When merely considering your rights can get you fired!

When merely considering your rights can get you fired!

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By Afshin Mozaffari

Employers may be reluctant to admit that their policies are designed to shut workers out of our civil justice system.  But there is no denying their intent.

Consider this example.  Elizabeth is a widow with five children who came into my office this spring.  Since the death of her husband a few years ago, she immersed herself in her work to provide for her family. Elizabeth didn’t earn much at her job, but her work as a waitress was enough to support her children.  She had been working for a California-based restaurant chain for nine years.

During a Friday shift last year, Elizabeth was informed about a new kind of company policy – an arbitration agreement that she was told she had to sign and return by Monday.  Elizabeth tried to find an attorney over the weekend to explain the document to her, and when she couldn’t, she asked her employer for more time to review the agreement.  She was fired a few days later for missing the 72-hour deadline.  The company also fired several other employees for either declining to sign the arbitration agreement or not doing so by the company-imposed deadline.

Elizabeth’s case is not uncommon, but it underscores just how much “free choice” goes into these “agreements.” Remarkably, courts have held that terminating employees for not signing employer-mandated arbitration agreements is not illegal.  These and other decisions are beginning to reach their absurd conclusions, where courts enforce arbitration agreements without regard to the rights of the affected individuals, enforcement of our laws, or the administration of justice. As Judge Jack Zouhary (a George W. Bush appointee) recently wrote in an order compelling arbitration of an antitrust claim, “This Court is bound by case law’s pro arbitration bent … common sense plays no role.”

Compulsory private arbitration has been the favored corporate practice for years.  It is easy to understand why.  Highly-paid private arbitrators, whose livelihood often depends on the repeat business from the same large corporations, render “justice” to an aggrieved employee who almost certainly will never appear before them again.  The inherent disadvantage for low wage workers facing off against multi-million dollar corporate employers in any setting is obvious, but the disadvantage is compounded in an arbitral forum.  Despite this, our courts have generally enforced these “agreements.”

I often see aggrieved employees who have signed arbitration agreements without understanding the content or the significance of the document. They sign the documents that their employers put in front of them, in order to continue working and to feed their families.  In fact, most workers don’t learn what the term “arbitration” means until they consult with an attorney and learn that they have already signed away their right to seek justice in a court.

But the compulsory nature of these arbitration agreements is undeniable when we look at the employees that don’t blindly “agree” to an employer’s mandatory arbitration policy, or those like Elizabeth who merely ask for time to conduct a careful review and to consider their rights before agreeing to sign them away.  If there was any question whether such “agreements” are a condition of employment, Elizabeth’s experience offers the answer.

Are we beginning to see the end to these extreme practices? On July 31, President Obama signed an executive order prohibiting certain federal contractors from forcing their employees out of court and into arbitration in workplace discrimination cases.

Although this executive action is a step in the right direction, it does not go far enough. Congress continues to ignore this systematic denial of justice to our workers by failing to move forward on the Arbitration Fairness Act, which has been pending since last year.  The Act would ban forced arbitrations in employment and consumer settings. Until workers have a real choice in deciding where to claim their rights, the scales of justice will remain unbalanced.

NLRB decision – McDonald’s and other corporations, not lovin’ it

NLRB decision – McDonald’s and other corporations, not lovin’ it

 

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By Alexis S. McKenna

For decades now, corporate franchisors have been able to have the best of both worlds with the franchise business model — exerting increasing control over their franchises’ operations in order to increase their own profits, while distancing themselves from the unlawful employment practices of the franchisees.

Take McDonald’s Corp. for example.  McDonald’s exercises a great deal of control over its franchisees and their employees through their franchise contracts.  This control includes partly setting wage levels, work rules and scheduling, requiring franchisees to use proprietary labor management software, and providing labor guidance to increase profitability. In fact, modern technology has made it easier over the years for corporations to increase its control and monitoring of the franchises, which in turn has increased profitability for the franchisees and the corporate franchisors.  But, increasingly, corporate franchisors wish to reap the benefits of the franchise industry while disavowing any responsibility for labor practices inside the restaurants.

That may be about to change.  Through a brief administrative decision on July 29, the National Labor Relations Board (NLRB)’s General Counsel, Richard Griffin, announced that McDonald’s could be treated as a “joint employer” (along with the franchisees) in labor cases.  In other words, McDonald’s could be legally responsible if its franchisees engage in unlawful employment actions, such as improperly paying workers or terminating them for union organizing.  In addition, treating McDonalds and its franchisees as “joint employers” would make it easier for fast food workers to unionize.  Instead of the time-consuming and expensive process of unionizing workers at each franchise location, company-wide organization may be feasible.  Perhaps more importantly, this decision could set a precedent not only for other franchisors, but for businesses that use temporary workers, subcontractors or so-called independent contractors as part of their business model.

