- Sens. Marco Rubio, Elizabeth Warren team up on federal bill to curb practice of yanking occupational licenses over unpaid student debt [Eric Boehm] “Pennsylvania’s Governor Calls for Abolishing 13 Occupational Licenses” [same] Licensing reform generally hasn’t been a partisan battle, but party-line vote in California legislative committee has derailed one promising bill [same] Nebraska gets out in front on the issue with a bill sponsored by libertarian state senator Laura Ebke [Platte Institute] “You Shouldn’t Need a License to Braid Hair” [Ilya Shapiro and Aaron Barnes on Cato amicus brief in Niang v. Tomblinson]
- Alone among states, California requires a “mandatory mediation and conciliation process” for agricultural employers. Arbitrary and open to constitutional challenge [Ilya Shapiro and Reilly Stephens on Cato amicus brief for California Supreme Court certiorari in Gerewan Farming Inc. v. Agricultural Labor Relations Board]
- “Lawsuits that compel sharing economy companies to treat their contractors as full-fledged employees will only forestall the inevitable transition towards a Tomorrow 3.0 economy.” [Pamela Hobart, Libertarianism.org reviewing Michael Munger’s new book “Tomorrow 3.0”] Plaintiffs in California Supreme Court ruling: “Uber Drivers Just Killed All the Parts of the Job They Supposedly Liked the Most” [Coyote]
- Or maybe the gig economy isn’t taking over after all [Ben Casselman, New York Times; Ben Gitis and Will Rinehart, American Action Forum, on new Bureau of Labor Statistics survey finding that prevalence of contingent work has declined, not risen, since 2005]
- “Original Meaning Should Decide Arbitration Act Case on Independent Contractors” [Andrew Grossman and Ilya Shapiro on Cato amicus in Supreme Court case of New Prime v. Oliviera]
- “Disability rates among working-age adults are shaped by race, place, and education” [Martha Ross and Nicole Bateman, Brookings]
On the Supreme Court’s modern development of doctrine favorable to private arbitration, George Mason lawprof Michael Greve is as usual stimulating and surprising [Law and Liberty] And NYU lawprof Sam Estreicher writes that “class action lawsuits are the wrong way to settle employment disputes….Epic Systems may well prove beneficial to workers, a qualified blessing in disguise.” [Bloomberg via Jonathan Adler] More: Christopher Murray, Federalist Society “Courthouse Steps” podcast.
Yesterday’s 5-4 Supreme Court decision upholding agreements to individually arbitrate wage-and-hour claims was neither surprising nor novel as a legal matter. Nor – notwithstanding the variously breathless, furious, and apocalyptic reactions it has drawn from stage Left – is it objectionable as a matter of policy, or “anti-worker.” It is pro-liberty, pro-contract, and pro-respect for private ordering….
NPR, which really should know better, misreported on Twitter that “The Supreme Court in a 5-4 vote has delivered a major blow to workers, ruling for the first time that workers may not band together to challenge violations of federal labor laws,” of which the first eight words count as accurate reporting, the next half-dozen as erroneous opinion, and the remainder as merely false in fact….
…an oft-heard argument is that a contract presented as a take-it-or-leave-it matter, as is typical of employer handbook policies, credit card terms and the like, doesn’t count as a “real” contract and is entitled to no respect as a matter or law or, presumably, from libertarians. … Properly evaluating that claim is a task for another occasion, but my colleague Andrew Grossman is surely right when he points out that every hour of the day workers choose to accept overall employment packages including some terms they welcome (health insurance coverage, paid vacations) along with others they may not (some weekend hours required, don’t take staplers home) and that the lack of dickering over individual terms does not mean that they are not voluntary or have somehow been imposed by force.
Whole thing here. As I wrote after Italian Colors, millions of people “sign away their class action rights not because they are all hoodwinked or coerced, but because at some level they have rational grounds to recognize that” those rights are mostly of value to the class action industry.
