Firing the Bankrupt Employee

Imagine two people file for bankruptcy.  One is fired by his employer because he filed.  The other applies for a job at the same employer, and is told that the company doesn't hire bankrupts.  Has the company violated the law under either scenario?

The answer is yes and no.  Under Section 525 of the Bankruptcy Code, an employee cannot be fired because he or she filed for bankruptcy.  However, as the Third Circuit ruled recently in Rea v. Federated, that same employer can refuse to hire an employee because he filed.

Dean Rea went bankrupt in 2002, and discharged his debts in 2003.  Six years later, in 2009, he applied for a job at Federated.  Federated initially indicated it was going to hire him, but then later sent him a letter saying it was not going to hire him because of the bankruptcy.  Rea sued under Section 525 of the Bankruptcy Code.

Subsection (a) of the Code says that government entitites cannot discriminate against people who file for bankruptcy, including a refusal to hire.  Subection (b), however, says that no private employer can "discriminate" against an employee who files.  Reading these sections together, the court in Rea concluded that the omission of language banning discrimination in hiring in Subsection (b) meant that Congress intended to ban private employers from discriminating against current employees only.

The court's decision seems correct, as a matter of statutory interpretation.  However, the law does not seem to make any sense.  Why should an employer be barred from firing someone for filing for bankruptcy, but not be barred from refusing to hire?  One reason might be that an employer should not be forced to hire a bankrupt, who in some circles is regarded as less than trustworthy, yet should also not be permitted to fire an employee who is otherwise a good employee.

It is expected that some 1.5 million people will file for bankruptcy this year, up from 1.4 million last year and less than a million in 2008.  In these economic times, that is not surprising.  What is surprising is that an employer would revoke an offer of employment to someone who had filed more than six years prior to the job offer.

Obama: Master Negotiator Against Himself

One of the first rules in labor negotiations is never to negotiate against yourself.  So if your goal is to get a dollar an hour raise, you don't start at a dollar, then negotiate down from there.  Likewise, if you are buying a car, you don't offer the dealer the asking price on the car.  You offer less.  Anyone who has bought a car understands this principle.  For some reason, however, President Obama does not get this concept.  From health care to the current tax bill, Obama starts in the middle, and then slowly works his way towards the Republicans. 

This is what is perhaps so infuriating to liberals who Obama (as well as Fox News) have been slamming for criticising the tax deal.  On health care, Obama quickly dropped the public option, and instead crafted a deal that, in the end, every single Republican opposed anyway.  Health care then became a campaign issue for Republicans who called it socialism.  If your enemies are going to oppose you at all costs, and if you are going to get tarred a socialist, shouldn't you at least craft legislation that is a little more "socialist?"

Likewise the tax cuts.  What did Obama get in return for caving in to the Republican demand that the wealthiest in this country suffer  no tax increases?  Not a lot.  He got a thirteen week extension of unemployment benefits -- keep in mind that there has never been opposition to federal unemployment benefit extentions when the unemployment rate was this high.  He got a cut in payroll taxes, but only on the employee side of the ledger -- and as one columnist pointed out, cutting payroll taxes and starving Social Security has long been a right-wing dream.  The payroll tax cut is also a benefit not enjoyed by state and federal workers, who don't pay into Social Security.  He also got some tax breaks for investments.  As Paul Krugman points out, how did Democrats get to the point that they have to plead with Republicans for tax cuts?

I'm not an economist, so I'm not sure whether the tax package is good or bad policy.  I do know that Obama needs to stop negotiating against himself if he has wants to have any hope of controlling the next Republican Congress.

The Glengarry Glen Ross Boss

In the brilliant movie Glengarry Glen Ross, Alec Baldwin "motivates" his sales team with a contest:  first prize is a Cadillac, second prize is a set of steak knives, and third prize is -- you're fired!  A sales manager is Utah seems to have been inspired by the movie.

In Huydens v. Prosper, a lawsuit claims that a supervisor would punish employees who did not meet performance expectations by drawing mustaches on their face with indelible marker.  He'd also walk around the office with a wooden paddle, and slam it on tables and desks.  The supervisor went too far for one employee, however, when the supervisor waterboarded him in the office.

