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Walmart Women Launch Another Round of Discrimination Suits, But Will It Even Matter in the Long Run?

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Ian Millhiser Last June, the Supreme Court tossed out a class action lawsuit brought by over a million Walmart employees alleging that the company systematically discriminates against women. The Court did not allow the women to try to prove that such discrimination exists, instead holding that the women did not have enough in common with each other to come together in one lawsuit. Yesterday, the women responded to this setback with the first of several cases breaking them down into smaller groups:

The lawyers promised an “armada” of other lawsuits in the next six months making discrimination claims in other regions of the country, as opposed to nationwide. “The case we are starting today is the first of many,” said Brad Seligman, one of the lead plaintiff lawyers. He added that the new lawsuits are “what we like to call Wal-Mart 2.0.” […]

The lawsuit filed Thursday in the United States District Court for the Northern District of California contends that Wal-Mart’s discriminatory practices on pay and job promotion affected more than 90,000 women currently or formerly employed at Wal-Mart and Sam’s Club stores in four regions in California and neighboring states.

This tactic could ultimately prove successful, and it is possible that many hundreds of thousands of women could receive long overdue justice by joining together in somewhat smaller groups. Even if they win, however, the sad truth is that this victory could probably never be repeated thanks to an enormous gift the Supreme Court gave powerful corporations last April.

When the Supreme Court’s Wal-Mart case was handed down, ThinkProgress called it only “the second worst class action case this Supreme Court term.” The worst decision — indeed, one of the very worst Supreme Court decisions in the last decade — was AT&T Mobility v. ConcepcionConcepcion built off a long line of misguided decisions allowing corporations to force their consumers and workers to sign away their right to sue the company in a real court and shunt any disputes into a secretive, privatized arbitration system that overwhelming favors corporate parties. Under Concepcion, corporations can not only take away your right to hold them accountable in a real court, they can also take away your right to join together with other victims of the corporation’s lawbreaking to form a class action lawsuit.

Thanks to this deeply erroneous decision, Walmart can now force each and every one of their workers to sign away their rights or they are fired. And without the ability to bring class actions in the future, many of these workers will be completely powerless against their megacorporate employer.

The class action one of the very few tools enabling vulnerable Americans to stand up to a wealthy and influential corporation. If a major corporation cheats a thousand of its workers out of a thousand dollars each, for example, very few of them will decide it is worth the hassle and expense of a major lawsuit and virtually no lawyer will be willing to take such a low dollar case on a contingency fee basis — meaning that the plaintiffs will have to pay more for legal counsel than they are likely to win in the end. If these thousand workers are able to join together into a class action, however, their million dollar claim suddenly becomes very attractive to top litigators — and the hassle of litigation will be virtually non-existent for most of the plaintiffs. Thanks to Concepcion, however, that is probably no longer an option.

Concepcion was an earthquake, and it shook one of the foundations of our civil justice system to the ground. Walmart may still be held accountable for its past actions, but it is doubtful that any of its workers will ever be able to join a class action against them again.

This blog originally appeared in ThinkProgress on October 28, 2011. Reprinted with permission.

About the Author: Ian Millhiser is a Policy Analyst at the Center for American Progress Action Fund and a blogger on judicial and constitutional issues for ThinkProgress.org. He received a B.A. in Philosophy from Kenyon College and a J.D., magna cum laude, from Duke University. Ian clerked for Judge Eric L. Clay of the United States Court of Appeals for the Sixth Circuit, and has worked as an attorney with the National Senior Citizens Law Center’s Federal Rights Project, as Assistant Director for Communications with the American Constitution Society, and as a Teach For America teacher in the Mississippi Delta. His writings have appeared in a diversity of legal and mainstream publications, including the Guardian, the American Prospect and the Duke Law Journal; and he has been a guest on CNN, MSNBC, Al Jazeera English, Fox Business and many radio shows.

