Labor and Employment Law Commons^™

A Worker-Centered Trade Policy, Desiree Leclercq

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What is a “worker-centered” trade policy? The Biden administration claims that it means protecting all workers—foreign and American—from exploitative working conditions in trade sectors. The administration’s vigorous enforcement of international labor rights suggests a significant departure from previous U.S. trade priorities centered on domestic interests. For economic and humanitarian reasons, various policymakers and scholars celebrate these developments. They optimistically assume that the administration’s new trade policy will influence foreign governments and facilities to comply with international labor rights in trade if the costs of noncompliance outweigh the benefits. They also assume that the policy will influence compliance with strong labor …

Strengthening Labor Rights In Trans Pacific Partnership Agreement: A Lost Opportunity?, Desiree Leclercq, Karen Curtis

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This Chapter was initially drafted during the Obama Administration. The Trans-Pacific Partnership Agreement (TPP) had been negotiated and, although it had not yet been ratified in the United States, the Administration and majority of policymakers were in favor of its implementation. Since that time, the United States Administration changed and the United States withdrew from participation in the TPP. While unfortunate, the Administration’s political decision to withdraw from the TPP does not come as a surprise; an examination of the negotiating history of those provisions illuminates a stark political divide within the United States, even prior to the change in …

The Indo-Pacific Economic Framework For Prosperity: Promise Or Peril For Labor Governance Through Trade Instruments?, Desiree Leclercq

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President Biden has launched an Indo-Pacific Framework for Prosperity (“IPEF”) that purports to facilitate high standards, including high labor standards, in the region. That Framework is silent on traditional trade matters such as market access, leading many trade and labor scholars and policymakers to question its utility.

Contrary to that skepticism, this commissioned report argues that the IPEF holds tremendous promise by realigning the bottom-up governance of labor rights in trade with international labor governance. Doing so, this report argues, will strengthen allyships and trade relations in the region. On the other hand, the IPEF could prove equally perilous if …

Rights-Based Sanctions Procedures, Desiree Leclercq

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Federal agencies are increasingly interpreting international labor rights and imposing a wide array of economic and financial penalties, or “rights-based sanctions,” under various laws and regulations. Congress recently vested the Office of the United States Trade Representative (USTR) with authority to impose targeted rights-based sanctions on foreign factories. USTR has begun administering its new authority with vigor. Policymakers and rights advocates hope that USTR’s enforcement activities will strengthen the protection of workers abroad.

Hidden from view, and thus largely overlooked, are the exclusory procedures that agencies follow when they administer rights-based sanctions. The Treasury Department’s Office of Financial Asset Control …

Optimizing Whistleblowing, Usha Rodrigues

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Whistleblowers have exposed misconduct in settings ranging from public health to national security. Whistleblowing thus consistently plays a vital role in safeguarding society. But how much whistleblowing is optimal? And how many meritless claims should we tolerate to reach that optimum? Surprisingly, legislators and scholars have overlooked these essential questions, a neglect that has resulted in undertheorized, stab-in-the-dark whistleblower regimes, risking both overdeterrence and underdeterrence.

This Article confronts the question of optimal whistleblowing in the context of financial fraud. Design choices, which play out along two axes, have profound effects on the successful implementation of whistleblowing policy. One axis varies …

Outsourcing Enforcement, Desiree Leclercq

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International organizations often outsource the enforcement of international law to their member states. The International Labor Organization (ILO), for instance, has neither its own adjudicative body nor an internal system of sanctions. Instead, the ILO’s maritime rules authorize states to impose costly retributive measures against noncompliant states. Conventional scholars are optimistic that these kinds of authorizations will strengthen otherwise toothless international law. During the COVID-19 pandemic, however, states neither followed nor enforced the ILO’s rules, harming hundreds of thousands of seafarers in the process.

Where has international law gone wrong? Challenging the conventional view, this Article unearths the state-centric drawbacks …

The Disparate Treatment Of Rights In Trade, Desiree Leclercq

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Rights advocates are increasingly urging U.S. trade negotiators to include new binding and sanctionable provisions that would protect human rights, women’s rights, and gender equality. Their efforts are understandable. Trade agreements have significant advantages as a process for advancing global rights. Even though Congress and the Executive incorporate global environmental standards and labor rights in U.S. trade agreements, they have refused to incorporate gender rights and broader human rights. The rationale behind the United States’ disparate treatment of rights in trade has received almost no scholarly attention. That is a mistake.

