Offshoring Industry Trends Affecting California Employment Law

Offshoring Industry Trends Affecting California Employment Law

Apr

14

2017

By Steve Danz

Businesses around the world are expected to spend nearly $1 trillion dollars on outside IT labor services in 2017. Perhaps this figure does not seem overwhelming on a global scale, but, the implications for employers and employees, on a micro-level, can be jarring and disruptive. Take, for example, the case of the IT department at the University of California at San Francisco (UCSF). Earlier this year, UCSF completed the transition to offshore their entire clinical IT team to an India-based company named HCL, resulting in the displacement of approximately 80 employees. A mere seven months ago, these individuals were gainfully employed. Next thing they know, they are being asked to train their replacements, ultimately culminating in the termination of their employment in favor of their new, ostensibly less expensive, counterparts.

What is striking is how pernicious this trend has become. In this case, this “organizational solution” was implemented at UCSF, a public nonprofit educational institution, who could not reasonably defend such a decision by borrowing the tired line used by for-profit companies that the move was in the “best interests of the shareholder and the bottom line.”  According to UCSF, the move will save nearly $30 million annually and will curb clinical-side IT costs that have nearly tripled between 2011 and 2016. In reality, the $50 million dollar contract would send the majority of the work to India and bring foreign IT staff to the UCSF campus on H-1B Visas.

Aside from the privacy and security concerns resulting from offshoring IT services, there are numerous business and employment law related concerns.  For instance, many large corporations are merely “shells” and offshore every job that does not interface with customers.  This makes it more difficult to bring a breaching or harmful company to court, and may even curtail enforcement from certain agencies such as the California Labor and Workforce Development Agency and the U.S. Department of Labor.  Our court system and laws have a storied history of protecting California workers.  Permitting companies to contract their labor with the ability to simply terminate a contract, or to instantly disappear altogether, is unacceptable.

When the lines are blurred between employment and contract labor, it not only affects our American tax system by giving reprieve to unscrupulous corporations, it also destabilizes and disenfranchises the American workforce.

The legislature must ensure that these companies are held accountable for how they pay and treat their workers.  This may mean creating new laws to govern these types of contracting industries.  We could look north of the border for an example where Canadian laws permit a third, legally recognized category known as “dependent contractor.”  This worker is economically dependent on, and subject to the control of, one principal employer, but uses his or her own tools and may expect a profit from the services provided. In return, an employer must give the dependent contractor reasonable notice of termination and the dependent contractor can sue the principal similar to how an employee may sue the employer.

The Protect and Grow American Jobs Act, introduced by Darrell Issa, a California Republican, and Scott Peters, a California Democrat, aims to curb the outsourcing of American jobs by reforming the nation’s high-skilled immigration program and helping to adjust the requirements in the issuance of H1-B Visas.  One way that the bill may encourage U.S. based companies to hire American workers is by increasing the minimum salary for foreign workers under the H-1B visa program from $60,000 to $100,000.  This will unquestionably help when companies are considering hiring an American worker versus a foreign worker.

There may still be time to save American jobs.  California’s legislature, as it usually does, should take the lead in protecting our local economy by introducing similar legislation and fighting for the employees, before it is too late.

Steve Danz is senior partner and chief trial attorney at Stephen Danz & Associates. He represents plaintiffs in wrongful termination, discrimination, disability, wage and hour class actions, and false claims act whistleblower litigation in partnership with the Department of Justice.

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Sexism and civility in today’s legal profession: Why one attorney was sanctioned for his remarks to opposing counsel

Sexism and civility in today's legal profession: Why one attorney was sanctioned for his remarks to opposing counsel

Feb

1

2016

By Eduard Meleshinsky

In a clarion call for civility among attorneys, Magistrate Judge Paul Grewal sanctioned a defense attorney for his tactics in a civil rights case, and excoriated him for “repeatedly and unapologetically flout[ing]” the Northern District of California’s Guidelines for Professional Conduct, the Federal Rules of Civil Procedure (FRCP), the court’s prior order, and – in this author’s opinion – offending standards of basic civility most of us learned on the playground, as children. The order is available here.

In connection with a deposition noticed by the mother of a pretrial detainee who committed suicide while in jail, the attorney for the public entity and employee defendants produced documents in a “physically cracked and unusable disc” on the day of the deposition, delayed correcting this abjectly deficient production for over a month after being repeatedly asked to do so by plaintiff’s counsel (only to produce documents defendants’ attorney already knew to be in plaintiffs’ possession), made “extremely long speaking objections” in depositions ordered by the court, and many more violations. Tellingly, defendants’ attorney made “no attempt to defend any of this conduct.”

