, and likely forgo altogether, implementing a federal rule which would have allowed foreign entrepreneurs to come to/stay in the United States to start companies.  According to the announcement, the International Entrepreneur Rule was delayed in order to “provide DHS with an opportunity to obtain comments from the public regarding a proposal to rescind the rule.”  The announcement was not well-received by many business leaders.  The president of the National Venture Capital Association (NVCA) called the announcement “disappointing,” and described it as “represent[ing] a fundamental misunderstanding of the critical role immigrant entrepreneurs play in growing the next generation of American companies.”

As we mentioned last week, on July 5, 2017, Washington State’s Governor, Jay Inslee, signed SSB 5975 into law.  The law guarantees paid family and medical leave, providing benefits of up to 90% of the employee’s income (matching D.C. in providing the highest percentage of income benefits of any state or district).  Under the law, employees who have worked at least 820 hours in the past year will be eligible for up to 12 weeks of paid family leave to care for a new child or sick family member.  Employees will also be entitled to up to 12 weeks of paid leave to manage their own serious health issues.  Employees will be able to, under certain circumstances, combine family and medical leave to receive up to 16 weeks of paid leave.  Finally, employees who experience pregnancy-related complications will be able to receive up to 18 weeks of paid leave.  Washington’s program, which will take effect in 2020, will be funded by both employers and employees.  Upon enacting this law, Washington became the fifth state to enact a state paid family and medical leave act.  D.C. has also adopted a paid leave program in its jurisdiction.  OnLabor has covered similar state enactments in the past (see here and here).

Today, oral argument takes place in Amanda Frlekin et al v. Apple.  The case is on appeal to the Ninth Circuit.  In this class action, plaintiff-employees argue that they should be paid for the time they spend at the end of their shifts undergoing anti-theft bag searches.  The employees lost below—U.S. District Judge William Alsup (in the U.S. District Court for Northern California, San Francisco) rested his ruling in part on the fact that employees could choose not to bring a bag to work, and thus obviate the delay of a bag search.  In a similar case, Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014), SCOTUS held that bag checks were not compensable activity because they were not an “integral and indispensable” part of the employees’ job responsibilities.  However, in Miranda v. Coach, Inc., 2015 WL 1788955 (N.D. Cal. 2015), the court held that Busk did not apply to California labor law.  Thus in Frlekin, the favorable outcome to Apple was based on the judge’s finding that employees were not “suffered or permitted” to work during bag checks.

The New York Times profiled economist Michael Mandel’s (Progressive Policy Institute) view that the rise of e-commerce is creating net jobs.  That is, that as e-commerce surpasses brick-and-mortar retail in the economic landscape, it is creating more jobs than it is displacing.  What’s more, Mandel’s “unorthodox” position asserts that these new jobs are higher-paying than traditional retail jobs.  As the profile points out, other economists are skeptical of Mandel’s position.  At the very least, the tension captures the existing anxieties, which we’ve previously covered, about the future of jobs as automation and other labor-saving technologies become increasingly prevalent.

Would Earlier Implementation of the New Overtime Rule Have Changed the Election Outcome?

Since the Presidential election was so close, it’s very tempting to engage in thought experiments about how different actions might have changed the outcome.  And for all of Hillary Clinton’s flaws as a candidate, exit polls suggest that the election can be viewed as a referendum on the Obama Administration.  For instance, 63% of the electorate said that the condition of the national economy was either “not good,” or “poor,” and Trump carried this group by a 63% to 31% margin.  In addition, only 31% of voters said that their financial situation was better now than it was four years ago.

While the economy has improved significantly since the devastation caused by the 2008 financial crisis, many workers still have not caught up to where they were before the financial crisis.  And for workers struggling to make ends meet in a small town in Florida, Michigan, Pennsylvania, or Wisconsin, it can be hard to see the ways in which President Obama has improved their lives.  It may well be that they are benefitting from the Affordable Care Act, but if they had insurance before the ACA passed, they may feel that the law has not done enough to contain costs, and they may not notice some of the benefits the law given them. As I have thought about the concrete ways that workers stand to lose when Donald Trump replaces President Obama, one thing that has jumped out at me is the new Department of Labor overtime rule.  The new rule, which goes into effect on December 1st (unless it is enjoined), will extend overtime protections to 4.2 million workers by raising the salary threshold for overtime eligibility from $23,660 a year to $47,476 a year.  This means that in small towns across America, assistant managers of retail stores, low-level supervisors, and other moderate income workers who are paid on a salary basis will either experience a reduction in hours or a wage increase.  These individuals can no longer be required to work a nine or ten hour day without receiving any extra compensation.

