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Will Wal-Mart Ever Pay its Fair Share?

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Those seeking to hold Wal-Mart just a little bit more accountable to its workers and the rest of its taxpayers were dealt a blow this week, as a federal judge in Maryland threw out the state’s Fair Share law. The court ruled that efforts to make Wal-Mart either pay more for health care or make a commensurate payment to the state treasury violated ERISA, a federal law regulating employer benefits. Will this development stop the state “Fair Share” movement in its tracks? Or will Wal-Mart’s argument eventually prove to be a loser before a higher court? One thing we can probably count on in these uncertain times is that Wal-Mart will employ some PR maneuver to make America think it’s paying its fair share, even when those in the know….know better.

The mood was jubilant in January when the Maryland legislature overturned the governor’s veto to pass the nation’s first fair share law. Although it was dubbed the Wal-Mart bill, it was only slightly less transparent: any private employer in Maryland who employs 10,000 employees in the state would be required to spend 8% of its payroll on employee health benefits or make a contribution to the state’s insurance program for the poor. While the bill’s application appears straightforward, it was admittedly designed in a way that would target Wal-Mart. Four employers in Maryland, Johns Hopkins University, Giant Food, Northrup Grumman, and Wal-Mart, employ over 10,000 workers in the state, but among those four employers, Wal-Mart was the only one that was not spending the amount required by the bill for its employees’ health benefits. See Maryland Leading the Way in States’ Fights Against Wal-Mart.

It was predicted at the time that many states would follow suit, and there were meaningful campaigns in several other states, including Washington, Colorado, and New Hampshire. (See February 28 Stateside Dispatch.) Other states rejected the Fair Share model, and undertook more ambitious plans to reform health care at the state and local level. (See July 24 Stateside Dispatch). San Francisco, attempting to lead the way as it did with gay marriage, is in the process of passing an ordinance guaranteeing health care to the city’s uninsured residents. (See SF Chronicle article.) Vermont and Massachusetts have also enacted plans that significantly expand coverage for the uninsured. (See July 24 Stateside Dispatch).

But comprehensive health care solutions, even though they’re more sound from a policy perspective, and are more likely to involve rather than alienate the corporate world and even conservative policy makers, lack the gotcha of whacking the world’s largest retailer. Inaugurated by a wave of anti-Wal-Mart sentiment generated by such work as the movie Wal-Mart: the High Cost of Low Price, and the activities of advocacy groups such as Wal-Mart Watch and Wake Up Wal-Mart, the Fair Share bills were admittedly a piecemeal solution, but one that made a statement. Wal-Mart scrambled to fix the PR damage from being unable to stop the Maryland effort, even as its attorneys were planning to file suit against the Maryland law. (See AP article.)

For the moment at least, the lawsuit has been successful in preventing the Fair Share bill from going into effect next January. (See Baltimore Sun article.) In his ruling, federal district judge J. Frederick Motz said that the Maryland law conflicts with ERISA, the federal law governing employee benefits. Under ERISA, state laws regulating benefit plans that conflict with federal law in a way that would require employers to follow different rules in different states are generally considered to be preempted, so as to bring some uniformity to benefit plans adopted by national corporations with employees in multiple states. The opinion noted that

…[T]the economic effect of the Fair Share Act upon Wal-Mart’s ERISA plan could not be more direct: it would require Wal-Mart to increase its health care benefits for Maryland employees and to administer its plan in such a fashion as to ensure that the statutory spending required by the Act is met. Thus, the Act violates ERISA’s fundamental purpose of permitting multi-state employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration.

Wal-Mart’s opponents (here, the State of Maryland defending the new law) had argued that since Wal-Mart has the option of paying money to the state treasury instead of changing its health care benefit plan, that the law does not regulate the plan. This argument was rejected by the judge, who wrote, “If employers are faced with the choice of paying a sum of money to the State or offering an equal sum of money to their employees in the form of health care, no rational employer would choose to pay the State….The “choice” here is a Hobson’s choice. ” (RILA v. Fielder).

The decision will most certainly be appealed to the 4th Circuit Court of Appeals, known as one of the most conservative courts in the country, and it’s even possible there could be a ruling before the law is scheduled to go into effect in January (although that’s less likely now that the law has been struck down and things return to the status quo.) In the meantime, it’s too soon to tell whether we will see bills in other states stall as a result of this ruling, although it’s reasonable that the spectre of expensive legal fees will intimidate some state legislators who might otherwise push hard for this type of legislation.