The unprofessional conduct did not stop at discovery abuse.  Escalating his disgraceful misconduct from unprofessionalism to sexism, defendants’ attorney told one of the plaintiffs’ female attorneys, at a deposition she was taking, “[D]on’t raise your voice at me. It’s not becoming of a woman ….” In briefing his opposition to the sanctions request, defendants’ attorney doubled down on his statement with a sorry-not-sorry apology (“a halfhearted politician’s apology ‘if [he] offended’ Plaintiff’s counsel”).

As Judge Grewal explained in his order, defendants’ attorney’s attack “endorsed the stereotype that women are subject to a different standard of behavior than their fellow attorneys.” The judge further elaborated that such gender-based vitriol “reflects not only on the attorney’s lack of professionalism, but also tarnishes the image of the entire legal profession and disgraces our system of justice.” The Court found that these types of statements – in addition to harming the many female attorneys who regularly endure similar treatment – degrade the legitimacy of the legal system itself.

Gendered attacks “reflect and reinforce the male-dominated attitude of our profession.” This malignant attitude has deep roots in the legal profession. Even the Supreme Court of the United States in Bradwell v. The State (a case that has rightfully taken its place among Plessy and Korematsu as part of the constitutional anti-canon) has perpetuated these gender stereotypes.  In upholding a state law prohibiting women from practicing law on account of their gender, the Court opined:

The paramount destiny and mission of woman are to fulfill the noble and benign offices of wife and mother. This is the law of the Creator. And the rules of civil society must be adapted to the general constitution of things, and cannot be based upon exceptional cases.

A lot of progress has been made since 1872: the 19th Amendment was ratified; Congress enacted the Equal Pay Act and Title VII of the Civil Rights Act of 1964, and amended the same to prohibit pregnancy discrimination; and Sandra Day O’Connor was confirmed as the first of four women so far to serve on the high court. However, despite the important gains made in the fight for gender equality in the workplace and beyond, much has remained the same in the legal profession for female attorneys.

For example, the opportunity for female attorneys to advance to leadership roles in law firms remains stymied, female attorneys are judged more harshly if they lack “interpersonal warmth” and are not recognized for their legal competence to the same degree as their male counterparts for career advancement purposes, and, more generally, the gender pay gap remains ever- present and ever unaddressed. In light of the work that remains to be done in making women’s equality a reality, our profession should, at the very minimum, not tolerate Mad-Men-styled sexist remarks from its members.

Fortunately, Judge Grewal suffers no fools. Because of the defense attorney’s egregious misconduct, the jurist awarded plaintiffs their fees and costs in bringing the motion for sanctions, as well as attorneys’ fees for depositions, including the deposition during which the sexist comment was made. Recognizing that monetary compensation for plaintiffs’ attorneys’ fees and legal costs still fell short of a just result, Judge Grewal ordered the “specific and appropriate sanction” of compelling defendants’ attorney to “donate $250 to the Women Lawyers Association of Los Angeles Foundation … and submit a declaration to the court confirming his compliance with this order.”

One hundred and forty-four years have passed since Bradwell, yet we continue to see conduct in the legal profession that perpetuates harmful gender-based stereotypes.  Too often, that conduct is simply dismissed without any consideration of its broader impact on our progress toward gender equality.  Courts should emulate Judge Paul Grewal, giving discrimination no quarter and enforcing basic civility in the legal profession.

An earlier version of this post appeared on the Bryan Schwartz Law blog under the title “Court Sanctions Defense Attorney for His Sexist Remarks to Opposing Counsel.”

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Judicial confirmations in 2016: The myth of the Thurmond Rule

Jan

13

2016

By Kyle Barry

“I think it’s clear that there is no Thurmond Rule” – Republican Senator Mitch McConnell

“There is no Thurmond Rule” – Republican Senator Orrin Hatch

With only 11 judges confirmed, 2015 was the worst year for judicial confirmations since 1960. Thirty-one nominees were left pending, including 14 noncontroversial nominees ready for votes on the Senate floor. With this abysmal record, it’s clear that the Senate’s unapologetic Republican majority will persist in its strategy of obstruct and delay, trying to keep vacancies open and limit the president’s influence on the judiciary. The excuses have started already, with Republican leadership alluding to a supposed Senate custom, known as the “Thurmond Rule,” of cutting off judicial confirmations during a presidential election year. The Thurmond Rule is complete nonsense, but before explaining why, it’s worth noting the destructive results of last year’s historic obstruction and where things stand today.

