Law Commons^™

Optimizing Whistleblowing, Usha Rodrigues

Scholarly Works

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 …

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.

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

Scholarly Works

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.

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

Scholarly Works

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 …

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

Scholarly Works

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 …

Title Vii And The #Metoo Movement, Rebecca White

Scholarly Works

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

Scholarly Works

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 …

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

Scholarly Works

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 …

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

Scholarly Works

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

Scholarly Works

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

Scholarly Works

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

Scholarly Works

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 …

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

Scholarly Works

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

Scholarly Works

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

Scholarly Works

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

Scholarly Works

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

Scholarly Works

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 …

Affirmative Action In The Workplace: The Signficance Of Grutter?, Rebecca H. White

Scholarly Works

The Supreme Court's decision last term in Grutter v. Bollinger answered important questions about the affirmative use of race in the educational context. I have been asked by the editors of the Kentucky Law Journal to explore the impact the decision is like to have on affirmative action in a different context--employment. Simply put, to what extent does Grutter affect a public or private employer's ability to voluntarily adopt an affirmative action plan in order to diversify its workplace? The short answer, of course, is that the Grutter decision does not directly apply to the affirmative use of race or …

Section 1983, The First Amendment, And Public Employee Speech: Shaping The Right To Fit The Remedy (And Vice Versa), Michael Wells

Scholarly Works

This Article is not about theories of free speech and how they bear on the public employment context, nor does it contribute to the academic debate over what the aims of public employee speech law ought to be. I take the Court at its word when it says that its aim is to give substantial weight to both the value of speech and the government's interest as an employer. Unlike Massaro and Ingber, I take it as a given that the government may insist on hierarchy and obedience to authority in the workplace. Unlike Rosenthal, I begin from the Court's …

Whose Motive Matters? Discrimination In Multi-Actor Employment Decision Making, Rebecca H. White, Linda Hamilton Krieger

Scholarly Works

The search for a discriminatory motive in disparate treatment cases often is envisioned as an attempt to determine whether a supervisor, despite his denials, consciously acted out of bias, animus or on the basis of “inaccurate and stigmatizing stereotypes” in making an employment decision. Framing the search for discriminatory motive is this way, however, cannot prove fully effective in eliminating discrimination, as individuals may be unaware of their own biases or the influences those biases have had on their own decision making.

The reality of decision making in the employment area, moreover, is that multiple individuals are often involved in …

Deference And Disability Discrimination, Rebecca H. White

Scholarly Works

In 1999, the question of deference to the EEOC grabbed the spotlight. It surfaced in a case that arose under the Americans with Disabilities Act of 1990 (the "ADA"), a relatively new, and sweeping, anti-discrimination law that prohibits workplace discrimination against qualified individuals with a disability. A difficult substantive question was presented: Is the determination of whether one has a disability within the meaning of the ADA to be made with or without regard to mitigating measures? Instinctively, either a "yes" or a "no" answer seems problematic. On the one hand, defining disability without regard to the corrective effects of …

De Minimis Discrimination, Rebecca H. White

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Is there any basis for a de minimis exception to our employment discrimination laws? This Article suggests a way of analyzing the issue of de minimis discrimination that comports with the language of and policies underlying Title VII and also with judicially developed disparate treatment theory. It approaches this project from a normative and doctrinal, not a deontological, perspective. Congress has enacted laws prohibiting discrimination in employment, and the appropriate question, in the first instance, is how those statutes should best be interpreted. Although the focus is on Title VII, the analysis undertaken here may be usefully applied to other …

Modern Discrimination Theory And The National Labor Relations Act, Rebecca H. White

Scholarly Works

This Article explores the concept of discrimination under the NLRA [National Labor Relations Act]. Specifically, it examines discrimination under the statute through the lens of Title VII, an approach that brings a fresh perspective to doctrine long considered settled. The purpose of this comparison is to explore the extent to which Title VII's discrimination concepts make sense under the NLRA. This analysis focuses on three specific areas. First, it examines discrimination cases under section 8(a)(1), concluding that the lower courts are wrong to apply Title VII concepts and to insist that without disparate treatment of union activities, no unlawful discrimination …

