Just the facts: The case for workplace transparency

Stanford Law Review

Volumn 63, Issue 2, 2011, Pages 351-408

  Estlund, Cynthia ^a  

^a NEW YORK UNIVERSITY SCHOOL OF LAW   (United States)

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EID: 79751490165     PISSN: 00389765     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (371)

1. Employers must disclose the terms of health and benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001-1461 (2006).
2. See U.S. DEP'T OF LABOR, REPORTING AND DISCLOSURE GUIDE FOR EMPLOYEE BENEFIT PLANS (2008), available at http://www.dol.gov/ebsa/pdf/rdguide.pdf. OSHA's Hazardous Communication Standard adopts an information solution to certain workplace hazards.
3. See infra text accompanying notes 88-89. Scholars have proposed broader use of disclosure of workplace hazards to improve safety.
4. See Thomas A. Lambert, Avoiding Regulatory Mismatch in the Workplace: An Informational Approach to Workplace Safety Regulation, 82 NEB. L. REV. 1006, 1038-40 (2004)
5. Susan Rose-Ackerman, Progressive Law and Economics-And the New Administrative Law, 98 YALE L.J. 341, 355-60 (1988).
6. Cass Sunstein has explored both disclosure mandates and the law of the workplace, but has addressed their overlap only with regard to occupational health and safety risks.
7. See Cass R. Sunstein, Informational Regulation and Informational Standing: Akins and Beyond, 147 U. PA. L. REV. 613, 626 (1999)
8. Cass R. Sunstein, Informing America: Risk, Disclosure, and the First Amendment, 20 FLA. ST. U. L. REV. 653, 655-61 (1993).
9. Other scholars have noted the potential value of disclosure in other work-related contexts.
10. See, e.g., Matthew T. Bodie, Information and the Market for Union Representation, 94 VA. L. REV. 1, 35-45 (2008) (proposing mandatory disclosure by unions in the context of representtation contests)
11. David J. Doorey, Who Made That?: Influencing Foreign Labour Practices Through Reflexive Domestic Disclosure Regulation, 43 OSGOODE HALL L.J. 353, 355-57 (2005) (proposing disclosure of manufacturing firms' supply chains)
12. Cynthia A. Williams, The Securities and Exchange Commission and Corporate Social Transparency, 112 HARV. L. REV. 1197, 1299, 1307-10 (1999) (proposing mandatory disclosure in corporate proxy statements of information about, inter alia, "domestic and international employment practices").
13. Two other areas of mandatory disclosure touch the law of work: advance notice of plant closing and mass layoffs under the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. §§ 2101-2109, and mandatory filing of financial and other information, mainly by labor unions, under the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA)
14. id. §§ 401-531
15. The WARN Act affects mainly the cessation of employment, while the LMRDA bears only peripherally on the employment relationship itself.
16. I have in mind here regular public disclosure obligations imposed on organizations, as opposed to obligations imposed on individuals within organizations to disclose, or "blow the whistle" on, incidents of wrongdoing within or by those organizations. The latter raise distinct concerns, as well as some parallel concerns that I allude to at relevant points in the analysis below.
17. See, e.g., No Child Left Behind Act of 2001 § 1116(a)(1), 20 U.S.C. § 6316(a)(1) (mandating that states and localities disseminate annual report cards recording student achievement on state assessments)
18. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) § 105(a)(8)(A), 42 U.S.C. § 9605(a)(8)(A) (establishing National Priorities List of hazardous waste sites)
19. Wallace F. Janssen, Outline of the History of U.S. Drug Regulation and Labeling, 36 FOOD DRUG COSM. L.J. 420 (1981).
20. On the history of food labeling, see Peter Barton Hutt & Peter Barton Hutt II, A History of Government Regulation of Adulteration and Misbranding of Food, 39 FOOD DRUG COSM. L.J. 2 (1984)
21. And Jean Lyons & Martha Rumore, Food Labeling-Then and Now, 2 J. PHARMACY & L. 171 (1993). For an interesting experimental study of the consequences of disclosure on healthy food choices
22. see Jessica Wisdom, Julie S. Downs & George Loewenstein, Promoting Healthy Choices: Information Versus Convenience, 2 AM. ECON. J.: APPLIED ECON. 164 (2010).
