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Oct 13, 2010
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Nobel Prize Goes to Labor Researchers

Earlier this week, while we were all celebrating the discovery of America, the The Nobel Foundation announced the winners of this year’s Nobel Prize for Economics. The three Laureates – Peter Diamond, Dale Mortensen, and Christopher Pissarides – were honored for their pioneering contributions to our1 understanding of “search frictions” in the marketplace, specifically with regard to inefficiencies in the labor market.

Search theory is a way of understanding why there can be a surplus of both supply and demand in a given market. Why, for instance, are unemployment rates so high at a time when so many companies say they need workers?

The Prize winners developed a theory, which now bears their names, to explain how external factors – the increased efforts of other job seekers, the matching of candidate skills with employer needs – can add cost barriers to the efficient, supply-and-demand equilibrium of the job market. The theory provides analysts with a starting point to model the job market, and hopefully figure out how to unstick a log jam in the seek-and-find dance of recruitment on a macro level.2

More information on the Laureates and the Prize can be found here.

Footnotes:
  1. I use that term loosely []
  2. One of the most talked about findings of the Laureates’ research is that increased unemployment benefits can create a barrier to finding a job, because it makes unemployment less burdensome. []
Jun 8, 2010
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Obama +1 – What’s Changed?

I attended a talk recently called “Obama Plus One” – an analysis of the employment law changes occurring since the new administration took office. The presentation was by two attorneys – Jeff Nowak, a partner at management-side employment firm Franczek Radelet, and Lori Deem, an employee-side attorney with Abrahamson Vorachek & Levinson.

Both attorneys agreed that the answer to what’s happened since Obama took over is, kind of surprisingly, “Not much.”

While President Obama seemed to start strong – the Ledbetter Act was the first law he signed – employment law dropped quickly and precipitously from the agenda, as national interest became laser-focused on the economy and healthcare.1

Deem (the Plaintiff-side attorney) thought that a slow-down on the pace of employment changes was good. Our jobs are so integral to our lives, and the public needs time to absorb workplace changes as a result.

The major changes the two attorneys saw in the past year or so are:

1. The Ledbetter Act

The law named after the Plaintiff in a Supreme Court opinion clamping the statute of limitations in discrimination cases to the time the original decision was made. The law makes it so the statute of limitations is “reset” every time that initial decision (e.g., discriminatory pay between women and men) affects the plaintiff (e.g., every time she gets a paycheck).

Both noted that the Supreme Court was about to weigh in on the Ledbetter Act for the first time in Lewis v. City of Chicago.2 Also, a note for employment lawyers: EEOC regulations on the Ledbetter Act are expected to be released for comment this fall.

2. GINA

The Genetic Information Nondiscrimination Act. The law (and the EEOC regulations clarifying it) make it unlawful for an employer to obtain or use “genetic information” about its employees or their family members in a discriminatory manner. By protecting employees from discrimination, GINA is meant to facilitate genetic testing for predisposition of certain diseases, and for greater research into genetic sources of health issues.

Two of the exceptions the EEOC gives to employers who seek genetic info gave Deem pause: first, if an employer has a voluntary wellness program, they can obtain GI. Deem saw an opening for employers to start “voluntary” programs that were really offers employees couldn’t refuse, resulting in GI being obtained where it really shouldn’t. Second, the EEOC regs exclude GI obtained during an employer’s certification of FMLA leave. Since certification info usually sits in an employee’s personnel file (a no-no under GINA), Deem sees the possibility that the information will get spread where it shouldn’t.

On the employer-side, Nowak is concerned about well-meaning managers creating potential liability for their companies simply by asking a subordinate about an illness or a sick family member. He’s worried the law will discourage compassion and friendliness between bosses and employees even more than current laws already do.

3. Whistleblower Changes

Lost in the sea of the Stimulus bill last year was a provision granting sweeping protection to whistleblowers at organization receiving stimulus funds. The speakers noted that, unlike Sarbanes-Oxley whistleblower rules, the Stimulus Act protects anyone making internal or external complaints of gross mismanagement or abuse of authority with regard to stimulus funds, wherever the whistleblower has a “reasonable belief” of retaliation. Also unlike SOX rules, the whistleblower has a right to a jury trial, and only has to prove that the complaints were a “contributing factor” to the discrimination they suffered. Broad, indeed. The healthcare bill contains similar language, and went even further by amending the Qui Tam laws3 to keep the person’s identity secret while the lawsuit is pending. That should encourage a few more people to step forward, Deem said.

