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Labor and Employment Law

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Markets and Discrimination

Jacob E. Gersen

Despite decades of scholarship in law and economics, disagreement persists over the extent of employment discrimination in the United States, the correct explanation for such discrimination, and the normative implications of the evidence for law and policy. In part, this is because employment discrimination is an enormously complex phenomenon, and both its history and continued existence are closely linked to politics and ideology. However, some portion of this dispute can also be traced to the incomplete use of empirical evidence. Most economic theories of employment discrimination imply empirical relationships between discrimination and the market structure of particular industries and characteristics of their workforces. Yet empirical work has most typically focused on either specific industries or the economy as a whole, and little systematic evidence about market structure and patterns of actual employment discrimination claims exists. This Article compiles and analyzes an original data set comprised of industry-specific measures of employment discrimination claims, market conditions, and labor force characteristics. In so doing, this Article contributes to an emerging literature that tests the core theoretical positions in the law and economics of discrimination literature, which in turn promises to advance understanding of both the causes of and remedies for employment discrimination.

The Earned Income Tax Credit as an Incentive to Report: Engaging the Informal Economy Through Tax Policy

John J. Infranca

The Earned Income Tax Credit (EITC) provides financial assistance to low-income workers through a refundable tax credit. The EITC, which has received strong bipartisan support since its introduction in 1975, now represents the nation’s largest anti-poverty program for non-elderly individuals. In this Note, I contend that the EITC’s historical development failed to account for (and prior scholarly analysis of its impact on labor supply decisions have ignored) the important role of informal employment in the lives of the working poor. This Note presents the first analysis of the financial impact of government transfer and tax programs on the decision to report informal income—income that, were it reported, would be otherwise legal. As the Note’s analysis reveals, while drastic changes in both tax and transfer programs may be necessary to provide financial incentives for many households with children to report informal income, more targeted changes to the EITC could pro- vide strong incentives for childless informal workers to report. The Note argues that the benefits to both individuals and society, financial and otherwise, of tax reporting by low-income individuals engaged in informal work merits reconsideration of the EITC’s overall structure and administration. Administrative and policy innovations described in the Note are also necessary to maximize reporting compliance.

Blameless Ignorance? The Ledbetter Act and Limitation Periods for Title VII Pay Discrimination Claims

Jeremy A. Weinberg

In Ledbetter v. Goodyear Tire & Rubber Co., the Supreme Court rejected the argument that a new Title VII violation occurred and a new charge-filing period arose each time an employer issued a paycheck to an employee that reflected some past, uncharged discrimination (the so-called “paycheck accrual rule”). This opinion was effectively reversed when President Obama signed his first bill into law: the Lilly Ledbetter Fair Pay Act of 2009. The new law amended Title VII such that an unlawful employment act occurs “when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.”

Considering issues of fairness to employees and employers, as well as the societal interest in repose, this Note examines the Ledbetter Act and measures it against two alternatives: (1) application of a discovery rule and (2) use of the doctrine of equitable tolling for fraud. The Note contends that the Ledbetter Act is a flawed way of addressing the problem that victims of pay discrimination face in detecting discrimination
and bringing suit within the limitations period. Concluding that the discovery rule has been foreclosed by Congress and the courts, this Note argues that equitable tolling for cases of fraudulent concealment is a sensible, viable way of giving blamelessly ignorant plaintiffs access to the courts and avoiding the drawbacks of the Ledbetter Act.

Tax Expenditures and Global Labor Mobility

Ruth Mason

Governments often deliver social welfare benefits through “tax expenditures,” which are provisions of the tax code (such as home mortgage deductions) designed to serve social policy objectives. This Article considers the criteria for granting tax expenditures to individuals who work outside the state where they reside. International tax norms currently assign the primary entitlement to tax labor income to the state where the taxpayer works, but they assign the obligation to confer personal tax expenditures exclusively to the state where the taxpayer resides. This Article argues that the disjunction between the entitlement to tax and the obligation to provide tax benefits affects cross-border labor mobility and has important distributive implica- tions for taxpayers and states. In constructing these arguments, this Article introduces the concepts of “labor export neutrality” and “labor residence neutrality” as tools for analyzing government policies that affect global labor mobility. A policy is labor export neutral if it does not distort taxpayers’ decisions about where to work. A policy is labor residence neutral if it does not distort taxpayers’ decisions about where to reside.

Workplace Grievance Procedures: Signaling Fairness but Escalating Commitment

Joshua C. Polster

Over the last fifty years, nonunion employers have increasingly adopted formal
grievance procedures, which allow employees to challenge a company decision or
policy and appeal manager adjudications of the challenge. Employers have
adopted these procedures to minimize liability and ensure employee productivity.
But while these procedures signal that employees are treated fairly, the psychological
theory of escalation of commitment suggests that complaint-and-appeals procedures
exacerbate workplace conflict. This Note presents this unintended
consequence of formal grievance procedures and discusses its implications for
workplace dispute resolution. Part I explains the adoption of formal grievance procedures
as employer efforts to signal that employees are treated fairly. Part II
applies the psychological theory of escalation to grievance procedures, and Part III
argues that escalation undermines the purpose of formal grievance procedures and
proposes mediation as an escalation-reducing alternative.

