LEL News-Jul09

The full text of many cases is now available free on-line. Where that is the case, links are provided.

Note: This month, the first three cases involve imposing liability for legal violations on entities beyond a single company.

One of the benefits of operating a business through a corporation is limiting liability to just the assets of the corporation. However, under some conditions, a plaintiff or creditor may pierce the “corporate veil” and seek monetary remedies. The usual target is owners of a corporation who have not treated it as a separate financial entity, who have undercapitalized the corporation or raided its assets, and who have not respected the boundaries of the corporation. When the courts decide that respecting the separate corporate existence would lead to injustice and promote a fraud, they will allow the “corporate veil” to be pierced. This usually means that the human owner of a corporation is held liable. But in a recent case, the actions of other entities made them liable for $2.5 million in benefits and other obligations owed by another corporation to its employees. Laborers' Pension Fund v. Lay-Com, Inc., Case No.06-3711 (7th Cir. Sept. 2, 2009). http://caselaw.lp.findlaw.com/data2/circs/7th/063711p.pdf

Another finding that can mean one entity is liable for another entity’s legal obligations is the alter ego or the disguised continuance alter ego doctrine. The alter ego involves two related entities that operate at the same time, for example, a “double-breasted” company. The disguised continuance alter ego involves a company that claims to have gone out of business but actually continues operations through another company. In a recent case, the Michigan Regional Council of Carpenters, AFL-CIO sued defendants Industrial Contracting and LaSalle Group asking to audit the benefit contributions the two companies had made. The union claimed that the two companies were alter egos and, under the contract signed by one company, other related companies doing the carpenter’s work were also liable to pay benefits for their carpenter workers.

The court found that the two companies had the hallmarks of an alter ego relationships, including “substantially identical management, business purpose, operation, equipment, customers, supervision and ownership.” The court also said that it was not necessary to prove that the alter egos intended to evade their legal obligations, but intent to evade is a factor that can be considered. The decision provides a clear review of two companies’ actions and explains why the plaintiffs are entitled to audit the books of both companies in order to ensure appropriate benefit contributions have been made by the two alter egos. Trustees of the Detroit Carpenters Fringe Benefit Funds v. Industrial Contracting, Llc, and Lasalle Group, Inc., Case Nos.08-1457 & 1994 (6th Cir. Sept. 17, 2009) http://www.michbar.org/opinions/us_appeals/2009/091709/43755.pdf

NLRA Violation for Refusing to Hire Employees in Order to Avoid Successorship Status

An employer (1) who buys or performs the work of a business and (2) whose employees include a majority of the prior employer’s employees may be found to have succeeded to the prior employer’s bargaining obligations. When an employer is a successor, it must recognize and bargain with the union that represented the employees of the predecessor employer. Although not involved in this case, privatization and contracting out can also create a successorship situation.

An employer that wants to avoid having a bargaining obligation may assume that the logical course is to refuse to hire employees of the predecessor. However, as a recent case shows, doing so may only bring a finding that the employer has violated the National Labor Relations Act and an order to hire / reinstate the predecessor employer’s employees and pay backpay to employees not hired. Parksite Group, 354 NLRB Case No.90 (Sept. 30, 2009). http://www.nlrb.gov/shared_files/Board%20Decisions/354/v35490.pdf

The National Labor Relations Act protects only employees. Employee status is very broad and includes “any employee” without regard to whether there is a relationship of employer and employee. The NLRA, however, excludes supervisors from the definition of employee. However, supervisors can be protected by the NLRA when protections are necessary to prevent violations of employee rights. In a recent case, an employer fired a supervisor who had refused to identify employees who had sent an anonymous petition complaining about working conditions to the company board of directors. The employer took the position that the supervisor was discharged for being disloyal and insubordinate for refusing to reveal her knowledge of the employees who had complained.

