Labor and Employment Law News - July/August 2003

Labor and the Law:

News and Current Events from the IRRA Section on Labor and Employment Law (LEL) © 2003

In the GAO Pipeline

Charles A. Jeszeck

The following are topics the General Administrative Office (GAO) had been requested to research.

Dedicated Taxes for Training

Requester: Senator Kennedy, Edward M.

Senator Murray, Patty

Background and Key Questions: America's workplace is becoming increasingly sophisticated as workers are expected to be computer savvy or up to date in the latest manufacturing technologies. Some states are raising additional funds through employer taxes to supplement federal workforce initiatives, as well as to create distinct state employment and training programs. GAO will study (1) How many states fund employment and training programs through specific employer taxes and what services do these programs provide; (2) To what extent these state employment and training programs are coordinated with federal workforce initiatives; and (3) What is known about how states are assessing these employment and training programs.

Secretary's National Emergency Grant Spending

Requester: Senator Kennedy, Edward M.

Senator Murray, Patty

Background and Key Questions: The Workforce Investment Act provides workers who have been dislocated by plant closures, mass layoffs, and catastrophic events with additional assistance in the form of emergency grants to facilitate a quick transition to new employment. To fund these grants, the Secretary of Labor retains 20 percent of dislocated worker funds in a national reserve account. States and local areas must competitively apply for the grants. The Senate HELP Committee is interested in (1) how much was spent in program year 2001; (2) who the recipients were, how much they received, and for which activities; and (3) how Labor manages grant spending. The committee needs this information by the summer, with an earlier briefing likely.

H-1B Worker Employment Product issue date: 9/10/03

Requester: Rep. Mark Udall

Background and Key Questions: To assist U.S. employers in filling specialty occupations with high-skilled workers, Congress in 1998 and 2000 increased the limit on the number of people who can enter the U.S. as H-1B nonimmigrant guestworkers. Since 2000, the U.S. has suffered an economic downturn, resulting in increased unemployment of U.S. workers. GAO will determine (1) what major occupational categories H-1B guest workers have been approved to fill and what is know about petition approval and U.S. employment patterns in those occupations; (2) what key factors affect employers' decisions about the recruitment and involuntary release of H-1B and U.S. workers as employers strive to remain competitive; and (3) what information is available about the entry, change in visa status, and departure of H-1B guest workers.

WARN Act Compliance Product issue date : 9/26/03

Requester: Representative Owens, Major R.

Representative Andrews, Robert E.

Representative Miller, George

Background and Key Questions: The recent collapse of Enron, Worldcom and other corporations has led to the displacement of thousands of workers. The Worker Adjustment and Retraining Notification Act (WARN) requires employers to provide 60 days advance notice of mass layoffs and plant closings to affected workers. While Labor developed the implementing regulations for WARN, the federal courts enforce the law and not Labor. Concerns have been raised about whether employers are complying with requirements so that workers can receive reemployment services. We have been asked to determine (1) To what extent are employers complying with WARN; (2) What are the issues, if any, that inhibit WARN implementation and compliance; and (3) What issues have been raised by laid-off workers who are seeking relief through the courts?

OSHA's Alternative Compliance

Requester: Representative Norwood, Charlie

Background and Key Questions: Labor's Occupational Safety and Health Administration (OSHA) has been increasingly looking beyond its traditional employer inspection activities towards other nontraditional strategies aimed at encouraging compliance with federal safety and health regulations. These strategies, such as compliance assistance rely heavily on employers' willingness to voluntarily take the necessary actions to achieve safe and healthy workplaces. While many believe these approaches have promise, others question their impact and value. We have been asked to (1) analyze the extent to which OSHA has employed such strategies, (2) summarize available information on the effectiveness of these strategies, and (3) identify obstacles that may prevent OSHA from implementing additional strategies.

Employment Arbitration NYSE/NASD: Product issue date: 07/30/03

Requester: Representative Dingell, John D.

Representative Markey, Edward J.

