Avoiding the impending catastrophe for 1.3 million long-term jobless Americans

Avoiding the impending catastrophe for 1.3 million long-term jobless Americans

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By Afshin Mozaffari

As we celebrate this holiday season, let’s remember our fellow citizens who are struggling with the unprecedented chronic unemployment caused by the Great Recession of 2008. While the most recent reports indicate the rate of unemployment is down to 7 percent, the lowest unemployment rate since November 2008—the number of long-term unemployed (those without a job for 27 weeks or more) continues to be stubbornly high. Indeed, while the unemployment rate declined overall by .3 in November, the actual number of long-term unemployed people remained essentially the same at 4.1 million. Compare this to 2007, when only around 1.2 million people were long-term unemployed.

In the face of this reality, Congress excluded extension of unemployment benefits from the bipartisan budget compromise it reached last week. Without congressional action, this means some 1.3 million workers will lose their extended unemployment benefits on December 28th of this year. And the number of chronically unemployed people losing benefits will grow every month thereafter. Needless to say, long-term unemployment and cessation of unemployment benefits is a tragedy for the unemployed workers and their families. However, persistent long-term unemployment also presents troubling long-term repercussions for the economy as a whole, including declining labor force participation, less consumption and a smaller tax base.

Long-term unemployment “is not exclusive to any one industry [or] occupation.” The demographic composition of the long-term unemployed is also diverse, but it is evident that workers ages 55 and older suffer a higher percentage of long-term unemployment of all age groups. Men are also more likely than women to be long-term unemployed.

The economic affect of long-term unemployment hinges, in part, on the issue of whether the workers who are unemployed for a long period of time would at some point become unemployable.  This was the subject of a 2012 study by William Dickens and Rand Ghayad of Northeastern University who studied the relationship between job openings and unemployment. Generally, the more job openings there are, the fewer workers there are out of work.  But when it comes to the long-term unemployed, a rising number of job openings does not seem to substantially reduce the number of long-term unemployed workers.  According to the Nobel Prize winning economist, Paul Krugman, this dangerous trend is creating “a permanent class of jobless Americans.”  He predicts that this reality and the loss of unemployment benefits, will in turn, depress the economy as a whole.

The extension is essential to the long-term unemployed, like Sheri Minkoff of Pittsburg, Pennsylvania, who is about to lose her only source of income. Sheri lost her job for the second time in the past 5 years.  The first time, she lost her job as a director of a nonprofit that lost its invested funds to the massive Ponzi scheme by Bernie Madoff that defrauded Sheri’s employer and thousands of other investors of billions of dollars.  Sheri was able to find employment two years later as a coordinator at a domestic violence shelter, only to lose that position due to the lack of funding.  During this period, Sheri has lost all of her retirement benefits and savings.  At the age of 50, she spends six days per week trying to find employment.  Sheri, and more than a million long-term unemployed Americans will continue to struggle to find employment even with the extension of unemployment benefits. The benefits will not only help cover their basic necessities like food and housing, but will enable them to continue their active search for work.

The White House and Democrats in Congress have called for extending the unemployment benefits, and vowed to try to retroactively extend unemployment benefits in early 2014.  There are also a number of outside groups that are organizing a campaign to pressure Congress to extend the Emergency Unemployment Compensation Program. The National Employment Law Project (“NELP”), a non-partisan organization that conducts research and advocates on issues affecting low-wage and unemployed workers, is collecting and distributing true stories of the long-term unemployed and urging everyone to contact their congressional representatives.  Without congressional action, more than a million Americans and their families will be left in desperate financial straits and the economy will suffer as a result.

High Court ruling threatens wage theft victims’ rights

High Court ruling threatens wage theft victims’ rights

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By Eugene Lee

In the early 1800s, workers in England rioted against unemployment, wage cuts and near-starvation, demanding “a fair day’s pay for a fair day’s labour.” Few would think to challenge such a demand. But two centuries later, fair pay remains as elusive as ever for low wage earning workers.

Consider the case of Everardo Carrillo and Juan Chavez. Both men worked for logistics companies with warehousing operations in California. According to Chavez, “I went 28 consecutive days without a day off. There were no lunch breaks, no rest breaks. ” Carrillo said, “I once worked from 7 a.m. to 2 a.m. the next day. . . If you asked questions [about pay arrangements], you could be laid off for two or three days or a week.” Carrillo, Chavez and four other workers took their employers to court in a class action suit seeking to recover more than $10 million in wage theft.