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Workers, the Courts, and the Election

Many people across the political spectrum have highlighted the importance of this year’s Presidential election to the future of the Supreme Court.  Also at stake in the Presidential election is the composition of the lower federal courts.  And since judicial appointments require Senate confirmation, control of the Senate is almost as important as winning the Presidency.

When it comes to the courts, the media has a tendency to focus on gun control, abortion rights, and to a lesser extent, LGBTQ rights.  While these issues are important to many voters including workers, the media pays far less attention to a set of issues of major relevance to all workers; namely, worker protection laws.  And when it comes to worker protection,  it matters enormously  which party controls judicial appointments.  While there are, of course, plenty of cases where judges appointed by Republican Presidents rule in favor of workers, there are also many close (and sometimes not so close) cases where judges make value judgments, and in doing so, they can either view a case from the perspective of a worker or an employer.

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Today’s News & Commentary — October 19, 2016

On Tuesday, Harvard University and the Harvard Graduate Student Union–United Auto Workers (HGSU-UAW) signed an agreement on election terms for eligible students to vote on unionization.  An email sent to the student body about the election can be accessed here.  HGSU-UAW seeks to represent all Harvard students who serve in research and teaching positions, with the exception of undergraduate research assistants.  The NLRB will conduct an on-site secret ballot election on November 16 and 17.  Both the Office of the Provost and the HGSU-UAW have created FAQ pages about unionization, and the HGSU-UAW has also created a “Response” to the Harvard FAQ page.

The Harvard University Dining Services (HUDS) workers’ strike has entered its third week, and students continue to rally to the cause.  On Monday, hundreds of students staged a walk-out to support the workers.  As The Crimson reports, the protests began at 10:30am, when Divinity students gathered at the Harvard Divinity School before marching to the Science Center Plaza to join striking HUDS workers for a rally.  At 12:30pm, hundreds of undergraduates walked out of their afternoon classes and joined another rally, organized by the Student Labor Action Movement, at the John Harvard statute.

Ford has decided to stop making small cars in the United States, and plans to move production of its Focus compact cars from a factory in Wayne, Michigan to a new plant in Mexico.  Donald Trump and other critics of NAFTA have attacked Ford for creating jobs in Mexico instead of the United States.  However, as the New York Times points out, the move will not result in a cut to U.S. jobs: the Wayne factory will remain fully staffed to build more trucks and S.U.V.s.  As the Times explains, Nafta has played a role in shifting American manufacturing jobs to Mexico.  The story of Ford’s Wayne plant, however, demonstrates that many factors — including the state of the economy, the profitability of the vehicles being produced, the strength of the dollar, and how well or not each carmaker’s products are faring in the marketplace — determine the number of auto-making jobs in the United States.

At the end of September, Nissan CEO Carlos Ghosn threatened to abandon a major investment in the U.K. until the nation provided more clarity on its plans for post-Brexit trade relations with the E.U.  According to the Wall Street Journal, Ghosn now appears to have shifted his tone.  After a meeting on Friday with U.K. Prime Minister Theresa May, Ghosn said in a joint statement that he looked forward to “continued positive collaboration.”  In the statement, Prime Minister May said that the U.K. government would continue to work with Nissan as it develops “the environment for competitiveness of the automotive industry here in the U.K. to ensure its success.”

Fair Treatment for Theatre Labor: A Right to Perform Plays

Catherine Fisk is Chancellor’s Professor of Law at the University of California, Irvine and an OnLabor Senior Contributor.  Alisa Hartz is a staff attorney at Public Counsel Opportunity Under Law in Los Angeles and has a Ph.D. in comparative literature.

