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 Ohio and Michigan 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?

Two recent cases decided by the 1st District Illinois Appellate Court have brought an interesting facet of our unemployment law to the fore:  you don’t have to be a lawyer to represent a party in an unemployment hearing.

In both cases (here and here), former employees appealed the Illinois Department of Employment Security’s denial of benefits, alleging that the hearing was voided because the former employer had hired a “representative” that asked questions of witnesses and made factual closing statements. 

In both opinions, the First District noted that the unemployment statute is meant to create an informal process, and specifically allows for a “duly authorized agent” to represent either party at the hearing.  The courts also noted that factual questioning and analysis of this one specific issue – unemployment insurance – doesn’t qualify as “practicing law”. 

I’m not sure about that last point.  The official definition of ”the practice of law” is:

“the giving of advice or rendition of any sort of service by any person, firm or corporation when the giving of such advice or rendition of such service requires the use of any degree of legal knowledge or skill.” 

I don’t quite see how summarizing facts at an unemployment hearing would be useful if the person summarizing those facts doesn’t have an understanding of the underlying law.  Not saying the courts were wrong – there is obvious leeway in the statute for non-lawyer representation – and there are valid public policy reasons for allowing non-lawyers to assist companies and aggrieved employees, not the least of which is sheer cost. 

But the exposition in these decisions about factual work being outside the practice of law creates a shaky precedent for me in any context.   What do you think?

Finally, remember that unemployment insurance typically requires that you prove you’re still looking for work.  So if you do have to go in for a hearing, ask around – you never know whose hiring these days.

The first installment of “A Couple of Questions…” goes to Brian D. McCarthy, Chief Employment Counsel at the risk management powerhouse Arthur J. Gallagher & Co.  Before joining AJG, McCarthy spent 10 years on the other side of the table, as a business-side employment attorney at the Labor & Employment firm Franczek Sullivan (now Franczek Radelet).  

No suprise, then, that Brian gets the series going right with insightful answers about the relationship between inside and outside counsel:

CE: Okay.  A couple of questions.  Here we go.

1.  What is the most important factor in maintaining a good relationship with a corporate client?

BDM: That’s an easy one.  Make me think of you as an essential part of our business.

You can do that by demonstrating a desire to understand our business model and our specific objectives.  Don’t be a contractor; be a teammate.  Respect our goals and make them your own, without simply rolling over (this is not Burger King; the client is not always right).  Maximize my confidence that you will handle my business the same way I would handle it – better, even – because that is why we send work out in the first place.  These are the things that will truly build up your relational capital with corporate counsel.

All that other stuff that shows up in your high-end, four color glossy firm brochure?  That’s important, too – don’t get me wrong.  I demand a high level of legal expertise; an ability to meaningfully and practically communicate that expertise; a command of pertinent decisions, regulations and trends; transparent value in staffing and billing; and willingness to understand our business model and specific objectives.  But these qualities are the sine qua non, the absolute preconditions, of getting hired and staying hired by my corporate legal department.  They are only facets of the bigger picture we see in our favorite outside counsel, the “go-to” lawyers with whom we actually look forward to working.

Here’s a simplified test:  your corporate counsel client assigns you a piece of work in the late afternoon.  How does the matter weigh on your client that evening?  Over the weekend?  On Monday morning?  Is your in-house client calm, cool, collected and at peace with the world?  If not (or if you can’t answer that question), there is definitely room to improve the relationship.  Obviously, this simplification won’t apply to a bet-the-company case or your first assignment from a new client, but it’s a good general barometer. 

And the best news?  I’m a lot more likely to forgive and forget those inevitable missteps if they are made by one of my go-to lawyers.

2.  Has the recession changed your perspective on outside counsel?

BDM: No question it has. 

Corporate counsel who were previously focused on value and costs are becoming positively obsessed.  Many are simply drawing the line and saying:  “I won’t pay for this anymore.”  Computerized research?  Forget about simply passing on that overhead anymore.  Charges for faxes – are you kidding?  Gone are the days of dozens upon dozens of billable hours (let’s face it, mostly inexperienced associate hours) that are unconnected to realized value.