The decision set off a firestorm in the industry, prompting a chicken-little-the-sky-is-falling response from franchisors and their proponents.  For example, in a quote in the Wall Street Journal, the chief executive for the International Franchises association said this opinion will “threaten the sanctity of hundreds of thousands of contracts between franchisees and franchisors.”  An editorial in the Chicago Tribune opined that “the new liability would invite a plague of lawsuits, while forcing corporations to drastically alter their operations.”  Numerous corporate leaders, such as the CEO of CKE Restaurants, which includes Hardee’s and Carl’s Jr., claim this change to the system will “destroy” it.

The industry’s reaction is totally out of proportion to the potential impact of the decision.  Virtually no one wants the franchise system to shut down.  Yet, business proponents bombard us with rhetoric that contracts are downright holy and lawsuits are a disease.  They lament that forcing corporations to take responsibility for the franchisees will kill the entire system.

We’ve heard this sort of fear-mongering from the business community before.  Take, for example, the 40 hour work week, which union leaders pushed for and business owners fought against in the early 19th Century.  Study after study has since shown that a 40 hour work week has not destroyed our economy, but in fact made businesses more productive and profitable.

It is good to have corporations on the line for all it its franchise workers – it creates incentives for the corporations to keep the franchisees in line and treat their workers better.  While corporate leaders fight to protect the status quo, joint responsibility will help ensure that workers in these jobs have their rights protected, and can collectively bargain for fair wages.  A study by the National Employment Law Project shows that post-recession job market is weighted heavily toward work in the fast food industry.  Over 8 million people work at fast food restaurants, amounting to 15 percent of all private sector jobs in the United States.  Given the increase in these kinds of job in the modern economy, we must make sure these jobs can support the economy.

In the end, corporate liability for franchise misconduct will force corporations, who benefit significantly from their franchises, to take responsibility for working conditions that really are under their control.  And that is a system that benefits everybody.

 

Alexis McKenna

About Alexis McKenna

Alexis McKenna is a partner at Winer, McKenna & Burritt, LLP, where she specializes in harassment, discrimination, wrongful termination and other employment claims on behalf of plaintiffs. Alexis is the immediate Past President of the Alameda/Contra Costa Trial Lawyers Association (ACCTLA), is on the Board of Governors of Consumer Attorneys of California, and is also a member of the San Francisco Trial Lawyers Association and American Association for Justice. A former editor of The Verdict for ACCTLA, Alexis has also published several articles and been a frequent lecturer in the area of employment litigation.

The myth of the disgruntled employee 5

The myth of the disgruntled employee

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By Marvin Krakow

Removed from the distant wars currently in the news, it is easy to see how neighbors alike in so many ways must dehumanize one another in the midst of conflict. It’s a form of blindness that is common not just to war, but to all conflict – and one that I see all too often in my practice.

Let me introduce you to the people who come to our law office for help.   Many have worked for the same employer for long years, often for decades.  Most feel strong and warm connections to their employers and co-workers.  They struggle, as we all do, with the challenges of life, with their health, with family responsibilities, with financial reversals, and with their careers.  They come to see us, because their bosses have disrupted their work, their source of income, their identity. They are not irrational.  They are not trying to game the system.  They work with a seriousness of purpose.

Who are they?  They do every kind of work: executives, janitors, public servants, truck drivers, waiters, teachers, and artists. They come from every imaginable background.  They have advanced degrees; they did not learn to read.  Their families are established; they are recent immigrants, accompanied by their children who translate. Some are old, some young, some rich, some poor.  They are straight. They are gay.   They have strong religious beliefs.  They have no religious beliefs. They are breadwinners with obligations to pay college tuition or to support an elderly parent.  They are men and women near the ends of long careers who need another few years of work, because they cannot afford to retire.   They are from every racial and ethnic background.

If they share anything in common, it is that they are not happy to find themselves in a lawyer’s office.  When I ask potential clients about their previous dealings with lawyers, the most common response is that they have never hired a lawyer, and have never been involved in a lawsuit.  Most of them come to us reluctantly, and they apologize for doing so.  They will explain that they would prefer to consider all other options instead of filing suit.  They come, despite that reticence, because they feel they have been seriously hurt and profoundly disrespected by their employers.

Who brings a lawsuit?  Here are a few examples from my own recent experience: a store manager falsely accuses a 60-year old retail assistant of failing a drug test, and fires him.  New owners replace a worker who successfully led a computer software development department for over thirty years and replace her with a less qualified, younger man.  An executive needs time off to care for his dying wife; the owner fires him a week after she dies.

In each of these cases, the prevailing myth of the “disgruntled employee” hides the reality of our common humanity. It is impossible to hear the adjective “disgruntled” without filling in the noun “worker,” and conjuring an image of a madman spraying bullets from an automatic rifle.