23. The harshest critiques of substantive mandates have come from law and economics scholars.
24. See, e.g., RICHARD A. EPSTEIN, FORBIDDEN GROUNDS: THE CASE AGAINST EMPLOYMENT DISCRIMINATION LAWS 41-43, 337-38 (1992)
25. RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 628-29 (4th ed. 1992). But skepticism of command-and-control regulation, and interest in information solutions, extends to those who would reform rather than drastically reduce regulation
26. See, e.g., STEPHEN BREYER, REGULATION AND ITS REFORM 163 (1982)
27. Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI. L. REV. 1, 102-12 (1995)
28. On the popularity of disclosure solutions with the critics of regulation, including industry, see MARY GRAHAM, DEMOCRACY BY DISCLOSURE 140 (2002)
29. And Paula J. Dalley, The Use and Misuse of Disclosure as a Regulatory System, 34 FLA. ST. U. L. REV. 1089, 1092-93 (2007).
30. See Howard Beales, Richard Craswell & Steven Salop, Information Remedies for Consumer Protection, 71 AM. ECON. REV. 410, 411, 413 (1981)
31. Paul H. Rubin, Information Regulation (Including Regulation of Advertising), in 3 ENCYCLOPEDIA OF LAW AND ECONOMICS 271, 272 (Boudewijn Bouckaert & Gerrit De Geest eds., 2000).
32. "New Governance" is one umbrella term for a range of post-command-and-control strategies for social control of economic organizations and activity. For a useful collection of exemplary scholarship
33. see LAW AND NEW GOVERNANCE IN THE EU AND THE US (Gráinne de Búrca & Joanne Scott eds., 2006)
34. For additional examples, see Michael C.Dorf & Charles F. Sabel, A Constitution of Democratic Experimentalism, 98 COLUM. L. REV. 267, 345-56 (1998)
35. David Hess, Social Reporting and New Governance Regulation: The Prospects of Achieving Corporate Accountability Through Transparency, 17 BUS. ETHICS Q. 453 (2007)
36. Bradley C. Karkkainen, Information as Environmental Regulation: TRI and Performance Benchmarking, Precursor to a New Paradigm?, 89 GEO. L.J. 257 (2001)
37. Orly Lobel, The Renew Deal: The Fall of Regulation and the Rise of Governance in Contemporary Legal Thought, 89 MINN. L. REV. 342 (2004)
38. Charles F. Sabel & William H. Simon, Destabilization Rights: How Public Law Litigation Succeeds, 117 HARV. L. REV. 1015 (2004);
39. And William M. Sage, Regulating Through Information: Disclosure Laws and American Health Care, 99 COLUM. L. REV. 1701 (1999).
40. Mandatory disclosure is thus held up by some scholars as an example of a regulatory intervention that may correct for well-documented behavioral impediments to rational decisionmaking without imposing serious burdens on "rational actors."
41. See, e.g., RICHARD H. THALER & CASS R. SUNSTEIN, NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, AND HAPPINESS 193-96 (2008)
42. Colin Camerer et al., Regulation for Conservatives: Behavioral Economics and the Case for "Asymmetric Paternalism," 151 U. PA. L. REV. 1211, 1230-37 (2003)
43. For a recent review of empirical research on the impact of mandatory disclosure on firms' performance
44. see Aaron K. Chatterji & Michael W. Toffel, How Firms Respond to Being Rated, 31 STRATEGIC MGMT. J. 917 (2010).
45. For a more pessimistic assessment, see Omri Ben-Shahar & Carl E. Schneider, The Failure of Mandated Disclosure (Univ. of Chi. Law Sch. John M. Olin Law & Econ. Research Paper, Paper No. 516, 2010), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1567284.