I’ll happily pay high rates for high quality and relevant experience.  Quality legal representation can be costly.  But I will be scrutinizing the value provided more closely than ever before. I’ll be looking to non-law firm consultants, contract attorneys and assistants and other nontraditional legal professionals who can do most of the work of associates in any number of disciplines – at a mere fraction of the cost. 

We could all take a lesson from the makers of “Borat,” who got big press, and saved a bundle, with their Indian off-shoring of legal work like research, litigation support, discovery, contract drafting and patent writing.  I’m not suggesting that most of my work could be sent to India, but I like that thinking.

Let me add that go-to lawyers, like the ones I talked about above, are the first to point out value that might be had from alternative staffing, billing and sourcing arrangements.  They concern themselves with hunting out and adding value to our relationship.  The result?  I now expect those suggestions from my business partners.  I would encourage other corporate counsel who aren’t getting them to pointedly ask outside counsel, why not?

There’s just something about that vision of the Great Idea Man, rising up as the suits around him fall, developing the next great business model or product or managerial structure that will rocket the business into the stratosphere, and will become the modus operandi for the inevitable Return to Greatness we all know is just one great concept away.  For sure, a lot of thought (and writing) has been spent in the current recession trying to divine what that next Great Idea is.  Green Energy?  Healthcare Reform?  The Wuggie? 

How about free labor? 

A story on NPR this morning profiled Ariel Horn, the head of a small ad agency in New York, who thinks he’s come up with a novel model for riding out the recession.  Horn has opened his doors to out-of-work execs to come in with their laptops, and utilize his company’s empty workspaces to look for work.  They can use the company’s desks, and presumably the internet connection, and can spend all day just sending out resumes, if they want.

Or, you know, if they feel like it, they could “brainstorm” with Horn about possible pitches to TV stations or other clients.  If one of the job seekers’ ideas hits, it could spell work at the Horn Group for a member of the unemployed brain trust.  From the NPR story:

If one of the ideas takes, it could lead to a job for Horn and his agency. It’s happened before, and when it does, Horn hires the person who came up with the idea. He pays them by the project, with no benefits. For Horn, this kind of business model has a big advantage. The people who come here have all kinds of backgrounds — digital marketing, social networking, music videos. It means Horn’s agency can function like a much bigger company than it really is.

Well, sure.  That is typically a benefit of getting something without paying for it. 

I don’t mean to be hard on Horn or his idea.  First off, letting freelancers use empty offices to come up with pitches isn’t new in the ad business.  Even the whole “you-get-paid-when-we-get-paid” thing happens pretty often, I understand.  Even if it’s not as novel as it looks, Horn seems to be repackaging the idea for the recession by turning these out-of-work execs into freelancers and his empty offices into job search stations.

To tell you the truth, I’m sort of on his side, here.  Is it a little deceptive to “open your doors” to down-on-their-luck executives just to tap into their various networks and ideas?  Maybe.  But like the story notes, one of the biggest problems with losing your job is the feeling that your talents aren’t being utilized.  If Horn’s method lets these guys keep their mojo while they’re searching, doesn’t that stand for something?  

Is the business model a blatant violation of the Fair Labor Standards Act?  Yeah, maybe.  But so are most of the unpaid college internships in this Country.  And when you think about it, how are these brainstorming sessions any different than a few guys in a startup partnership, each putting in ideas with no promise or remuneration, but with the understanding that success will be shared among them all? 

My new-lawyer/compliance/fear-of-lawsuit brain says he should be putting some enormous waiver or contract in place before the “job searchers” ever plop down at a desk, but the part of me that wants to see the economy improve, see the concept of employment evolve, wants to encourage fostering partnerships with all levels of workers, that part of me wants Horn’s thing to be the Next Big Thing, no roadblocks, please. 

And as long as it’s a victimless crime (which, done correctly, is what it looks like to me), maybe any violation with the FLSA says more about the FLSA than it does Horn’s business model.  In this economic environment, laws should encourage people who are thinking of creative solutions, not boxing them in.  And it’s clear by now that this recession is leading a lot of employers to use a lot more freelance, temporary, or other types of arrangements that would typically fall into independent contractor categories.  Maybe instead of raising the red compliance flags at creative employers, it’s time we start analyzing the usefulness of the law they are being forced to comply with.