The Board found that “even though supervisors are not protected by the Act, a supervisor's discharge violates Section 8(a)(1) under certain limited circumstances, including when it is based on the supervisor's testimony in a Board hearing or refusal to commit an unfair labor practice. . . . In such circumstances, a prohibition against discharging the supervisor is necessary in order to vindicate employee rights under the Act and does not unduly trench upon the employer's legitimate interests in selecting and trusting its management team. Thus, the Board has held that an employer may not terminate a supervisor for insufficiently advancing the employer's plan to unlawfully prevent unionization.”

Bureau of Labor Statistics, Change in real average hourly earnings, August 2009: Real average hourly earnings fell 0.2 percent from July to August, after seasonal adjustment

Bureau of Labor Statistics, Frozen Defined Benefit Pension Plans in March 2008: Many employers have opted to freeze their current defined benefit plan and provide an alternative. Data from the March 2008 National Compensation Survey on employee benefits indicate that a fifth of all private industry workers participating in a defined benefit plan are affected by a freeze. http://www.bls.gov/opub/ted/2009/ted_20090831.htm

Proprietary Schools: Stronger Department of Education Oversight Needed to Help Ensure Only Eligible Students Receive Federal Student Aid GAO-09-600, August 17, 2009

Low-Income and Minority Serving Institutions: Management Attention to Long-standing Concerns Needed to Improve Education's Oversight of Grant Programs GAO-09-309, August 17, 2009

No Child Left Behind Act: Enhancements in the Department of Education's Review Process Could Improve State Academic Assessments GAO-09-911, September 24, 2009

Biosafety Laboratories: BSL-4 Laboratories Improved Perimeter Security Despite Limited Action by CDC GAO-09-1038T, September 22, 2009 http://www.gao.gov/new.items/d091038t.pdf

Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed GAO-09-1016, September 23, 2009 http://www.gao.gov/new.items/d091016.pdf

Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed (Appendixes) GAO-09-1017SP, September 23, 2009 http://www.gao.gov/new.items/d091017sp.pdf

Troubled Asset Relief Program: Status of Efforts to Address Transparency and Accountability Issues GAO-09-1048T, September 24, 2009 http://www.gao.gov/new.items/d091048t.pdf

Understanding the Primary Components of the Annual Financial Report of the United States Government GAO-09-946SP, September 25, 2009 http://www.gao.gov/new.items/d09946sp.pdf

Employee Misclassification: Improved Coordination, Outreach, and Targeting Could Better Ensure Detection and Prevention GAO-09-717, August 10, 2009 http://www.gao.gov/new.items/d09717.pdf

Dorothea Alewell, et alia, The Impact of Dismissal Protection on Employers' Cost of Terminating Employment Relations in Germany: an Overview of Empirical Research and its White Spots, 30 Comp. Lab. L. & Pol'y J. 667 (2009)

Sarah Altschuller & Amy Lehr, Corporate Social Responsibility, 43 Int'l Law. 577 (2009)

Bradford Anderson, Comment: Edwards v. Arthur Andersen LLP: There Is Not a "Narrow-Restraint" Exception to California's Prohibition of Noncompetition Agreements, and a General Release May Not Mean What it Says, 39 Golden Gate U. L. Rev. 163 (2009)

John Enriquez Andres, Philippine Labor Migration, and the Filipino Migrant Worker's Experience, 10 Rutgers Race & L. Rev. 523 (2009)

William Baker, Class Action Arbitration, 10 Cardozo J. Conflict Resol. 335 (2009)

Benjamin Barros, Facilitate Cooperation in a Diverse Society, 18 Cornell J.L. & Pub. Pol'y 203 (2008)

Luis Beccaria, Notes on the Evolution of Wage Distribution in Argentina, 30 Comp. Lab. L. & Pol'y J. 693 (2009)

Sanjai Bhagat & Roberta Romano, Reforming Executive Compensation: Focusing and Committing to the Long-Term, 26 Yale J. on Reg. 359 (2009)