The myth serves intertwining legal and psychological purposes for employers and their counsel.   A long term, productive employee is viewed as damaged.  He or she suddenly becomes a “complainer,” “a trouble maker,” “not a team player,” “unable to communicate,” “uncooperative,” “unresponsive to constructive criticism,” “an alarmist,” someone who “games the system,” “insubordinate.”  Managers targeting these employees sometimes send lengthy and detailed emails documenting “deficiencies” which were neither observed nor noted before the employee raised questions of discrimination or harassment on the job.  As part of this management mythology, employers assume that an employee who complains does so out of a failure of character: the employee must be permanently and irrationally dissatisfied by his or her lot in life, and with his or her workplace in particular.  They believe, or claim to believe, that the employee is dangerous.

Management’s goal is to cast the person as fundamentally unlikeable, less worthy of respect, “less human.”  Ultimately, management lawyers who demonize the worker who reports a problem by treating them as quasi-criminals, put the entire workforce at risk.  When the starting point is that complaints come mainly or exclusively from defective personalities, employers fail to take reports seriously.  They fail to remedy problems before they grow more serious.  They ignore warning signs of sexual predators.  They fail to correct safety hazards.  They allow mistreatment of older workers.  They make it harder for a parent to care for his or her children.

There is a better way.  When a manager puts aside defensiveness and character assassination, and  sees the care and loyalty driving an employee complaint,  he or she is likely to recognize issues that are critical to the well-being of the employer’s enterprise. Unfortunately,  conflict feels less troubling when the enemy isn’t quite so human.  I sometimes think these employers missed a chance to get to know my clients in all their humanity.  But perhaps it is simply easier for them to forget the people they once knew.

Marvin Krakow

About Marvin Krakow

Marvin Krakow (B.A., Yale, 1970, J.D. Yale, 1974), a founding partner of Alexander Krakow + Glick LLP, focuses on discrimination based on race, age, religion, disability, gender, sexual orientation, national origin, and ethnicity, wrongful termination of employment, civil rights, and class actions. He has won seven, and eight figure results. He helps victims of sexual harassment and rape, and represents whistle blowers. He argued landmark cases before the California Supreme Court, Loder v. City of Glendale and Superior Court v. Department of Health Services (McGinnis).

Corporate clones no more: Religious diversity is coming to a store near you

Corporate clones no more: Religious diversity is coming to a store near you

By Alan Reinach

Ever since the Civil Rights Act championed the rights of a diverse workforce, many American corporations have fought to hold on to their homogeneous corporate image.  Some industries, like airlines and retail stores, have elevated corporate cloning to an artform, insisting that their employees embody their brand.

But the rise of the clones has met with resistance in the courts.  In an early case, an airline lost a legal challenge to its requirement that “stewardesses” (they were not called “flight attendants” back then) all be female, young, slender, sexy, and clad in tight fitting clothing.  No matter that such corporate branding was designed to appeal to the male business traveler.  The courts rejected these requirements as gender discrimination.

In more recent years, the most notorious American company to pursue a similar strategy is the clothing retailer, Abercrombie & Fitch.  A&F began as a purveyor of luxury sporting goods in 1892.  After bankruptcy in the mid 1970’s, the brand was resurrected as a youth-oriented clothing retailer.  Today, it is a thriving fixture of the American shopping mall.  Don’t expect to find salespeople in an A&F store – the company doesn’t hire any!  The people who staff A&F’s retail outlets are called “models.”

By hiring “models,” A & F seeks to preserve the right to make its “look”policy a key part of its marketing strategy. Those who work in retail are expected to be living ads for the brand, its image, and its product.

Enter a Muslim woman, wearing a head covering, and you can predict the unfolding drama. In 2009, 19-year-old Umme-Hani Khan was working at an A&F store for several months before the regional sales manager spotted her, and quickly fired her for violating the company’s “Look Policy” – specifically, its prohibition of hats.  The United States Equal Employment Opportunity Commission filed a lawsuit, and the judge heard arguments whether the “Look Policy” justified what amounted to religious discrimination.  The company vainly tried to prove that its marketing success depended on strict compliance with its “Look Policy.”  But as the judge wanted to see more than opinion – she wanted to see how having this woman and her head covering in the store for four months had an adverse impact on the store’s business.  Without such evidence, the judge ruled that A&F had no defense to this act of religious discrimination.

The protection for religious expression exemplified by the outcome in the Abercrombie & Fitch case has enormous significance for all Americans, and for the look of the American workforce. Many religions express themselves through individual dress and appearance:  Muslim women may cover their heads, but so do others.  Sikh men wear turbans, observant Jewish men wear yarmulkes.  Men in several religious traditions wear beards. Christians may wear a cross necklace, and the list goes on.