Vicarious And Personal Liability For Employment Discrimination, Rebecca H. White

Scholarly Works

This Article addresses the issues of vicarious and personal liability for employment discrimination as a coherent whole. Part II examines the prevailing view on an employer's vicarious liability for employment discrimination under Title VII, the ADEA, and the ADA. Part II further discusses the exception to vicarious liability that has developed in hostile work environment cases and examines the justifications advanced for that exception. My point here is not so much to debate whether such an exception should exist but to determine whether the arguments against vicarious liability in hostile work environment cases justifiably can be limited to that context. …

The Eeoc, The Courts, And Employment Discrimination Policy: Recognizing The Agency's Leading Role In Statutory Interpretation, Rebecca White

Scholarly Works

This Article explores whether a delegation to the EEOC of law-interpreting authority may be found under Title VII, the ADEA, or the ADA, despite the agency's lack of full enforcement authority under these statutes. If the EEOC possesses such authority, it, not the courts, will decide many of the difficult issues left unresolved by Congress under the 1991 Civil Rights Act, the ADA, and other statutes administered by the agency. I easily conclude the EEOC has been delegated law-interpreting power under both the ADEA and the ADA. The authority to issue legislative rules, in the context of these statutory schemes, …

Job Security: Protecting At-Will Employees With Good Cause Legislation, Mayumi Yokoyama

LLM Theses and Essays

Recent decades have witnessed significant developments in employment termination law in the United States. In particular, the long-standing “at-will” doctrine, under which employers can fire employees for good, bad, or no reason at all, has experienced great erosion and wide variations in law from state to state. There has been a movement of statutory and common law restrictions limiting an employer’s freedom to terminate at will, which reflects the increasing consciousness of job security by society and workers. This paper analyzes the problem of job security by tracing the origin of the at-will doctrine to 19th century principles favoring economic …

The Proper Role Of After-Acquired Evidence In Employment Discrimination Litigation, Rebecca White, Robert D. Brussack

Scholarly Works

A new defense to employment discrimination claims has gained acceptance in the lower courts. Employers who allegedly have discriminated against their employees because of race, sex or age are winning judgments on the basis of after-acquired evidence of employee misconduct. The evidence is “after-acquired” in the sense that the misconduct was unknown to the employer at the time the alleged discrimination occurred but was acquired later, often through the use of discovery devices in the employee's discrimination action. Lower courts have accepted the proposition that if the employer would have discharged the plaintiff on the basis of the after-acquired evidence, …

State Taxation Of Nonresidents' Pension Income, Walter Hellerstein

Scholarly Works

This article examines the issues raised by the efforts of some states to tax the pension income of their former residents and of the proposed congressional legislation to forbid such taxation. While there may be sound policy reasons for forbidding state taxation of nonresident pension income, they have yet to emerge clearly from the rhetoric that has thus far dominated the debate over the pension tax issue. The goal of the article is to examine the questions raised by the controversy over state taxation of nonresident pensions in the hope that dispassionate analysis of the problem may contribute to a …

The Statutory And Constitutional Limits Of Using Protected Speech As Evidence Of Unlawful Motive Under The National Labor Relations Act, Rebecca White

Scholarly Works

A difficulty inherent in cases under the National Labor Relations Act (NLRA), as in other areas of employment law, is in determining why the employer acted. Perhaps an even harder question, and one too frequently overlooked, is what form of evidence the National Labor Relations Board (NLRB or Board) and any reviewing court properly may consider in determining motive. More specifically, can the Board take into account an employer's vigorous opposition to the union in deciding whether or not a particular action was motivated by antiunion animus? Although common sense suggests yes, several courts of appeals have said no, relying …