In Janus v. AFSCME Council 31, et al., the Supreme Court heard oral argument recently on whether an Illinois law requiring nonunion public employees to pay partial fees to unions that negotiate on their behalf violates their constitutional right to free speech. A decision against the unions would undo forty years of precedent and financially devastate organized labor in its last stronghold, the public sector.
In bringing this case, state employee Mark Janus has asked the Court to overrule the 1977 decision Abood v. Detroit Board of Education. Under Abood, non-members can opt out of paying for a public employee union’s political activities but may be required to pay “fair share” fees to support services a union is statutorily required to provide all employees, such as negotiating collective bargaining agreements.
Mr. Janus argues that a union’s bargaining against the government is not government speech expressed through employees but rather advocacy or political speech expressed through an independent interest group. As such, to require non-member employees to pay fees that subsidize the union’s bargaining infringes the non-member employees’ First Amendment rights to choose which political speech is worthy of their support.
This position appeared to resonate with conservative justices during the February 26 hearing. Justice Samuel Alito was particularly vocal, asking at one point: “When you compel somebody to speak, don’t you infringe that person’s dignity and conscience in a way that you do not when you restrict what the person says?”
A recent survey revealed some startling news about the lack of fiduciary awareness. In the survey conducted by AllianceBernstein L.P., more than 1,000 defined-contribution plan executives were asked if they were fiduciaries. While all in fact were fiduciaries, nearly half said they were not, and another 6 percent didn’t know or weren’t sure. Worse, the survey suggested that fiduciary awareness is steadily decreasing over time. In 2011, 61 percent of interviewees correctly identified themselves as fiduciaries; by 2014, the percentage had dropped to 58 percent; and now we are at a low of 45 percent.
Despite the need for fiduciary education made so painfully clear by the study, only about two-thirds of the plans surveyed offered any fiduciary training at all. And of those respondents who were offered fiduciary training, about 50 percent reported that the training program was not comprehensive. The results dovetail with a 2014 survey of multiemployer trustees conducted by the International Foundation of Employee Benefit Plans (IFEBP), which found that only 15 percent of funds surveyed had formal orientation, mentoring, or knowledge transfer programs for new trustees. The majority of trustees surveyed by the IFEBP opined that it takes 3 to 5 years to develop a competent trustee, and 93 percent found the trustee role more challenging than in the past.
The full article can be accessed here.
There’s been a lot of media coverage about sexual harassment in the workplace, leaving many women – and men – wondering exactly what sort of behavior crosses that sometimes-invisible threshold and rises to the level of illegal harassment. You may have the feeling you’re being harassed at work, but you’re not sure whether you have an actual legal claim. This post is intended to help workers identify sexual harassment violations in the workplace, and take the first steps in addressing the problem.
It’s important to always bear in mind that it’s not always about sex: if you are harassed on the job because of your sex, race, color, religion, gender identity, sexual orientation, or national origin, you may have a legal claim.
First, it’s important to understanding the legal definition of harassment.
Sexual Harassment: If a supervisor makes unwelcome sexual advances to a job applicant or employee, and then uses his authority to take a job action, good or bad, against that person, that is unlawful sexual harassment. If a supervisor threatens – explicitly or implicitly – a harmful job action or offers a job benefit to get an employee to comply with sexual advances, that is also unlawful.
Hostile Workplace: If anyone in the workplace – not just supervisors – engages in unwanted touching or makes unwelcome or offensive comments or “jokes” that are sexual or linked to gender, race, or another protected characteristic, it is considered unlawful harassment if the behavior is so severe or ongoing that it creates an intimidating, hostile, or abusive work environment. A worker must be able to show that tolerating this behavior was a condition of staying in their role.
Specific examples of what can constitute harassment:
• In a case of religious harassment, a state court has found that it was harassing for an employer to place Christian-themed messages and Bible verses on paychecks given to employees.
• Repeated, and unwanted, preaching by coworkers on religious matters can potentially constitute harassment.
• Hanging a picture of a political leader or activist, or photograph of an ethic disturbance or conflict that reflects negatively upon people of that nation, can constitute national-origin harassment.
• Using racial epithets to describe a set of people can constitute racial harassment, even if the epithets are not directed at a particular individual.
Next, here are some steps you can take to address a problem in your workplace:
Let those inside and outside the company know what is going on: If your employer has an anti-harassment policy, follow its process for reporting harassment. In some cases, you risk undermining your claim if you don’t report and give your employer the opportunity to address the issue first. Keep copies of all communications with the harasser and your employer, as well as thorough notes on each incident.
