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Indiana’s Carrier Factory Cuts Focused The “Trade” Election Issue

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dave.johnsonSometimes an event comes along that crystallizes people’s awareness of an issue. It is just the right things at the right time. The layoffs at the Indianapolis Carrier air conditioner factory are an example of this kind of event.

The layoffs have focused many people’s feelings about our disastrous “trade” agreements that enable, even encourage, companies to move jobs and factories out of the country so that executives and Wall Street can pocket the wage and environmental-cost differential for themselves.

What Happened At Carrier?

In February air-conditioner manufacturer Carrier, a wing of United Technologies, announced that beginning next year it will move its Indianapolis production to Mexico and lay off the company’s U.S. workers. (It will also gut the factory’s suppliers and surrounding businesses.) The announcement was caught on video and went viral just as the presidential campaign was focusing on the disastrous effects of our country’s “trade” policies.

United Technologies reported $7.6 billion in profits for 2015. This was up from $6.2 billion in 2014. The company is spending $12 billion to purchase its own stock, which manipulates an increase in the stock price. That gives an idea of just how much cash the company has at its disposal. They use plenty of it to enrich executives, with their CEO getting almost $10 million in 2014 after getting more than $20 million in 2013.

Meanwhile, Mexico pays wages averaging $2.70 an hour for manufacturing jobs. By moving production there, the company, executives and Wall Street shareholders can pocket the wage differential. Carrier’s Indianapolis workers, suppliers, businesses, tax base, housing prices and job market? Too bad for them, but that’s not United Technology’s problem.

Workers Driven To “Outsiders” Sanders, Trump

Indiana’s presidential primary is Tuesday, and the Carrier layoffs have become an issue in the campaign. Zach Carter, reporting at The Huffington Post, in “Watch Corporate America Turn A Roomful Of Workers Into Bernie Sanders And Donald Trump Supporters,” writes about the effect of that video announcing the layoffs:

“Throughout the transition, we must remain committed to manufacturing the same high-quality products,” an executive can be heard insisting in a video of the announcement.

“Yeah, fuck you!” a member of the crowd responds.

“Please quiet down,” the official says. “This was an extremely difficult decision.”

“Was it?!”

In his report, Carter explains how this fits into the larger national discussion of “trade” and the effect our “trade” policies have had on jobs and incomes, and why this is a boost to Bernie Sanders’ and Donald Trump’s “outsider” campaigns:

Both Republicans and Democrats have consistently backed economic policies over the past 35 years that have systematically gutted the American middle class. For decades, Congress has listened to corporate lobbyists who told our representatives that if they could just cut this one tax rate, or just ease this one regulation, there would be a renaissance of prosperity. The renaissance has happened for the rich. Everyone else has been left behind.

The middle and working classes have been hit hard by these economic policies that favor the upper-end “donor class.” This “establishment” abandonment of America’s middle- and working-class voters is a “YUGE” issue in this year’s presidential election, driving the insurgent campaigns of Sanders and Trump. In an example of how the Carrier layoffs are driving this, The Indianapolis Star reported on Trump’s campaign announcement, in April’s “Trump opens Indiana campaign by blasting Carrier, Republican nominating process“:

“You’re looking at a situation where the jobs are being ripped out of our states, out of our country, like candy from a baby,” he said.

He lambasted massive layoffs at air conditioner manufacturer Carrier’s plant in Indianapolis. The company and its affiliates announced in February they would eliminate 2,100 Indiana jobs as they move production to Mexico. The layoffs have been a favorite target of Trump, who said Wednesday he would “tax the hell” out of the company.

“You’re going to bring it across the border, and we’re going to charge you a 35 percent tax,” he said. “Now within 24 hours they’re going to call back. ‘Mr. President, we’ve decided to stay. We’re coming back to Indianapolis.’”

While the economic picture moves many voters toward both Sanders and Trump, it appears that Sanders is the once getting much of the support of the Carriers workers themselves. Dave Jamieson, also writing at HuffPo, has an article headlined “Union Representing Laid-Off Carrier Workers Endorses Bernie Sanders“:

The Carrier workers found themselves in the national spotlight after a video emerged in February that showed a company executive informing them that their jobs were going to Mexico. Since then, the Carrier story has worked its way into the stump speeches of presidential candidates on both the left and the right, as they have pilloried the company for its plans to offshore 2,100 jobs.