Speaking of Italian Colors, the outcome in Epic Systems would surely have been no different had Scalia lived, since he led the way on the Court toward respecting contractual arbitration clauses and upholding the broad scope of the Federal Arbitration Act. More from Archis Parasharami and Dan Jones at SCOTUSBlog: “The best available empirical evidence shows that employees who arbitrate their claims are more likely to prevail than those who go to court, and to obtain awards that are the same as or larger than court awards in a shorter amount of time.” More: James Copland.
- “For years, a Texas electric utility company and its union feuded over the installation of automated smart meters; the company wanted them; the union didn’t, fearing they would put meter-readers out of work. A repairman for the company testifies to state legislators that the smart meters are combustion prone and damaging homes. Company: Which isn’t true. You’re fired. NLRB: Can’t fire him. His testimony was protected union activity. D.C Circuit: Maybe not. We’re very deferential to the Board, but even so, the NLRB’s reasoning here is ‘too opaque.'” [John Kenneth Ross, Short Circuit, on Oncor v. NLRB]
- May Day replay: What happened at the Haymarket Affair? [John J. Miller] A Wikipedia footnote [Timothy Messer-Kruse, Chronicle of Higher Education]
- Decline in number of U.S. manufacturing jobs is not owing to decline in unionization [Colin Grabow, Cato]
- More for the “I thought contractual non-union arbitration was just a racket to benefit employers” files [Eric B. Meyer, Employer Handbook (prospective “tsunami” of arbitration claims against chain restaurant); Daniel Schwartz (exotic dancers win big in private arbitration)]
- “Regulating the Modern Workforce,” Federalist Society Regulatory Transparency Project symposium video with James C. Cooper, Clark Neily, Ryan Nunn, Gabriel Scheffler, John Yun;
- “Consumers do not have the option of abandoning unionized public services if they become too expensive and inefficient, as they can do with unionized services in the private sector.” [Chris Edwards, Cato on Janus v. AFSCME]
- In “race to the courthouse,” lawyers urge Texas counties to sue over opioids [Marissa Evans, Texas Tribune] “Leading Pain Doctors Face Scores of Opioid Lawsuits” [Roger Parloff, who edits newly launched nonprofit site Opioid Watch] “Opioid Settlement Talks Hit Headwinds” [Sara Randazzo, WSJ] A professor (and friend) recently treated for cancer doesn’t care for the “just throttle the supply of prescription opioids” answer [Steven Horwitz, USA Today]
- Asbestos bankruptcy trusts are poorly defended against fraudulent claims. What happens if they run out of money? [U.S. Chamber Institute for Legal Reform study and release] Three senators introduce bill aimed at providing oversight of the bankruptcy trusts [Sen. Chuck Grassley] Have asbestos filings finally peaked? [Amanda Bronstad, National Law Journal] “Cleaning Up The Asbestos Litigation Mess: A Role For The Department Of Justice?” [Glenn Lammi, WLF/Forbes]
- Trial lawyers yearn to knock down validity of contractually agreed arbitration so that every dispute can go to litigation. Is this their year? [L.M. Sixel, Houston Chronicle]
- Judge turns back class action against Home Depot over size of 4x4s, other lumber [Scott Holland, Cook County Record; Jonathan Stempel, Reuters (can be refiled), earlier here and here]
- “The Impact of Lawsuit Abuse on American Small Businesses and Job Creators,” November testimony by John Beisner before Senate Judiciary Committee;
- “Civil Justice Update – Wisconsin Governor Walker Signs Into Law New Reforms” [Andrew C. Cook, Federalist Society] More on disclosure of litigation finance arrangements [Kevin LaCroix]
- D.C. Circuit’s en banc decision upholding constitutionality of CFPB disappointing but not surprising. On to SCOTUS [Ilya Shapiro, Aaron Nielson, Jonathan Adler]
- Big thinking under way at the SEC could replace securities class action sector with free contract: “The SEC should authorize mandatory arbitration of shareholder class action lawsuits” [Bainbridge, Benjamin Bain/Bloomberg News (noting that broker dealers have long been free to use arbitration clauses)]
- Milberg Weiss founder Melvyn Weiss dies at 82 [ABA Journal, our coverage over the years of Weiss and his firm, @PaulHorwitz (“Give generously, and to the right people, so that your NYT obit can be a glowing apologia despite a few inconvenient facts.”)]