46. See Ben-Shahar & Schneider, supra note 10
47. Samuel Issacharoff, Disclosure, Agents, and Consumer Protection (NYU Law & Econ. Research Paper Series, Working Paper No. 10-33, 2010), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640624.
48. Among the problems are information overload, behavioral impediments to the processing of information, and the costs of producing information
49. See ARCHON FUNG ET AL., FULL DISCLOSURE: THE PERILS AND PROMISE OF TRANSPARENCY 73-74 (2007)
50. GRAHAM, supra note 7
51. Dalley, supra note 7, at 1113-19
52. Sage, supra note 9, at 1710
53. Ben-Shahar & Schneider, supra note 10, at 38-54.
54. See FUNG ET AL., supra note 12, at 122-25
55. Issacharoff, supra note 11
56. On the fall of collective bargaining and the proliferation of substantive mandates, see CYNTHIA ESTLUND, REGOVERNING THE WORKPLACE: FROM SELF-REGULATION TO COREGULATION 52-74 (2010).
57. On the policy debates over the efficiency and consequences of mandates, see infra text accompanying notes 22-27.
58. For several wide-ranging assessments, see FUNG ET AL., supra note 12
59. Dalley, supra note 7, at 1108-29
60. And Ben-Shahar & Schneider, supra note 10
61. The granddaddy of mandatory disclosure regimes in the United States-the financial disclosure requirements for publicly traded corporations-has created its own scholarly cottage industry.
62. See, e.g., Stephen M. Bainbridge, Mandatory Disclosure: A Behavioral Analysis, 68 U. CIN. L. REV. 1023 (2000)
63. John C. Coffee, Jr., Market Failure and the Economic Case for a Mandatory Disclosure System, 70 VA. L. REV. 717 (1984)
64. Dalley, supra note 7, at 1093-108
65. The boundaries of the firm are a subject of vigorous dispute. See Oliver E. Williamson, Michael L. Wachter & Jeffrey E. Harris, Understanding the Employment Relation: The Analysis of Idiosyncratic Exchange, 6 BELL J. ECON. 250 (1975)
66. But the location of employees within those boundaries is conventional wisdom, and I mean to suggest nothing more precise than that.
67. See Daniel R. Fischel, Labor Markets and Labor Law Compared with Capital Markets and Corporate Law, 51 U. CHI. L. REV. 1061, 1067-68 (1984)
68. cf. Bodie, supra note 2, at 35-45 (conceptualizing union representation elections as purchases of services).
69. On the civic dimension of work, see CYNTHIA ESTLUND, WORKING TOGETHER: HOW WORKPLACE BONDS STRENGTHEN A DIVERSE DEMOCRACY 105-24 (2003).
70. In referring to the "voting citizenry," I do not mean to suggest that the law of the workplace should treat citizens differently from other workers. But I do think that the fact that most employees are eligible voters, and that most eligible voters are also employees, is relevant to the law governing the workplace.
71. The following overview of the employment relationship is drawn from Cynthia L. Estlund, Between Rights and Contract: Arbitration Agreements and Non-Compete Covenants as a Hybrid Form of Employment Law, 155 U. PA. L. REV. 379, 383-86 (2006).
72. Protections against retaliation and discrimination are mainly litigated in connection with termination, though they also affect hiring and terms and conditions of employment.