Workers at the plant are represented by the United Steelworkers Local 1999, based in Indianapolis. …

Hugunin said the union decided to back Sanders because of his consistency in opposing trade deals such as the North American Free Trade Agreement, which removed trade barriers between the U.S. and Mexico.

With the Indiana primary on Tuesday, Sanders has been showing up and talking about the Carrier layoffs. Last week WFYI Indianapolis reported:

As many as a thousand union members and supporters of Democratic presidential candidate Bernie Sanders rallied outside the Indiana Statehouse Friday in support of laid-off Carrier factory workers.

Sanders’ last-minute appearance at the protest came days before Tuesday’s primary election, where the Carrier story has taken center stage.

The diverse crowd on the statehouse lawn wielded signs reading “Keep it made in America” and “Save our jobs, stop corporate greed,” and chanted union slogans like “stand up, fight back.”

Many of them were there just for Sanders, who gave an energetic speech calling Carrier’s plans to close its Indianapolis factory and move 1,400 jobs to Mexico “unbelievable.”

We will see after the polls close Tuesday know how this affects the Indiana primary.

Racing To The Bottom

Moving jobs to Mexico and other low-wage countries impoverishes American workers and devastates entire regions of the country, while enriching executives and Wall Street shareholders. Our country used to “protect” our democracy with its good wages and environmental protections by assessing a tariff on goods coming from countries that exploit workers and the environment. This prevented the cost savings gained from this kind of exploitation from undermining American workers and their quality of life.

Since “free trade” ideology took hold in the 1970s, undoing these protections and allowing companies to move production out of the country, our country has had a trade deficit every single year, and American workers have not seen a wage increase. Wall Street’s share of the economy (and political power) has soared while manufacturing’s (and workers’) share has declined. Inequality has accelerated.

This kind of “trade” trade-off is often justified as good for the workers in the low-wage countries. However, Reuters provides an example of how this just is not the case:

But the same low wages that help make manufacturers competitive are a long-term drag on the economy.

[ …] Low wages are a huge incentive for both Mexican and foreign firms. One in seven Mexican workers earn the average minimum wage of 65.58 pesos ($5.10) a day or less, national statistics office INEGI says. The average hourly wage in Mexico – home to Carlos Slim, one of the world’s richest men – is 31.3 pesos ($2.43).

Manufacturing workers fare better with wages averaging about $2.70 an hour but they make up only 16 percent of the labor force and their pay is way below the $19.50 per hour in the United States, figures from INEGI and the U.S. Bureau of Labor Statistics show.

[ …] Mexico City’s center-left mayor Miguel Angel Mancera has called for a national debate on how to improve wages. “Could it be that the Mexican economy doesn’t grow because the level of income for workers is so low?” he said.

Summary: “Could it be that the Mexican economy doesn’t grow because the level of income for workers is so low?” Workers there are paid so little that they not only can’t afford to buy things made in the U.S., they can’t even get by in Mexico, and this is dragging down Mexico’s economy along with ours.

Workers here are left fighting each other for the remaining low-wage jobs. Entire regions of our country are left devastated – Flint and Detroit, Mich., and the rest of the Rust Belt. “Free trade” has delivered nothing but misery and destruction to so many … but made a very few people enormously wealthy. The public is sick and tired of the “establishment” that brought this on us.

Or, as Atrios put it Monday,

This is the simple fact that our political class (who are mostly rich) fails to grapple with. I think they see the world as a combination of the way their peers see it (and they’re mostly rich!), some 30 year old vision of Middle Class America, and The Poors. They don’t get that middle class America are increasingly becoming like the poors. Maybe a bit more money, maybe a bit better lifestyle, but living paycheck to paycheck with student debt and one financial (medical, etc..) event away from nothing.

… I’m sure we can throw a few more credits into the tax code and that will solve everything.

Maybe he’s right. Maybe a few more tax credits for the already-wealthy will fix everything. Maybe another “trade” deal encouraging even more factories to move somewhere else will fix everything. After all, prices will be even lower as more things are made and done by exploited workers in places that don’t protect the environment. What could go wrong?