Today’s workers are facing what commentators have described as an “invisible epidemic” of wage theft. According to a survey conducted by Fast Food Forward, an advocacy group, a whopping 84% of fast food workers in New York City reported being victims of wage theft. That’s 4 out of every 5 fast food workers. Meanwhile, according to CNN Money, the number of collective lawsuits filed in federal court in 2011 alleging wage and hour violations of the Fair Labor Standards Act were up 400% from 2000 levels.

Until recently, workers who have been victims of wage theft have had the option of filing a complaint directly with the California Labor Commissioner, otherwise known as the California Department of Labor Standards Enforcement, or “DLSE.” The DLSE offers a number of benefits for workers over the usual route of filing a civil lawsuit: no filing fees, shorter processing times, hearings before deputy commissioners who appreciate and understand low wage worker conditions, assistance with collecting on any judgments awarded by the DLSE, streamlined evidentiary procedures, etc. For workers with wage claims too small to attract the interest of contingency fee attorneys, the DLSE may be their only feasible option.

Now that right is being threatened.

In a decision issued in October 2013, the California Supreme court held that employers can force employees who have signed arbitration agreements to give up their right to file a complaint with the DLSE. These workers must now submit their disputes to arbitrators, essentially private judges. As any attorney who represents workers will tell you, arbitration is a forum that is best avoided by workers. For one thing, arbitrators overwhelmingly tend to favor employers – who are often repeat customers – over employees – who the arbitrators will likely never see again. Arbitration can also be expensive, particularly compared to the DLSE complaint process which has no filing fees. Finally, according to Prof. Alex Colvin, a researcher at the Pennsylvania State Department of Labor Studies and Industrial Relations, employees who sue their employers instead of going to arbitration not only win more, they get bigger awards.

But not all hope is lost. The Supreme Court opinion went on to note that workers are still free to challenge the fairness or “unconscionability” of the arbitration agreements they had signed. Moreover, if workers can show that the arbitration would be less “affordable” and “accessible” than filing a complaint with the DLSE, that could “support” their challenge.

Most employees are not equipped to fight the battle against forced arbitration on their own.  And most contingency lawyers cannot afford to take on cases of wage theft unless the losses are in the tens of thousands of dollars.  So does this mean that low-wage workers have no choice but to seek redress in the unfriendly arbitration forum?  Not necessarily.   In select cases, the DLSE legal department can choose to step in or “intervene” on behalf of the worker.

This is what actually happened for one of my clients. After I filed a DLSE complaint for my client, I learned that he had signed an arbitration agreement. The employer’s law firm immediately filed a petition to compel arbitration in civil court, asking the court to order my client to dismiss his DLSE complaint and participate in what no doubt would have been a long, expensive, and probably futile arbitration. Given the relatively small size of my client’s claim, challenging the petition or proceeding to arbitration probably would have made little economic sense.

Cue the DLSE legal department. A DLSE lawyer called me and let me know that the DLSE legal department would be willing to step in and fight the employer’s petition on my client’s behalf. In the end, the threat of that intervention was enough to get the employer to cave. The case resolved and my client and I thanked the DLSE lawyers profusely.

I’m encouraged that the DLSE took action to vindicate my clients’ rights and I’m rooting for the agency to keep up the good work.  Forcing low wage workers into arbitration is really just an attempt to cut them off at the pass that would lead to recouping their stolen wages.  The more employers learn that the DLSE is serious about being a law enforcement agency, the more likely wage and hour laws will be followed and forced arbitration won’t serve as a get-out-of-jail-free card for scofflaw employers engaged in wage theft.   As worker advocates fight for a legal standard that can keep the DLSE’s doors open to low wage workers,  DLSE intervention in these cases stands as an essential bulwark against exploitation of low-wage workers.

Eugene Lee

About Eugene Lee

Eugene D. Lee represents employees throughout California who seek to protect their legal rights in the workplace. Mr. Lee has obtained numerous six- and seven-figure settlements and judgments for employees throughout California. Mr. Lee received a B.A. with honors from Harvard University, and a J.D. with honors from the University of Michigan Law School. Prior to starting his own firm, Mr. Lee was a lawyer in the New York offices of Shearman & Sterling and Sullivan & Cromwell.

Nelson Mandela and the importance of civil justice

Nelson Mandela and the importance of civil justice

Nelson Mandela

By Mark Kleiman

The memory of Nelson Mandela is being honored for his courageous and deeply dignified stance while imprisoned, and for his astute and successful efforts at reconciliation and nation building when he was finally released in his 70s.