At the same time, you may reach out to the EEOC or your state’s analog, or the following organizations for more information about your legal options: the National Women’s Law Center; Equal Rights Advocates. You may also with to contact a private attorney for confidential advice and counsel. A directory of employment lawyers specializing in representing employees – not employers – is available at the website for the National Employment Lawyers Association.
Litigation can be risky and there are no guarantees of victory. Even when an individual woman recovers a good settlement or jury verdict, she may not see the sort of structural, systemic change that prevents future problems instead of just compensating for past problems. But cases that are brought as class actions have greater potential for relief that can really change a workplace over time. While not all circumstances are appropriate for class action litigation, in cases that are, the relief is more than just monetary. If you are one of many experiencing harassment on the job, it’s worth talking with a lawyer about whether your case is suitable for litigation on a class action basis.
Remember that you have a right to report harassment, participate in a harassment investigation or lawsuit, or oppose harassment, and it is unlawful for your employer to retaliate against for doing so.
Christine E. Webber is a partner in the Civil Rights & Employment practice at Cohen Milstein Sellers & Toll PLLC, where she regularly represents victims of discrimination and other illegal employment practices in class and collective actions. Aniko R. Schwarcz is an attorney in the same practice, where she serves as Director of Civil Rights & Employment Case Development, investigating new cases and serving as the first point of contact for prospective clients and class members.
Manufacturers market booster seats to parents whose children are too young to safely travel in one, increasing the risk of serious injury. Here are some issues you may face in these difficult but vital cases – and how to get around them.
Before children are large enough to be placed in booster seats, they typically are buckled into forward-facing restraint systems, also referred to as “harness seats.”1 Nearly all harness seats incorporate a five-point harness with straps that secure at the shoulders, across the upper thighs, and between the child’s legs. Most children then graduate to booster seats, which elevate a child so that a vehicle’s integrated lap and shoulder belt will fit safely and appropriately.2
Many booster seat companies market their products as equally safe and appropriate as harness seats for children weighing as little as 30 pounds and as young as three. But this directly contradicts the recommendations of the National Highway Traffic Safety Administration (NHTSA) and the American Academy of Pediatrics (AAP.)3 Both state that children between three and seven should ride in a harness seat until they reach the top height or weight limit allowed by the manufacturer and outgrow the harness seat.4
Notes
1. 49 C.F.R §571.213 S4 (2017).
2. See id.
3. Dennis R. Durbin, Policy Statement—Child Passenger Safety, 127 Pediatrics 788 (2011).
4. Nat’l Highway Traffic Safety Admin., Car Seat Recommendations for Children (March 21, 2011).
As litigation about the legality of the Department of Labor’s controversial Fiduciary Rule reaches federal circuit courts, the current administration has turned into the Fiduciary Rule’s biggest adversary.
Over a year ago, insurance companies started a broad offensive against the Fiduciary Rule in federal courts across the country. Challengers to the rule have filed six cases in three federal district courts to date. Despite the success of the Department of Labor (“DOL”) in defending the Fiduciary Rule, recent changes of position by the Department of Justice and DOL have cast a shadow over the Fiduciary Rule’s future.
Background
The Fiduciary Rule (the “Rule”) was the product of rulemaking that started nearly eight years ago, in 2010. DOL sought to replace its 1975 regulation’s five-part test for fiduciary status with a new interpretation of ERISA’s definition of an investment advice fiduciary. In 2011, DOL withdrew that proposal, and on April 20, 2015, issued a new proposal that again sought to replace the 1975 definition and also sought to revise administrative exemptions under which fiduciary investment advisors may obtain relief from ERISA’s prohibited transaction provisions.
DOL was concerned that its 1975 definition of “fiduciary” no longer covered many of the financial services provided to retirement investors in the 21st century. Of particular concern was the individual retirement account (“IRA”) market. According to a 2017 survey by the Investment Company Institute, IRAs hold $8.2 trillion in retirement assets. This number is likely to increase substantially over the next five years as DOL estimates plan participants will rollover more than $2 trillion of assets from ERISA-protected 401(k) plans into IRAs. Given the size of this market and the ERISA enforcement gap, DOL sought to promulgate a rule that protects individuals from the detrimental effects that conflicts of interest have on their retirement savings.
The regulation resulting from DOL’s rulemaking imposes fiduciary status on a financial professional that provides investment advice to an individual or a Title I plan for a fee, whether or not that advice is given on a “regular basis”. This brought under ERISA’s umbrella a number of investment advisers who provide advice on a one-time basis.