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When it Comes to Finding Workers, CEOs Suddenly Forget ‘Free Market’ Principles

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adele_stan_140x140Examining the complaints of some CEOs that they just can’t find qualified workers, economist Dean Baker lays waste to that argument on several fronts, most notably the CEOs’ apparent inability to apply the laws of supply and demand to fulfilling their stated workforce goals.

Baker, who co-directs the Center for Economic and Policy Research (CEPR), first crunches some data to show that, in fact, the ratio of unfilled jobs to employment is “down by almost a third from its pre-recession level,” Baker reports in a column titled, “A Generation of CEOs Who Don’t Know How to Raise Wages.” He writes:

According to standard economics, when businesses can’t fill job openings, they are supposed to offer higher wages. If these businesses offered higher wages, then they could lure away workers from their competitors…If these CEOs raised wages high enough, then these workers would be willing to work for their companies.


Since it would be rude to imply that CEOs are not being honest when they complain about the lack of skilled workers, we should assume that they don’t know how to raise wages. This is a problem that could be easily remedied. The government could offer short courses to CEOs and other top executives that would teach them how to raise wages and why this would be beneficial to their firms.

Of course, CEOs aren’t total strangers to methods of upping compensation packages — when it comes to their own, that is. The AFL-CIO annual PayWatch data shows that in 2010, CEOs of the largest companies received, on average, $11.4 million in total compensation last year.  Overall, CEOs of the 299 companies in the AFL-CIO Executive PayWatch database received a combined total of $3.4 billion in pay in 2010, enough to support 102,325 jobs paying the median wages for all workers.

In 1964, the apex of performance of the economy, CEO pay relative to average wage-earners was 24 to 1. Now it is 340-1.

This blog originally appeared on AFL-CIO Now Blog on October 27, 2011. Reprinted with permission.

About the Author: Adele Stan is a journalist and lifelong member of the labor movement, reports on a timely forum on inequality and jobs at Georgetown University today.

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New Study Confirms Overwhelming Support for LGBT Workplace Protections

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Zack FordResults from the 2010 Out & Equal Workplace Survey show this week that 78 percent of heterosexual adults agree that employees should be evaluated for their job performance, not their sexual orientation. In addition, 62 percent support providing equal benefits for all employees’ partners or spouses. Here are a few more key findings from the Out & Equal Workplace Survey:


  • 66 percent of heterosexuals were neutral or disagreed that they’d be uncomfortable knowing a coworker was LGBT.
  • 61 percent of heterosexuals were neutral or disagreed that they’d be uncomfortable if their boss was LGBT.
  • Only 18 percent of respondents agreed it would be difficult to be openly LGBT in the workplace.
  • Only 44 percent of heterosexuals agreed that LGBT people are treated fairly and equally in the workplace.

These data match similar results from a Center for American Progress study released in June, which also found that 90 percent of Americans already think LGBT people are protected from workplace discrimination, even though in most states they are not. Given the overwhelming support for workplace protections — not to mention belief that they already exist — as well as the endorsement of both small businesses and large corporations, passing LGBT non-discrimination policies on both the state and national level should be a no-brainer. Not only do businesses benefit, but the protections allow both LGBT employees and their coworkers to flourish.

Nevertheless, Republican leadership continues to oppose LGBT equality in ways that hurt businesses. Michigan conservatives are trying to follow Tennessee’s atrocious example of banningmunicipalities from passing employment protections based on sexual orientation and gender identity. In addition, GOP-led efforts to ban marriage equality in states like Minnesota and North Carolina, as well as at the national level, hurt businesses who strive to hire and retain talented and productive staff. Opposing LGBT equality is anti-business and anti-jobs, in addition to being completely out of touch with voters.

*Disclaimer: The opinions and views of this blog are the opinions of the author’s alone and not of Workplace Fairness.

This blog originally appeared on ThinkProgress on October 26, 2011. Reprinted with permission.

