Tag Archives: petition

Detroit Bankruptcy is Unconstitutional

As a follow up to the prior post reporting on the bankruptcy filing of Detroit, now a Michigan court has ruled that the bankruptcy filing is unconstitutional.  The decision can be accessed here.

The background of this legal battle raises a lot of legal questions.  The events are as follows.  First, Detroit announces it will be declaring bankruptcy.  Then, lawsuits are filed to block bankruptcy filings/proceedings.  An emergency hearing is scheduled on Thursday (last week) in front of a judge about blocking the bankruptcy proceedings.  Five (5) minutes before the Thursday hearing, Detroit files a petition for bankruptcy.  Afterwards, another hearing is set for Friday.

On Friday, the Ingham County Court ruled against the city.  The court relied on Michigan’s state constitution, which prohibits actions that diminish or impair pension benefits of public employees.  Because Detroit was aware that declaring bankruptcy would affect negatively the pension benefits of public employees, the court ruled that it acted unconstitutionally.

Michigan’s Attorney General Schuette stated that Detroit will be appealing the ruling.  The Attorney General also stated that they will be requesting a stay on the bankruptcy proceedings until the appeal is heard.

This background is so interesting because it raises a lot of legal questions.  Filing a Chapter 9 petition gives the bankruptcy court exclusive jurisdiction over the debtor’s (Detroit) assets.  The interesting predicament is that Detroit filed a petition for bankruptcy five (5) minutes before the Thursday hearing — before any order from the Ingham County Court.

Yet, the state court is ordering the Governor to “(1) direct the Emergency Manager to immediately withdraw the Chapter 9 petition filed on July 18, and (2) not authorize any further Chapter 9 filing which threatens to diminish or impair accrued pension benefits.”

Some of the questions include how to reconcile the state’s and the bankruptcy’s court jurisdictions.  For example, can the state court order state officials (like the Governor) to withdraw the petition? How can a bankruptcy proceeding reconcile itself with Michigan’s state constitution? Are the plaintiffs subject to sanctions for violating a stay in bankruptcy court?

The Huffington Post has an interesting tidbit:

Michigan is one of nine states that explicitly protects public employee pensions in its state constitution.  But the state of Michigan doesn’t guarantee the money to public employees if a city defaults or can’t pay those bills…

The law of bankruptcy is enshrined in the U.S. Constitution.  And the limited case law of Chapter 9 bankruptcy, which applies to cities and municipalities, doesn’t say whether a judge can legally subvert Michigan’s constitution to lessen Detroit’s obligations to its pensioners.

You can read more about Michigan’s constitution protecting public employees’ pensions here.  Some other notable Chapter 9 bankruptcy proceedings nuclide Jefferson County, Alabama (2011) and Orange County, California (1994).

via Detroit bankruptcy unconstitutional, judge rules in pension case – ABA Journal.

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Supreme Court refuses to hear 2nd Amendment case

The U.S. Supreme Court declined to hear a case that contended the Second Amendment protects the right to carry a gun in public.  The denial of this petition had no comments.  Because there were no comments to the denied petition, there is no way to know why the Supreme Court chose not to get involved in this controversy.

The case is Kachalsky v. Cacace.  The issues presented to the Supreme Court were:

  1. Whether the Second Amendment secures a right to carry handguns for self-defense outside the home; and
  2. Whether state officials violate the Second Amendment by denying handgun carry licenses to responsible, law-abiding adults for lack of “proper cause” to bear arms for self-defense.

The Second Circuit Court of Appeals (Kachalsky v. County of Westchester, 701 F.3d 81 (2d. Cir. 2012)) affirmed the district court’s decision to grant summary judgment to the State.  The district court found that the plaintiffs lacked standing to sue.  The district court concluded that carrying concealed weapons in public is “outside of the core of the Second Amendment concern.”  Alternatively, the district court also concluded that the “proper cause” requirement would survive the scrutiny under the Second Amendment.

