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Give Mayor Peduto credit and room to lead on Amazon

The Pittsburgh Post Gazette has unfairly and naively criticized Pittsburgh Mayor Bill Peduto for his efforts to persuade Amazon to locate its second headquarters in the Steel City. His plan is too secretive, the newspaper says, as though business negotiations of this kind are conducted publicly. They aren’t. Preliminary plans and negotiations are always confidential, and yes, that’s true even when one of the parties is a public entity. Even the Post Gazette must acknowledge that the Peduto Administration is one of the most open and transparent in the Country. Spend 10 minutes on the City’s website and you will find a trove of information ready for any curious resident to download and read. Want to see who testified on such and such date before City Council? You can because the City posts videos of Council meetings. Want to see every last line item in the City’s budget? You can download that information with the click of a mouse. Bill Peduto, his staff and other community leaders should be praised for making a proposal that edged out the majority of other competitors and secured Pittsburgh a spot on Amazon’s list of 20 finalists. If Amazon chooses Pittsburgh, it will become the City’s second largest employer, and will bring with it a diverse, skilled, well paid and youthful workforce, making an instant impact and propelling Pittsburgh forward as it continues to evolve into one of the most sophisticated tech centers in the world. And the only reason Amazon is even looking at Pittsburgh is because of the foresight and hard work of leaders like Bill Peduto. The PPG need not thank him, but its criticism of him is profoundly misplaced.

Equifax proves case against forced arbitration

equifax_148083By David Dayen, The Intercept – EQUIFAX, THE CREDIT REPORTING BUREAU that on Thursday admitted one of the largest data breaches in history, affecting 143 million U.S. consumers, is maneuvering to prevent victims from banding together to sue the company, according to consumer protection advocates and elected officials.

Equifax is offering all those affected by the breach a free, one-year credit monitoring service called TrustedID Premier, which will watch credit reports for suspicious activity, lock and unlock Equifax credit reports, scan the internet for Social Security numbers, and add insurance for identity theft. But the service includes a forced arbitration clause, which pushes all disputes over the monitoring out of court. It also includes a waiver of the right to enter into a class-action lawsuit.

This shields TrustedID Premier from legal exposure, instead relying on a process that’s very favorable to corporate interests. At first the arbitration clause was a non-negotiable feature of the contract. Now Equifax says you can opt out, but only if you contact them in writing within 30 days.

There’s already a proposed class-action suit against Equifax itself, arguing that the company failed to protect consumer data and exposed hundreds of millions to identity theft. But if you can’t sue over the credit monitoring but only the credit breach, it could significantly lessen the damages at issue. Also the language of the arbitration clause is fairly broad, saying that those who agree to the credit monitoring “will be forfeiting your right to bring or participate in any class action … or to share in any class awards, even if the facts and circumstances upon which the claims are based already occurred or existed.” Presumably some defense lawyer is thinking up a clever way to apply that to the Equifax breach itself.

Equifax’s terms of service also include an arbitration clause, which is almost identical to the one in the credit monitoring agreement. It also includes an opt-out, but it’s not clear when the clock starts on that, since people are not informed of Equifax monitoring their credit in the first place. “Look up ‘shameless.’ There’s a new first definition: Equifax,” said Public Citizen president Robert Weissman in a statement.

In short, nobody asked Equifax to monitor their credit and then let hackers steal their data. But if these same victims have a problem with the company’s remedy for this massive breach, they have to do all the work to make sure they’re allowed to sue.

This has inspired fury, to put it mildly. New York Attorney General Eric Schneiderman has asked Equifax to take down the arbitration clause entirely, calling it “unacceptable and unenforceable.”

Sen. Sherrod Brown, D-Ohio, ranking Democrat on the Senate Banking Committee, did the same. “It’s shameful that Equifax would take advantage of victims by forcing people to sign over their rights in order to get credit monitoring services they wouldn’t even need if Equifax hadn’t put them at risk in the first place,” he said in a statement.