About the Author: Zack Ford is an LGBT researcher/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Prior to joining ThinkProgress, Zack blogged for two years at ZackFordBlogs.com with occasional cross-posts at Pam’s House Blend. He also co-hosts a popular LGBT-issues podcast calledQueer and Queerer with activist and performance artist Peterson Toscano. An accomplished pianist, Zack has a bachelor’s in Music Education from Ithaca College, where he served as student body president. His passion, however, is social justice education and advocacy, having completed a Master’s in Higher Education Student Affairs from Iowa State University and helped to found the Central Pennsylvania LGBT Aging Network. He’s originally (and proudly) from rural central Pennsylvania.

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Denver Paid Sick Leave Initiative Being Fought By Restaurant Chains

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Laura ClawsonNext week, Denver voters go to the polls to vote on a referendum that would require employers to offer paid sick leave, and restaurant chains and the National Restaurant Association are spending hundreds of thousands of dollars to defeat it. The Huffington Post’s Dave Jamieson explains why an ordinance in one city matters so much:

Denver’s is just the latest in a string of similar proposals pushed by labor and public-health groups around the country, including one signed into law in Connecticut earlier this year. Employers in industries with low-paid part-time workers are growing concerned that mandated paid sick days could become the norm rather than the exception, thanks to a raft of local legislation.

But a ballot initiative is particularly worrisome for business interests. Paid sick days are generally a popular idea with the public, and ballot initiatives can preempt mayors, governors and state legislators who’ve come out on the industry’s side on workplace issues.

That’s why the American Legislative Exchange Council (ALEC) is focusing on state-level legislation that would overturn local paid sick leave laws—it offers one more chance for corporations use their pet politicians to block something the public would support.

This blog originally appeared in Daily Kos Labor on October 26, 2011. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.

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Can Nontraditional Labor Orgs Represent Workers?

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mike elkTaxi Workers Alliance joins AFL-CIO, as number of contract workers continues to grow

WASHINGTON, D.C.—Last week, the National Taxi Workers Alliance became the first nontraditional labor group to join the AFL-CIO as an affiliate since the 1960s, when the United Farm Workers were admitted to the labor union federation. The alliance isn’t a union; since cab drivers often work as independent contractors and rarely share common employers, they legally cannot organize and bargain collectively.

The admittance of the NTWA, which formally occurred last Thursday at a panel event hosted by AFL-CIO President Richard Trumka and Labor Secretary Hilda Solis, shows the AFL-CIO’s commitment to pursuing irregular channels to organize workers and form community alliances. More and more workers find themselves employed as independent contractors and in employment relationships that do not allow for collectively bargaining. Organizing these workers will be crucial to rebuilding worker power.

But how do you build a financially sustainable and membership-driven labor organization when in some cases it’s impossible to organize workers lacking collective bargaining rights?

“We all carry around the mental mood of the workplace, where we have an employer and a worker. And our laws respond to that. But that no longer corresponds to reality,” panelist David Weil of Boston University said Thursday at “The Future of Work and New Ways to Build Power,” held in Washington D.C.

More than 10 million U.S. workers are currently classified as independent contractors and not allowed to organize legally. In addition, several million more work in agriculture or domestic work—sectors that are forbidden to organize under the National Labor Relations Act. And millions of restaurants experience such high turnover that it is nearly impossible for workers to form a union. And of couse, employees union-busting efforts also make it difficult to for workers to organize.

The only way organized labor may be able to fight for these workers is by engaging in nontraditional labor campaigns that do not seek traditional collective bargaining arrangements at their heart. Winning this kind of non-traditional community-labor campaigns will not only help labor advocate for these workers, but could potentially strengthen labor’s power through building community alliances and organizing workers that were previously excluded.

Some in the labor movement sees the New York taxi drivers’ 15-year effort to win pay increases and improve working conditions as an example of how the labor movement can fight for workers in industries traditionally difficult to organize.