The lack of confirmations in 2015 was an enormous step backward. At the start of 2015, there were only 43 vacancies and 12 judicial emergencies, numbers that have since increased by 63 percent and 166 percent, respectively. On January 1 vacancies climbed back to 70 for the first time since May 2014, and by month’s end four more seats will be empty. Fourteen states now have multiple vacancies; nine states have three or more; and six states—Texas (9), Pennsylvania (6), Alabama (5), Florida (4), New Jersey (4), and New York (4)—have at least four vacancies. In Texas, the longstanding epicenter of the vacancy crisis, eight of the nine vacancies are judicial emergencies; in New Jersey, that’s true of all four. In these corners of the country, justice is on hold until the Senate resumes its basic constitutional function of confirming judges.

In 2016, the good news is that, before the Senate adjourned last year, Majority Leader Mitch McConnell agreed to hold confirmation votes for five judicial nominees by Presidents’ Day recess, starting on January 11 with Third Circuit nominee L. Felipe Restrepo. Only against the Senate’s recent record could such a modest agreement represent progress, but it does mean that by mid-February in 2016 we’ll have nearly half the total confirmations we had all of last year. It also means, assuming all five nominees are confirmed, that four judicial emergencies will be filled, including one on the Third Circuit.

The bad news is that Republicans will inevitably rely on these confirmations when, soon after, they invoke the so-called “Thurmond Rule” to shutdown confirmations entirely. First they’ll point to this early-year, five-judge agreement as a magnanimous gesture that warrants unequivocal praise. Then they’ll say, sorry, no more; it would be inappropriate to move more judges because of the longstanding Thurmond Rule. They’ll say that the rule dates back to 1968, when Senator Strom Thurmond objected to President Lyndon Johnson elevating Abe Fortas to Chief Justice during an election year. Since then, they’ll say, the Senate has applied the Thurmond Rule to block confirmation of all judicial nominees in the latter months of a presidential election year. Judiciary Committee Chairman Chuck Grassley has already primed the pump, saying that the rule goes into effect “next summer.” Media reports have reinforced the concept, restating the rule in formal terms. According to one Politico report, “[t]he Thurmond Rule . . . holds that the Senate shuts off the confirmation valve of lifetime judicial appointments in July of an election year.”

Do not believe it.

The Thurmond Rule is not real. It is a myth, a figment of the partisan imagination invoked to give an air of legitimacy to a strategy—blocking even the most noncontroversial of judicial nominees—that is pure obstruction. Most obviously, there is no Thurmond Rule in the formal sense—no law, senate rule, or bipartisan agreement renewed each congress. Its existence also is belied by historical practice. Going back to Reagan, the Senate has confirmed an average of 16 judges in the second half of presidential election years, and in 2008 the Democratic Senate confirmed 22 judges in the last seven months of the George W. Bush administration, including 10 district court judges in September. It is telling that these numbers well exceed the 11 confirmed in all of 2015, when the Senate was supposedly operating under “regular order.”

 

image005

Even the final years of two-term presidencies have been relatively productive; on average, the respective eighth year for Reagan, Clinton, and George W. Bush (each of whom faced an opposition senate) yielded about 10 percent of their total judicial appointments. Bush was the lowest of the three, with 28 judges confirmed in 2008 for 8.6 percent of his 324 total district and circuit court confirmations. It would take 35 confirmations this year for President Obama to appoint 10 percent of his total judges in 2016, and about 30 confirmations to hit Bush’s rate of 8.6 percent.

President
Judges Confirmed in 8thYear
Total Confirmations
% of Total Confirmations in 8th Year
George W. Bush
28
324
8.6%
Bill Clinton
39
375
10.4%
Ronald Reagan
40
379
10.6%

 

image006

The above chart also shows that election-year confirmations have not been limited to district court judges. A couple of noteworthy examples within the data: In 2008, Bush nominated Fourth Circuit Judge Steven Agee in March, Judiciary Committee Chairman Patrick Leahy held Agee’s hearing on May 1, and the full Senate confirmed Agee on May 20. In 1980, President Carter nominated Stephen Breyer to the First Circuit in November, and the Senate confirmed Breyer in December on a vote of 80 to 10.