Background and Key Questions: The securities industry, which is regulated by the Securities and Exchange Commission (SEC), uses groups of industry professionals, known as self regulating organizations (SROs) such as the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD) to administer arbitration activities. Congress has been concerned about the use of arbitration to resolve employment disputes-including employment discrimination. GAO was asked to examine the NYSE and NASD to determine: (1) what procedures exist at the NYSE and NASD for arbitrating employment and employment discrimination cases, (2) how the numbers, types, and outcomes of these cases have changed over the last ten years, and (3) how the arbitration of these cases is being monitored.

MSHA's Protection of the Health and Safety of Miners Product issue date: 9/5/03

Requester: Senator Kennedy, Edward M.

Senator Harkin, Tom

Senator Specter, Arlen

Background and Key Questions: Several recent accidents, along with internal agency reviews and reports from the United Mine Workers Assn., have raised concerns about the safety of mine workers. At the request of several congressmen, GAO will review the efforts of Labor's Mine Safety and Health Administration (MSHA) in protecting the safety and health of mine workers and improving their working conditions. Specifically, we will examine: (1) how MSHA ensures the safety and health of mine workers through its review and approval of mine plans, (2) how effectively MSHA oversees its mine safety inspection process, and (3) the extent to which MSHA uses its accident investigations process to help improve the safety and health of mine workers.

Analysis of Women's Earnings Product issue date: 9/25/03

Requester: Representative Dingell, John D.

Representative Maloney, Carolyn

Background and Key Questions: Important debates continue among policy makers about the progress that women have made toward equal pay and career advancement opportunities over the past thirty years. Some recent studies claim that women continue to lag behind men in pay and advancement, while other studies claim the opposite. In addition, debate continues about the reasons why any differences might exist. Our requestors have asked that we study women's earnings and explore reasons why earnings may differ by gender. Accordingly, our objectives are to identify (1) what differences exist between earnings of men and women, (2) after controlling for key factors that affect earnings, whether any differences exist between earnings of men and women, and (3) what factors have the largest effect on explaining any differences.

Adequacy of Benefit Provision for Radiation-Exposed Workers

Requester: Senator Grassley, Charles E.

Representative Sensenbrenner, James F.

Representative Boehner, John A.

Representative Tauzin, W.

Senator Domenici, Pete V.

Representative Hostettler, John N.

Background and Key Questions: The Energy Employees Occupational Illness Compensation Program (EEOICP) was enacted into law in October 2000. Its goals are to compensate employees (or their survivors) who were employed by the Department of Energy or its contractors and who suffered radiation-related cancer, beryllium-rated disease, or chronic silicosis resulting from work in producing or testing nuclear weapons. In order for deserving individuals to promptly receive the compensation they are entitled to under law, several federal agencies (i.e., the Departments of Labor, Energy, Health and Human Services, and Justice) must each carry out their respective responsibilities under the law as well as partner with each other effectively. As with any new program, there have been implementation issues and unforeseen obstacles that the various agencies have contended with. Congress is interested in examining key components of this program, including, (1) the efficiency and timeliness of claim processing and payment procedures and (2) the adequacy of procedures to share information and coordinate payments among the responsible agencies.

SSA Disability Decision Making: Potential Racial Disparities Product issue date: 11/14/03

Requester: Representative Rangel, Charles B.

Representative Matsui, Robert T.

Representative Green, Gene

Background and Key Questions: In 1992, GAO reported that racial differences in SSA's disability decisions could not be explained by key factors in its decision-making process (e.g., claimant's age and severity of impairment), especially at the Administrative Law Judge (ALJ) level. In September 2002, GAO reported on steps SSA had taken to correct unwarranted disparities and recommended measures that would enhance its ability to determine whether racial bias exists in its decision-making. This review will examine (1) whether racial disparities exist in ALJ disability decisions and, if so, the extent to which these disparities are explained by key factors related to SSA's decision making and (2) challenges SSA faces in assessing potential racial disparities at the ALJ level in the future.

Economic and Intergenerational Implications of "No Action" on SS Reform

Product issue date: 7/29/03

Requester: Senator Grassley, Charles E.