“We need to follow lead of the taxi drivers alliance,” says Justin Molito, an organizer with Writers Guild of America East. “The decentralized nature of work is creating a new decentralized nature of resistance they will not be able to stop.”

While organizing workers outside of collective bargaining units can bring about real change for workers, it can be difficult to financially sustain such organizations since collective bargaining agreements do not exist that make it easy for unions to collect dues automatically through paychecks. A large part of the funding for many of these nontraditional labor groups comes from others unions and large foundations.

The National Domestic Workers Alliance won landmark rights for domestic workers last year when New York State passed the landmark Domestic Workers Bill of Rights. However, Ai-Jen Poo, the groups’ executive director, says even the majority of their funding comes from external sources.

The inability to self-fund workers’ rights organization can lead to significant instability when outside groups decide to stop giving money. Outside funding from foundations and unions can be problematic as the funding is often dictated by the ability and desire of those outside groups and not necessarily by people in the group trying to improve their working conditions.

“When people get most of their money from the outside, it can create inertia,” Bhairavi Desai, NTWA’s executive director, said Thursday. The organization gets 80 percent of its funding from internal member dues collected individually one by one from members through an elaborate system of union stewards.

“If you don’t need dues, you don’t work too hard because getting people to give dues voluntarily is a tough thing to do. When your organization is driven internally, you are much more focused on meeting the needs of the members and making sure you work hard for that dues money.”

This blog post originally appeared in In These Times on October 24, 2011. Reprinted with permission.

About the Author: Mike Elk is an In These Times contributing editor, has worked for the United Electrical, Radio, and Machine Workers union, the Campaign for America’s Future and the Obama-Biden campaign. Based in Washington D.C., he has appeared as a commentator on CNN, Fox News, NPR, Democracy Now! and MSNBC. His work has also appeared at Alternet and in The Nation, The Atlantic and The American Prospect.

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Yes, Public Sector Cutbacks are Hurting the Economy

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yglesias_matthew_bioI’m reading on right-wing blogs that it was somehow “deceptive” of me to post accurate statistical information about the fact that the private sector labor market is showing okay growth while the public sector labor market is deteriorating. You see, net private sector job losses since the start of the recession have been larger! This is true, which is why I never said otherwise. That’s for the very good reason that the total scale of government employment is pretty small relative to private sector employment:

We have, in other words, many more people working at CVS than the DMV. Which is great. That’s your modern day mixed market economy. Most people work in the private sector. That means the scale of private sector shifts is almost always going to outweigh the scale of whatever’s happening in the public sector. But look at growth rates and zoom in on the Obama era:

When the President was inaugurated, we were already in a steep recession with giant private sector job losses. At the time, the government sector was doing its normal non-cyclical thing. The rate of private sector losses slowed, and since the beginning of 2010 private sector employment has been enjoying slow-but-steady growth. It turns out, however, that once you look past the spikes around the census that these private sector gains are being partially offset but steady job losses in the public sector.

In a normal time, you might think of this as “crowding in.” Reduced government spending frees up funds for private purposes. And reduced government employment frees up personnel for private purposes. But that’s not a plausible interpretation of today’s events with high unemployment and lots of economic slack. Nobody is saying “God, my company really needs to hire some janitors but there are no unemployed people around to hire; if only they’d lay off some of the guys who mop floors at the local federal building I’d be able to expand.” Instead what’s happening is people are saying “hey—my company sells goods and services at a profit, so I’d expand operations if some of these unemployed people were hired to repair roads and this had more money to spend at my shop.”

This blog originally appeared in ThinkProgress on October 23, 2011. Reprinted with permission.

About the Author: Matthew Yglesias is a Fellow at the Center for American Progress Action Fund. He holds a BA in Philosophy from Harvard University. His first book, Heads in the Sand, was published in May 2008 by Wiley. Matt has previously worked as an Associate Editor at The Atlantic, a Staff Writer at The American Prospect, and an Associate Editor at Talking Points Memo. His writing has appeared in The New York Times, the Guardian, Slate, The Washington Monthly, and other publications. Matthew has appeared on Fox News and MSNBC, and been a guest on many radio shows.