According to the complaint, the supervisor asked for "volunteers" for a motivational exercise. The plaintiff alleges that he volunteered.  The employee and others were brought to a hill near the office, where he was ordered to lie down with his face pointed downill.  Other employees held his arms and legs, and the supervisor then poured water out of a gallon jug into his mouth and nose so he could not breathe.

The employee struggled, but was being held down by other employees and could not escape.  At the conclusion of this team building exercise, the supervisor told employees they should "work as hard at making sales as Huydens had tried to breathe."  The employee suffered nightmares and psychological difficulties, and ended up suing for a variety of claims.

The case ended up in the Utah Supreme Court after it was dismissed by a lower court judge.  Incredibly, one reason the court below dismissed the assault charge was that the exercise was done not with the intent to harm the plaintiff, but as a motivational exercise.  The Utah Supremes did not resolve the merits of the dispute, but instead send it back to the court for reconsideration. 

Waterboarding in the office.  What will they think of next.
 

Careful What You Tweet

As everyone knows by now, employees can be fired for things they do off duty, like post an inappropriate remarks about the boss on Facebook.  Of course, the employee might be saved if the post implicates the National Labor Relations Act's restrictions on discharging someone for protected activity.  The employee might also be saved if he or she has a union that will take their case to arbitration.

Take the matter of King Man Ho and Radio Free Asia.  Last January, Hillary Clinton was in Hong Kong and gave a speech (ironically, it turns out) on internet freedom.  Ho covered the story and quoted the reactions of two Chinese bloggers to the speech. 

The bloggers accused Ho of misquoting them and being unethical on their Twitter accounts.  Ho, trying to find out why they were making the accusations, used his own Twitter account to try and find out what was going on.  Ho became somewhat agitated in his Tweets, eventually prompting his editor to tell him to stop Tweeting.  Ho Tweeted one more time, which resulted in his termination for insubordination and violating RFA rules about appropriate behavior.

Had Ho been employed by a non-union employer, that would have been the end of the story.  However, because Ho's union contract had a provision in it stating that employees could not be discharged except with "just cause," he was able to present his case to an arbitrator.

The arbitrator ruled that Ho was discharged without just cause, and reinstated him to employment with full back pay and benefits.  The arbitrator acknowledged that the employer could have a policy regarding Tweeting, but held that it was unclear whether the policy had been violated given the circumstances of the case.  Additionally, the arbitrator found that Ho was not guilty of insubordination because the directives he had been given by his supervisor were not very clear.  The decision can be read here.

As technology evolves, so does the employer's ability to reach outside the workplace and fire employees for violating work rules on their own time.  But with cases like the NLRA Facebook case and this one, sometimes old standards applied to new technology save the day.

Petty Tyrants in the Workplace

At one time or another, almost everyone has had to work for a petty tyrant.  The boss who belittles, the supervisor who enforces every little rule, the foreman who criticizes every aspect of the job.  Last week's This American Life devoted an entire episode to the rise and fall of a School District Maintenance Manager who terrorized employees for several years before ending up in jail for some of his extracurricular activies.  If you haven't listened to the show, click here, it's definitely worth listening to. 

Steve Raucci, the star of the show, rose from a position as a maintenance man to head of the maintenance department for a school district in New York, in charge of 120 employees.  At the same time, Raucci was president of his local union.  He could thus not only punish and fire employees, he could also quash their grievances.  Raucci's intimidation and terror of employees was such that no one dared cross him.  Eventually he was arrested and sent to jail for seting off a bomb, yes, a bomb, near the front door of an employee he was trying to make quit.

Raucci's petty tyranies differ only in kind from the types of tales I hear on a weekly basis.  Employees complain of being harassed by their supervisor, or of having a target on their back, or of being hounded out of the workplace.  In many cases, there is nothing that can be done  -- unless the harassment is on account of race, age, sex, union acticity, or another unlawful reason.  And many times the "harassment" isn't really harassment at all -- it's more a case of a supervisor taking a dislike to someone and then scrutinizing their work.  If scrutinized closely enough, any employee's work will reveal mistakes or other issues.

Sadly, the worst bullies are usually bosses who rose up through the ranks.  The problem seems to be more acute in the public sector as well.  I'm not sure why that is, except for the fact that there are sometimes more layers of supervison in the public sector, and less accountability for managers.