The concept poses a lot of interesting questions about what employment means, and what employees and employers both are owed.  How involved can Horn get in helping the job searchers find other work?  Can he endorse them?  Does he have to worry about distracting them from their job searches if their brainstorming is successful, but they don’t get paid from it?  At what point does Horn’s firm become an employment agency?  What happens when one of the brainstorming sessions produces a good idea, but a bad employee/contractor?  Who keeps the client after the job is done? 

But these questions can be addressed by some short, to-the-point agreements that don’t have to overwhelm the freewheeling spirit Horn’s idea is trying to capitalize on.  Plus, you can’t tell me normal employment relationships aren’t just as rife with issues.  If that was true, we’d all be out of work.

On the contrary. 

Amidst the gradual demise of this country’s economic infrastructure, legal and financial institutions have been faced with historic downsizing efforts.  The public has been inundated with headlines foretelling salary cuts, layoffs, and disappearing pensions.  As the dust begins to settle, it appears that these mass reductions are widening a gender gap that, up to now, had been slowly closing. 

On March 16, Forbes magazine ran a cover article exposing claims made by Wall Street women that female employees have endured the brunt of downsizing efforts.  According to the article, the financial services and insurance firms have cut approximately 260,000 jobs.  An astounding 72% of these jobs belonged to women, even though women only constituted 64% of the workforce before the economic downturn. 

Many of the ousted female professionals are seeking legal recourse and have recently filed charges with the U.S. Equal Employment Opportunity Commission.  Attorney Douglas Wigdor, who is featured in the Forbes article, currently represents a group of five former managers and rising young stars who claim they were victimized by the cuts.  In the article, Mr. Wigdor describes the cuts as a case of “recessionary discrimination.”

Still, other women with cognizable claims against various financial institutions will not come forward.  There is a concern that in doing so, they will be professionally exiled from the industry once the economy regains its footing.  The Forbes article recounts a 2007 class action settlement, where female employees at Morgan Stanley were given the opportunity to opt-in:

 Alice Hughes, a Morgan Stanley financial adviser in Dallas, talked with several women who declined to participate–and not because they planned to pursue separate claims. “It was just sheer fear,” she says, that even if they kept their jobs they might be excluded from benefits like getting a chunk of business when another broker left the firm. “They’re right,” says Hughes. Moreover, she claims, if they make trouble, “they will be blacklisted from working at any major firm.”

I love David Greising.   The Chicago Tribune and NPR business contributor seems to understand everything business, especially the stuff I don’t.  This morning, he took on AIG’s bailout apologist CEO, Edward Liddy, for going soft on derivatives execs after canning 6000 Allstate employees a few years ago, employment contracts be damned.  

Why, Greising asks, after pushing Allstate into a handful of class action lawsuits (two by the EEOC, even – that takes work) because he ignored the axed employees’ contracts, has the man brought in by the Bush Administration to clean up AIG dropped the broom?

Given his own history, Liddy’s explanation that his “hands are tied” because of the derivative department’s executive agreements is sad.  Can you imagine the media tsunami that would follow a class-action lawsuit on behalf of AIG derivatives executives for their bonuses?  It’s not even their salaries, it’s their #%*$@* bonuses!  …  [cough] sorry. 

Honestly, it’s like Wall Street and K Street are having a “who can sound more hollow” contest. 

Greising also points out that other ailing corporations, including Motorola and Continental Airlines, have worked out deals with their executives for pay cuts, bonus paybacks and the like.

And then there’s the big wrench in Liddy’s explanation – the United Auto Workers.  They, too, had a contract.  A few, actually.  But nobody – not the government, the union or the automakers asking for tax money ever questioned whether it could be renegotiated.

And that’s as it should be.

So what’s different about AIG?  How is it that, in the face of a furious public, following one of the biggest collective renegotiations in history, and with a proven executioner at the helm, this company can’t get out of paying millions in bonuses?

Is there a double standard among contracts for workers and contracts for executives?  Probably.  But Greising’s article proves that that can’t answer the whole question.  Honestly, I think the real problem here is a denial of workplace realities. 