All this historical data was perhaps best summed up by Chuck Grassley himself, who in 2008 spoke at a hearing dedicated to arguing that the Thurmond Rule does not exist: “The reality is that the Senate has never stopped confirming judicial nominees during the last few months of a president’s term,” and the Thurmond Rule, Grassley said, is “plain bunk.”

Good words for a Judiciary Committee Chairman to live by, and those to which Grassley should be held in 2016.

Kyle Barry is the Director of Justice Programs at Alliance for Justice, a national association of over 100 organizations, representing a broad array of groups committed to progressive values and the creation of an equitable, just, and free society.   This post originally appeared on the Alliance for Justice Blog.

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Worker classification and secure work in the “sharing economy”

Worker classification and secure work in the “sharing economy”

Jul

22

2015

FullSizeRender-1By Veena Dubal

Last month, a California Labor Commissioner decided that Barbara Ann Berwick was an employee of (venture capital darling) Uber for purposes of employment protection under California law.   A charged media flurry followed.   If Uber drivers were employees, then was the company’s highly profitable business model kaput?   Were casual Uber drivers going to be entitled to minimum wage and business expenses (like gas and car upkeep)?  What did this mean for the potential success of other aspiring businesses in the so-called “sharing-economy”?  How did the commissioner come to this decision?  What defines an employee?

While the Berwick decision forced many non-lawyers to think about worker classification for the first time, this debate is nothing new in the tort context.   Courts have long struggled to distinguish independent contractors and employees when determining vicarious liability.   Who should be responsible for the negligence of a worker?  This question, under the common law, turned on an unwieldy analysis of whether that worker was an independent businessman, engaged in his own entrepreneurial dealings, or an employee laboring for an employer.  Far from being easily identifiable, the definition of an employee for tort purposes has resulted in much head scratching, with courts coming down differently while applying the same facts to the same (capacious) set of rules.

But where did this idea that only common law “employees” get work safety net benefits come from?  What few understand is that applying this dichotomous classification in tort law to the context of employee protections is not natural or necessary.   In fact it is relatively recent.  Whether or not the application makes good legal sense or serves broader social goals is worth pondering.

In the tort context, the inquiry boils down to an analysis (crudely put) about who deserves blame, that is, who is really in charge (or, in legal terms, who controls the means and manner of production).   U.S. courts first began to borrow this analysis and utilize it in the employment protection context when businesses tried to evade New Deal legislation put in place to protect the ordinary worker.   Prior to efforts by business representatives to dodge the costs associated with secure work, service workers – including insurance salesmen, taxi drivers, and newspaper boys – were protected under the law.   Indeed, the legislative history of the New Deal reveals no Congressional debate on whether or not “independent contractors” should be covered.  The term used over and over again, by both representatives of manufacturing and of labor, is “worker.”

Today, in what is popularly termed the corporate “sharing economy” – or perhaps more aptly, the “sharing-the-scraps economy” – companies are borrowing from post-New Deal efforts by businesses to increase their own profit through use of “contractors,” evading laws intended to force them to take responsibility for their workers.  Uber, for example, is reaping huge profits from the labor of casual drivers by calling those workers “independent businessmen.”  The company’s position has been that this contractor status of workers means that the company is not liable for the worker’s negligence – OR for the health, safety, and financial security of Uber drivers.

While across the country, judges, commissioners, and regulators have come down differently about whether or not Uber drivers are employees, the history and legislative intent of employment protections begs the question:  why are courts applying the reasoning of tort law to social policy that is intended to create a safety net for workers?

As we enter a historical moment when half the working population will be laboring casually and precariously as a result of evolving business models, we must ask not, “who is an employee” under the common law, but how do we use laws and regulations to create stable and secure work environments?

Veena Dubal is an Associate Professor at University of California Hastings College of Law.  Professor Dubal’s research focuses primarily on law and social change in the context of work law.  Her dissertation, a three year ethnography, examines the work lives and worker collectivities of taxi drivers in San Francisco. Her research suggests that conventional wisdom on lawyering on behalf of low-income independent contractors needs to be re-examined and re-configured based on the desires and everyday realities of these workers.  An earlier version of this blog post was published on the author’s blog.