Unionized Charter School Contracts as a Model for Reform of Public School Job Security

Peter Kauffman

To have a strong public education system, it is imperative to recruit and maintain high-caliber public school teachers and ensure that school administrators can terminate underperformers. Teachers unions have contributed to this effort by increasing professionalism in teaching and giving teachers a role in school management, but they have also detracted from it by making it too difficult to terminate incompetent teachers. Nonunionized charter schools that employ teachers at will, on the other hand, may leave teachers vulnerable to arbitrary or malicious terminations. Unionized charter schools, a relatively recent phenomenon, produce teacher contracts that, as the result of labor negotiations between two prominent players in education, could provide valuable lessons for reform to the American public education system. This Note’s analysis of contracts from the unionized charter schools in New York City reveals that they provide teachers with more job protection than employment at will but far less than provided in the public school union contract. Traditional public schools and unions should reform their collective bargaining agreements to provide a level of job security similar to that in the unionized charter school contracts. This may create the right balance between allowing principals to terminate incompetent teachers and protecting teachers from arbitrary or malicious terminations.

Turn Off the Danger: The Lack of Adequate Safety Incentives in the Theatre Industry

Lori Brooke Day

This Note uses the Broadway musical Spider-Man: Turn Off the Dark as a case study to examine the legal and nonlegal systems in place to deter unsafe working conditions in the theatre industry. In little over a year of rehearsals and performances, seven members of the Spider Man cast were injured, one very seriously. (An eighth cast member was then seriously injured as this Note was being prepared for print, approximately two years later.) This Note argues that Spider-Man illustrates how the current regime does not deter unsafe conditions. It argues that the workers’ compensation exclusivity bar to a civil suit—which provides employers a complete defense with respect to covered injuries, unless an injury is the result of an intentional tort—should be lowered to create better incentives for producers to ensure the safety of their actors.

Not Part of the Bargain: Worker Centers and Labor Law in Sociohistorical Context

Thomas I.M. Gottheil

The American labor movement is in trouble. As union density declines and worker organizing becomes more difficult, a relatively new model, the worker center, has emerged to organize low-wage immigrant workers. Worker centers devise a broad range of strategies and internal structures to meet the challenges of the contemporary organizing landscape, and these strategies would not be possible were worker centers considered labor organizations under labor law. Recently, anti-union groups and members of Congress have shifted focus to worker centers, urging that they be regulated under the National Labor Relations Act. By examining the history of labor law and the structure of worker centers, this Note argues that regulation of worker centers under the NLRA would be inappropriate, ahistorical, and an unreasonable restriction on the associational rights of workers.

The Use and Abuse of Labor’s Capital

David H. Webber

The recent financial crisis has jeopardized the retirement savings of twenty-seven million Americans who depend on public pension funds, leading to cuts in benefits, increased employee contributions, job losses, and the rollback of legal rights like collective bargaining. This Article examines ways in which public pension funds invest against the economic interests of their own participants and beneficiaries, and the legal implications of these investments. In particular, the Article focuses on the use of public pensions to fund privatization of public employee jobs. Under the ascendant—and flawed—interpretation of the fiduciary duty of loyalty, public pension trustees owe their allegiance to the fund itself, rather than to the fund’s participants and beneficiaries, notwithstanding the fact that the duty of loyalty commands trustees to invest “solely in the interest of the participants and beneficiaries” according to ERISA and similar state pension codes. I argue that this “fund-first” view distorts the duty of loyalty and turns the role of trustee on its head, leading to investments that undermine, rather than enhance, the economic interests of public employees. I turn to ERISA, trust law, agency law, and corporate law to argue that public pension trustees should consider the impact of the funds’ investments on the jobs and job security of the funds’ participants and beneficiaries, where relevant. I also adduce evidence that these controversial investments are widespread. I propose that public pension funds be governed by a “member-first” view of fiduciary duty focused on the economic interests of public employees in their retirement funds, which go beyond maximizing return to the funds. I argue that this view is more faithful to the original purpose of the duty of loyalty than is the fund-first view. I suggest ways to implement the member-first view, discuss potential extensions beyond the jobs impact of investments, and assess the proposed reform’s practical effects.

Ably Queer: The ADA as a Tool in LGBT Antidiscrimination Law

Alok K. Nadig

Being queer—like deviating from the norm in any way—can be socially disabling. So why not turn to disability law for redress? After a nationwide same-sex marriage ruling from the Supreme Court, many are devoting more attention to the current absence of uniform, federal employment discrimination protections for lesbian, gay, bisexual, and transgender (LGBT) people. As Title VII has grown friendlier to claims made by LGBT individuals, people are debating the merits of cognizing anti-LGBT bias as sex discrimination in the law. Meanwhile, the Equality Act, introduced in Congress in 2015, would ban discrimination on the basis of LGBT status throughout the country. But while vital, Title VII and the Equality Act could leave a gap through which queer people whose identities are not legible within the gender binary and are not politically stable as lesbian, gay, bisexual, or transgender are left out. This Note argues that LGBT people should challenge their current exclusion from the Americans with Disabilities Act (ADA) through constitutional litigation to fill this gap. Through its disavowal of traditional identity politics, the ADA offers an additional comparative advantage that has transformative potential for queer plaintiffs: Its foundation on the social model of disability topples the LGBT rights movement’s historic emphasis on respectability to enable unrestrained self-determination.