When the auto industry was getting bailed out, one of the biggest arguments against giving them the money was that it would create a false sense of stability.  The employees and executives of the Big 3 needed to understand the dire straits they were in, and government infusions would keep that from happening. 

The same is clearly true at AIG.  Employees and executives alike simply don’t understand how close to the edge they are.  They want to pay bonuses to “retain talent”?  Talent? 

The department created confusing securitized investments that didn’t work.  Now it’s months away from being wound down, and they’re still paying to retain talent?  This is a group of people who need to feel their livelihoods are in jeopardy.  That’s why the UAW renegotiated their deals.  That’s why Motorola execs adjusted theirs, too. 

Employment contracts are only as good as the companies that agree to them.  Perhaps if AIG were suddenly small enough to fail (potentially, at least), its employees would find it in their hearts to discuss their compensation structures.

Sound familiar?  

Well, sorry.  Those statistics didn’t come from the U.S. Department of Labor.  They came from the Supreme People’s Court of China, according to AFP. 

Lawsuits nearly tripled in some eastern and southern coastal cities during the period… partly due to companies taking cost-cutting measures in their struggle to pull through the financial crisis.

***

Some companies also cut jobs in response to … [a new law that] requires employers to offer open-ended contracts to employees who have worked for them for 10 years or more or have completed two fixed-term contracts. 

It also mandates companies to make larger contributions to pension and insurance funds, the China Daily said.

Finally, to really put a 95% uptick in litigation for China’s courts into perspective, note that the report says about 20 million migrant workers lost their jobs in China last year.  And that’s just factory workers. 

A DOL report from last week shows the estimated total Americans out of work is hovering around 5 million.

Employers can, and generally do, charge former employees and/or their dependents up to 102% of the premium that the employer would have paid for the coverage had the individual and/or his dependents continued to be covered by the plan. In addition to multiple other notices employers are required to provide with respect to COBRA, employers must provide notice of the availability of COBRA to each covered employee at the time of termination of employment.

The American Recovery and Reinvestment Act of 2009 (ARRA), which the President signed into law this afternoon, provides for a 9 month, 65% subsidy for COBRA premiums for coverage periods beginning on or after March 1, 2009, for those individuals who lost/lose their jobs between September 1, 2008 and December 31, 2009.

Employers must provide notice to all former employees and their dependents to whom this subsidy is available.  In other words, employers must provide additional notice to those former-employees who were already laid off and already provided the “regular” COBRA Notice.

Consistent with current COBRA requirements, the subsidy will no longer be available to individuals who become eligible under another health plan, and the subsidy is not available to individuals with annual income exceeding $145,000 and couples with income exceeding $290,000.

It’s also a bit of a tease.  This article (or this writer.  Or this website) will make no opinion about whether the UAW is responsible for the mess the auto industry is in.  We will leave that to the biased blogs to our right and left. 

But as we all eagerly anticipate the release of GM and Chrysler’s restructuring plans, the UAW’s staunch refusal to concede on issues like healthcare payments is already being cited as a reason the Plans won’t meet with much satisfaction on the Hill.

And that’s probably true. Congress will likely hate the fact that, for the mess the economy is in, the UAW is standing pat on its collective bargaining agreements and playing hardball with concessions. Indeed, as we reported last fall, part of the deal the Bush White House struck with automakers when it promised the $17 Billion was that they get concessions from the Union on the big-ticket items like health coverage, wages and work rule restrictions.

But wait. That’s the problem. This wasn’t the UAW’s deal. Sure they were “at the table” when negotiations were taking place, but the UAW wasn’t asking for the money. No, remember: what happened here was that Congressional Republicans had tried to get them to concede to these very same cuts weeks before the deal went through, and when they failed, Bush just put the onus on the carmakers to force the union’s hand.

And that’s my problem with putting this one on the UAW.  Whether they got Detroit in this mess or not, they didn’t draft the “bailout” last fall, and they didn’t approve it, but it had everything to do with them.

So while the politicians and media will no doubt fall on one side or the other of the debate, let’s not forget that they were the ones who praised the original bailout, without ever bringing up this promise-discrepancy in the first place.