This blog originally appeared at ourfuture.org on May 3, 2016. Reprinted with permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.


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Garment Factory Workers in Southern California Are Calling for a Boycott of American Apparel

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Mario VasquezThe General Brotherhood of American Apparel Workers (GBWAA), a union for garment workers at American Apparel’s southern California manufacturing facilities—one of which, its downtown Los Angeles location, is the largest garment-making factory in the country—has called for a boycott of the brand’s merchandise, pointing to mass layoffs and reduced compensation and benefits that have intensified since new management in January 2015 began a process of post-bankruptcy restructuring throughout the corporation.

GBWAA is currently awaiting a certification election date from the National Labor Relations Board, and workers with the union say they are calling for the boycott because American Apparel consumers must know corporation is not the high-wage, sweatshop-free company once marketed itself to be, especially since Paula Schneider replaced American Apparel founder Dov Charney as chief executive officer of the corporation.

Schneider’s appointment was approved by a corporate board that had been mostly hand picked by the hedge fund Standard General, who effectively had control of the company after a failed bid by Charney to regain control. Previously ousted as CEO amid reports of alleged sexual misconduct, Charney saw millions of his voting shares go to Standard General. When the company filed for bankruptcy in October 2015, claiming its debt was insurmountable, complete ownership went to the company’s principal debtholders: Goldman Sachs Asset Management, Monarch Alternative Capital, Coliseum Capital, Pentwater Capital Management and Standard General (famous for their previous alleged hostile takeover of Radioshack), who kept on Schneider as CEO—much to the dismay of Charney and workers at American Apparel production sites that had already began organizing.

Union president Stephanie Padilha dos Santos tells In These Times, “If you’re used to buying American Apparel and think that the company is great and that the whole concept of paying fair wages in [the garment] industry was what made the company a huge success, then we invite you now to boycott the brand because it is no longer sweatshop-free.”

Padilha alleges that the company has been outsourcing production to other “sweatshops” around Los Angeles, while reducing the once relatively high wages earned by production workers at the company, which were the highest in the world, according to the company.

American Apparel did not respond to requests for comment by In These Times.

Meanwhile, in another round of layoffs, over 500 workers are reported to have been laid off this April as part of what Schneider has called a “redesign of [their] production process.”

Victor Narro, Project Director at the UCLA Labor Center, says that American Apparel was famous for providing high-wage garment jobs that are seldom seen for the immigrant communities typically doing the work in Los Angeles. “These garment workers are not going to be able to find a similar type of workplace in the industry,” Narro says.

Padilha says that after being abruptly let go with little notice, “All the dignity that the company provided [the laid-off workers] will be gone and they’re going to have to go back to the poor reality of the garment industry.” In the past, GBWAA has led work stoppages over decreased conditions and has filed dozens of unfair labor practices against the company since Schneider took over. Padilha believes a union can put a check on further layoffs and stabilizes the free falling wages and hours for the garment workers. American Apparel did not respond to requests for comment by In These Times in regards to GBWAA claims.

The company, however, has stressed that “the GBWAA could not fairly represent the interests of its near 4,000 production workers, even if elected” because of Charney’s appearances at union functions throughout 2015 “Mr. Charney has used every tactic imaginable to claw his way back to the head of the company—including organizing workers to demand his return as CEO,” says a letter by American Apparel legal representatives, asking a U.S District Court to force Charney to appear at NLRB hearings to provide testimony as well as submit documents relating to GBWAA in its appeal of the union’s petition for election. The appeal centers on the claim that GBWAA is a Charney-created entity.

Nativo Lopez, an organizer in Los Angeles who has worked with American Apparel workers over issues of immigrant rightssince 2009, says that the company’s allegations are “absolutely false.” Lopez says that garment workers active in Lopez’s immigrant rights advocacy organization, Hermandad Mexicana, helped lead organizing, with Lopez serving in a voluntary advisory position. Thus, GBWAA is claiming it is an independent union—not a product of Charney.

Workers, he says, only focused on the return of Charney to company leadership initially because “working under him, in his administration, [they were] enjoying above-minimum wage and benefits that they had never previously experienced in any other apparel company where they had been employed.”

