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Some Reflections on Unfair Dismissal and Plant Closure Legislation from a Comparative Perspective William B

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Some Reflections on Unfair Dismissal and Plant Closure Legislation from a Comparative Perspective William B Nebraska Law Review Volume 67 | Issue 1 Article 4 1988 Job Security in the United States: Some Reflections on Unfair Dismissal and Plant Closure Legislation from a Comparative Perspective William B. Gould IV Stanford Law School, [email protected] Follow this and additional works at: https://digitalcommons.unl.edu/nlr Recommended Citation William B. Gould IV, Job Security in the United States: Some Reflections on Unfair Dismissal and Plant Closure Legislation from a Comparative Perspective, 67 Neb. L. Rev. (1988) Available at: https://digitalcommons.unl.edu/nlr/vol67/iss1/4 This Article is brought to you for free and open access by the Law, College of at DigitalCommons@University of Nebraska - Lincoln. It has been accepted for inclusion in Nebraska Law Review by an authorized administrator of DigitalCommons@University of Nebraska - Lincoln. William B. Gould IV* Job Security in the United States: Some Reflections on Unfair Dismissal and Plant Closure Legislation from a Comparative Perspective TABLE OF CONTENTS I. Disciplinary Dismissals: The Problem ................... 30 II. Economic or Collective Dismissals: The Problem ....... 32 III. The Theory of Wrongful Discharge: The Proposed Legislation ............................................... 38 IV. State Plant Closure Legislation .......................... 42 A. Summary of State Legislation ....................... 42 B. Constitutionality .................................... 44 V. Federal Plant Closure Legislation ....................... 47 VI. Obligations Under International Labor Law ............. 49 VII. Relevant Western European Law and Experience: The Substantive Standard For Dismissal ..................... 50 A. Union Influence Prior to the Decision .............. 52 B. Notification and Consultation of Workers and Government Representatives ........................ 53 VIII. Conclusion ............................................... 54 The problem of job security has been addressed by the industrial- ized countries in the West and Japan with increased frequency in the post World War II period. Promulgated in 1982, the International La- bor Organization's Termination of Employment Convention,1 which provides some measure of job security for dismissed employees, high- * Charles A. Beardsley Professor of Law at Stanford Law School; Co-Chairman of the California State Bar Ad Hoc Committee on Wrongful Discharge and Termi- nation At Will. The author is grateful for the considerable research assistance provided by Thomas Thompson, Stanford Law School '89. 1. Terminationof Employment at the Initiative of the Employer, International La- bour Conference, 68th Session, Reports V(1) & (2) (1982). 1988] COMPARATIVE PERSPECTIVE lights the significance of the issue. And, the matter of individual dis- missals of workers, in particular, principally for disciplinary reasons - long ago addressed by comprehensive unfair dismissal legislation in other industrialized countries - has become both a centerpiece of in- dustrial relations legal conflict in the 1980's in America and a problem that will not disappear in the coming decades. Protection of jobs is also important to what Europeans refer to as collective dismissal and regulate through job protection legislation - the layoff of large numbers of employees for economic reasons. A growing number of states in this country have enacted plant closure legislation which requires notification of closing, information to be provided to employees, or the award of severance benefits to assist in relocation. President Reagan vetoed the same kinds of legislation at the national2 level when it was part of an omnibus trade bill and Con- gress considered the matter anew.3 The second time around, subse- quent to passage of identical legislation by both Houses of Congress, 4 Mr. Reagan declined to veto a plant closing notification measure standing alone,5 allowing the bill to become law without his signature because political sentiment in Congress and public opinion promised to make a veto politically beneficial for the Democratic Presidential nominee Michael Dukakis.6 Moreover, a series of collective bargain- ing agreements fashioned by the United Auto Workers in the farm equipment and automobile industries in 1987 have provided workers with relatively comprehensive protection against collective dismissals.7 The new focus upon employment and the view that improper dis- missals require regulation is appropriate. The Supreme Court has 2. Senate Upholds Veto; New TradeBill Sought, N.Y. Times, June 9,1988, at D1, col. 4. 