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Alleged ‘Skills Gap’ Takes Spotlight Off Who’s to Blame for Massive Jobs Shortage

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Roger BybeeLately, the usual stream of stories about America’s jobs crisis has been displaced by a story about the shortage of crucial skills among the jobless.

This new narrative—fed by new studies from corporate sources like Deloitte & Touche—has seemingly displaced information about the plight of the unemployed. Suddenly, stories about the unemployed—except for jobless college graduates who are carrying part of the country’s $1 trillion in outstanding student debt—have virtually disappeared from the mainstream media.

What’s happening to the growing numbers of “99-ers,” people whose unemployment benefits have expired? How are families and communities coping with a rising tide of mortgage foreclosures—that, as GOP presidential hopeful Michelle Bachmann of all people reminded us—painfully force families from the security of their “nests”?

Worry not, a new hook for economic coverage has arrived. A major study on the perils posed by the “skill gap” to our economy warns:

American manufacturing companies cannot fill up to 600,000 skilled positions, even as unemployment numbers hover at historic levels, according to a survey released Monday from Deloitte & Touche and The Manufacturing Institute.

…Some companies are not bidding for projects because they lack skilled manpower to do the work, according to Wisconsin Manufacturers & Commerce.

It’s the “jobs paradox,” said WMC President and CEO Kurt Bauer.

“We have high unemployment, yet companies can’t find the skilled help they need,” he said.

Another report from the U.S. Chamber of Commerce National Chamber Foundation and Wisconsin Manufacturers & Commerce received prominent play in the Milwaukee Journal Sentinel, as have a number of other recent stories on the predicted shortage of skilled workers looming soon in Wisconsin’s future:

The report also warns that the state’s workforce is aging, an ominous sign for a labor market that faces an ongoing shortage of skilled workers.

New York Times columnist Thomas Friedman quotes the CEO of Caterpillar about the dangers of inadequate education in what Friedman calls “The Age of Austerity”:

Doug Oberhelman, the C.E.O. of Caterpillar, which is based in Illinois, was quoted in Crain’s Chicago Business on Sept. 13 as saying: “We cannot find qualified hourly production people, and, for that matter, many technical, engineering service technicians, and even welders, and it is hurting our manufacturing base in the United States. The education system in the United States basically has failed them, and we have to retrain every person we hire.”

The highly influential Fareed Zakaria, columnist, TV host and “apostle of globalization…, who has long argued that free trade and globalization are win-win propositions and good for America, now argues that while globalization has been good for American companies, the way it has been operating has not been so good for American workers and job creation,”  notes former globalization enthusiast Clyde Prestowitz. Prestowitz goes on to point out:

Astoundingly, Zakaria says this is because the U.S. workforce is not well enough educated. He quotes Pimco bond fund founder Bill Gross as saying that: “Our labor force is too expensive and poorly educated for today’s market place.”

One could easily conclude from these stories and accompanying headlines that a substantial part of America’s unemployment problem is caused by jobless workers’ individual failures to update their skills.

Further, the public schools and the unionized teachers—under attack not just from Republicans like Scott Walker, but also Education Secretary Arne Duncan (see here, and here) and Chicago Mayor Rahm Emanuel (see here and here)—have been failing to properly provide 21st century skills to their students.

Perhaps far too much attention has been devoted to the government role in job creation and retention, when American CEOs need to demand more from their employees and from the U.S. educational system to solve the jobless problem over the long term, this narrative suggests.

But in reality, this whole “Education, Training, and Skills” narrative serves to divert attention from the massive shortage of jobs and Corporate America’s misdeeds to “failing” teachers and supposedly under-educated workers. Corporate America has failed to produce virtually any net gain in U.S. jobs since 1999; the period was the only decade when U.S. employment grew by less than 20 percent.