“The ‘Save American Apparel’ slogan has been changed to ‘Boycott American Apparel,” Lopez says, predicting an entire offshoring of American Apparel’s domestic manufacturing to low-wage countries, joining the approximately 97 percent of apparel brands in this country who do not produce their clothing in the United States. Onlookers from the finance world havesaid the same elsewhere. “It’s no longer the same American Apparel,” Lopez tells In These Times.

The last public union campaign at American Apparel garment factories occurred in 2003, when UNITE (the garment workers union that soon after merged with HERE to form UNITE HERE) tried to organize workers in the downtown manufacturing hub. Charney was not supportive, according to Stephen Wishart, a senior research analyst with UNITE HERE at the time, whosaid of the campaign:

The company’s activities included holding captive meetings with employees, interrogating employees about their union activities and sympathies, soliciting employees to ask the union to return their union authorization cards, distributing anti-union armbands and T-shirts, and requiring all employees to attend an anti-union rally. The company’s most devastating tactic, though, was threatening to shut down the plant if the workers organized.

Charney, speaking to the Los Angeles Business Review in 2004 about the unsuccessful union organizing campaign, called unions an “obstacle”:

The concept of a union is a check against greed on the part of the employer. If I really wanted to be motivated by greed alone and pay the lowest possible wage, I wouldn’t be working in this factory. To say, “Let’s appoint a union to represent the workers even further” may put into disequilibrium the delicate balance that I’ve created between all the parties.

Narro says that although wages were high at American Apparel, the benefits of union collective bargaining agreements have always been sorely lacking and it remains evident in its current restructuring process. “If he had worked something out with UNITE back in 2002, and they agreed to a union contract, [then] these workers would have had a lot of protection right now. Nothing is guaranteed, but they would not have been as vulnerable to the bankruptcy and the downsizing and the management decisions.”

“Union contracts would create mechanisms to protect workers as much as possible,” says Narro. Organizing amid the corporation’s restructuring is “harder to do now because there’s nothing to enforce,” he adds.

For now, GBWAA hopes the boycott will bring to the light the urgency they feel is required in its certification efforts, especially as predicted further layoffs loom. Padilha says the NLRB needs to act now, telling me, “As soon as a hedge fund takes over, the company goes into bankruptcy. Workers getting laid off, having their rights ripped apart, and they make no money. Everything is changing; outsourcing production. There [are] enough reasons why this election is what workers need right now.”

This blog originally appeared at inthesetimes.com on May 3, 2016. Reprinted with permission.

Mario Vasquez is a writer from southern California. He is a regular contributor to Working In These Times. Follow him on Twitter @mario_vsqz or email him atmario.vasquez.espinoza@gmail.com.

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Kansas Republicans Again Stab Workers, And Democracy, In The Back

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poole-60x60Once again, that conservative maxim about the government that’s closest to the people serves the people best was thrown out the window by conservatives when it comes to protecting the interests of workers against the abuses of businesses.

The latest example is Kansas, which just passed a law that said that local governments could not pass laws regulating just-in-time work scheduling, the practice of scheduling workers for shifts with as little as a few hours notice. The practice makes it impossible for workers on such schedules to plan to work second jobs or attend classes during their off hours. Employers who engage in this real-time scheduling expect workers to be on call, uncompensated, for when they might be called to work.

Workers subjected to these kinds of schedules often do not know how many hours of work they will have each week – and thus can’t predict how much they earn.

The bill, passed by the overwhelmingly Republican legislature and sent to ultraconservative Sen. Sam Brownback, pre-empts local governments in other areas as well, including their ability to impose nutritional labeling or content laws (thus a jurisdiction could not require restaurants to post the caloric content of their food) and their ability to police real estate transactions or rental inspections.

It is a continuation of a trend that has picked up momentum in recent years as more harshly conservative state legislatures have opted to clamp down on the ability of progressive enclaves in their states to govern their jurisdictions as they see fit.

