Federal Courts Disregard Longstanding Worker Rights

August 31, 2012 by Leave a Comment

Workers continue to lose ground in federal courts, where judges are disregarding a ruling by the National Labor Relations Board (NLRB) that says companies cannot require workers to sign away their right to bring class action arbitrations and lawsuits.

 The NLRB’s  administrative decision in January  served as a theoretical  counterpoint to an earlier 5-to-4  decision by the U.S. Supreme Court in AT&T Mobility v. Concepcion.

 The Concepcion case involved alleged false advertising by AT&T and a $30 claim by a California plaintiff, who sought to prosecute the case as  class  arbitration . As the  dissent noted in Concepcion: “What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?”

 The Supreme Court majority held that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class action lawsuits  – which means that contracts can exclude class action arbitration. 

 The NLRB ruling involved national homebuilder D.R. Horton’s practice, begun in 2006, of forcing all employees to agree as a condition of employment, not to pursue class or collective litigation of claims in any forum –  arbitral or judicial.  In its ruling, the NLRB said it has long held –  “with uniform judicial approval” –  that the National Labor Relations Act “protects employees’ ability to join together to pursue workplace grievances, including through litigation.”  

According to Thompson Reuters’ journalist Nate Raymond,  courts generally are rejecting the NLRB decision, some on the grounds that the  Federal Arbitration Act controls, and others cite the Supreme Court’s Concepcion decision. For example, in recent months:

  •  U.S. District Judge Gene Pratter in Philadelphia agreed with Tenet Healthcare and confirmed an arbitrator’s finding that a nurse could not bring classwide wage-and-hour claims in arbitration. The nurse’s lawyer had cited D.R. Horton in arguing that the arbitrator had erred.
  •  U.S. District Judge D.P. Marhsall in Little Rock, Arkansas, on Aug. 1, 2012 concluded that the FAA trumped the NLRA. and compelled individual arbitration in a putative class action of guards suing Securitas Services Inc.   Marshall said that accepting the NLRB’s reasoning would mean favoring litigation over arbitration, in contrast to the federal policy of favoring arbitration.
  •  Employees at Waffle House Inc. cited D.R. Horton in an effort to convince U.S. District JudgeCarlos Murguia of Kansas City, Kansas, to not compel individual arbitration. They lost. “Although Concepcion may not speak directly to the issue before the court,” the judge wrote, “it does illustrate a guiding principle: arbitration agreements are enforceable even when they prohibit the use of a class action.”

 Thomas Reuter News Service reports that  judges in New York, California, Pennsylvania, Florida and Georgia have refused to allow employee class actions to move forward on the basis of the NLRB’s holding, in cases against Jenny Craig, Citigroup, P.F. Chang’s and UBS, among others.

The Concepcion decision likely will have a devestating impact upon workers who are cheated by unscrupulous employers out of overtime pay or hourly wages.

“Class claims frequently offer the only vehicle for consumers or employees to challenge unlawful actions that cause limited damages to each individual while often reaping millions for business,” law professor Ann C. Hodges writes in an American Constitutional Society blog analysis of D.R. Horton. “… In the workplace, Fair Labor Standards Act cases seeking minimum wage or overtime payments are most likely to be abandoned on this basis and Horton involved such a claim, alleging that the nonunion employer misclassified employees as exempt from overtime pay.”

The Progressive States Network (PSN) in a recent report entitled, Where Theft is Legal: Mapping Wage Theft Laws in the 50 States, estimates that more than 60 percent of low-wage workers suffer wage violations each week. On average, the PSN reports, low-wage workers lose $51 per week to wage theft, or $2,634 per year. For low-wage workers, that amounts to 15% of their annual income, at average earnings of $17,616 per year.

Federal judges are appointed for life (in good behavior) and earn annual salaries of $174,000..

* See earlier reporting by this blog on federal court judges’ hostility to employment discrmination lawsuits.

Filed Under: DISPATCHES, NLRB Tagged With: American Constitutional Society, Anti-employee bias, AT&T Mobility v. Concepcion, D.R. Horton case, , Federal Arbitratoin Act of 1925, , , , , Thomas Reuter, U.S. District Court Judges, U.S. District Judge D.P. Marhsall, U.S. District Judge Gene Pratter, U.S. District JudgeCarlos Murguia,

DECK STACKED IN FEDERAL COURTS?

March 14, 2012 by Leave a Comment

Note: The media office of the Administrative Office of the U.S. Courts has failed to respond to a request for comment about this blog entry. PGB

Workers who bring employment discrimination cases in federal court are not just paranoid. Apparently, the deck really is stacked against them!

(Isn’t this discrimination in itself?)

The New York Law School Law Review and The Employee Rights Advocacy Institute For Law & Policy co-sponsored a symposium April 23, 2012 to examine the high failure rates of plaintiffs in employment discrimination cases in federal courts.

Specifically, they discussed why employment discrimination cases are more likely to be summarily dismissed by federal judges through rulings on pre- and post-trial motions.  One factor is believed to be  U.S. Supreme Court decisions (Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal) that raised the quantum of facts that a plaintiff must plead to avoid a motion to dismiss.

“A substantial and growing body of evidence, both empirical and anecdotal, shows that civil rights cases, and in particular those alleging employment discrimination, are disproportionately susceptible to dismissal before trial as well as to unfavorable  (judgment notwithstanding verdict)  motions after trial,” said the symposium planners.