In short, the Education, Training and Skills “frame” on our economic problems plays several useful functions for the CEOs and the rest of the richest 1 percent. It takes the spotlight off CEOs’ decisions to wipe out decent-paying job opportunities. As Gordon Lafer writes in The Training Charade,

Workers are encouraged not to blame corporate profits, the export of jobs aboard, or eroding wage standards—that is, anything that they can fight—but rather to look inward for the source of their misfortune and the seeds of their resurrection.

It also distracts from a few other things:


With 15 million Americans officially unemployed (the number rises to about 25 million when you include the discouraged jobless and those involuntarily working part-time), the relative number of positions going unfilled is infinitesimal in comparison. Just 5 percent of all current manufacturing jobs are unfilled due to a lack of qualified applicants.

Conceivably, a firm commitment by Corporate America and the federal government to maintaining and expanding America’s industrial base, accompanied by an equitable sharing of the massive productivity gains accruing almost solely to corporations, would make work in skilled manufacturing once again attractive. But as illustrated by the direction of leading corporations like General Electric, major firms seem less committed than ever to keeping their manufacturing production in the US. Moreover, leading figures in both political parties resist the notion of an “industrial policy” to foster U.S. manufacturing, as economist Jeff Faux has emphasized.


When displaced workers successfully complete retraining programs, they are generally unable to find jobs comparable in pay and benefits to the ones they lost. “Out of a hundred laid-off workers,” says New York Times economics writer Louis Uchitelle in his book The Disposable American: Layoffs and Their Consequences, “27 are making their old salary again, or more, and 73 are making less, or not working at all.”


CEOs like Caterpillar’s Oberhelmer feel free to demand that our schools produce well-trained workers. However, corporations like Caterpillar and GE are unwilling to pay the taxes necessary to support quality education for all children. These and other corporations have skillfully avoided paying any federal taxes in some years, and paying minimal taxes in others.

Caterpillar’s Oberhelmer used a frequent corporate ploy in response to tax increases in Illinois. Despite massive increases in profits for the Peoria-based firm, he sent a letter to Illinois Gov. Pat Quinn with a thinly-veiled threat to relocate the corporate headquarters because of a 2 percent tax increase for wealth executives.

Without corporations paying their fair share of taxes, how can they expect a top-notch workforce?

Let us be clear: more education, training, and skills for the unemployed will not produce job opportunities when Corporate America is unwilling to invest in new U.S. jobs, despite the deceptive arguments presented by corporations and allies like Friedman and Zakaria. Nor will public education be able to improve for the children of poor and working-class children when corporations like General Electric and Caterpillar use blackmail threats of relocation to reduce their taxes.

Lafer offers a cold splash of reality on the whole Education, Skills, and Training charade:

Whatever the problem, it seems job training is the answer. The only trouble is, it doesn’t work, and the government knows it. . . . Indeed, in studying more than 40 years of job training policy, I have not seen one program that, on average, enabled its participants to earn their way out of poverty.

This blog originally appeared in Working In These Times on October 20, 2011. Reprinted with permission.

About the Author: Roger Bybee is a Milwaukee-based freelance writer and progressive publicity consultant whose work has appeared in numerous national publications and websites, including Z magazine, Dollars & Sense, Yes!, The Progressive, Multinational Monitor, The American Prospect and Foreign Policy in Focus. Bybee edited The Racine Labor weekly newspaper for 14 years in his hometown of Racine, Wis., where his grandfathers and father were socialist and labor activists. His website can be found here, and his e-mail address is winterbybee@gmail.com.