3. A Plant-ClosingsBill Worth Passing,N.Y. Times, June 23, 1988, at A22, col. 1; Congress Drafts Revised Trade Bill, N.Y. Times, June 24, 1988, at D1, col. 3; G.O.P. Plan On Layoffs Is Defeated, N.Y. Times, June 25, 1988, at 33, col. 3; Republicans in Senate Fail To Block Plant-Closing Bill, N.Y. Times, June 28, 1988, at C1, col. 1. 4. 134 CONG. REc. H5500, 5520 (daily ed. July 13, 1988); House Passes Bill on Plant Closings by Vote of 286-136, N.Y. Times, July 14,1988, at Al, col. 1; 72 to 23 Senate Vote Approves Notice of Plant Closings, N.Y. Times, July 7, 1988, at Al, col. 6. 5. Roberts, PresidentDecides Not to Veto Bill Requiring Notice of Plant Closings, N.Y. Times, Aug. 3, 1988, at Al, col 2. 6. Hume, Reagan, Succumbing to Politics,Decides Against Vetoing Plant Closings Measure, Wall St. J., Aug 3, 1988, at 3, col. 2. 7. Caterpillar,UAW are Said to Agree Tentatively on Pact with Wage Freeze, Wall St. J., July 7, 1986, at 7, col. 2; Ford and UAWAgree on 3 Year Pact That Grants Broad Job GuaranteesExcept DuringIndustry Slump, Wall St. J., Sept. 18,1987, at 3, col. 1; GMLooksfor UAW ContractLoopholes, Wall St. J., Oct. 2, 1987, at 5, col. 2. However, the 1987 agreements do not establish new protection for workers in plants which are not closed but rather "idled" for a substantial period of time, i.e. years as well as months. NEBRASKA LAW REVIEW [Vol. 67:28 now recognized a property interest of the employee in the job he or she has held and the status derived from employee expectations.8 I reiterate what I said about this matter two years ago: It seems to me that the starting point for evaluation of these issues is the realization that in a modem industrialized economy employment is central to one's existence and dignity. One's job provides not only income essential to the acquisition of the necessities of life, but also the opportunity to shape the aspirations of one's family, aspirations which are both moral and educational. Along with marital relations and religion, it is hard to think of what might be viewed as more vital in our society than the opportunity to work and retain one's employment status.9 I. DISCIPLINARY DISMISSALS: THE PROBLEM The 1980's have witnessed a host of individual employer-employee controversies which have arisen both in and out of the organized labor sector of the economy. The rights of retirees, questions of privacy aris- ing out of drug testing and alcohol abuse programs, 10 and the Age Dis- crimination in Employment Act11 claims have woven their way into the tort and contract theories now associated with wrongful discharge 8. Skeptics should note that this principle was established by Justice Powell's opin- ion in the context of reverse discrimination litigation attacking the propriety of affirmative action in Wygant v. Jackson Bd. of Educ., 476 U.S. 267 (1986). See generally W. Gould, BLACK WORKERS IN WHITE UNIONS: JOB DIscRMINATION IN THE UNITED STATES (1977). 9. Gould, The Idea of the Job as Propertyin ContemporaryAmerica The Legal and Collective BargainingFramework, 1986 B.Y.U. L. REv. 885, 892; see also Culpep- per v. Reynolds Metal Co., 421 F.2d 888, 891 (5th Cir. 1970); Woolley v. Hoffman- LaRoche, Inc., 99 N.J. 284, 300, 491 A.2d 1257, 1266 (1985), modified, 101 N.J. 10, 499 A.2d 515 (1985). 10. See Shoemaker v. Handel, 795 F.2d 1136 (3d Cir. 1986), cert. denied, 107 S. Ct. 577 (1986) (holding that selection by lot for drug testing does not violate jockey's fourth amendment rights); Jones v. McKenzie, 833 F.2d 335 (D.C. Cir. 1987) (re- versing lower court's decision prohibiting public school system's compulsory drug testing program without probable cause); National Treasury Employees Union v. Raab, 816 F.2d 170 (5th Cir. 1987) (holding that urinalysis for employees seeking promotion is reasonable search); Brotherhood of Locomotive Engineers v. Bur- lington N.R.R., 838 F.2d 1087 (9th Cir. 1988) (holding that railroad's unilateral implementation of mandatory drug testing program is a "major dispute" within the meaning of the Railway Labor Act); see generally Comment, Yellow Rows of Test Tubes: Due Process Constraintson Discharge of PublicEmployees Based on Drug Urinalysis Testing, 135 U. PA. L. REV. 1623 (1987); Bible, Employee Urine Testing and the FourthAmendment, 38 LAB. L.J. 611 (1987); and Joseph, Fourth Amendment Implications of Public Sector Workplace Drug Testing, 11 NOVA L. REv. 605 (1987). 11. 29 U.S.C. §§ 621-634 (West 1985 & Supp. 1987); see also Western Air Lines v. Cris- well, 472 U.S. 400 (1985) (affirming lower court's decision that Airline violated Age Discrimination in Employment Act (ADEA) by requiring mandatory retire- ment of flight engineers without showing age restriction is reasonably necessary to overriding interest in public safety); Transworld Air Lines v. Thurston, 469 U.S. 11 (1985) (airline's policy denying transfer to sixty year old pilots violates ADEA). 1988] COMPARATIVE PERSPECTIVE actions initiated throughout the country. While the wrongful dis- charge litigation
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