Very few people remember that the man who helped lead a revolution was not always ready to die for his cause.  Sixty years ago, Nelson Mandela was a civil rights lawyer in the only African-run law firm in South Africa.  He represented victims of police brutality and the overbearing racial authority in his country.  The white-run government could not tolerate these challenges and used the apartheid laws to force the firm to move out of downtown Johannesburg and into a remote area.  Mandela could not get to the courts, and his clients could not get to him.   Unable to practice under these conditions, Mandela and his partner had to close their practice.

Blocked in his efforts at peaceful reform and appalled by the government’s wanton demolition of an all-Black Johannesburg suburb, Mandela took up the path of armed resistance.  This was the beginning of an armed struggle that went on for over thirty years, taking tens of thousands of lives.  Mandela spent twenty-seven of those years in prison, much of it in solitary confinement.

It is no accident that a smart and determined leader would seek justice under the law.  And it is no surprise that after being thwarted at every turn, he sought that justice through other means.

After years as an organizer I went to law school to help get justice in this country.  I was confident that unlike South Africa, I lived in a country with a rich history of democratic feistiness and a strong commitment to fair enforcement of the laws.  I now wonder if I was wrong.

In the United States we are witnessing an unprecedented attack on legal rights.  One courthouse door after another is slammed – on workers, on women, on people of color, and even on everyday consumers.    Instead of club-swinging southern sheriffs or snarling lynch mobs, the new weapon of choice is a judicially enforced, secret system of private judging called arbitration.  Arbitration strips away Americans’ constitutional right to a jury trial and drops them into the murky world of closed-door judging.  It’s a rigged game where one side hires, fires, and pays for the referees.  Arbitrators at one top private judging firm ruled for employers and against employees, for big business and against consumers 93.8% of the time.  And these decisions are made in secret, instead of an open courtroom.

Time after time the U.S. Supreme Court has twisted federal law to strip away these constitutional rights.  It Walmart v Dukes it ruled that over a million women working at Walmart could not band together to sue for sex discrimination that stole wages from them. Rights to equal pay, a safe workplace, and equal treatment have been stripped away by secret tribunals.  Now that same Supreme Court, in ATT Mobility v Concepcion,  has also ruled that fine print language buried in 30-page user agreements can be used to keep millions consumers from banding together in class action suits or workers from demanding that they be repaid for meal and break time stolen from them.

As we honor Mandela, it bears remembering that his broad vision for his country, and his skills as an orator bring to mind an American leader with those same traits, John Fitzgerald Kennedy.  President Kennedy may have had Mandela in mind when he prophetically warned that “those who make peaceful change impossible make violent revolution inevitable.”

The engineers of current attacks on access to justice in America would do well to reflect on JFK’s cautionary words, and on the fiery trajectory of Nelson Mandela.  If the life of the man being honored this week proves anything, it proves that without justice, restoring security for America’s working people will require a lot more than lawsuits.

Mark Kleiman

About Mark Kleiman

A long-time human rights and consumer activist, Mark has filed cases that have led to over $500 million being recovered for U.S. taxpayers. He has won multimillion dollar verdicts in consumer fraud and medical malpractice trials.

Let’s Pass the FAMILY Act: American workers deserve paid family and medical leave 1

Let's Pass the FAMILY Act: American workers deserve paid family and medical leave

dreamstime_xs_15472580By Ramit Mizrahi

Today, Sen. Kirsten Gillibrand (D-NY) and Rep. Rosa DeLauro (D-CT) introduced the Family and Medical Insurance Leave Act (“FAMILY Act”). This bill would provide workers throughout the United States with up to 12 weeks of paid leave at up to 66% of their earned wages, similar to (but more generous than) California’s Paid Family Leave Program.

As both an employment lawyer (with a special interest in leave laws) who represents many working parents and as a mother myself, I can say from experience that California’s Paid Family Leave Program has had a tremendous impact on working parents, many of whom  struggle to balance work and family.

The first three months of being a new parent were the hardest, most trying times of my life. As a litigator, I used to think that going to trial was physically demanding–with four hours of sleep a night for weeks on end–but, really, that’s nothing compared to what it takes to care for a newborn when you’re already worn down by pregnancy and childbirth!

My husband and I both took off as much time as we could. I received 16 weeks of leave paid through the State of California’s Employment Development Department (EDD), the first ten as pregnancy disability leave and the next six as paid family leave for baby bonding. My husband took 12 weeks of baby bonding leave, which was job protected under the California Family Rights Act (CFRA) and the Family and Medical Leave Act (FMLA). Unfortunately, his was unpaid because he was a state employee and most state employees are ineligible for paid family leave through EDD.