The Real Story: Funding

Both attorneys agreed that, while the above changes were significant, the Obama Administration’s biggest act so far in the employment law arena was the massive funding the President has allocated to the Department of Labor and the EEOC.

After a decade of budget cuts (or no budget at all), the EEOC saw its budget increase by hundreds of millions of dollars, and the DOL recently received over $1 Billion to increase enforcement of worker protection laws.

This money means more employees, deeper investigations, and new leadership for the two agencies charged with overseeing federal workplace laws.

In case you are skeptical that more money is all the agencies needed to shake things up, the EEOC’s Chicago District Office recently announced that it’s planning to review every discrimination charge that comes in for systemic discrimination, something that seemed impossible a year ago. They’ve also announced new tactics in charge reviews, including increased employee interviews and broader requests for information from employers. Nowak said that he’s seen a dramatic increase in subpoenas from the EEOC, which spells trouble for many employers who try to respond to charges without lawyer assistance.4

At the DOL, Nowak noted a swift uptick in OFCCP compliance audits,5 even where there’s a question as to whether the employer is really a government contractor.

The Future

Neither attorney would speculate whether Obama will pick up his employment reform agenda anytime soon. The 2010 elections are looming, and Nowak felt like the death of EFCA in Congress took the wind out of the sails on a lot of initiatives.

Both attorneys agreed that, but for the elections this fall, ENDA – the law extending discrimination protection to gay, lesbian, and transgender employees – would likely be on its way to a vote. It may be too hot a topic until after the election (or too cold – if incumbents are looking for something to tout back home).

[An Aside]

One final note – At the beginning of the post, I mentioned that both employer- and employee-side attorneys agreed that not much has changed since Obama took over. This agreement was pervasive – the two lawyers expanded on each other’s points throughout – and was remarkable to a young lawyer that’s been inundated with talk of how volatile the two sides are supposed to be.

The reason, I think, for the lack of derision, was two-fold: #1) the Chicago labor & employment bar is secretly full of professionals with manners; and #2) the talk was put on by the Chicago Chapter of LERA6 – a group founded on the principle that labor and management should get together to discuss the workplace and how to make it better.

LERA has been a great resource to me as I begin my career, and its one that I’d highly recommend to anyone involved in employment law or labor relations at any level. The national website is here. Go see if there’s a local chapter in your area.

Footnotes:
  1. Of course, both of those topics inform employment,  but only tangentially, policy-wise. []
  2. That Supreme Court opinion has since come out, in favor of the Plaintiffs. I’ll do a broader post on this soon. []
  3. laws that let people sue on behalf of the government for wrongful acts against the government. Qui Tam plaintiffs get a portion of money recovered on behalf of the USA. []
  4. A future post is coming on this, as well. []
  5. audits performed on government contractors []
  6. the Labor & Employment Relations Association []
Aug 12, 2009

Willing to Relocate? Bring a Coat.

bison-chillingWhat if I told you there was a magical land where the mortgage crisis never happened, where banks, people, and the government were all flush with cash, taxes were going down, industries were moving in and home prices were reasonable?  What if I told you there was a place with 4.2% unemployment and 9,000 available jobs, just waiting for resume submissions? 

If you’re like I was, you’re now asking what language they speak in this Utopia.  Well, it’s English.  Moostly, ya noo. 

Yep, jobless midwesterners, break out that Bison penant  - North Dakota wants you!

A report from Marketplace details how North Dakota is soliciting workers from hard-hit midwestern states like Ohio1 and Michigan2 for its booming work needs.

According to Marketplace, the Flickertail State is reveling in a combination of planning and timing – their banks steered clear of the subprime mess, and they lured companies like Microsoft to set up shop (if Jeff Krause is right, though, let’s hope it’s not an Office 2007 distribution center or something). 

While all that was going on, the coasts suddenly realized there was a huge land mass between them that could be used to create renewable energy, and North Dakota added a whole new industry to its list of hiring sectors. The state currently has a $700 million surplus and just lowered its taxes.

Will it be a switch from what you’re used to?  Sure, especially if you’re coming from a big city.  But don’t judge the state too quickly.  Here’s what one person featured in the story had to say about her new home:

Oh, Bismarck is beautiful! It’s clean, and there’s a mall, and it’s a nice mall, and has some of my favorite stores. 

Wait – even their malls are surviving?  Man, when can I move?

Footnotes:
  1. 11% unemployment []
  2. 15% – highest in the country []
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