That happened recently in North Carolina, where a state law was passed to invalidate local LGBT-rights ordinances. North Carolina is also one of 19 states that have laws on the books telling cities that they cannot pass their own minimum-wage laws. The list – compiled by the National Employment Law Project – is a rogue’s gallery of worker-unfriendly states: Alabama, Colorado, Florida, Georgia, Indiana, Idaho, Kansas, Louisiana, Michigan, Mississippi, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Utah and Wisconsin.

What the Kansas legislature was attempting to prevent was the spread of laws like one that passed last year in San Francisco, the “Predictable Scheduling and Fair Treatment for Formula Retail Employees Ordinance.” According to this fact sheet, the ordinance requires larger employers to post work schedules for employees at least two weeks in advance and requires employers to give due consideration to employee requests for changes. If an employer makes last-minute changes to the work schedule or requires a worker to be on call but does not actually summon the worker to work, the ordinance sets out how the worker is to be compensated for his or her time.

The organization A Better Balance has been fighting to get a bill called the Schedules That Work Act passed at the federal level. You can imagine the uphill battle getting such legislation passed nationally will be, when conservative legislatures won’t even allow democratically elected local officials to rein in the abuses against workers within their municipal boundaries.

This blog originally appeared at ourfuture.org on May 2, 2016, Reprinted with permission.

Isaiah Poole Worked at Campaign for America’s Future, attended Pennsylvania State University, and lives in Washington, DC.

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House Republicans Have A Temper Tantrum Over Rule That Bans Financial Advisers From Scamming Retirees

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Bryce CovertThe Department of Labor (DOL) has finalized rules that require financial advisers who help people make investments for retirement to put their clients’ interests ahead of their own. But House Republicans aren’t letting the rule go into effect without a fight.

On Thursday, the House voted on a resolution that would effectively block the new rules, which require advisers to adhere to a “fiduciary standard,” that passed along strict party lines, with 234 Republicans voting yes and 183 Democrats voting no. Republicans claim that the rule will make investment advice more expensive, with Rep. Phil Roe (R-TN), a sponsor of the legislation, saying it would “protect access to affordable retirement advice.” They’ve also characterized the rules as government overreach, with House Speaker Paul Ryan (R-WI) calling them “Obamacare for financial planning.”

Their position mirrors that of the financial industry, which has fought the rules with claims about the impact they could have on their businesses that Sen. Elizabeth Warren (D-MA) has questioned as being disingenuous. Ahead of the House vote on the resolution, eight big financial industry trade groups sent a letter to lawmakers urging them to vote in favor of the resolution.

The vote, however, is a largely symbolic move. For the resolution to have any power, it would have to be taken up and passed by the Senate, and President Obama would have to sign it. But he’s already threatened to veto the measure. DOL Secretary Thomas Perez called Thursday’s vote “a waste of time.”

Before the new standard, advisers were only required to give “suitable” advice, which left the door open for them to steer clients into products that made the advisers more money but weren’t the best option. That practice was costing Americans an estimated$17 billion a year in conflicted advice, according to the White House. Some people say their finances, particularly their chances of retiring comfortably, have been destroyed by bad advice and that they would have simply been better off without it.

Americans have little wiggle room for losing money when it comes to saving enough for retirement. Pensions, which guarantee payments in old age, have beenoverwhelmingly replaced with 401(k)s, which require individual workers to make smart investment choices in order to have enough to live off of when they stop working. And by and large workers aren’t putting enough aside. The gap between what they should have saved up and what they’ve actually put away is $6.6 trillion. Meanwhile, about 60 percent of working age people have no retirement savings at all.

This blog originally appeared on Thinkprogress.org on April 29, 2016. Reprinted with permission.

Bryce Covert Bryce Covert is the Economic Policy Editor for ThinkProgress. Her writing has appeared in the New York Times, The New York Daily News, New York Magazine, Slate, The New Republic, and others. She has appeared on ABC, CBS, MSNBC, and other outlets.

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Tuesday’s Baltimore Primary Results Mean a $15 Minimum Wage Is Likely Coming Soon

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Bruce VailBALTIMORE—Although it was nowhere on the ballot, the Fight for 15 was a winner in the municipal elections here Tuesday.

In a Democratic Party primary election that selected candidates for both a new mayor and a new majority of the city council, supporters of a city-wide minimum wage law of $15 an hour appear to have won enough offices to see it enacted. The push is underway now to get it passed this year, and almost certainly will be passed by early next year, at the latest, activists say.