Approximately 150 attended the symposium, including  retired Judge Nancy Gertner from the U.S. District Court for the District of Massachusetts. She said the message sent by Twombly and Iqbal is that courts should be more concerned with protecting employers from being falsely accused of discrimination than they should be with allowing discrimination to go unpunished, and that as a result, the courts effectively have repealed the protections of Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination.  A report of the symposium is availble from the Employee Rights Advocacy Institute for Law and Policy.

A study by the Federal Judicial Center of summary judgment cases filed in seventy-eight federal district courts in 2006 found that federal judges granted requests by the employer for dismissal on a motion for summary judgment 73 percent of the time. This compares to a rate of dismissal of:

  • 53 percent in contract cases,
  • 54 percent in tort or personal injury cases
  • 70 percent in civil rights cases generally
  • 64 percent in prisoner cases
  • 53 percent in “other” cases, including antitrust (53%) and patent (47%) and trademark (50%).

See Joe Cecil & George Cort, Federal Judicial Center, Estimates of Summary Judgment Activity in Fiscal Year 2006 (2007).

Some district courts granted summary judgment motions in employment discrimination cases more than others. In the Ninth Circuit, which is based in San Francisco, CA, some courts granted summary judgment in employment discrimination cases 93% of the time. In the Eleventh Circuit, which is based in Atlanta, GA, some courts granted summary judgment in employment discrimination case 95 % of the time.

This is a trend that has been getting WORSE for years, according to Cornell Law School Professors Kevin M. Clermont and Stewart J. Schwab, authors of Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse? 3 Harv. L. & Pol’y Rev. 103 (2009).

They write that the plaintiff win rate for employment discrimination cases in federal court from 1979-2006 was 15 percent, which was much lower than that for non-jobs cases (51%), possibly because of hurdles placed in jobs cases that do not exist in non-jobs cases.

Furthermore, the authors state that there was a startling 37 percent drop in the number of employment discrimination cases in federal district courts between 1999 and 2007.  They say the decline may be  because “federal courts disfavor employment discrimination plaintiffs, who are now forswearing use of those courts.”  In other words, fear of bias by federal judges may be discouraging  potential plaintiffs from even filing employment cases in federal court!

Plaintiffs who appeal their losses or face an appeal of their victory “again fare remarkably poorly in the circuit courts,” the authors write.  Defendant/employers in the federal courts of appeals have managed over the years to reverse forty-one percent of their trial losses in employment discrimination cases, while plaintiff/employees manage only a nine percent reversal rate.

Generally, it appears that employers do far better in federal courts these days than ever before. A 2010 study found  the U.S. Supreme Court under the leadership of Chief Justice John G. Roberts, Jr., has ruled for business interests 61 percent of the time, compared with 46 percent in the last five years of the court led by Chief Justice William H. Rehnquist, who died in 2005, and  42 percent by all courts since 1953.

Some other sobering but well-documented observations from the Clermont/Schwab article:

  • Plaintiffs in employment discrimination cases are much more likely to have to go to trial, possibly because employers perceive the anti-plaintiff bias works in their favor and refuse to settle.
  •  “ … [E]mployment discrimination cases constitute one of the least successful categories at the district court level, in that plaintiffs win a very small percentage of their actions and fare worse than in almost any other category of civil case.”
  • “Defendants, in sharp contrast to plaintiffs, emerge from appellate court in a much better position than they were in when they left trial court. … we have unearthed an anti-plaintiff effect that is troublesome.”
  • “The bulk of employment discrimination cases turn on intent … The subtle question of the defendant’s intent is likely to be the key issue in a nonfrivolous employment discrimination case that reaches trial, putting the credibility of witnesses into play.  When the plaintiff has convinced the fact finder of the defendant’s wrongful intent, that finding should be largely immune from appellate reversal … Reversal of plaintiffs’ trial victories in employment discrimination cases should be unusually uncommon. Yet we find the opposite.”

It is unlikely that employment law cases are weaker than other types of cases. The authors note that many studies show that people are not anxious to sue except in egregious situations and that contingent-fee attorneys, as well as those looking to fee-shifting, are reluctant to bring questionable claims. They say the impact of other factors on the decline of employment discrimination cases in federal court —  such as alternative dispute resolution — is not known but is unlikely to have caused the precipitous drop.

The authors say the employment discrimination category has dropped in absolute number of terminations every year after 1998, when the total was 23,722.  They say the drop has gone virtually unnoticed and unexplained.

It is understandable that courts want  to place procedural limitations on  cases to avoid overcrowded dockets and to  safeguard judicial resources. However, it is obviously unfair (or worse) for judges to single out employees who allege discrimination for disparate treatment. Like any other plaintiffs, these plaintiffs have  no where else to go but the courts for justice and they have every right to expect a fair and impartial hearing.

In fact, Americans are guaranteed a right to a trial by jury in federal court cases under the Seventh Amendment of the U.S. Constitution.  Specifically, the Seventh Amendment states:

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

Filed Under: AGE DISCRIMINATION, DISPATCHES, FEDERAL, TITLE VII, U.S. SUPREME COURT Tagged With: abusive employers, Administrative Office of U.S. Courts, , Ashcroft v. Iqbal, , bias in federal court, , Cornell Law School, , Employmen, , Employment Rights Advocacy Institute for Law & Policy, Federal Court of Appeals, , federal judge bias, federal judges biased, Harvard Law and Policy Review, Kevin M. Clermont, New York Law School Law Review, , Stewart J. Schwab,