As new parents, we were incredibly grateful to have this time with our baby. Even before my husband and I got married, we agreed that we would both take the full amount of time that we could, and that we would be equal parents. Both of us are committed to gender equality and know that it cannot be achieved unless dads step up and do their fair share at home. But while equal parenting was something we were philosophically committed to, we soon discovered that spending time with our baby was a labor of love and a privilege, not an obligation.

I simply cannot imagine going back to work full time six or eight or even twelve weeks after my baby was born. But that is what many moms do. And most moms don’t have the support of a partner who can take off even a month, let alone 12 weeks. Research shows that one in four American mothers returns to work within two months of giving birth, and 41% within three months (compare this to only 7% of mothers in the U.K.). And while 85% of new dads take parental leave, the vast majority take only a week or two.

Why is this the case? In short: because most Americans simply cannot afford to take more time off. According to a 2012 Department of Labor (DOL) survey, only about 40% of employees nationally have access to fully paid FMLA leave for durations of longer than 10 days. A mere 22% of worksites offer any paid maternity leave, while only 9% offer paid paternity leave. It is estimated that around three quarters of Americans live from paycheck-to-paycheck, and 68% of Americans would face difficulties if their paychecks were delayed by even a week.

It is no surprise, then, that the 2012 DOL survey found that nearly half of workers who took leave (49.6%) cut it short because they could not afford more time off. Among those who reported that they needed leave but did not take it, 46% stated that inability to afford leave was the reason they did not take it. This applies not just to baby-bonding leave or leave to care for a sick relative, but also leave that workers need to take for their own serious medical conditions.

What’s the solution? Paid family and medical leave for all American workers. California’s Paid Family Leave (PFL) Program serves as a wonderful example. Since 2004, this program has offered paid family leave to all workers who pay into the state disability insurance program. It has proven to be wildly successful. According to research published in the report Leaves That Pay: Employer and Worker Experiences with Paid Family Leave in California (Eileen Appelbaum and Ruth Milkman, 2011):

  • 91% of those who used PFL stated that it had a positive effect on their ability to care for a new baby, foster child, or adopted child.
  • The median duration of bonding leave by fathers using PFL was more than double that of those who did not use it, four weeks vs. two weeks by men in higher-paying jobs (those that paid over $20 an hour and had employer-paid health benefits) and eight weeks vs. three weeks by men in lower-paying jobs (this statistic being particularly exciting).
  • PFL doubled the median duration of breastfeeding by new mothers who used it, from five to eleven weeks by mothers in higher-paying jobs and five to nine weeks by mothers in lower-paying jobs.

We can help bring these benefits to workers, babies, families, and employers throughout the country by passing the FAMILY Act. If passed, the FAMILY Act will provide workers with paid leave that will cover time off to care for their own serious health condition; the serious health condition of a child, parent, spouse, or domestic partner; the birth or adoption of a child; and/or certain military-related care and leave. The FAMILY Act would cover all workers, regardless of the size of their employer or the duration of their employment, and would be funded by payroll contributions that are only 0.2% each by employers and employee (a mere 2 cents per ten dollars earned!).

The Chamber of Commerce and other conservative groups will undoubtedly label this bill a “job killer” and fight against it (as they did with the FMLA and California’s PFL program). But we need only look at the tremendous success of California’s Paid Family Leave program, and the change in attitude by the business community to support the program just a few years after its implementation. According to the Leaves That Pay report, the vast majority of employers surveyed about the impact of the PFL program responded that it had either a “positive effect” or “no noticeable effect” on business productivity (89%), profitability/performance (91%), turnover (96%), and employee morale (99%). We can expect the same from the FAMILY Act.

The FAMILY Act will make it possible for more workers to make ends meet when they take much-needed time off to care for their own health and that of their loved ones. Society as a whole stands to benefit.

Consider contacting your Senators and Representative to voice your support for the FAMILY Act! By providing paid family and medical leave to all workers, we can ensure that people do not have to choose between making ends meet and caring for themselves, their children, and their sick relatives.

Ramit Mizrahi

About Ramit Mizrahi

Ramit Mizrahi, the founder of Mizrahi Law, APC, practices in the area of employment law, representing employees exclusively. Her work focuses on cases involving discrimination, harassment, retaliation, leave law issues, and wrongful termination. She is a graduate of Yale Law School, The London School of Economics, and UC-Berkeley.

