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Merry Christmas from Freking and Betz (But not Rand Paul)

Randy Freking

As we celebrate the Holidays and Christmas this week, Freking and Betz wishes everyone a wonderful holiday season, and best wishes for 2014. For those suffering from unemployment, we wish you success in your efforts to find new employment and we hope Congress decides to continue extended unemployment benefits for workers unable to find new jobs.

On the other hand, Senator Rand Paul (R-Ky) hardly wishes the long unemployed well. Rather, he thinks we do a “disservice” to reach out a helping hand to those who have been unemployed for more than 26 weeks. Read about his comments in this article from The New York Times.

 

 

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Judge’s Pension Ruling Disturbing for the Middle Class

Randy Freking

A federal bankruptcy judge in Detroit ruled that public employee pensions were not protected from a federal bankruptcy filing, even though the Michigan Constitution expressly protects them.

This ruling -the first of its kind- is disturbing and the impact will be catastrophic to persons who labored for years in reliance on the guarantee of a pension.

More scary, this decision may prompt other public employers with financial problems largely of their own doing to do the same.

The ruling is just the latest example of bankruptcy law changes in the late 1970s that we’re pushed through Congress by business lobbyists, and criticized by Hedrick Smith in his best selling book, “Who Stole the Amerivcan Dream?” The answer: wealthy businessmen who care more about short term profits rather than the employees who made their businesses successful.

For more information on pensions read Mary Williams Walsh’s article in The New York Times.

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Who Stole The American Dream?

Randy Freking

If you ever wondered why real wages and income have stagnated since the 1970s, read “Who Stole the American Dream?” by Hedrick Smith (Random House).

According to Mr. Smith, a best selling author, one fundamental cause of wage stagflation is the difference between the early and mid-20th century industrialists, such as Henry Ford and Reginald Jones (Jack Welch’s predecessor at GE). They believed  that part of their mission was to benefit all of their constituents – workers, suppliers, the community, to name a few. In those times, the Chief Executive Officers pay was around 40 times the pay of the average worker according to the Federal Reserve.  So, if an average worker earned $30,000 a year, the person who began the operation or led the operation could expect to make 40 times that pay – or $1,200,000.  A nice incentive, but nothing like today.

Unfortunately, along came economists like Milton Friedman in the 1970s, who took the view that the mission of the CEO was to maximize shareholder profits rather than view employees as the Company’s greatest assets.  Maximizing shareholder profits leads to pressure on all costs, and most importantly in our opinion, the costs of labor. With that as the mission, CEO’s began taking stock options and stock shares as compensation. A nice incentive that motivated them to solely increase profits.

The result? The multiple today between average worker pay and the pay of the CEO has risen tenfold – to 400 times the average worker pay instead of 40 times. So, if the average worker earns $30,000, the CEO expects 12 million dollars in compensation.

By the way, at Wal-Mart – the “friend” of the struggling middle class and working poor – former CEO Lee Scott was paid $17.5 million in 2005 – 900 times the average pay and benefits of the typical Wal-Mart employee.

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When is an accomodation too much?

Randy Freking

Under Title VII of the 1964 Civil Rights Act, an employer is obligated to accommodate the religious beliefs of employees.  Similarly, the Americans With Disabilities Act requires an employer to accommodate the needs of disabled workers.

Muslim employees in Greeley, Colorado and Grand Island, Nebraska meat packing plants claimed that the plants violated Title VII by failing to accommodate their need to pray periodically during the work day.  The employees believed that they should be allowed to take unscheduled breaks to pray or have a mass meal break at a time coinciding more closely with sunset prayer.

On October 11, 2013, a federal judge in Nebraska granted summary judgment for the employer, reasoning that the employee’s request would cause an undue hardship to the employer.

This case illustrates the employer’s obligation in response to an accommodation request for either religious or disability reasons.  When an employee claims that an employer failed to accommodate his or her religious beliefs or a disability, the employer has the burden of proving the affirmative defense that the granting of the proposed accommodation would have resulted in an “undue hardship.” Relevant case law defines “undue hardship” as more than a de minimis burden on the employer, and essentially requires larger employers to honor proposed accommodations more so than smaller employers.

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Randy Freking on WLW 700 today discussing workplace bullying

Randy Freking

Listen in to WLW 700 today at 12:05PM when Willie Cunningham will interview Randy Freking as a follow up to our blog post yesterday about bullying in the workplace.

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