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Controversial DC Education Reform Has Raised Teacher Salaries Substantially

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yglesias_matthew_bioVia Dana Goldstein, a Democrats For Education Reform analysis (PDF) of the controversial IMPACT evaluation system in DC raises a couple of interesting issues about the real Michelle Rhee legacy.IMPACT

For starters, as you can see the way the evaluation system (which combines in-person evaluations with test scores) works the number of people who get a negative evaluation is the same as the number of people getting a positive evaluation. There’s a lot of fairly sensationalized talk about firing “bad” teachers, but the actual system we’ve implement here in DC is equally about identifying which are the most effective teachers. And concurrently with that, the net upshot of the change has been to increase teacher salaries:

— Last year, over 660 (out of a total of just over 4,000) Washington Teachers’ Union (WTU) members were eligible for bonuses ranging from $3,000 to $25,000.
— 290 WTU members (7%) were eligible to have a base salary increase of up to $27,000 for being rated Highly Effective two years in a row.
— The maximum teacher salary under IMPACT is $131,540, compared with $87,584 under the previous contract.
— 65 WTU members (2%) were rated Ineffective and were terminated.
— 141 WTU members (4%) were rated Minimally Effective for two years in a row, and were terminated.

In other words, an approximately even number of people are getting IMPACT raises as are getting impact terminations. Another larger set of people are getting one-off IMPACT bonuses. And the compensation ceiling is going up.

The national political legacy of this is quite clear. The American Federation of Teachers decided that it had nothing better to do in the 2010 election cycle than spend $1 million on a primary challenge to Adrian Fenty who lost. New mayor Vince Gray got rid of Chancellor Rhee, and replaced her with Rhee’s deputy while keeping the evaluation system AFT objected to in place. At the same time, a bumper crop of new Republican governors and state legislators were elected who’ve gone about enacting various kinds of education cuts. Rhee has frequently been collaborating with these new governors on their education agenda, and both Rhee and Fenty seem pretty bitter about getting fired and are making various kinds of anti-union statements. In turn, union folks are constantly pointing to Rhee’s post-DC career as evidence that education reform has “really” been all about union busting and budget cuts from day one.

This is all unfortunate in my view, but it has relatively little to do with what actually happened in DC. Here, DCPS teachers are still represented by the Washington Teachers Union and have all their collective bargain rights intact. What’s more, they’re earning more money than ever. The city implemented a fairly basic compensation swap, in which teachers gave up some job security in exchange for higher pay. This got dragged into a larger national ruckus for various reasons, but in concrete city-level terms this plan to give teachers more money doesn’t bear a close resemblance to the vicious, teacher-hating reforms I frequently read about.

This blog post originally appeared in ThinkProgress on October 19, 2011. Reprinted with permission.

About the Author: Matthew Yglesias is a Fellow at the Center for American Progress Action Fund. He holds a BA in Philosophy from Harvard University. His first book, Heads in the Sand, was published in May 2008 by Wiley. Matt has previously worked as an Associate Editor at The Atlantic, a Staff Writer at The American Prospect, and an Associate Editor at Talking Points Memo. His writing has appeared in The New York Times, the Guardian, Slate, The Washington Monthly, and other publications. Matthew has appeared on Fox News and MSNBC, and been a guest on many radio shows.

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Poll Finds Ohio’s Issue 2 Headed for Defeat

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Laura ClawsonYesterday I noted that polling on Ohio’s Issue 2 (the ballot measure formerly known as SB 5) was tightening, with opposition still leading the way but by reduced margins. Today, it’s a different story.

Public Policy Polling (PDF). 10/13-16 (8/11-14). MoE ±4.1%.

Q: This fall, Ohio will have a referendum on whether to approve or reject Senate Bill 5, which was passed earlier this year and limits collective bargaining rights for public employees. If the election was today, would you vote to approve or reject Senate Bill 5?

Approve: 36 (39)
Reject: 56 (50)
Not sure: 8 (11)

Different in that the margin for repeal has opened back up, that is. Tom Jensen points out that:

The preferences of Republicans and independents on Senate Bill 5 are mostly unchanged from two months ago.  Independents are evenly divided on the issue, 46/46. And Republicans want to uphold it 61/30. But Democrats have unified in their support for repealing SB 5.  In August they were only planning to overturn it by a 69/21 margin. Now that figure is 80/13. That increase in Democratic support for repeal may be indicative of voters becoming increasingly aware what the implications of a ‘yes’ and ‘no’ vote are on this somewhat complicated referendum.