The rule also revised the administrative exemption structure under which fiduciary investment advisers may obtain relief from ERISA’s prohibited transaction rules when they recommend the purchase of proprietary investment products in which they have an economic interest. The exemptions allow fiduciaries to engage in these transactions if they comply with conditions designed to mitigate their conflict of interest. The rule includes the new Best Interest Contract Exemption (“BICE”) requiring relevant fiduciaries to (1) give advice in the retirement investors’ best interest; (2) charge only reasonable compensation for the services provided; (3) disclose material information to the retirement investors, such as conflicts of interest; and (4) enter into contracts with the retirement investors that promise the fiduciary will adhere to these standards, without limiting liability or requiring class action waivers. DOL also revised Prohibited Transaction Exemption 84-24 to include a requirement that fiduciaries comply with the same impartial conduct standard in the BICE and to limit its application to transactions involving fixed-rate annuities rather than variable and fixed-index annuities (whose rates of return are linked to a market rate rather than pre-determined rates). These products are sold to retirement investors on a one-time basis, bringing the financial professionals who sell the products for compensation under the purview of the Rule.
In the wake of the financial crisis a decade ago, policymakers faced a stark reality concerning fraud in the financial sector: To prevent future crises, people on the front lines must be willing to come forward and report fraudulent activity. Indeed, the crisis showed that the entire financial services industry must be more vigilant in preventing widespread fraud.
In response, Congress established the Securities and Exchange Commission whistle-blower program as part of the Dodd-Frank Act. The program acknowledges that Wall Street itself must be an important part of any effort to make our laws and regulations more effective, provide restitution to victims and prevent fraud. Accordingly, this program is of particular importance to employees and institutions in New York City and other major financial centers.
For many, doing the right thing and reporting fraudulent activity can seem like a risky endeavor. But it doesn’t have to be. In recent years, the SEC has paid out over $150 million to whistle-blowers who provided information that assisted successful enforcement actions, all while keeping their identities strictly confidential. And yet, the SEC program and the various protections in place for whistle-blowers remain unknown and underutilized by many on Wall Street. Here are three reasons to keep this program in mind when you begin to suspect a company is violating federal securities laws:
…
The SEC whistle-blower program is relatively young and the pace with which it acts on tips has steadily increased over time. It issued over $57 million in awards in 2016, which exceeded the cumulative awards issued prior to last year. Ultimately, the success of this vital program depends upon individuals who learn of securities fraud and report it to the government. The SEC is doing everything in its power to make doing so both simple and rewarding for financial professionals.
If you have any questions about the issues raised below or would like to learn more about the SEC’s whistleblower program, please contact one of our Whistleblower Attorneys at 267.479.5700 or whistleblower@cohenmilstein.com to arrange a complimentary confidential consultation. Alternatively, please submit your contact information via the CONTACT US box below, and we will schedule a convenient time to speak.
Charges of workplace sexual harassment have exploded into the news in recent months as allegations by dozens of women have forced the resignations of such high-profile figures as Uber co-founder Travis Kalanick, Fox TV host Bill O’Reilly and — in perhaps the most spectacular fall from grace — iconic Hollywood producer Harvey Weinstein. Many observers believe the scandals, which involve accusations of harassment, sexual coercion and in some cases rape, mark a turning point in the decades-long battle to change corporate culture so that sexual harassment is no longer tolerated. Human resource managers are beginning to evaluate whether anti-sexual harassment programs might be more effective if they focused on teaching employees to avoid and respond to all types of inappropriate and uncivil behavior rather than simply on teaching them the technicalities of anti-harassment law. At the same time, however, businesses increasingly are requiring employees to sign arbitration agreements that forbid them from taking sexual harassment claims to court, a practice some women’s rights advocates say helps perpetuate the behavior.
Cohen Milstein Partner Joseph Sellers tackles this subject in a pro/con debate over whether mandatory arbitration is harmful to victims of harassment. Mr. Sellers takes the pro argument, writing, “when arbitration is used to resolve a private dispute, nobody knows about it except the employer. You lose the benefit of having rulings that are public and could guide people’s conduct in the future.”
See CQ Researcher’s full “Workplace Sexual Harassment” report.
A Leland woman has filed a class action lawsuit against Chemours and its subsidiary Chemours after elevated levels of GenX was found in her home’s water heater.