The breach, which includes names, Social Security numbers, birthdates, and driver’s license numbers, encompasses roughly three-quarters of all people with credit reports in the U.S. Even to check to see if you’re a victim of the breach, you have to give Equifax the last six digits of your Social Security number, which, given their track record, is a bit unnerving.

These arbitration clauses have been deemed so harmful to consumers that the Consumer Financial Protection Bureau issued rules to ban the waiver of class-action rights within them. That rule was finalized in July, but doesn’t take effect on contracts until next March. This arbitration clause, in other words, would be illegal if it were presented in consumer contracts in the future.

That CFPB rule is now under threat from Congress, and the Equifax controversy is now at the heart of that. Under a law called the Congressional Review Act, Congress has 60 legislative days from the finalizing of an agency rule to formally disapprove of it. Since President Donald Trump’s inauguration, Congress has used this 14 times to kick out rules they didn’t like. And a disapproval of the CFPB arbitration rule has already passed in the House.

However, it has run into some resistance in the Senate. Some Republicans, like Sen. Lindsey Graham, R-S.C., have already announced their support for the arbitration rule, and others have wavered. With the Equifax breach showing what arbitration clauses mean in practice, Republicans may find the CFPB rule too hot to touch. “This is just one more example why the Consumer Financial Protection Bureau’s rule banning forced arbitration is badly needed to protect the rights of working Americans,” Brown said.

Equifax also faces investigation because three of its top managers sold $1.8 million in company stock after they learned of the data breach but before the company released that information to the public.

“Equifax just gave 143 million reasons why Americans should tell Congress not to take away their day in court when companies like Equifax abuse their trust,” said Lauren Saunders, associate director of the National Consumer Law Center.

The fraud called “Free Trade”

In this video, Representative Alan Grayson explains how “free trade” hurts American workers and lowers our standard of living.  We don’t need another NAFTA.  Call or email your congressional representatives and tell them to oppose Fast Track on President Obama’s classified Trans-Pacific Partnership deal.

Pittsburgh employment lawyer Charles A. Lamberton. Representing employees in discrimination, retaliation, sexual harassment and wrongful termination cases for more than 15 years. High end representation for high end cases and clients. Contact us today.

Raising minimum wage helps economy

One popular myth is that raising the minimum wage hurts the economy. Seventy-five years of empirical data has busted that myth wide open. Since 1938, the minimum wage has been raised several times yet the economy has grown and grown. Raising the minimum wage creates purchasing power for wage earners who then spend their wages. Their spending creates demand for goods and services.  Because one person’s spending is another person’s wages, the economy grows.

Source: Bureau of Economic Analysis, www.bea.gov
Mid-year population estimates from U.S. Census Bureau, www.census.gov

 

Workers can’t survive on the minimum wage

From Secretary of Labor Tom Perez –

To create opportunity for American workers, we must ensure that they can earn enough to support a family and afford life’s very basics. Tomorrow, it will be exactly four years since our low-wage workers last saw a raise. Now more than ever, we must renew the call to increase the minimum wage.

If you work full time in the wealthiest nation on earth, you shouldn’t live in poverty. You shouldn’t have to lay awake at night worried about how you’re going to pay the utility bill, or what you’ll do if the car breaks down, or whether you can put dinner on the table the next day.

Minimum wage infographicJoin the conversation on Twitter and Facebook using the hashtag #MWraise.

President Obama has proposed raising the federal minimum wage from $7.25 to $9 per hour. Since the last increase, its value has eroded 7.3 percent due to the rising cost of living, so the president also wants to index the minimum wage to inflation beginning in 2015. Why shouldn’t workers’ take-home pay keep up with the price of a gallon of milk or a pair of children’s shoes?

The president’s minimum wage increase is part of his vision of an economy where opportunity is available to everyone; where we all get a fair shake; where the middle class is within reach no matter who you are or where you come from.

There is a lot of sky-is-falling rhetoric suggesting that a higher minimum wage will be a catastrophic job-killer. But we’ve seen this movie before. This argument rears its ugly head every time an increase is on the table. The minimum wage has increased in 22 steps since the 1930s, thanks to strong bipartisan support. Not once did it send the nation into an economic death spiral.