Robert Bird & John Knopf, Do Wrongful-Discharge Laws Impair Firm Performance? 52 J.L. & Econ. 197 (2009)

Reagan Bissonette, Note: Reasonably Accommodating Nonmitigating Plaintiffs after the ADA Amendments Act of 2008, 50 B.C. L. Rev. 859 (2009)

Paul Bland & Claire Prestel, Challenging Class Action Bans in Mandatory Arbitration Clauses, 10 Cardozo J. Conflict Resol. 369 (2009)

Kylar Broadus, The Criminal Justice System and Trans People, 18 Temp. Pol. & Civ. Rts. L. Rev. 561 (2009)

Brett Busch, Comment: Workers' Compensation Benefits Go from Bad to Worse: the Kansas Supreme Court Eliminates the Parallel Injury Rule, 48 Washburn L.J. 705 (2009)

Gordon Butler, American Paternalism and the One Fund Solution, 9 Wyoming L. Rev. 485 (2009)

Thomas Carbonneau, E. Arguments in Favor of the Triumph of Arbitration, 10 Cardozo J. Conflict Resol. 395 (2009)

Amara Chaudhry, Lessons from Jim Crow: What Those Seeking Self-Determination for Transgender Individuals Can Learn from America's History with Racial Classification Categories, 18 Temp. Pol. & Civ. Rts. L. Rev. 505 (2009)

Kevin Clermont & Stewart Schwab, Employment Discrimination Plaintiffs in Federal Court: from Bad to Worse? 3 Harv. L. & Pol'y Rev. 103 (2009)

Caldwell Collins, Note: Home Alone: Is this the Best We Can Do? A Proposal to Amend Pending Parental Leave Legislation, 29 Wash. U. J.L. & Pol'y 301 (2009)

Tiffany Compres, Note: Labor of Love: Using International Labor Law to Achieve Human Rights for Women Sex Workers in the Dominican Republic, 40 Geo. J. Int'l L. 1027 (2009)

Leemore Dafny & David Dranove, Regulatory Exploitation and Management Changes: Upcoding in the Hospital Industry, 52 J.L. & Econ. 223 (2009)

Bobby Dexter, Tenure Buyouts: Employment Death Taxes and the Curious Obesity of "Wages", 70 U. Pitt. L. Rev. 343 (2009)

Jeffrey Dolan, Comment: Employee Benefits Law – Drunk Driving Fatality Determined Not Accidental under Erisa-governed Insurance Plan, 42 Suffolk U.l. Rev. 1021 (2009)

Christopher Drahozal, Business Courts and the Future of Arbitration, 10 Cardozo J. Conflict Resol. 491 (2009)

Angelique Eaglewoman, Tribal Nation Economics: Rebuilding Commercial Prosperity in Spite of U.S. Trade Restraints – Recommendations for Economic Revitalization in Indian Country, 44 Tulsa L. Rev. 383 (2008)

Marc Edelman & Elizabeth Masterson, Could the New Women's Professional Soccer League Survive in America? How Adopting a Traditional Legal Structure May Save More than Just a Game, 19 Seton Hall J. Sports & Ent. L. 283 (2009)

William Emanuel, Union Trespassers Roam the Corridors of California Hospitals: Is a Return to the Rule of Law Possible? 30 Whittier L. Rev. 723 (2009)

Samuel Estreicher, "Think Global, Act Local": Employee Representation in a World of Global Labor and Product Market Competition, 24 Lab. Law. 253 (2009)

Brian Etherington, The B.C. Health Services and Support Decision – The Constitutionalization of a Right to Bargain Collectively in Canada: Where Did it Come from and Where Will it Lead? 30 Comp. Lab. L. & Pol'y J. 715 (2009)

Yuval Feldman, Ex-Ante Vs. Ex-Post: Optimizing State Intervention in Exploitive Triangular Employment Relationships, 30 Comp. Lab. L. & Pol'y J. 751 (2009)