- Here come the shareholder derivative suits over sleazy-boss #MeToo scandals [Kevin LaCroix] “NERA: 2017 Securities Suits Filed at ‘Record Pace'” [same]
- Rogoff rebuttals: “More Evidence of the High Collateral Damage of a War on Cash” [Lawrence White, Cato, earlier] “Money as coined liberty” [David R. Henderson]
- Quotas/targets for percentages of women, disabled and indigenous persons on Canadian corporate boards? [Terence Corcoran/Financial Post, more]
The campaign against consumer arbitration has sought over the years to establish a number of propositions: that the process favors business over consumers, that the arbitrator is in the pocket of the corporate repeat player, that you can’t get discovery in arbitration, that arbitration is unfairly secretive, and so forth. Ted Folkman, who in addition to being a practicing commercial lawyer and longtime blogger is also an arbitrator who serves on the American Arbitration Association’s commercial and consumer panels, has some perspective to offer. [Letters Blogatory]
Megan McArdle writes at Bloomberg on the downfall of the CFPB’s anti-arbitration rule, and why the results of most class actions, though expensive to provide, are not greatly valued by consumers. She also quotes me on one reason why surveys find (paradoxically or otherwise) higher consumer satisfaction with the experience of arbitration that you’d think from the campaign against it:
The alternative to lawsuits, arbitration, is supposed to follow the same laws as courts, and to do so more quickly and without a lot of the costly procedure. As a result, says Walter Olson of the Cato Institute, consumers are in general surprisingly satisfied with the arbitration experience, because it provides the kind of justice we imagine courts will: You sit down and tell your story in your own words. In court, by contrast, everything has to proceed according to complicated rules of evidence, with opposing counsel interrupting to tell the court that you can’t say certain things.:
More on the recent Congressional rejection of the CFPB’s regulation: Thaya Brook Knight. And in a new paper, David Noll (Rutgers) finds the new administration’s rollback of anti-arbitration rules to be piecemeal in nature and of only middling success so far. Earlier here.
- Sources: Treasury intelligence division has unlawfully spied on and collected Americans’ private financial information [Jason Leopold and Jessica Garrison, BuzzFeed]
- “A majority of Americans oppose the idea of regulating CEO pay.” [Thaya Brook Knight, IBD]
- “Senate should vacate the harmful consumer banking arbitration rule” [Keith Noreika (acting U.S. Comptroller of the Currency), The Hill]
- “Derivative litigation mainly serves as a means of transferring wealth from investors to lawyers.” Is there a case for abolishing it? [Stephen Bainbridge]
- U.S. government files false affidavit, stages splashy raid, destroys business. Tough luck apparently [Ira Stoll on Second Circuit finding of qualified immunity for prosecutors in David Ganek case]
- “Look in the Mirror: Why the Number of Public Companies & IPOs are in Decline” [Patrick A. Reardon, CrowdFund Insider]
The Supreme Court will resolve a circuit court split on whether employment agreements under which workers agree to “arbitrate disputes with their employers individually, rather than bringing class-action lawsuits collectively with their co-workers, are valid….In an unusual twist, the administration will face off against an independent agency of the federal government, the National Labor Relations Board (NLRB).” [Lawrence Hurley and Robert Iafolla, Reuters, earlier here, here, here, and arbitration generally] Monday was oral argument on the trio of Murphy Oil, Ernst & Young, and Epic Systems [Amy Howe, transcript]