In the meantime, let’s hope we see some inroads in confronting our growing national health care dilemma. We need more states and cities grappling with comprehensive health care plans. We need more employers recognizing the ultimate solution lies with government action, as profits are unlikely to keep up with rising health care costs for very much longer (in the few circumstances where they still are already). We need more employees, as taxpayers and citizens, demanding health care as a right, not a benefit that employers can decide to cut back on. We need more pressure on Wal-Mart, for oh so many reasons other than just health care. With all of these things happening simultaneously, maybe — just maybe — we’ll start to see more progress than the glimmer here and there we see now, and we won’t have to worry so much about Wal-Mart’s status as a health care provider.

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In the Stifling Heat, Let’s Remember the Workers

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As heat grips most of the United States, we’re all looking for ways to keep cool. Those who work in office buildings may take for granted the ability to work in a comfortable office environment, fearing only the moment in which they must leave their offices and face the heat. But there are many workers who can’t beat the heat right now. When public officials focus on seniors and children being most vulnerable, they neglect to mention those workers who put their lives at risk merely by continuing to do their jobs.

This week, most Americans are grappling with the high temperatures currently gripping our nation, with the forecast predicting more of the same until this weekend. (See AP article.) Three deaths have already been reported, and in some cities, officials are opening up public buildings for those who don’t have air conditioning. The heat wave seems to be the (un)natural culmination of what has already been reported as the hottest six months in U.S. history since daily temperatures were first officially recorded in 1895. (See Houston Chronicle article.)

But there’s one group of individuals who may not easily be able to escape the heat, and that’s workers whose job requires them to be outdoors all day long. Every summer, thousands of workers – particularly those in agriculture, landscaping, and construction – spend long days working in the hot sun. And every year, without fail, too many die or become ill due to heat exposure.

One of the most highly publicized cases of heat stroke was that of Korey Stringer, a 27 year-old member of the Minnesota Vikings football team who collapsed after two-and-a-half hours of practice in 90 degree heat. At the hospital, his core body temperature was recorded at 108 degrees. He died shortly thereafter of major organ failure. Stringer’s tragic story brought to light a serious workplace hazard that concerns thousands of workers every year. Last summer alone, 13 workers died from heat-related illness in California. (See Contra Costa Times article.) Unfortunately those deaths, mostly of immigrant farm workers, didn’t register on the national radar screen the way that the death of a NFL star did.

While heat-related illness isn’t the largest workplace hazard, it may be the most preventable. “Workers need to know how to avoid heat injuries and how to recognize signs of heat stress not only in themselves, but in their coworkers, too. By looking out for each other, they can help protect each other…. With increased awareness and some basic precautions, many of these illnesses and deaths can be prevented,” says Trese Louie, a safety and health specialist with OSHA.

In Canada, Labour Minister Steve Peters has issued a statement calling on employers “to take every precaution reasonable to ensure a worker is protected from heat stress.” The ministry reminded employers that they have a duty under the Occupational Health and Safety Act to take every precaution reasonable to protect a worker from oppressive conditions. Employers who don’t make sure their workplace is safe in hot conditions can face compliance orders and even prosecution. Dr. Leon Genesove, physician for the ministry of labour, said the advisory went out to “bring more awareness to the situation on what is the hottest work day of the year so far.” (See Toronto Star article.)

Yet here in the U.S., we don’t see similar pronouncements from the highest levels of government. In California, you might expect something, especially after the brutality of last summer’s heat, which led to California becoming the first state to adopt heat illness prevention regulations. The regulations require that outdoor employees have access to one quart of water per hour for the entire shift, that employees have the right to take a break in the shade for at least 5 minutes when they feel they need one, and that employers receive special training. To encourage compliance, fines of up to $25,000 per violation may be assessed on employers.

While many praise the new regulations, not everyone is happy with them. Critics point out that the law does not require mandatory breaks, but rather requires workers to ask for a break when they feel they need one. Dr. Robert Harrison, a former member of the OSHA Standards Board and professor of occupational medicine at UC San Francisco, states that it’s “risky for us to always rely on workers to ask for rest breaks.” This is especially so when the worker is paid by how much they harvest, because there is a strong financial incentive not to take breaks and to keep working. (See Contra Costa Times article.) But even critics acknowledge that they’re a start, and more than exists in other states.

However, while California Gov. Arnold Schwarzenegger pushed for new regulations after last year’s farmworker deaths (See Desert Sun article), and lauded the enactment of permanent regulations which went into effect in June, his voice — and the voices of many other public officials — has been silent during this heat wave. Gov. Schwarzenegger instead has focused on energy conservation at the state level, requiring state offices to reduce thermostats and turn off non-essential lights. (See Governor’s Press Release.)