The SCOTUS blog,

 

 

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Sup. Ct. will hear retaliation mixed motives case

On Friday, the Supreme Court granted certiorari in the University of Texas Southwestern Medical Center v. Nassar to address mixed motives in retaliation cases.

The question the Supreme Court will address is:

Whether the retaliation provision of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), and similarly worded statutes require a plaintiff to prove but-for causation (i.e., that an employer would not have taken an adverse employment action but for an improper motive), or instead require only proof that the employer had a mixed motive (i.e., that an improper motive was one of multiple reasons for the employment action).

(emphasis added).

Plainly, the Supreme Court will opine about who has the burden of proof (who has to prove that retaliation was/or-is-not improper).

  • If the worker has to prove that the retaliation was improper, the worker has to show that the employer retaliated only due to the improper motive/reason (i.e. filing a lawsuit, making a complaint with HR, having a disability, due to race, gender, religion, etc.).
  • If the employer has to prove that the tangible employment action (i.e. discipline, firing, transfer, demotion) was not retaliation, the employer has to show that the improper motive/reason was part of many reasons.

The SCOTUSblog file with links to documents is here.

via Workplace Prof Blog: SCOTUS grants cert in retaliation mixed motives case.

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Union Decertification Case Law

The D.C. Circuit Court of Appeals, in SFO Goodnite Inn v. NLRB, ____F.3d____ (D.C. Cir. Nov. 20, 2012), enforced  a National Labor Relations Board order finding a California hotel improperly withdrew recognition from a UNITE HERE local, rejecting the hotel’s argument that it lawfully relied on anti-union petitions signed by a majority of its employees.

In the decision, the court approved the NLRB’s interpretation of Hearst.

[T]he Board has now articulated a clear line for applying the Hearst presumption of taint in “the narrow circumstance where an employer unlawfully instigates or propels a decertification campaign, and then invokes the results of that campaign to justify its unilateral withdrawal of recognition from its employee’s representative.”

The Board explained that the Hearst presumption applies where the employer is directly involved in advancing a decertification petition, whereas the Master Slack test applies where the employer committed unfair labor practices unrelated to the petition that may have contributed to the erosion of support for the union.

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Stericycle vs Novotel at NLRB

In Stericycle, Inc., the Board reversed its Novotel rule for dealing with union-backed employment law suits before an election.

At issue is whether union assistance with such suits constitutes an improper grant of benefit that might warrant re-running the election if the union wins. Under Novotel, a union may give employees free legal services to investigate, prepare, and file a lawsuit during the critical period before an election. However, the D.C. Circuit has refused to enforce that rule, prompting the majority in Stericycle to reverse it and conclude that such assistance is objectionable conduct.

The key ruling in the decision, which Members Becker, Hayes, and Pearce joined, is that:

we hold that a union engages in objectionable conduct warranting a second election by financing a lawsuit filed during the narrow time period—known as the “critical period”—between the date of the filing of the representation petition and the date of the election, which States claims under Federal or State wage and hour laws or other similar employment law claims on behalf of employees in the unit.

The Board acknowledged the importance to employees’ collective rights that education about their workplace rights, attorney referrals, and funding for lawsuits provides. But those interests were outweighed by the need to avoid the grant of benefits before an election (Novotel distinguished funding extraneous benefits with funding lawsuits directly related to the workplace problems that lead to the union campaign). The Board also argued that the harm to employees’ collective rights was minimal because of the critical period was only for a limited amount of time. Further, funding a lawsuit before the critical period remains unobjectionable conduct.

The Board, with Liebman, Becker, and Pearce signing on, also tried to define the boundaries of permissible and impermissible assistance.  According to the Board, is is OK for a union during the cirtical period to “inform employees about their rights [under labor and employment laws], assist them in identifying violations, urge them to seek relief, and even refer them to competent counsel [which may file suit during the critical period as long as there is no union funding] without casting into question subsequent election results.”

via Workplace Prof Blog.

 

 

 

 

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