According to the complaint, a June 2017 sampling of bottom sludge collected from a water heater from the residence of plaintiff Victoria Carey detected GenX levels at 857 parts per trillion in the top layer of sludge and 623 ppt in the bottom layer.
“Can you imagine what it’s like worrying if the water you’re giving your family could kill them? That’s my daily reality and the reality of so many families across areas of North Carolina that get their water from the Cape Fear River,” said Carey. “I’m standing up because I can’t let DuPont and Chemours get away with putting our health at risk and contaminating our properties. DuPont and Chemours need to take responsibility for their years of bad actions and willful misconduct.”
The health goal threshold level established by state officials is 140 ppt.
“For over 35 years, DuPont and Chemours have put the lives and health of hundreds of thousands of men, women and children at risk,” said Ted Leopold, co-counsel for the plaintiff in the suit, in a statement. “Nothing will take away the health risks these North Carolinians have experienced, but it is important that these willful acts by DuPont and Chemours be brought to light so corporate misconduct of putting innocent lives at risk will stop. These defendants need to be held accountable and take full responsibility for their actions.”
Read Leland Woman Files Lawsuit After High GenX Levels Found in Water Heater.
Imagine that you are an employee working your way up the corporate ladder. You’ve spent years following the rules, paying your proverbial dues, and seemingly excelling in your current position. With your sights set on a move to management, you apply for a promotion. It’s denied.
Disappointed but not defeated, you apply for a promotion again the next year. And the next several years after that. Each time, you are passed over for advancement while other people, colleagues with mediocre performance and less experience, are promoted over you. Although you tried to overlook it the first few times you lost the promotion, it is now undeniable that the company is only promoting people of a certain race — people who look nothing like you. Your patience runs thin, but then again, so does the company’s rationale for denying your promotion; their reasons simply don’t add up. You consider pursuing legal action, but the idea of playing David to your company’s Goliath is terrifying. You can’t afford to lose your job, and the only evidence you have is your own story.
Now imagine you later learn that a number of other employees at your company — coworkers who look like you, sought similar jobs, and reported to the same managers — were denied promotions under nearly identical circumstances. Armed with access to this additional evidence and backed by your peers, you see a clear pattern of misconduct and become more confident in your conclusion that the promotion denials were not a matter of bad luck or mere chance; the pattern is evidence of discrimination, and you set out to prove it as such. The battle undoubtedly will be difficult, but by joining your claim with similarly situated coworkers and accessing companywide data, information that was always in your employer’s possession, you have the potential to level the playing field.
One need not stretch the imagination very far to appreciate the core premise of this scenario and others like it. Whether it is confronting discriminatory denials of promotion, exposing dangerous working conditions, opposing policies that surreptitiously shave time off employee timesheets or challenging other workplace offenses, the idea of strength in numbers — that insurmountable challenges can be overcome when tackled by a group — is part of this nation’s DNA. Indeed, this country sprang from the revolutionary decision of a few individuals to unite against a foe so formidable that collective action was not just the best option, it was the only option. And for more than 80 years, the National Labor Relations Act has been protecting the rights of workers to engage in “concerted activity” — conduct such as picketing, striking and pursing legal claims together with other workers.
This right to join together to challenge workplace misconduct is under siege and its very survival will be before the U.S. Supreme Court in early October. The court will consider whether the NLRA allows employers to require that workers, as a condition of their employment, surrender their right to jointly pursue claims challenging workplace misconduct. If our ability to challenge workplace wrongs is to have any meaning, the answer to this question must be a resounding no.
In each of the three related cases, Epic Systems Corp. v. Lewis; Ernst & Young v. Morris and NLRB v. Murphy Oil USA, Inc., an employer demanded of its employees, as a condition of employment, that they submit every workplace dispute over the entire course of their employment to private arbitration. Their claims would only be tried individually and arbitration would be conducted in secret before a private arbitrator.
The right to join together to challenge common grievances has long been an essential component of our nation’s slow but deliberate progress toward a “more perfect union.” Without this bedrock right, our country would have fallen far short of achieving many of the protections against discrimination on which we now depend and may take for granted.
Many of the workplace protections we enjoy today were achieved through legal action brought by groups of workers. They include routine protections, such as the right to work as a flight attendant regardless of your gender; to work beyond the age of 60 as an engineer; to work in the front of a showroom regardless of your skin color; to be compensated when your boss asks you to stay past your shift to restock the shelves; to seek and keep certain jobs even if you’re pregnant, and many other protections established by courts through cases brought by workers who joined together to challenge a common injustice.