Quite the contrary. A higher minimum wage boosts consumer demand, the engine that powers our economy during a recovery like this. Study after study from credible economists demonstrate that raising the minimum wage has no negative effect on employment and may be good for business as it leads to a more stable workforce with less turnover, lower training costs and higher productivity.

The minimum wage numbers tell a compelling story, as the above graphic illustrates.  But behind the numbers are stories of real people, their struggle and sacrifice – a father working in the grueling heat as an airport baggage handler, a grandmother doing back-breaking work cleaning offices at night. They’re working hard and taking responsibility. They’re not looking for handouts or special favors. They just want a fair day’s pay for a fair day’s work.

It is time to increase the minimum wage. As a matter of social justice, it’s the right thing to do; as a matter of economic common sense, it’s the smart thing to do.

More on unpaid internships

The Post-Gazette’s Michelle Hackeman interviewed us for this wonderful piece on unpaid internships and the Fair Labor Standard Act.  As Michelle reports, college students seek internships to gain job experience and learn what cannot be learned in a classroom.  That experience is supposed to give them a leg up on their competitors when they graduate and are applying for jobs.  But what happens when employers hire interns for no pay and then assign them menial work?  The employer gains an unfair advantage over its competitors and swindles the student interns who choose to invest in their future careers by working without pay in the short term.  Such conduct has broad repercussions, as Michelle reports in her article.

Many students debate the value of unpaid internships – By Michelle Hackeman / Pittsburgh Post-Gazette

Up until her junior year at Chatham University, Elizabeth Dorssom supplemented the hours she poured into her schoolwork with a job at a Bath & Body Works store. She would need the extra money: In May 2012, she graduated with $40,000 in student loan debt.

Ms. Dorssom knew, like many of her college-age peers, that a bachelor’s degree would not be her ticket to securing a job. So in her junior year, she quit her job to take an internship at the Allegheny County district attorney’s office, which didn’t offer her payment for the work.

The plight of the unpaid intern has gained notoriety following a lawsuit in New York against Fox Searchlight Pictures, the producer of the movie “Black Swan” that employed several unpaid production interns on its set. Judge William Pauley of the southern district of New York, who ruled in favor of the interns in June, said Fox had violated federal labor laws by not offering its interns proper compensation, though it had benefited from the interns’ work.

“I have heard employers say that they just love their unpaid interns because they see them as free employees,” said Charles Lamberton, president of the Pittsburgh-based Lamberton law firm who represents plaintiffs in employment disputes and other civil rights cases.

“For so many of these interns, the entry-level position is an unpaid internship. There’s no other way in. That’s the door they have to go through.”

According to the Fair Labor Standards Act, which regulates pay and overtime, an internship program can be unpaid if it meets several criteria. The internship must contain a significant training component, comparable to an education program. The intern’s work must not benefit the employer, “and on occasion its operations may even be impeded.”

According to the judge’s decision, the experience and connections that an intern gains while working are not sufficient forms of compensation to justify not paying them the minimum wage.

The ramifications of this ruling may have the effect of leveling the playing field for students who seek work experience before they apply for full-time jobs.

In recent years, college students and employers have increasingly regarded internships as stepping stones on the way to full-time employment, so much so that the internship has come to replace a traditional entry-level position.

In a 2009 survey conducted by the National Association of Colleges and Employers, more than three quarters of employers said they prefer job candidates with the requisite experience that can be gained through an internship.

But about half of the internships in the United States are unpaid, according to a 2013 survey by the association.

For some students, working for free carries few costs. Other than the time they are sacrificing without pay, they can save money by living at home or asking parents to assist with living expenses. But for others, taking an unpaid internship means forgoing much-needed earnings.

Mike Howie, who graduated from Robert Morris University in May without a job waiting for him, began looking for unpaid internships to gain experience. He said that, though the situation was far from ideal, he could afford to do so because his family will allow him to live at home.

“It would be a major setback — I want to move out, I want to start making money and saving money,” he said.