Taylor Flynn, Instant (Gender) Messaging: Expression-Based Challenges to State Enforcement of Gender Norms, 18 Temp. Pol. & Civ. Rts. L. Rev. 465 (2009)

Kristin Fortin, Reviving the Lawyer's Role as Servant Leader: the Professional Paradigm and a Lawyer's Ethical Obligation to Inform Clients about Alternative Dispute Resolution, 22 Geo. J. Legal Ethics 589 (2009)

James Foster, et alia, Almost Too Good to Be True: Counter-Narratives in Four Films about Women Lawyers, 40 U. Tol. L. Rev. 643 (2009)

Kimberly Fox, Comment: Building on a Broken Employer Sanctions System: The Impact of the Bush Administration's SSA No-Match Letter Proposal. 3 Harv. L. & Pol'y Rev. 203 (2009)

Benjamin Garner, Note: The Rise, Fall, and Resurrection of Retaliation Claims under Section 1981, 3 Charleston L. Rev. 647 (2009)

Paul Gertler & Jennifer Kuan, Does it Matter Who Your Buyer Is? The Role of Nonprofit Mission in the Market for Corporate Control of Hospitals, 52 J.L. & Econ. 295 (2009)

Betsy Ginsberg, Out with the New, in with the Old: the Importance of Section 504 of the Rehabilitation Act to Prisoners with Disabilities, 36 Fordham Urb. L.J. 713 (2009)

Elizabeth Glazer & Zachary Kramer, Transitional Discrimination, 18 Temp. Pol. & Civ. Rts. L. Rev. 651 (2009)

Joseph Goldhammer & Naomi Perera, We Never Talk Anymore: Evaluating Confidentiality Rules and No-Fraternization Policies – Cintas Corp. v. NLRB and Guardsmark, LLLC v. NLRB, 24 Lab. Law. 379 (2009)

Robert Gonnello, Comment: Closing One Door and Opening Another: the End of the Paycheck Accrual Rule and the Need for a Legislative Discovery Rule, 39 Seton Hall L. Rev. 1021 (2009)

David Hambrick, Note: Reconsidering Extraterritoriality: U.S. Labor Law, Transnational Organizing, and the Globalization of the Airline Industry, 47 Colum. J. Transnat'l L. 576 (2009)

Thomas Harris, Note: Alternate Remedies & the False Claims Act: Protecting Qui Tam Relators in Light of Government Intervention and Criminal Prosecution Decisions, 94 Cornell L. Rev. 1293 (2009)

Stephen Huber, State Regulation of Arbitration Proceedings: Judicial Review of Arbitration Awards by State Courts, 10 Cardozo J. Conflict Resol. 509 (2009)

Harry Hutchison, Liberty, Liberalism, and Neutrality: Labor Preemption and First Amendment Values, 39 Seton Hall L. Rev. 779 (2009)

Dan Irving, The Self-Made Trans Man as Risky Business: A Critical Examination of Gaining Recognition for Trans Rights Through Economic Discourse, 18 Temp. Pol. & Civ. Rts. L. Rev. 375 (2009)

Sumeet Jain, Note: Tightening India's "Golden Straitjacket": How Pulling the Straps of India's Job Reservation Scheme Reflects Prudent Economic Policy, 8 Wash. U. Global Stud. L. Rev. 567 (2009)

Daniel Johns, Action Should Follow Words: Assessing the Arbitral Response to Zero-Tolerance Workplace Violence Policies, 24 Ohio St. J. on Disp. Resol. 263 (2009)

Simi Junior, Note: Many Strands: Immigration Reform and the Effect of Mexican Migration on African American Unemployment, 10 Rutgers Race & L. Rev. 487 (2009)

Erin-Ann Jurrens-Sudkamp, COBRA's Gross Misconduct Exception: Strategies for Compliance in the Face of Uncertainty, 24 Lab. Law. 399 (2009