Before you light your torch with the rest of the mob tomorrow when the wails against the UAW start, here are a few points to consider:

The fight is not over “health-care costs”.

Well, it is, but not really. During the parties’ last collective bargaining negotiations, the union agreed to take on all of the healthcare responsibilities for its workers. That would have been a huge money-saver for GM in the long run. The deal was that GM would put $34 billion or so in a trust, called a VEBA, which would provide startup money for the union to use to administer the employees health plans. After that initial cash infusion, GM would essentially be off-the-hook for healthcare coverage for its unionized workforce. 

Now, as part of the “restructuring plan”, GM wants the union to agree to reduce its payment obligation, delay the VEBA’s funding or more.  While the rioters make it sound like the union is pushing back against reductions in healthcare coverage, the reality is that the UAW made a huge concession taking on healthcare administration, and wants GM to cover what they promised in the interim.

The Union has been making the exact type of concessions Congress is demanding for years.

Also at the most recent contract talks, the UAW reduced its base pay for recent hires and altered its job classifications to make certain jobs more flexible and pay less. It’s not ignorant to the economic plight in Detroit.  I think it’s just doing what unions do – fighting for every drop or crumb it can get for the workers.  Good or bad, criticizing the UAW for that is like blaming a cow for eating grass or Terrell Owens for mouthing off.

After giving up a lot of ground over the past few years, is the union playing hardball? Yes. That, in fact, is why unions exist.  It gave up a lot during the last round of collective bargaining, and is probably wondering what the point was, if it was just going to have to give up so much more now, whether it likes it or not.

Should Congress be demanding some accountability in Detroit?  Again, sure.  But if it wants concessions from the UAW, it should’ve gotten them itself, instead of creating this prisoner’s dilemma and then patting itself on the back for saving the auto industry.

Look, saying you’ll loan person #1 money that they need to survive, provided they can convince person #2 to do something that you yourself could not convince them to do is not exactly a recipe for success. The obvious result of forcing the car companies to make promises they couldn’t control was exactly what happened – a meltdown at the negotiating table.

One has to wonder whether that was the idea all along. Instead of criticizing Bush in his unappealing, waning days as President, push the public anger back into the Obama administration, and blame the union. That sounds like a much better proposition for those thwarted Congressional Republicans.

7.2%.  

$700 billion.

The news is full of numbers these days.  And most of us who read them (and report them) scan through the figures, or nod our heads at how hard it is to navigate the bureaucratic system of unemployment or get attention for workplace grievances these days, and we sigh collectively over the state of our nation and go on with our lives. 

Because, in truth, most of us still have jobs.  We may see less movies or buy less clothes, but most of us still pay our rent or mortgage, buy our groceries, live our lives.  And the unemployment rate grows on paper or on the TV, but it’s safely contained behind the fence of statistics and macroeconomic analysis.

Then a couple in southern California both lose their jobs, feel ignored by their union, and go home and kill themselves and their five little children. 

From the AP:

KABC reported that the man claimed in [a fax to the station] that an administrator rebuffed them when they showed up to work, told them to file a union grievance and said, “You should have blown your brains out.”

The man wrote that they filed a grievance but nothing was done and two days later they were fired, KABC said.

Surely this man had more than the loss of his job affecting his judgment.  And a tragedy like this can never be explained or simplified into the logic of motives or purposes. 

But I suggest we take the moment to remember that 7.2% is a staggering number of people who want to work but can’t, and there are even more who work for fractions of their former salaries.  And every single one of those people is living a very anxious, angry or sad life right now. 

My point is this:  the DOL’s January jobs report comes out next week.  Let it affect you.  Internalize the number of people out of work.  Be a little nicer, a little more understanding.  I’m really not trying to get sentimental.  But this is the news without statistics.  If you can, find a way to help. 

Here, I’ll get you started:

• The National Employment Law Project
• ABA Labor & Employment Law Pro Bono Committee

If you are a part of a pro bono program in your area helping the un- or under-employed, or if you know of any worthy charitable employment organizations, post a comment below or send me an email and I will add them to the list.