Because of a large Democratic majority in the city, the spring party primary is considered tantamount to final victory in the November general election. Only an unprecedented political upheaval could prevent the candidates selected this week from taking office in January 2017.

Fight for 15 supporters are mobilizing behind a bill introduced earlier this month by City Councilwoman Mary Pat Clarke (D). Clarke’s bill would raise the minimum wage to $15 an hour by 2020, and also eliminate the subminimum “tipped wage.”

Worker activists are pleased that the new Democratic candidate for mayor, Catherine Pugh, is committed to signing a $15 bill, says Charly Carter, executive director of the political party Maryland Working Families. The new city council will include a strong majority who have already committed to supporting the higher minimum wage, so the path to final passage seems clear, she says.

Majority support in the 15-member city council was evident even before the election this week, Carter explains. “We had somewhere between nine and 12 votes before the primary. But our goal had to be at least 12,” to override an anticipated veto by current Mayor Stephanie Rawlings-Blake, she says. Although Rawlings-Blake had never explicitly threatened a veto, some City Hall insiders are interpreting her lukewarm public comments about the higher minimum wage as a veiled veto threat.

With this political arithmetic, Working Families made support for $15 one of its minimum requirements for an endorsement in city council races, as did a number of labor unions active in local politics. Special importance was attached to the council races because an unusually large number of members had announced their retirements, meaning that a working majority on the council would be reformulated in the election process. Therefore it was a priority for Working Families to add support for the Fight for 15, Carter says.

Riccara Jones, a political organizer for the Service Employees International Union (SEIU), did candidate interviews on behalf of her union and reports that most candidates were quick to commit to $15. “Support for Fight for 15 is out there in the community, and the politicians who are listening to the community are lining up,” Jones says. SEIU endorsed seven candidates for council, and six of those were successful on election day.

“I’m optimistic we have the votes” to pass the minimum wage law, Jones adds. The union will push to pass it this year, despite reservations about Mayor Rawlings-Blake. “She’ll be gone at the end of the year, so I don’t see any reason why she would want to fight over this. Even if she wins a veto fight, then it gets passed under Mayor Pugh. … Our goal is to do it now. Baltimore can’t wait another year,” she says.

Jones’ comment partially reflects a feeling among some political activists that an opportunity for change in the wake of the Baltimore race riot one year ago is slipping away. Working Families’ Carter, for example, says that there have been a lot of press conferences and statements from public officials, but there is no sense in the streets that anything has changed. The voluntary retirement of Rawlings-Blake and the turnover at the city council seem to be admission of defeat by the city’s political leadership, but that has yet to be replaced by a renewed sense of purpose.

“A year after the uprising, nothing has been done. The terrible conditions in these neighborhoods have not changed at all,” she says.

Operating independently of Working Families, UNITE HERE Local 7 has been active in this election but on a different scale, says President Roxie Herbekian. “We are more oriented to the community level. We saw that two council districts had a high percentage of our members, and that the incumbent councilmen in those two districts are what I would call ‘do nothing’ politicians. So we supported challenger candidates and worked hard to get them elected. Of course, we wouldn’t support anyone who would oppose the $15.”

UNITE HERE was rewarded with success on Election Day, and both challengers supported by the union won. “But really, we are not about making friends with one candidate or another. We are mobilizing on a community level around our broad goals,” of improved lives for workers, she says.

A higher minimum wage fits in with those broader goals and will have a real impact in the lower-income neighborhoods of Baltimore, Herbekian predicts. UNITE HERE, along with other unions and local activists, will be pushing the city’s elected officials to move as quickly as possible.

This blog originally appeared at inthesetime.com on April 27, 2016. Reprinted with permission.

Bruce Vail is a Baltimore-based freelance writer with decades of experience covering labor and business stories for newspapers, magazines and new media. He was a reporter for Bloomberg BNA’sDaily Labor Report, covering collective bargaining issues in a wide range of industries, and a maritime industry reporter and editor for the Journal of Commerce, serving both in the newspaper’s New York City headquarters and in the Washington, D.C. bureau.

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