Senator Craig, Larry

Background and Key Questions: In testimony on March 25, 1999, GAO discussed three basic criteria that policy makers should consider in choosing among different Social Security reform proposals. GAO has been asked to apply these criteria in assessing a "no action" scenario. This is a scenario that, assuming no legislative intervention, results in scheduled benefits not being paid upon the exhaustion of the OASDI combined trust fund. GAO will determine: 1) What is the fiscal result of a "no action" scenario using GAO's criteria for evaluation of Social Security reform proposals? 2) What is the outcome of a "no action" scenario on individual beneficiaries? 3) Does the scenario adequately address issues of administration and implementation?

Progressivity and Social Security Reform

Background and Key Questions: In assessing proposals to reform Social Security, GAO has identified benefit progressivity as one of the parameters in its criteria to assess Social Security reform proposals. While some believe that Social Security reform proposals which include individual accounts will reduce the progressivity of benefits, hurting low-wage workers, such proposals appear to vary in this regard, with some specifically designed to improve the progressivity of program benefits by providing crucial benefit protection for low-wage workers. Questions to consider on progressivity could include: (1) What are the appropriate parameters and general approach one should use in assessing the benefit progressivity of different Social security reform proposals? (2) How does the overall benefit progressivity of various proposals compare to GAO’s benchmarks for different cohorts? How should benefit progressivity be understood in the overall context of the GAO criteria?

Mexico Totalization Agreement Product issue date: 9/30/03

Requester: Representative Sensenbrenner, James F.

Representative Shaw, E. Clay Jr.

Background and Key Questions: The President may enter into social security totalization agreements with foreign countries to exempt corporations and workers from paying social security taxes on the same earnings to both countries, combine ("totalize") service years for employees who have worked in two countries to allow eligibility for benefits in one or both countries, and waive rules precluding payment of benefits to aliens who live outside the country. Congress has 60 days to reject or modify a proposed agreement. GAO was asked to provide (1) an overview of the purposes of totalization agreements and processes used to establish them, (2) information on how such agreements affect social security payments to aliens, and (3) information on the impact that an agreement with Mexico would have on program trust funds.

Pension Plan Rates of Return Issue date: 2/24/04

Requester: Representative Miller , George

Background and Key Questions: The continued decline in the stock market and its effects of the financial condition of private defined benefit pension plans has raised questions about the rate of return assumptions plan sponsors use for pension plan funding and corporate financial reporting purposes. The assignment objectives are to (1) describe the different rate of return assumptions used for pension plan funding and financial statement purposes, (2) discuss the factors plan sponsors and actuaries, including guidance provided by regulators and professional standard setting organizations, consider when setting plan rate of return assumptions, and (3) compare for a sample of pension plans the expected and actual rates of return, and the effects on plan funding levels.

Preserving Retirement Savings Product issue date: 7/29/03

Requester: Representative Cardin, Benjamin

Representative English, Phil

Representative Pomeroy, Earl

Representative Portman, Rob

Background and Key Questions: Employer-sponsored pensions may pay benefits as an annuity or lump sum amount at retirement. Retiring participants who receive benefits as a lump sum distribution may not preserve these assets to provide retirement income and may outlive their pension assets. In response to this concern, we were asked to: (1) determine what benefit payout options and accompanying information defined benefit and defined contribution plans offer at retirement, (2) determine what benefit payout options plan participants elect at and during retirement, and how these retirees differ from each other, and (3) discuss options that might encourage more plans to offer and participants to elect or purchase annuities at retirement.

Financial Condition of PBGC Estimated completion date: 7/22/03

Requester: Representative Boehner, John A.

Representative Johnson, Sam

Background and Key Questions: The Employee Retirement and Income Security Act of 1974 (ERISA) established the Pension Benefit Guaranty Corporation (PBGC) to pay the benefits, up to certain limits, promised by defined benefit pension plans in the event that an employer could not. ERISA requires that PBGC be self-financing. Several large claims from underfunded plans have led to a decline in PBGC's financial condition from a $10 billion surplus to a $3.6 billion deficit in just 2 years. To address concerns about PBGC's financial status, GAO will provide information on: (1) factors that contributed to recent changes in PBGC's financial condition, (2) risks to PBGC's long-term financial viability and the ability of PBGC to forecast its future financial condition, and (3) options for enhancing PBGC's future solvency.