Background checks: It’s not a “good thing” 3

Background checks: It's not a

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By Christian Schreiber

Consider the following hypothetical.  You own a restaurant and you’re looking for an assistant to the head chef.  The applicant needs to be able to cook, yes.  But the position also requires administrative skills – ordering, inventory, relationships with vendors and staff.  Creativity with the menu would be a plus.  A woman comes with lots of relevant experience. You notice she has a six-month interruption in her resume in late 2004, early 2005.

Years ago, an interview might have sufficed; perhaps you would have called her references, or tried her out on a lunch shift.  Today, in addition to the tryout and the references, you ask her to authorize a background check.  In the meantime, she wows you on the lunch shift.  Her plates look great.  She cleverly rearranges the pans between orders.  Then you get back her background check: she was convicted in federal court of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators.  Does she get the job?

While the dark potential of our information age remains thankfully unrealized, the workplace remains a frontier of personal data collection and snooping.  The ACLU claims that “it receives more complaints about privacy in the workplace than about any other issue.”

For workers, this unquenchable thirst for more information often first presents itself under the auspices of “background checks” (called “consumer reports”) required by employers.  Where background checks were once the province of private investigators and reserved for high-level executives, now even low-wage workers are asked to authorize employers (and potential employers) to investigate their “character, general reputation, personal characteristics, or mode of living.”  The trend is dangerous and often serves as the pretext for discrimination that would otherwise be prohibited under State and federal anti-discrimination law.

One of the most popular myths is that employers who screen candidates for credit histories and criminal records can reduce their potential liability from “bad hires.”  Some courts have even adopted the rhetoric that background checks embrace a “common sense” approach because they help employers “better evaluate the trustworthiness, reliability, and effectiveness of prospective employees.”  Yet, while other “common sense” claims hold up based on evidence of their truth, in this arena, employers have never even been asked for any proof that credit and criminal background checks increase retention rates, worker productivity, or diminish liability for negligent hiring or supervision.

In fact, consumer reports are notoriously flawed. The Federal Trade Commission and its successor, the Consumer Financial Protection Bureau, have claimed there may be as many as 42 million Americans with errors on their credit reports.  But this is only part of the problem.  Despite propaganda from the industry, race and gender result “substantial differences in credit scores across racial groups…with blacks and Hispanic whites having notably lower credit scores than other racial groups. These racial differences persist, even after controlling for other demographic characteristics such as age, marital status, and an estimate of income.”  Though the law is still evolving in this area, denying employment on the basis of a bad credit history, therefore, may be tantamount to denying employment on the basis of race.

For workers with criminal histories, background checks present a more obvious and intractable problem.  As a practical matter, criminal background checks are often harmful beyond the criminal conviction history they may include.

Like credit histories, they are frequently incorrect—sometimes the reports mix up identities (are you the same “Michael Miller”?), omit essential information about the offense or the disposition, or misstate charge levels or convictions.  By the time such errors are challenged or corrected (companies have up to 30 days), employers have already moved on to the next applicant.  This can also involve purely practical considerations: employers may understandably have difficulty sifting through charging codes, references to statutes, or interpreting dismissals and dispositions.  Is it worth understanding a complicated report when a stack of “simple reports” offers a large enough applicant pool?

Or consider an individual who has had her record “expunged,” a process whereby the individual withdraws a guilty plea and the court dismisses the charges.  Consumer reporting agencies often unlawfully report both the conviction and the dismissal, which they then claim is “factually accurate.”  One can fairly ask what purpose the expungement serves if it fails to shield the conviction from later disclosure.

As the government grows more opaque, criminal records have become more public.  The increase in computerized public records has made background checks easier and cheaper to obtain.  What once required a trip to the courthouse is now accomplished by a few seconds at the keyboard.  Consumer reporting agencies use sophisticated databases to package, market and sell criminal record information and credit histories to anyone with curiosity and a credit card.

This isn’t to suggest that childcare providers shouldn’t have access to criminal records of convicted child abusers, or that employers should not be able to discuss resume gaps with applicants and evaluate a potential employee’s record on a case-by-case basis.

Ultimately, given the over-representation of African Americans and Latinos in the criminal justice system, using criminal background histories is itself a race-conscious undertaking.  This alone should give employers pause.  Blind reliance on background checks of dubious reliability used to prescreen applicants only encourages discrimination.  More importantly, it denies willing and capable workers, including ex-offenders, the opportunity to make an honest living.

Christian Schreiber

About Christian Schreiber

Christian Schreiber is a partner at Chavez & Gertler, where he works primarily on class actions involving employment and consumer rights, civil rights, and financial services matters.

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