Petty tyrants cause hardship not only for those below them, but for the employer as well.  When employees aren't treated fairly, they resort to lawsuits, EEOC filings, and filing grievances.  And, in the non-union sector, more organizing drives have probably been started because of bad supervisors than bad wages and benefits.  One management lawyer friend of mine says that whenever he is retained by a client to defeat a union organizing drive, the first thing he wants to know is who the first-level supervisors are, and whether they are liked by the employees.  If the petty tyrant is the problem, it is pretty much assured that he will be fired first in an attempt to defeat the organizing drive.

Extending Unemployment

The next few weeks will be crucial for the five million Americans who have been out of work for more than 26 weeks collecting unemployment.  That's because federal unemployment extension benefits expire on November 30, and many lawmakers are opposed to extended the benefits further.

Most states provide unemployment benefits of up to 26 weeks.  As it has in previous recessions, the federal government provided funding to extend benefits up to a year.  The government has never stopped funding these type of extensions when the jobless rate was this high -- 9.6%.  Yet many politicians are clamoring to do just that, claiming that we should not increase the deficit without spending cuts to offset the cost of the extension.

One of the rich ironies of politics these days is the spectable of lawmakers pimping for tax cuts for the super-rich while at the same time opposing an extention in unemployment benefits on the ground that it would contribute to the deficit.  After all, extending unemployment benefits for an additional year would cost about 6 to 7 billion per month, or around 72 billion.  That's less than extending the Bush tax cuts for the wealthy for two years. 

While the dollar amount for these two policies is roughly the same, the economic effect is not. It is estimated that every dollar spent on unemployment insurance generates $1.60 in spending activity.  Unemployment insurance, in other words, is a stimulus to the economy.  Tax cuts for the rich, on the other hand, do nothing to stimulate the economy -- unless, like believing in the tooth fairy, one believes in the trickle down theory of wealth creation.  It seems obvious to me that cutting unemployment off a few weeks before Christmas is going to hurt, not help the economy.

But don't unemployment benefits discourage people from working?  That argument has been made, and there may be something to it.  Some people, for sure, would prefer to collect unemployment than take a job they don't really care to do.  However, the vast majority of people on unemployment are there becaure there are no jobs for them to take in this "jobless recovery."

There are only six more working days for Congress to pass the unemployment extension.  Several groups are sponsoring call ins to get people to call their Senators in support of the extension.  Call yours today toll-free at  1-866-606-1189 or 1-877-662-2889 and tell him or her to do the right thing

Rip Van Winkle Awakens

It's not often that the NLRB gets front page treatment in major newspapers, and I don't think it's ever been one of the "most viewed" stories on the online New York Times.  Certainly it's never been featured on gossip site PerezHilton.  But this week the Board has been in the news because it is going after an employer that fired an employee for her Facebook posts criticizing a supervisor.  Perez Hilton, incidentally, thinks the employee should have been fired.

The employee in question was fired by American Medical Response after she posted comments critical of one of the company and one of her superivsors on her Facebook page.  The NLRB issued a complaint charging the company with firing the worker for engaging in protected activity -- criticizing the boss -- and for maintain a rule prohibiting employees from talking about the company in any way on Facebook or other social media sites.

The NLRB is merely extending to Facebook posts a rule that already applies in the workplace:  talking about working conditions with coworkers is protected under the NLRA; thus, it would be unlawful to fire an employee for complaining about a supervisor while standing at the water cooler.  The only difference in this case is that the discussion took place on Facebook.

Perhaps this is a signal that the NLRB is coming into the 21st Century.  One of the more infamous cases under the Bush Board was Register Guard.  In that case, the NLRB held that employees had no right to use employer email systems for union activity, even though employees could use emails for all kinds of other activities.  In a blistering dissent, Members Liebman and Walsh accused the majority of confirming the Board's reputation as the “Rip Van Winkle of administrative agencies.”  Given the Board's analysis in Register Guard, it was hard to disagree with the characterization.

The decision to issue a complaint in the Facebook case pehaps shows a new willingness of the NLRB to tackle emerging workplace issues and bring the agency into this modern era of the internet, email, and social media.  Given the recent election, the Board may only have two years to do that before a Republican president reshuffles the composition of the Board and starts a retreat from boldly enforcing employee rights.