Using labor rights as a case study, this Article …

Nestlé United States, Inc. V. Doe. 141 S. Ct. 1931 (2021), Desiree Leclercq

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On June 17, 2021, the United States Supreme Court reversed and remanded a suit filed against Nestlé USA and Cargill under the Alien Tort Statute (ATS) 1 for lack of jurisdiction. This case has already garnered attention over the nature of the dispute (child slaves in Africa), the Supreme Court’s treatment of jurisdiction under the ATS, and the finding shared by five of the nine Supreme Court justices that domestic corporations can potentially be sued under the ATS. This analysis focuses on the child slavery and global supply chain aspects of the decision.

Could The Gig Economy Send Another Faa Disagreement To The Supreme Court?, Peter B. Rutledge, Jacob Bohn

Popular Media

The Federal Arbitration Act ordinarily obligates federal and state courts to enforce arbitration agreements, including in employment contracts. However, a nearly-century-old carveout in Section 1 exempts from the FAA's sweep contracts of employment for seamen, railroad workers or other individuals "engaged in foreign or interstate commerce." The "gig" economy has spawned increased litigation over the carveout's scope—specifically, whether it applies to certain categories of workers, ranging from Amazon drivers to Grubhub delivery workers. Disagreements are emerging among the federal courts, the law is uncertain in the Eleventh Circuit, and Supreme Court review may soon be called for.

Aging On Air: Sex, Age, And Television News, Rebecca H. White

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The best piece of advice I received when I began teaching law was to adopt Charlie Sullivan's and Mike Zimmer's casebook for my Employment Discrimination class. Before I became a law professor, I had no clue how important choosing the right textbook is, not only for the students but for the teacher. I also was unaware of how much I had to learn about a subject I thought I knew well. I had been litigating employment discrimination cases for several years, but when I began teaching, I quickly learned how much I did not know. Charlie's and Mike's casebook, through …

Retaliation: 462 Clark County School District V. Breeden, 532 U.S. 268 (2001), Rebecca White

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Clark County School District v. Breeden, to my mind, has always been a sleeper case. A per curiam opinion, it takes up no more than five pages in the US reports, yet when I taught this case to my employment discrimination students, we often would spend a full class period – and sometimes more – on it. Why? Because it presents virtually every issue that can crop up under section 704 of Title VII of the Civil Rights Act of 1964, the statute’s antiretaliation provision.

A Rules-Based Approach To Jam’S Restrictive Immunity: Implications For International Organizations, Desiree Leclercq

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U.S. jurisprudence has granted international organizations immunity from suit, even when they carry out operations that violate U.S. rules. In the recent Jam v. Int’l Fin. Corp., the Supreme Court reversed this jurisprudence and restricted the immunity of international organizations. Jam is a landmark decision, but the Court’s failure to address critical questions concerning the scope and meaning of its restricted immunity has led to legal uncertainty and criticism. Under both predominant theories in the international organization discourse – functionalism and constitutionalism – scholars predict that Jam will have a deleterious impact on international organizations. Given the theories’ emphasis on …

Title Vii And The #Metoo Movement, Rebecca White

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The #MeToo movement has drawn unprecedented attention to sexual harassment in the workplace. But there is a disconnect between sexual harassment as popularly understood and sexual harassment as prohibited by Title VII. This Essay identifies those areas where the law and the public understanding of it most starkly diverge. These include the requirements of severity or pervasiveness, the issue of unwelcomeness, the availability of an affirmative defense for hostile work environment claims, and the time limits within which claims must be brought. Additionally, those making claims of sexual harassment fare poorly when they suffer retaliation for stepping forward. Internal complaints …

Center-Left Politics And Corporate Governance: What Is The 'Progressive' Agenda?, Christopher Bruner

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For as long as corporations have existed, debates have persisted among scholars, judges, and policymakers regarding how best to describe their form and function as a positive matter, and how best to organize relations among their various stakeholders as a normative matter. This is hardly surprising given the economic and political stakes involved with control over vast and growing "corporate" resources, and it has become commonplace to speak of various approaches to corporate law in decidedly political terms. In particular, on the fundamental normative issue of the aims to which corporate decision-making ought to be directed, shareholder-centric conceptions of the …

Tournament Of Managers: Lessons From The Academic Leadership Market, Usha Rodrigues

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Why do firms usually make, not buy, their chief executive officers (CEOs)? Public corporations hire their CEOs from within the firm 78% of the time. They do so although earlier studies have found no clear evidence that internal hires perform better than external ones. So why do firms prefer them? Few scholars have focused on this simple question.