Bridget Kenny, Mothers, Extraordinary Labor, and Amacasual: Law and Politics of Nonstandard Employment in the South African Retail Sector, 31 Law & Pol'y 282 (2009)

William Kilberg, et alia, A Measured Approach: Employment and Labor Law During the George W. Bush Years, 32 Harv. J.L. & Pub. Pol'y 997 (2009)

Allan King & Camille Ozumba, Strange Fiction: The "Class Certification" Decision in FLSA Collective Actions, 24 Lab. Law. 267 (2009)

Shani King, Race, Identity, and Professional Responsibility: Why Legal Services Organizations Need African American Staff Attorneys, 18 Cornell J.L. & Pub. Pol'y 1 (2008)

Thomas Kleven, Systemic Classism, Systemic Racism: Are Social and Racial Justice Achievable in the United States? 8 Conn. Pub. Int. L.J. 207 (2009)

Terry Kogan, Transsexuals in Public Restrooms: Law and Cultural Geography, 18 Temp. Pol. & Civ. Rts. L. Rev. 673 (2009)

Andrew Koslow, Note: "Appropriate Equitable Relief" in Wal-mart v. Shank: Justice for Whom? 12 Quinnipiac Health L.J. 277 (2008-2009)

Mike Kreager, The Physician's Right in Section 15.50(b) to Buy out a Covenant Not to Compete in Texas, 61 Baylor L. Rev. 357 (2009)

Sebastian Krebber, European Union Developments: Status and Potential of the Regulation of Labor and Employment Law at the European Level, 30 Comp. Lab. L. & Pol'y J. 875 (2009)

Marc Law & Mindy Marks, Effects of Occupational Licensing Laws on Minorities: Evidence from the Progressive Era, 52 J.L. & Econ. 351 (2009)

Denis Lemieux, Fair Procedures and the Contracting State, 61 Admin. L. Rev. 115 (2009)

Elizabeth Leonard, The Public's Right to Health: When Patient Rights Threaten the Commons, 86 Wash. U. L. Rev. 1335 (2009)

Brett Lovellette, Comment: "Mortal [K]ombat in Cleats": An Examination of the Effectiveness of the National Football League's Disability Plan and its Impact on Retired Players, 36 Pepp. L. Rev. 1101 (2009)

Nikita Lyutov & Daiva Petrylaite, Trade Unions' Law Evolution in Post-Soviet Countries: The Experiences of Lithuania and Russia, 30 Comp. Lab. L. & Pol'y J. 779 (2009)

Elizabeth Malcolm, Comment: "Looking and Feeling Your Best": A Comprehensive Approach to Groom and Dress Policies under Title VII, 46 San Diego L. Rev. 505 (2009)

Barbara Marchetti, The WTO Dispute Settlement System: Administration, Court, or Tertium Genus? 32 Suffolk Transnat'l L. Rev. 567 (2009)

Gillian Metzger, E. Facial and As-Applied Challenges under the Roberts Court, 36 Fordham Urb. L.J. 773 (2009)

Faina Milman-Sivan, The Virtuous Cycle: A New Paradigm for Democratizing Global Governance Through Deliberation, 30 Comp. Lab. L. & Pol'y J. 801 (2009)

Bruce Money & Chad Allred, An Exploration of a Model of Social Networks and Multilateral Negotiations, 25 Negotiation J. 337 (2009)

Erin Nave, Note: Giving Deference to Inaction: How Geddes v. United Staffing Alliance Employee Medical Plan Compromised an Employee's Right to Meaningful Review under ERISA, 29 Wash. U. J.L. & Pol'y 323 (2009)

Tiago Neves, Practice Note: Community Mediation as Social Intervention, 26 Conflict Resol. Q. 481 (2009)

Marisa Pagnattaro, Is Labor Really "Cheap" in China? Compliance with Labor and Employment Laws, 10 San Diego Int'l L.J. 357 (2009)