California now leads the way in outlawing such conduct, with passage of the Workplace Religious Freedom Act, which explicitly prohibits segregating workers form the public on account of religious appearance. As a result of the new California law, and decisions like that in the A&F case, expect to see more religious diversity in corporate America, especially in retail.

The momentum in favor of diversity of both religion and appearance is long overdue. Homogeneous corporate appearance standards are part of a culture that breeds conformity and mediocrity at the expense of individuality and freedom of religious expression.  So don’t be shocked the next time you see a turban, a hijab or a beard at one of the country’s giant chains. Corporate clones be gone: individuality is coming back to a workplace near you.

Editor’s Note:  For more about what the Abercrombie & Fitch decision means for workers, read CELA VOICE Co-Chair Charlotte Fishman’s op-ed in the Sacramento Bee.

Alan Reinach

About Alan Reinach

Alan J. Reinach, Esq., is the Executive Director of the Church State Council, the oldest public policy organization in the west devoted exclusively to issues of religious discrimination and the separation of church and state.

At-will employment: What would Midas do? 1

At-will employment: What would Midas do?

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By Marvin Krakow

In California, as in most of the United States, the default rule about job security is that there is none.  Employers call the default job security rule “at-will employment.”  What at-will employment means is that the boss is free to say “you’re fired,” at any time, for any reason, or for no reason at all.   A new boss who wants to clean house can show the door to a man or woman who devoted twenty or thirty years to the company, without a penny of severance.  Sometimes, business owners and managers use the at-will rule to hide illegal reasons for firing.  They get rid of whistleblowers.  They force out older workers.  They pick on those too sick to fight back.  As our economy goes through turmoil or as an individual business goes through hard times, loyal employees learn to their dismay that they have no job security at all.

A wise woman once explained to me her approach to difficult problems.  She called it the “what would Midas do?” method.  You may remember the fable of King Midas, a man with great wealth, and, as it turned out, excessive greed.  But for our purposes the critical fact is great wealth.  The method is simple: For any given problem, consider how a person of unlimited wealth might solve the problem.  What could he or she buy that would fix it?  Then, having identified the expensive method, figure out how to duplicate the result with amounts of money or resources more readily available to ordinary mortals.  The “what would Midas do” method can shine a bright light on the related problems of job security and workplace fairness.

We don’t have to guess what our mythological Midas might do.  We actually know.  Our modern day Midases are the One Percent.  They are the managers of multinational corporations, the highly compensated professionals, the academic superstars.  What they do is surprisingly simple.  They use their privilege and bargaining power to insist on written employment contracts that modify the default rule of at-will employment.  Almost without exception, the One Percent, our modern oligarchs, insist on contract terms which prevent firing without cause and which provide generous severance payments when they are fired.  We see this in news reports of CEO’s who walk away from their jobs with multi-million dollar “golden parachuteswhen the company changes hands or the board of directors decides it’s time for a new king or queen.

And we also have seen the Midas approach adapted by the less wealthy.  Working men and women, when they have the power of a good union behind them, bargain for security in much the same way as the far wealthier business owners.  I learned that lesson on my father’s knee.  I had the good fortune to grow up in a home where unions were valued for bringing security to the workplace.  As a young boy, I asked my father what a union was and what a union did.  His answer – which I remember to this day – was that a union keeps the boss from saying “Off with your head!”  Seeing what Midas does, union members and their representatives, as their first order of business, negotiate contracts which prevent termination without just cause.  Next, union bargainers seek earned severance benefits to provide loyal employees the resources to support themselves and their families during the long search for a new a job.

In recent decades, unions have fallen on hard times.  For most of us, there is no union to bargain for job security.  Even for working people who have a union, the rich and the powerful have mounted persistent and effective assaults on job security.  We need to ask the question again: how can we have the job security which the wealthy take for granted?  The answer is simple.  We can change the default rule to the rule which the wealthy claim for themselves.  Revoke the at-will rule for firing employees after their first year.  Change the default rule to permit termination only for just cause.  Require employers to fund and to pay meaningful severance benefits for economic layoffs.  Those simple changes would create a better and fairer workplace.

We can’t expect those with the Midas touch in this economy to eliminate at will employment voluntarily.  But, no matter how long it may take, instituting a just cause requirement is the real answer to this Midas question.

Marvin Krakow

About Marvin Krakow

Marvin Krakow (B.A., Yale, 1970, J.D. Yale, 1974), a founding partner of Alexander Krakow + Glick LLP, focuses on discrimination based on race, age, religion, disability, gender, sexual orientation, national origin, and ethnicity, wrongful termination of employment, civil rights, and class actions. He has won seven, and eight figure results. He helps victims of sexual harassment and rape, and represents whistle blowers. He argued landmark cases before the California Supreme Court, Loder v. City of Glendale and Superior Court v. Department of Health Services (McGinnis).

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