The reason why firms favor internal candidates matters not only in its own right, but also for an overlooked reason: it informs the controversial question of executive compensation. Currently board-compensation committees look to peer benchmarks to set executive pay. But, taking cues …

Strengthening The Southern African Development Community: A Critique Of The International Labor Organization's Development Assistance In Swaziland And Zimbabwe, Desiree Leclercq

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Insufficient labor policies contribute to poverty, while those poverty conditions contribute to limited employment opportunities and labor rights abuses. Traditional multilateral lending institutions, such as the World Bank and the International Monetary Fund, provide development aid but tend to treat labor policies as incompatible with efficient market functioning. The International Labor Organization (ILO), on the other hand, provides development assistance specifically targeting labor policies. Unlike traditional lending institutions, the ILO's assistance imposes no conditions. Instead, the ILO's mandate requires it to design its programs in consultation with the recipient country's government and social partners.

This article studies the ILO's assistance …

Ilo Labor Standards And Trade Agreements: A Case For Consistency, Desiree Leclercq, Jordi Agusti-Panareda, Franz Christian Ebert

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A growing number of trade agreements have taken an important step toward ensuring consistency by referring to - and hence incorporating the legal content of - ILO instruments. On its face, this uniform reference suggests an increasing alignment between the ILO's international labor standards system and the labor provisions included in the various trade agreements. The application of these references in the decentralized trade context needs to be considered carefully, however, as there is a risk of inconsistent practices between agreements.

Andrew B. Arnold's Fueling The Gilded Age: Railroads, Miners, And Disorder In Pennsylvania Coal Country, Laura Phillips Sawyer

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Andrew Arnold’s Fueling the Gilded Age explores the struggles for managerial control and economic power that erupted among coal miners, coal operators, and railroad executives in central Pennsylvania between 1872 and 1902. Rather than presenting an unassailable triumph of the railroads’ interests over labor, Arnold argues that the “coal industry defied order” (p. 3) and laborers exhibited “unexpected agency ” (p. 4, emphasis in original) by thwarting the plans of railroad executives to impose managerial capitalism from the top down. Instead, wage earners “refused to accept their designated fate as commodities” (p. 222) and thereby exerted influence on the institutional …

Sea Change: New Rulemaking Procedures At The International Labour Organization, Desiree Leclercq

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The International Labour Organization (“ILO”) turns 100 years old in 2019, and is accordingly one of the oldest international organizations. Its mandate to promote decent work through standard-setting and norm supervision has been challenged by rapid changes in the world of work brought on by globalization, technological advancements, and an increasingly migratory workforce. These changes require the ILO to maintain a flexible system of norm creation and rulemaking that can adapt just as rapidly.

To ensure a flexible system, the ILO should be able to revise its instruments in a sufficiently responsive time. The ILO’s rule to amend its instruments, …

Acqui-Hiring, Gregg D. Polsky, John F. Coyle

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Facebook, Google, and other leading technology companies in Silicon Valley have been buying start-up companies at a brisk pace. In many of these transactions, the buyer has little interest in acquiring the startup’s projects or assets. Instead, the buyer’s primary motivation is to hire some or all of the startup’s software engineers. These so-called “acqui-hires” represent a novel — and increasingly common — tool by which the largest and most successful technology companies in the world satisfy their intense demand for engineering talent.

To date, the acqui-hire has attracted no attention in the academic or professional legal literature. With this …

Contested Meanings Of Freedom: Workingmen's Wages, The Company Store System, And The Godcharles V. Wigeman Decision, Laura Phillips Sawyer

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In 1886, the Pennsylvania Supreme Court struck down a law that prohibited employers from paying wages in company store scrip and mandated monthly wage payments. The court held that the legislature could not prescribe mandatory wage contracts for legally competent workingmen. The decision quashed over two decades of efforts to end the “truck system.” Although legislators had agreed that wage payments redeemable only in company store goods appeared antithetical to the free labor wage system, two obstacles complicated legislative action. Any law meant to enhance laborers’ rights could neither favor one class over another nor infringe any workingman’s ability to …

Can Executive Compensation Reform Cure Short-Termism?, Gregg Polsky, Andrew C. Lund

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There is an increasingly pervasive view among corporate governance observers that senior managers are too focused on short-term results at the expense of long-term interests. Concerns about “short-termism” have been expressed within the financial industry context and outside of it, but because of the recent financial crisis, much of the discussion has been directed at financial institutions. To combat short-termism, several commentators have advocated executive compensation reform to encourage senior managers to adopt a longer-term perspective. Yet these reforms will likely prove ineffective because of other significant pressures on managers to maintain current stock prices.

Fixing Section 409a: Legislative And Administrative Options, Gregg D. Polsky

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This symposium contribution to the Villanova Law Review describes the legislative calamity that is section 409A of the Internal Revenue Code. Section 409A manages, all at once, to (i) fail to better neutralize the tax treatment of deferred compensation with that of current compensation, (ii) impose significant compliance costs on sophisticated taxpayers, and (iii) provide a dangerous trap for unsophisticated taxpayers.