While energy conservation is of course a worthy goal, the Governor missed a prime opportunity to educate California employers and workers on the new regulations. California led the way in enacting these regulations, and Gov. Schwarzenegger’s influence could motivate other states to follow suit. Let’s hope that it doesn’t take too many tragic deaths in other states to encourage each state to remember its working population during this and the many other heat waves that are sure to come.

More Information:

Note: Some of the material in this blog entry is excerpted from the Workplace Fairness special report, Summertime, and the Working Isn’t Easy: Workers Who Know Their Rights Are Less Likely to Get Burned. This special report, was written by summer law intern Katherine Watts, and is available at our website, www.workplacefairness.org.

OSHA’s Fact Sheet for Protecting Workers in Hot Environments

National Institute for Occupational Safety and Health’s Working in Hot Environments

Memo: CalOSHA’s Investigation of Heat-Related Illnesses

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Leaving the Office Time-Space Continuum Behind at Warp Speed

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Working 9 to 5: it’s a movie, it’s a song, but could it soon be a thing of the past? What a few years ago might have seemed unfathomable is now being actively explored, as employers consider whether to discard regular work schedules and fixed office locations in favor of more creative solutions. While it may be a while before showing up at the same office at the same time every day is a complete anomaly, it’s also more than just science fiction at this point, which is probably a positive development for American workers.

Telecommuting doesn’t even begin to describe what some companies these days are experimenting with. Corporations used to spending copious amounts of company cash on office space are starting to consider whether many workers need permanent space at all. For example, Deloitte & Touche is rolling out the “hoteling” concept in its offices worldwide, where mobile employees call up an office concierge and reserve space as needed, rather than having fixed offices sitting idle most of the time. Procter & Gamble recently revamped one of its Cincinnati offices to resemble a bar, for its product packagers most used to doing business in international hotels. (See Business Week article.)

Looking for the ultimate in infrastructure-free offices? Look at what Coghead is doing in Mountain View, California. Coghead leases its office space and uses mostly web-based applications. The company’s CEO and founder says that if an earthquake or Avian flu outbreak occurred, the company could up and move anywhere within a day. (See Business Week article.) As a telecommuter for over four years now, I can personally attest that telecommuting works for me and for Workplace Fairness. (See Baltimore Sun article.) It is possible to work with and even supervise employees from remote distances, and still maintain strong communication and productivity. So I’m not surprised that more companies are thinking about mobile office solutions, and reducing the amount of fixed office space for employees.

There are some kinks to be worked out, certainly. Companies have to think about security when employees take home sensitive information — a lesson the Veterans Administration recently learned here in my Maryland home base. (See Reuters article.) (Although as this article points out, the VA employee whose data was stolen wasn’t even a telecommuter, just an employee who took work home, as many non-telecommuters now do.) Some employees are not yet ready to be productive telecommuters, which appears to have been a factor in Hewlett-Packard’s recent decision to bring some of its employees back in-house to help with teamwork and productivity. (See Mercury-News article.) (I can say that I’ve never been on a tractor during conference calls — not even when taking them from my parents’ farm. Okay, what was that employee thinking?)

And just as it may not be necessary to have a fixed office, it also may not be necessary to have a fixed schedule, either. At the recent Take Back America conference, presenters Cali Ressler and Jody Thompson talked about a new innovation they spearheaded at the Best Buy corporate offices, called ROWE: a Results-Only Work Environment. Under ROWE, there are no schedules or set times that employees must be in the office. Workers who want to take time to attend their kid’s school play or golf on a particular afternoon are free to do so, as they are evaluated solely on their results. Ressler and Thompson claim that after ROWE was implemented at Best Buy, the ROWE teams had an average 3.2% lower voluntary turnover, average 5.03% higher internal customer satisfaction, and an average 35% increase in productivity. Not bad, certainly, if the results can be replicated in other office environments

The director of design for Steelcase, Inc, James Ludwig, says: “If my people aren’t in the design studio, I’m not sweating it. All things are becoming output-oriented, rather than location- or time-oriented.” (See Business Week article.) This trend certainly has implications for Steelcase, who makes, you guessed it: office furniture. But it has implications for the rest of us as well. It’s a solution for working parents who, no matter how long and hard they work, never seem to have enough time to spend with their children. It’s a solution for Generations X and Y looking for work-life balance (see Ithaca News article) and for Baby Boomers looking to stave off retirement a little longer, or who are juggling parental care responsibilities. (See Associated Press article.)

And if businesses start to realize that increased productivity, more employee satisfaction, less turnover, and lower real estate costs are all good for them as well, we might even have a solution that works for everyone. Seems like it’s an experiment worth trying, doesn’t it?

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