Achieving these victories would have been far more difficult, if not impossible, had the challenge fallen to a single person rather than a group of workers. It is rare that people who engage in discrimination or harassment publicly state their intentions. Much more often, claims of discrimination and other workplace misconduct rely on evidence of a pattern of misconduct that can be proven only when claims challenging the same conduct are tried together. And, where workers who proceed alone do succeed in proving discrimination, the remedy may be limited to the individual worker. The chance to eradicate more deep-seated discriminatory policies and longstanding bias is typically reserved for occasions where groups of workers prove a pattern of bias. Indeed, had the bans on bringing worker claims together, now before the Supreme Court, been the law of the land over the last half century, more than 120 landmark civil rights cases would never have been brought.
Barring workers from joining together to challenge injustice in their workplace could set back by a century this nation’s progress toward social justice for all Americans.
Published in the September 25, 2017 edition of the The Los Angeles ❘ San Francisco Daily Journal. Joe Sellers is a partner and Shaylyn Cochran is an associate in the Civil Rights & Employment practice at Cohen Milstein Sellers & Toll PLLC.
Last month marked 45 years since the U.S. Supreme Court’s ruling in Affiliated Ute Citizens of Utah v. United States, which established a rebuttable presumption of reliance for securities fraud claims based on omissions of material fact. This Expert Analysis special series explores the decision’s progeny in the Supreme Court and various circuits.
Affiliated Ute Citizens of Utah v. United States held that investors need not prove they relied on a defendant’s omission of material information to establish their injury. Affiliated Ute v. United States, 406 U.S. 128 (1972). Instead, reliance is inferred from the importance of the information withheld.[1] Since that ruling, various courts of appeals have explained that Affiliated Ute offers only a presumption of reliance, which is rebuttable.[2] Once the presumption is invoked, the burden of proof then switches to a defendant who withheld information material to investment decisions despite having a duty to disclose. The defendant can only avoid liability by demonstrating that even if the investors had been fully informed, their investment decision would have remained the same.
The rationale underlying Affiliated Ute is common in civil law — a party that is unable to present evidence supporting her position will lose that issue. As a practical matter, it is nearly impossible for an investor to demonstrate that the opposite of the omission was the basis for her investment decision. Accordingly, Affiliated Ute relieves investors of that burden and deems reliance to exist where a defendant owes a duty to disclose the truth, yet omits material information.
The Seventh Circuit Court of Appeal has cited the Affiliated Ute decision 145 times.[3] The most significant of these decisions was the Seventh Circuit’s rejection of the “fraud created the market” theory as an extension of Affiliated Ute. Eckstein v. Balcor Film Investors, 8 F.3d 1121 (7th Cir. 1993) (Easterbrook, J.). What could have been a major blow for investors has had far less impact because the decision acknowledges that investors may establish reliance indirectly.
[1] Justice Harry Blackmun explained, “[u]nder the circumstances of this case, involving primarily a failure to disclose, positive proof of reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld be material in the sense that a reasonable investor might have considered them important in the making of this decision.” Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-154 (1972) (citations omitted).
[2] See Panter v. Marshall Field & Co., 646 F.2d 271, 284 (7th Cir. 1981) (“The Mills-Ute presumption is essentially a rule of judicial economy and convenience, designed to avoid the impracticality of requiring that each plaintiff shareholder testify concerning the reliance element. Mills v. Electric Auto-Lite Co., 396 U.S. 375, 385 (1970); see Chris-Craft Industries Inc. v. Piper Aircraft Corp., 480 F.2d 341, 375 (2d Cir.), cert. denied, 414 U.S. 910, 94 S. Ct. 231, 38 L. Ed. 2d 148, 94 S. Ct. 232 (1973) (“These impracticalities are avoided by establishing a presumption of reliance where it is logical to presume that such reliance in fact existed”); Kohn v. American Metal Climax Inc., 458 F.2d 255, 290 (3d Cir.), cert. denied, 409 U.S. 874, 93 S. Ct. 120, 34 L. Ed. 2d 126, 93 S. Ct. 132 (1972) (Adams, J., concurring in part, dissenting in part) (10b-5 action). However, when the logical basis on which the presumption rests is absent, it would be highly inappropriate to apply the Mills-Ute presumption. “(W)here no reliance (is) possible under any imaginable set of facts, such a presumption would be illogical in the extreme.” Lewis v. McGraw, 619 F.2d 192, 195 (2d Cir. 1980).