Creative workers experience some of the same kinds of exploitation that other workers do: long hours, low pay, and bouts of unemployment.  But one kind of exploitation that uniquely harms creative workers concerns their lack of control over intellectual property rights.  Creative workers should have greater protection so that copyright owners can’t exploit their labor. One area where reform is needed concerns the risk that theatre troupes will be blocked from engaging in certain types of creative labor or lose the right to perform a play that they have spent weeks or months rehearsing.

The Wooster Group, one of the most innovative theatre troupes in the United States, mounted an inventive and well-reviewed production of Harold Pinter’s earliest play The Room in Los Angeles in February. In the weeks before it opened in LA, Samuel French, the agent that controls the rights to the play, insisted that it hadn’t granted permission for the LA run.  Though French did not try to stop the LA performances, it made a widely condemned effort to prevent the Wooster Group from publicizing the performances and it tried to prevent reviews of the production.  Though French failed to prevent the Wooster Group from advertising the performances and failed in its effort to prevent anyone from reviewing the play, it did succeed in forcing the cancellation of anticipated productions in New York and Paris.  French, reportedly at the urging of the Pinter Estate, claimed that it had granted permission for the Wooster Group to perform the play only in a limited setting in Brooklyn before the LA run and insisted that the Pinter Estate has other plans for performing the play.  Critics of French and the Pinter Estate asserted that the Pinter Estate simply did not like the Wooster Group’s interpretation of the work.

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Workplace Democracy Lite

Earlier this week, the Wall Street Journal ran an article entitled “Workplace Democracy Catches On.”  I was surprised by this headline given how undemocratic most workplaces are.  But, when I read the article I was less surprised.  It turns out that these workplaces are democracies the way North Korea is a democracy – they hold elections from time to time even though the elections don’t actually matter.

In North Korea, the parliamentary elections were widely perceived as a joke when the country announced that 100% of the voters had cast ballots in favor of the ruling party.  None of the companies in the Wall Street Journal article gave workers a chance to vote for their top officers (though one did ask for feedback from workers), but even if they had, the odds are that the vote would not have represented the true wishes of the employees.  One reason why there is no democracy in North Korea or the average American workplace is that democracy can’t exist without freedom of speech.  And while I’m not equating American workplaces with the police state of North Korea, in order to have a functioning democracy, citizens must be free to speak their minds without fear of reprisal from those in power.  Yet, in the employment-at-will regime that dominates in this country, how many workers feel free to publicly criticize the boss?

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1099 as Antitrust?

There’s an interesting post up on interfluidity arguing that independent contractor status should be awarded selectively, in a manner designed to incentivize competition in the gig economy.  The basic idea is that there is a substantial risk that gig economy firms like Uber will become monopolists because of a particular kind of cycle, or “network effect.”  The cycle works like this: “[c]ustomers flock to the platform that has the densest, richest set of offerings;” when workers decide which platform to use, they’ll “prefer to work for the platform that has the most customers;” so “once one platform pulls ahead, a cycle may kick in . . . leading to a single dominant platform.”  To disrupt this cycle of monopolization, interfluidity proposes that we find a way to incentivize gig economy firms to require their workers to “multihome” – to work for multiple platforms.  The incentive he proposes is to award independent contractor status to workers who multihome in a “substantive, not mere token way.”

As a matter of competition policy, this approach may make good sense.  Given the resistance that Uber has shown to employee status, the firm might be willing to do a lot to ensure its drivers remain independent contractors.  But, as the interfluidity post itself recognizes, the approach – even if it works – will benefit consumers a lot more (or at least a lot more immediately) than it would benefit workers.  As the post puts it, “[t]his suggestion basically sells out benefits and protections for workers in order to secure competition on behalf of customers.”  That seems largely correct.  If an Uber driver loses the chance to claim employee status simply because she also drives for Lyft, that would be a very major impediment to drivers ever being able to claim protection of the vast swath of labor and employment laws.

To address this problem with the proposal, interfluidity suggests (via this link) that we offer a universal basic income (also known as an unconditional basic income). Continue reading