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The March for Jobs and Freedom continues: A daughter walks in her mother’s footsteps

The March for Jobs and Freedom continues: A daughter walks in her mother's footsteps

Jan

19

2015

By Tiren Angela Steinbach

march

My mother grew up in a middle class African American family in Hyde Park, Chicago.  She graduated from high school in 1963 and was enrolled in Skidmore College for the fall. As a girl, she was a dancer, so she convinced her parents to send her to dance school in Paris the summer before she started college.  Paris in the early 60s was the mecca of cool, the epicenter for Black intellectuals and artists who had left the United States to find greater acceptance in the City of Lights.  So, in the summer of ‘63, eighteen years old, my mom flew off alone to Paris, which was horribly romantic in theory but rather lonely in reality. This was particularly true if your French was less that exemplary, which was, unfortunately true for my mother.

My mother was alone and desperate for her mother tongue, so she read the International Herald Tribune every day cover to cover. One day, there was a notice on the back pages: “Interested in Civil Rights?  Want to talk with other folks about the March on Washington? Come to Café Blah de blah blah at 4 p.m.” It was signed J.B.  My mother circled the notice and went to Café Blah de blah at 4 o’clock.  The café was overflowing with dozens of American ex pats, many African American, all sitting around drinking café lattes and discussing the March on Washington for Jobs and Freedom that was planned for the following week.  The small café was filled with a cacophony of American-accented voices speaking at once, asking, “What was it all about?”  “What should we do?” “What does this all mean for Negros – is this really going to make a difference?”  Finally the host of the meeting, J.B. – James Baldwin – stood up and said simply, “It’s time to go home.  Our people need us.”

My mom went home.  She changed her ticket and flew back to Chicago the day before the march.  But when she got there, her parents’ house was empty. She went to her aunt’s place next door – empty. It was like the whole of Hyde Park was empty, all gone to Washington DC to take part in history. No one had been expecting her so there was no message, no instructions, nothing.  Finally she found a scrap of paper written in her twin sister’s handwriting that had a name and number. She called it and a man on the other end said that the last chartered train to DC was leaving in two hours and she better get to the station if she wanted to get on board. So she did.

podiumShe arrived in DC with hundreds of thousands of people there to march to support civil rights. My mother was swept out of the train station into the crowd flowing like a human river towards the Lincoln Memorial.  There, a queue of speakers took the stage to address the crowd, among them Martin Luther King Jr., who delivered a thoughtful speech about the emancipation proclamation and the national legacy of racism.  Some say that it was gospel singer Mahalia Jackson, who was standing nearby on the stage, who called out, “tell them about your dream, Martin!” And my mom stood in a crowd of over 200,000 listening to the speech that would later be recognized as a transforming moment of the Civil Rights Movement.  That day, my mom never found her mother or father or her twin sister or aunts, uncles, cousins, grandfather, and neighbors, but she knew that they were there with her somewhere in the crowd.  And she knew that her world had changed forever.

My mother started college several weeks later.  She joined SNCC – the Student Non-violence Coordinating Committee.  She joined SDS – Students for a Democratic Society.  She joined the MOVEMENT…and never looked back.  A couple years later, in 1965, while organizing for another march on Washington to oppose the Vietnam War, my mom got a call from a graduate student at Rochester, saying that he had three busloads of people for the march but needed to connect to an organization to get them to DC. My mother told the grad student to come to a planning meeting in New York City, and he did. That man was my father. And the rest, as they say, is history.

I share this story as a call to us all, J.B.’s call that my mother answered, “to go home, our people need us.”  And home is not only our home, but the streets and jails and prisons and homeless shelters and veterans homes and community centers and clinics and legal aids and public defender offices and all places we are needed to advocate for justice. And our people are all people whose voices are silenced and stories vilified and humanity stolen – all people for whom the law has been wielded as a weapon against them rather than a tool for their equality.  And on this journey for justice, we will sometimes feel alone and scared and far from comfort, but our spirits will be buoyed by the many others who have also answered the call, and comforted by knowledge that we are part of global movement – people raising hands up and voices loud and putting lives at risk for justice.  And we will need to be lifted by words and wisdom of those who preach proudly to the choir because they know the power of their sermons is what inspires the choir to sing our loud and proud and powerfully for justice – justice that looks like love in public. And we must answer this call and never look back because today, more than ever, our people need us.

Tirien Angela Steinbach is the executive director of the East Bay Community Law Center, the community-based clinic for Berkeley Law School, where she graduated from law school in 1999. This post was written from her life experiences in hopes of inspiring a call to justice.  It originally appeared on the EBCLC blog under the title “J.B.’s Call and the March for Jobs and Freedom.”

 

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