Section Review

Comments from the Labor and Employment Section Chairman

As I pause to consider the state of our labor and employment practice, it seems fair to say that it is barely recognizable from as recently as 10 years ago. For members of the bar, it is worth reflecting on where we are and how we got here. Although the centuries old at-will doctrine may not appear at first glance to be the central issue in employment law these days, in an indirect way I believe it is. Recently I was informed that the state Legislature is considering a bill that would make it unlawful for employers to discriminate against employees based upon height or weight. I doubt the bill will become law, but if it ever did the longstanding common law at-will doctrine - now on life support - might finally drop dead. Perhaps we are there already.
The steady erosion of at-will employment appears to have begun with, and been fueled by, the enormous growth in the anti-discrimination and related laws over the past 10 to 15 years. These laws form the cornerstone of many of our practices. In those years, there have been new substantive protections, such as the ADA and FMLA; explosive growth in sexual harassment claims; increased damages; the arrival of a new insurance vehicle, EPLI; and simply more employees willing to fight their employers, and lawyers on both sides eager for the work. It's no longer the rare employment decision that is carefully scrutinized for potential legal claims; it's the rare one that is not.
Factors other than EEO laws have contributed to this phenomenon. It seems that every new employee handbook decision that comes down assigns greater contractual weight to those documents, and makes it harder for employers to escape their provisions. This trend effectively subjects all aspects of the employment relationship to contract claims. In most cases, virtually all documents that govern the employment relationship are, like handbooks, unilaterally issued by the employer - policies, work rules, standards of conduct. As these documents come to be seen more and more as contractual, even though they are not bilateral, at-will employment further gives way to legal control over the employment relationship.
Not only have these unilaterally issued employer policies been turned into contracts; they also have taken on criminal connotations. The attorney general has promulgated guidelines that could send employers to prison for not following their own vacation policies. The wage statute, which drives the attorney general's vacation rules, is part of what appears to be the next big wave of employment litigation. It has already been reported that wage claims represent the biggest area of growth in employment-related claims nationally. In Massachusetts as well, amendments to the wage laws in the past decade have both strengthened the hand of government enforcement, criminal and civil, and facilitated private actions with the promise of treble damages and attorney fee recovery.
It is probably not a coincidence that these non-EEO laws are growing in use now, having had the way paved by EEO litigation. At-will employment and the mores that went with it - notably, deference to employer decisions - no longer restrain most employees from taking employment disputes of all sorts to court.
In our area of practice, labor and employment, what had at one time been a heavy tilt toward labor - traditional, union-related matters - has moved inexorably toward the employment side. But surprisingly little of the hallmarks of the labor practice apply to employment litigation. For one thing, the lottery dynamic of employment litigation cases - not many employees win, but some win real big - is markedly different from the collective interests that predominate in labor law. Resources allocable to employees tend not to be spread evenly, or perhaps even efficiently, but are reserved for the occasionally big pay-day of a successful suit or settlement. This may or may not be an inevitable result of employment claims in a non-union environment. In theory, class action claims serve a collective purpose, but for whatever reason, those are not common for employment claims in Massachusetts.
Another important difference between labor and employment law is where the claims are heard. Rather than choose an arbitral forum - the traditional labor dispute resolution mechanism assigned almost mythic status by the U.S. Supreme Court - individual employees routinely oppose arbitration agreements and demand their day in court. While strategically this may be effective (though I'm not sure of that), it does substantially lengthen the time for, and increase the costs of, resolution of employment disputes. It must be true that at least a fair number of potential plaintiffs view the cost, delay and personal sacrifice of a long court process as too daunting to pursue. Consequently, whether or not traditional grievance arbitration is the precise model, it would seem to be beneficial for employees and employers if the new-style employment litigation adopted some of the bedrock principles of old-style dispute resolution to make for a speedier, more efficient and more just process.
Ironically, even the traditional EEO processes, which had been relatively streamlined, have become drawn out. An example is the MCAD, which now has litigation-style discovery at the preliminary investigative stage, followed by a summary judgment process.
Perhaps not surprisingly in this environment, an insurance vehicle - EPLI - has emerged. As EPLI continues to expand, significant changes in the handling of employment disputes are inevitable. Some have suggested that before long, employment claims will be resolved the way industrial accident claims are. That may be too extreme, but certainly change continues to occur. On top of this, in just the past few weeks I have seen numerous articles and advertisements promoting companies that purchase litigation futures. If this sticks, it's bound to be another catalyst of change in our practices.
While for most of us, the daily demands of our work and clients pull us in more discrete directions, these are profound issues the bar needs to focus on and think about. With respect to substantive law, if at-will employment is about dead, what is the correct way to characterize the general rule of employment in Massachusetts? Surely it is not yet "just cause," but maybe it is "good grounds and good faith." For years we said that an employer could terminate an employee for a good reason, a bad reason or no reason at all, so long as the actual reason was not proscribed by law. This no longer is true, at least as a practical matter. If Lipchitz says that pretext gets you to a jury, neither a bad reason nor no reason at all will suffice for any employer I know. While perhaps the reason still need not be good, in the just cause sense, it does need to be good enough to be plausible and good enough that people will believe it was the real reason for a decision.
A healthy, big-picture discussion of process is as important to the bar as a consideration of substantive law. Where is EPLI leading us? Will we see greater use and acceptance of arbitration after Circuit City? Should we? It does appear that participants on all sides of employment disputes increasingly view the cost and time commitment of court litigation with displeasure. Whether this displeasure moves those clients and their lawyers to change the system in a fundamental way is a question we need to be discussing.
©2014 Massachusetts Bar Association