With state tea party leaders talking about how Issue 2 is really about defunding unions and defeating Democrats, no wonder Ohio Democrats are coming together to vote it down.

There’s still nearly three weeks to go before the vote, and each one of those weeks will see an avalanche of Republican money poured into deceptive advertising and mailers. But 20 points is a big lead to overcome in three weeks, even for the biggest money and the dirtiest campaign.

This blog originally appeared in Daily Kos Labor on October 19, 2011. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.

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New Law Ups the Ante Significantly for California Employers Who Are Caught Misclassifying Employees As Independent Contractors

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Brad Yamauchi

Kevin AllenBackground

One common strategy used by companies to cut labor costs is to classify as much of its work force as “independent contractors” as possible. A company does not have to pay payroll taxes for independent contractors nor does it have to worry about pesky labor code requirements pertaining to minimum wages, overtime, meal and rest breaks, or expense reimbursement requirements. Additionally, a company does not have to cover independent contractors under workers’ compensation insurance, and is not liable for payments under unemployment insurance, disability insurance, or social security.

Given these cost savings, it should, perhaps, not be surprising that there has been a trend in companies classifying more of their workforce as independent contractors. A 2007 study by the General Accounting Office estimated that the number of workers classified as independent contractors rose by almost two million between 1995 and 2005 alone.

However, just calling someone an independent contractor does make it so and many companies do so without considering the legal distinctions between employees and independent contractors. Indeed, there is a presumption that workers are employees (Labor Code Section 3357) and a company that wishes to rebut this presumption will be required to undergo a multi-factor test which includes questions regarding whether the company has control, or the right to control, how the work is done and the manner and means by it is performed. See, S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341. If they are unable to do so, then the worker will be classified as an employee and the company will potentially be on the hook for four years of overtime wages, meal and rest premiums, etc.

The New Law

S.B. 459 was chaptered by California’s Secretary of State as Chapter 706, Statutes of 2011. It will appear as Sections 226.8 and 2753 of the California Labor Code. The new law:

  • Prohibits the “willful misclassification” which is defined as “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”
  • Prohibits charging a misclassified individual “a fee or making any deductions from their compensation for any purpose, including for goods, materials, space rental, services, government licenses, repairs, equipment maintenance, or fines arising from the individual’s employment where any of the acts… would have violated the law if the individual had not been misclassified.”
  • Subjects violators to dramatic civil penalties of at least $5,000 and as much $15,000 per violation, in  addition to any other penalties or fines permitted by law. Violators who are determined to have engaged in a  pattern of violations are subject to a civil penalty of at least $10,000 and as much as $25,000 per violation.
  • Gives the Labor and Workforce Development Agency authority to assess penalties and includes special requirements for licensed contractors subject to the Contractors’ State License Board.
  • Subjects non-lawyers who advise an employer to misclassify a worker to joint and several liability with the employer.

Although independent contractor misclassification cases are nothing new, the new law will lead to an increase in such lawsuits. Perhaps the most significant change is the addition of the new penalties. To wit, a company engaged in 100 violations could be liable for $2,500,000 in penalties under the new statute, in addition to the existing remedies (such as attorney’s fees and costs under Labor Code Section 218.5, penalties under Labor Code Section 203 and 226, interest).

The bottom line– Companies should think twice before misclassifying their work force to avoid paying employees premium wages and avoid payroll taxes!

About the authors:Brad Yamauchi is a partner and Kevin Allen is a litigation associate at Minami Tamaki LLP in San Francisco, California.  The firm has litigated individual and class action wage and hour, civil rights and financial and consumer fraud cases for 35+ years. It is currently handling class action misclassification claims in the hi-tech, restaurant, retail, communications and trucking industries on behalf of thousands of employees.

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