For her part, Ms. Dorssom was able to work at the district attorney’s office for 10 hours a week because she spent an equal number of hours working as a secretary at her campus’s police department. The money she made that summer covered her rent and living expenses, but stretched no further.

Many internships require students to obtain course credit for their work as a form of compensation, a practice that the judge in New York pronounced illegal. What often goes unmentioned is that obtaining course credit costs money, as universities consider it the equivalent of taking a class over the summer.

Most of the major universities in the Pittsburgh area offer course credit for internships, including Carnegie Mellon University, the University of Pittsburgh, Chatham and Penn State University. The price of a three-credit internship can range anywhere from $500 to $3,000.

Chatham, Ms. Dorssom’s alma mater, recently made completion of an internship one of its graduation requirements. “The university really regards this as an academic endeavor,” said Chris Miller, director of career development. “It is considered part of their tuition — just as they pay for any other class, they’re paying for that credit.”

Jennifer Gosslin, a Pittsburgh native and a senior at West Virginia University in Morgantown, W.Va,, also faced an internship-for-credit policy.

After working as a news broadcaster at her college radio station, she wanted to try her hand at commercial radio with an unpaid internship at Froggy Radio in Pittsburgh. But the internship would have cost her $3,000 in course credits, not counting any of the living costs she would incur over the summer. She opted to work at a Bridgeville restaurant instead.

“I think it’s really stupid that you have to pay thousands of dollars to get this experience for free and give up time from your actual job in the process,” she said.

Tresa Weimer, the interim director of financial aid and scholarships at WVU, said that, in cases such as that of Ms. Gosslin, the financial aid office would advise students to pursue private loans.

Since unpaid internships have such a high threshold of entry, economists and public policy experts have begun pointing to them as a major block to economic mobility. As the theory goes, only students wealthy enough are able to accept unpaid internships, and the experience they gain gives them a leg up over lower-income students who could not afford to work without pay.

“As an economic reality, a lot of people are economically shut out of those sorts of career opportunities,” Mr. Lamberton said. “People in that income group, they don’t have savings. It’s just not an opportunity that they can pursue.”

Even if the New York lawsuit does effect broader change, its purview only extends as far as internships in the for-profit sector. Under federal labor law, government agencies and nonprofits can still hire unpaid interns, since the law states that they are volunteering their time.

“I’m most worried about this in places like government, where it’s important to have people representing different income brackets,” said Ross Eisenbrey, vice president of the Economic Policy Institute, a nonpartisan think tank in Washington, D.C.

“But the only people who have the experience to get a job on Capital Hill are the people who can afford it — the people whose parents were able to support them through their unpaid internships. That’s very bad for our democracy.”

Unfortunately for Ms. Dorssom, the public sector is definitely where her interest lies. Even after completing her unpaid internship at the district attorney’s office, she has still struggled to find work.

When no job opened up after her graduation last year, she enrolled in an online public policy graduate program at the California State University, Northridge. She chose the online program so that she does not have to pay for room and board.

“I know that when I finish my master’s degree, a lot of the jobs I will want require experience, but I can’t get the experience if no one will hire me,” she said. “Still, I can’t take an internship unless it’s virtual or paid. Because I can’t afford the gas money to commute.”

Michelle Hackman: mhackman@post-gazette.com or at 412-263-1969.
First Published July 14, 2013 12:00 am

 

More on employers’ use of credit reports

Employers across the country are now using credit reports to as a part of their hiring procedures. Use of credit reports in the application process is becoming a standard practice. Even employers outside of the financial industry are using credit reports as a screening tool.  Using credit reports as a screening tool can have legal consequences. Ten states have  enacted protections for applicants and employees against the use of credit reports as a employment screening tool. Should your prospective employer be allowed access to your credit report and deny you a job? Should your current employer be allowed access to review your credit report and terminate you? Should employees have some protection against these practices? This show will investigate these questions and more. We are joined by Pittsburgh employment law attorney Charles A. Lamberton and industry expert Jay Meschke. Click the picture to download the podcast or click here to stream.

CONTACT US

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