Daniel Pasternak & Justin Keith, One of These Things Is Not like the Other: The Continuing Battle over the Meaning of Discrimination – Salmon Run Shopping Center LLC v. NLRB and Guard Publishing Company v. NLRB, 24 Lab. Law. 325 (2009)

Ramsey Prather, Elsensohn v. St. Tammany Parish Sheriff's Office: An Evaluation of the Fifth Circuit's Recent Associational Retaliation Jurisprudence, 83 Tul. L. Rev. 1537 (2009)

Luca Ratti, Agency Work and the Idea of Dual Employership: A Comparative Perspective, 30 Comp. Lab. L. & Pol'y J. 835 (2009)

Recent Development. Emergency Economic Stabilization Act of 2008, 46 Harv. J. on Legis. 569 (2009)

Roberta Romano, Does the Sarbanes-Oxley Act Have a Future? 26 Yale J. on Reg. 229 (2009)

Katrina Rose, Where the Rubber Left the Road: The Use and Misuse of History in the Quest for the Federal Employment Non-discrimination Act, 18 Temp. Pol. & Civ. Rts. L. Rev. 397 (2009)

Yona Rozen, at alia, One of These Things Is Not like the Other: the Continuing Battle over the Meaning of Discrimination – Salmon Run Shopping Center LLC v. NLRB and Guard Publishing Company v. NLRB, 24 Lab. Law. 339 (2009)

Peter Rutledge, Arbitration Reform: What We Know and What We Need to Know, 10 Cardozo J. Conflict Resol. 579 (2009)

Kathryn Sabbeth & David Vladeck, Contracting (Out) Rights, 36 Fordham Urb. L.J. 803 (2009)

Amy Schmitz, Nonconsensual + Nonbinding = Nonsensical? Reconsidering Court-Connected Arbitration Programs, 10 Cardozo J. Conflict Resol. 587 (2009)

Dean Spade, Keynote Address. Trans Law & Politics on a Neoliberal Landscape, 18 Temp. Pol. & Civ. Rts. L. Rev. 353 (2009)

Anna Spain, Using International Dispute Resolution to Address the Compliance Question in International Law, 40 Geo. J. Int'l L. 807 (2009)

Symposium: Entertainers' and Athletes' Conduct Unrelated to Their Employment, 19 Seton Hall J. Sports & Ent. L. 479 (2009)

Symposium: Intersections of Transgender Lives and the Law, 18 Temp. Pol. & Civ. Rts. L. Rev. 351 (2009)

Symposium: The Future of Public Rights Litigation, 36 Fordham Urb. L.J. 603 (2009)

Curtis Thomas, Note: Cat's in the Cradle: Tenth Circuit Provides Silver Spoon of Subordinate Bias Liability, 61 Okla. L. Rev. 629 (2008)

Katherine Trisolini, What Local Climate Change Plans Can Teach Us about City Power, 36 Fordham Urb. L.J. 863 (2009)

Daniel Tukel, The Best Defense or a Good Offense? Are the Damage Caps in 42 U.S.C. Section 1981a Waivable Affirmative Defenses? 24 Lab. Law. 303 (2009)

Joel Tuoriniemi & Roger Reinsch, Return to Camelot: a Statutory Model for a Judicial Examination of Employment Agreements with Shortened Period of Limitations, 35 Ohio N.U. L. Rev. 751 (2009)

Jillian Weiss, Transgender Identity, Textualism, and the Supreme Court: What Is the "Plain Meaning" of "Sex" in Title VII of the Civil Rights Act of 1964? 18 Temp. Pol. & Civ. Rts. L. Rev. 573 (2009)

Yin Zheng, Note: It's Not What Is on Paper, but What Is in Practice: China's New Labor Contract Law and the Enforcement Problem, 8 Wash. U. Global Stud. L. Rev. 595 (2009)

Michael Zimmer, A Pro-employee Supreme Court? The Retaliation Decisions, 60 S.C. L. Rev. 917 (2009)

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October 2009 Labor and Employment Law News

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