Proxy Voting Under ERISA

Requester: Senator Kennedy, Edward M.

Background and Key Questions: The growth in pension plans as a source of investment capital has raised questions about the decisions of some plan fiduciaries in corporate governance activities. Public pensions have emerged as influential institutional investors, but questions remain about the extent to which private plan fiduciaries are fulfilling their responsibilities under ERISA in making decisions such as how to vote stock and whether to approve corporation mergers. We were asked to: 1) describe the fiduciary requirements relative to proxy voting under ERISA, 2) identify the Department of Labor's (DOL) actions to enforce these requirements, and 3) describe proxy voting practices public and private sector pension plans have adopted to protect against fiduciary conflict of interests.

Status of Multi-Employer Defined Benefit Pension Plans

Product issue date: 3/27/03

Requester: Representative Boehner, John A.

Representative Johnson, Sam

Background and Key Questions: The financial crisis facing the Social Security program and the declining stock market have heightened the importance of ensuring adequate retirement income through private defined benefit (DB) pension plans. Existing multiemployer collectively bargained DB pension plans provide coverage to 22 percent of private employer DB plan participants. GAO will provide information on: (1) What is the status of multiemployer DB plan formation, coverage, funding, and financial stability; (2) What has PBGC done to insure the financial stability of multiemployer DB plans; (3) What are the major impediments to Multiemployer DB plan financial security and what solutions have been proposed; and (4) What are the major impediments to multiemployer DB plan formation and what solutions have been proposed?

Web Links

OMB Circular A-76 Revisions (May 29, 2003) http://www.whitehouse.gov/omb/circulars/a076/a76_rev2003.pdf

ILO reports on work and Crisis Response and Reconstruction, including armed conflicts, natural disasters, economic downturns, gender and crisis, and political transition

http://www.ilo.org/public/english/employment/recon/crisis/index.htm

Reports on trade and NAFTA, Social Security, and other tax and economic issues

http://www.cbo.gov/

Business Roundtable statements on corporate governance and accountability

http://www.brtable.org/issue.cfm/2/0/0/12

Recent Labor and Employment Law Publications

Marc Altenbernt, Comment: Will EEOC v. Waffle House, Inc. Signal the Beginning of the End for Mandatory Arbitration Agreements in the Employment Context? 3 Pepp. Disp. Resol. L.J. 221 (2003)

Leonard Baynes, Racial Profiling, September 11th, and the Media: A Critical Race Theory Analysis, 2 Va. Sports & Ent. L.J. 1 (2002)

Richard Block, Understanding International Labor Standards, 11 Mich. St. U.-Det. C.l. J. Int'l L. 113 (2002)

Jason Bosch, Note. None of Your Business (Interest): The Argument for Protecting All Employee Behavior with No Business Impact, 76 S. Cal. L. Rev. 639 (2003)

William Clatanoff, From NAFTA/NAALC to the FTAA via TPA-trade Promotion Authority Legislation, 11 Mich. St. U.-Det. C.l. J. Int'l L. 47 (2002)

Dennis Devaney, An Argument for Extraterritorial Regulation of Multi-national Corporations Using U.S. Law, 11 Mich. St. U.-Det. C.l. J. Int'l L. 69 (2002)

Peter Dorman, International Labor Standards: The Economic Context, 11 Mich. St. U.-Det. C.l. J. Int'l L. 125 (2002)

Peter Dorman, Child Labor: Case Study in International Labor Standards, 11 Mich. St. U.-Det. C.l. J. Int'l L. 79 (2002)

Kevin Doyle, Comment: The Shifting Legal Landscape of Contingent Employment: A Proposal to Reform Work, 33 Seton Hall L. Rev. 641 (2003)

Bill Ezzell, Note: Laws of Racial Identification and Racial Purity in Nazi Germany and the United States: Did Jim Crow Write the Laws That Spawned the Holocaust? 30 S.U. L. Rev. 1 (2002)

William Fletcher, Labor Rights in a Free Trade World: A Challenge to the Paradigm, 11 Mich. St. U.-Det. C.l. J. Int'l L. 7 (2002)