Ideally, Congress should repeal section 409A and replace it with a system that taxes deferred compensation more neutrally vis-a-vis current compensation. Failing that, Congress should either replace section 409A with a broad grant of authority to the Treasury and …

The Diminishing Returns Of Incentive Pay In Executive Compensation Contracts, Gregg D. Polsky, Andrew Lund

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For the past 30 years, the conventional wisdom has been that executive compensation packages should include very large proportions of incentive pay. This incentive pay orthodoxy has become so firmly entrenched that the current debates about executive compensation simply take it as a given. We argue, however, that in light of evolving corporate governance mechanisms, the marginal net benefit of incentive-laden pay packages is both smaller than appreciated and getting smaller over time. As a result, the assumption that higher proportions of incentive pay are beneficial is no longer warranted.

A number of corporate governance mechanisms have evolved to duplicate …

Section 8(F) Prehire Agreements And The Exception To Majority Representation: Are Construction Workers Getting The Shaft?, Desiree Leclercq

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Congress has neglected the federal labor rights of construction workers for half a century. Back in 1959, Congress addressed the needs of construction workers and attempted to ensure that those workers, who were hired by construction employers for erratic and short periods of time, retained the right to organize in unions. To that end, Congress added section 8(f) to the National Labor Relations Act ("NLRA"), authorizing construction employers and unions to enter voluntarily into prehire collective bargaining agreements covering construction workers. Additionally, Congress included a proviso permitting employers to require, as a condition of employment, that their employees join the …

Controlling Executive Compensation Through The Tax Code, Gregg D. Polsky

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This article analyzes Internal Revenue Code § 162(m), which in general denies public companies a deduction for annual non-performance-based compensation in excess of $1,000,000 paid to senior executive officers. Congress enacted § 162(m) with the intent to reduce the overall level of executive compensation and to influence the composition of executive compensation in favor of components that are more sensitive to firm performance. Notably, § 162(m) represents the most direct Congressional effort to influence executive compensation design. In light of recent events, Congress is being called upon to once again address the perceived problem of overgenerous executive pay packages. Accordingly, …

Reforming The Taxation Of Deferred Compensation, Gregg D. Polsky, Ethan Yale

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Executive pay is currently a topic of significant interest for policymakers, academics, and the popular press. Just weeks ago, in reaction to widespread press reports and academic criticism of extravagant executive perquisites, the SEC proposed new regulations designed to change fundamentally the manner in which executive compensation is reported to share-holders. Despite all of this attention, one significant aspect of executive deferred compensation has gone virtually unnoticed - the federal tax rules governing this form of compensation are fundamentally flawed and must be extensively over-hauled. These rules are flawed because they often create a significant incentive for companies and their …

Of Offers Not (Frequently) Made And (Rarely) Accepted: The Mystery Of Federal Rule 68, Harold S. Lewis Jr., Thomas A. Eaton

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This Symposium brings together, from around the nation, eight civil rights and employment discrimination lawyers, four legal academics, and an eminent federal judge, all with deep experience and interest in the promise and pitfalls of Federal Rule of Civil Procedure 68. We gather to unravel a mystery. In an oversimplified nutshell, Rule 68, as construed, enables the defendants to say to the plaintiffs in employment discrimination and civil rights cases: "If you don't beat my offer at trial, you forfeit your right to any future statutory attorney fees." Rule 68 would, therefore, appear to give the defendants a significant incentive …

Taxing The Promise To Pay, Gregg D. Polsky, Brant J. Hellwig

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The IRS recently disclosed that it has identified more than 100 executives at 42 leading public corporations that participated in a tax shelter designed to defer the recognition of income from the exercise of stock options. While the agency thus far has identified approximately $700 million in unreported gains from these shelters, it predicts that the revenue loss to the government will ultimately exceed $1 billion. Compared to most tax shelters, this particular transaction (commonly known as the "Executive Compensation Strategy" or "ECS") is remarkably simple. Rather than exercise the options individually, a participating executive instead transfers the options to …

Employment Discrimination Remedies And Tax Gross Ups, Gregg D. Polsky, Stephen F. Befort

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This article considers whether a successful employment discrimination plaintiff may be entitled, under current law, to receive an augmented award (a gross up) to neutralize certain adverse federal income tax consequences. The question of whether such a gross up is allowed, the resolution of which can have drastic effects on litigants, has received almost no attention from practitioners, judges, and academics. Because of the potentially enormous impact of the alternative minimum tax (AMT) on discrimination lawsuit recoveries, however, the gross up issue is now beginning to appear in reported cases.

The three principal federal anti-discrimination statutes - Title VII, the …