Jay Folberg, Arbitration Ethics – Is California the Future? 18 Ohio St. J. on Disp. Resol. 343 -(2003)

Keith Hammond, An Employer's Guide to Analyzing Issues under the Americans with Disabilities Act, 4 Transactions 7 (2002)

John Hancock, Comparing Labor Laws of Countries in Different Stages of Development: Application of These Laws to International Workers, 11 Mich. St. U.-Det. C.l. J. Int'l L. 59 (2002)

Robert Holtzman & Jeff Kichaven, Recent Developments in Alternative Dispute Resolution, 38 Tort Trial & Ins. Prac. L.J. 167 (2003)

Jon Lambiras, Comment: White-collar Crime: Why the Sentencing Disparity Despite Uniform Guidelines? 30 Pepp. L. Rev. 459 (2003)

Michael Leroy & Peter Feuille. Judicial Enforcement of Predispute Arbitration Agreements: Back to the Future, 18 Ohio St. J. on Disp. Resol. 249 (2003)

Darryl Liguori, Note: Fore! The Supreme Court Tees off a Standard to Apply the Americans with Disabilities Act to Professional Sports, 12 Widener L.J. 185 (2003)

Ed Lorenz, Bringing Law to Globalization Through ILO Conventions: A Labor Perspective on the Core Labor Standards, 11 Mich. St. U.-Det. C.l. J. Int'l L. 101 (2002)

Tom Niles, Raising Respect for Core Labor Standards in the Globalized Economy, 11 Mich. St. U.-Det. C.l. J. Int'l L. 91 (2002)

Latressa McLawhorn, Recent Development. Leveling the Accessibility Playing Field: Section 508 of the Rehabilitation Act, 3 N.C. J.L. & Tech. 63 (2001)

Deboarh Maranville, Workplace Mythologies and Unemployment Insurance: Exit, Voice and Exhausting All Reasonable Alternatives to Quitting, 31 Hofstra L. Rev. 459 (2002)

Shereen Marcus, Note: Efficiency in Exchange: An Economic Analysis of Acquisition by Negotiation, 32 Pub. Cont. L.J. 659 -673 (2003)

Kathryn Moran, Montgomery. Recent Developments in Employer-Employee Relations, 38 Tort Trial & Ins. Prac. L.J. 309 (2003)

Meredith Myers, Comment. Grades Are No Longer Just for Students: Forced Ranking, Discrimination, and the Quest to Attain a More Competent Workforce, 33 Seton Hall L. Rev. 681 (2003)

Ryan Philp, Comment: Silence at Our Expense: Balancing Safety and Secrecy in Non-disclosure Agreements, 33 Seton Hall L. Rev. 845 (2003)

Robert Reilly, Recent Developments in Workers' Compensation and Employers' Liability Law, 33 Tort Trial & Ins. Prac. L.J. 749 (2003)

Jennifer Rhodes, Comment: Judicial Review of Partial Arbitral Awards under Section 10(a)(4) of the Federal Arbitration Act, 70 U. Chi. L. Rev. 663 (2003)

Jonathan Rose & Michael Buddendeck, Recent Developments in Employee Benefits Law, 38 Tort Trial & Ins. Prac. L.J. 289 (2003)

Symposium: Labor Rights in a Free Trade World: Paradigm or Paradox? 11 Mich. St. U.-Det. C.l. J. Int'l L. 1 (2002)

Mildred Warner, Rosaria Ribeiro & Amy Erica Smith, Addressing the Affordability Gap: Framing Child Care as Economic Development, 12 J. Affordable Housing & Commun. Dev. L. 294 (2003)

Ian Weinstein, Don't Believe Everything You Think: Cognitive Bias in Legal Decision Making, 9 Clinical L. Rev. 783 (2003)

Holly Winefsky & Julie Tenney, Note. Preserving the Garment Industry Proviso: Protecting Acceptable Working Conditions Within the Apparel and Accessories Industries, 31 Hofstra L. Rev. 587 (2002)

Toni Wortherly, Note: There's No Business like Show Business: Alternative Dispute Resolution in the Entertainment Industry, 2 Va. Sports & Ent. L.J. 162 (2002)

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