73. See Cynthia L. Estlund, Wrongful Discharge Protections in an At-Will World, 74 TEX. L. REV. 1655, 1657 (1996).
74. See Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 201-219 (2006)
75. Occupational Safety and Health Act of 1970 (OSHA)
76. id. §§ 651-678
77. Employee Retirement Income Security Act of 1974 (ERISA)
78. id. §§ 1001-1461
79. Family and Medical Leave Act of 1993 (FMLA)
80. id. §§ 2601-2654
81. See Richard A. Epstein, In Defense of the Contract at Will, 51 U. CHI. L. REV. 947 962-77 (1984)
82. Mayer G. Freed & Daniel D. Polsby, Just Cause for Termination Rules and Economic Efficiency, 38 EMORY L.J. 1097, 1103-05 (1989)
83. Richard A. Posner, An Economic Analysis of Sex Discrimination Laws, 56 U. CHI. L. REV. 1311, 1325-34 (1989)
84. Richard A. Posner, Some Economics of Labor Law, 51 U. CHI. L. REV. 988 (1984)
85. Edward B. Rock & Michael L. Wachter, The Enforceability of Norms and the Employment Relationship, 144 U. PA. L. REV. 1913, 1935 (1996)
86. Stewart J. Schwab, Predicting the Future of Employment Law: Reflecting or Refracting Market Forces?, 76 IND. L.J. 29, 46-48 (2001)
87. Lawrence H. Summers, Some Simple Economics of Mandated Benefits, 79 AM. ECON. REV. 177, 181 (1989)
88. J. Hoult Verkerke, An Empirical Perspective on Indefinite Term Employment Contracts: Resolving the Just Cause Debate, 1995 WIS. L. REV. 837, 909-12.
89. See, e.g., Lawrence E. Blades, Employment at Will vs. Individual Freedom: On Limiting the Abusive Exercise of Employer Power, 67 COLUM. L. REV. 1404, 1404-13 (1967)
90. Clyde W. Summers, Individual Protection Against Unjust Dismissal: Time for a Statute, 62 VA. L. REV. 481, 519-20 (1976)
91. see also Theodore J. St. Antoine, A Seed Germinates: Unjust Discharge Reform Heads Toward Full Flower, 67 NEB. L. REV. 56, 65-66 (1988).
92. "Unequal bargaining power" features in the preamble to the National Labor Relations Act (NLRA), 29 U.S.C. §§ 151-169, as an explicit basis for the federal right to form unions and bargain collectively, and appears to underlie many judicial and legislative interventions into the employment contract. For a thoughtful defense of the "unequal bargaining power" thesis
93. see Michael H. Gottesman, Wither Goest Labor Law: Law and Economics in the Workplace, 100 YALE L.J. 2767, 2787 (1991) (reviewing PAUL C. WEILER, GOVERNING THE WORKPLACE: THE FUTURE OF LABOR AND EMPLOYMENT LAW (1990))
94. Law and economics scholars have repeatedly criticized the "unequal bargaining power" claim and argued for greater deference to contracts.
95. See, e.g., Stewart J. Schwab, The Law and Economics Approach to Workplace Regulation, in GOVERNMENT REGULATION OF THE EMPLOYMENT RELATIONSHIP 91, 111-13 (Bruce E. Kaufman ed., 1997)
96. Verkerke, supra note 22, at 909-12
97. Michael L. Wachter & Randall D. Wright, The Economics of Internal Labor Markets, 29 INDUS. REL. 240, 254-55 (1990).
98. See, e.g., WEILER, supra note 24, at 20-22
99. Simon Deakin & Frank Wilkinson, Labour Law and Economic Theory: A Reappraisal, in LAW AND ECONOMICS AND THE LABOUR MARKET 1 (Gerrit De Geest, Jacques Siegers & Roger Van den Bergh eds., 1999)
100. Samuel Issacharoff, Contracting for Employment: The Limited Return of the Common Law, 74 TEX. L. REV. 1783 (1996)
101. Stewart J. Schwab, Wrongful Discharge Law and the Search for Third- Party Effects, 74 TEX. L. REV. 1943 (1996)
102. St. Antoine, supra note 23
103. David A. Strauss, The Law and Economics of Racial Discrimination in Employment: The Case for Numerical Standards, 79 GEO. L.J. 1619 (1991)
104. John J. Donohue III, Advocacy Versus Analysis in Assessing Employment Discrimination Law, 44 STAN. L. REV. 1583 (1992) (book review)
105. J. Hoult Verkerke, Free to Search, 105 HARV. L. REV. 2080 (1992) (book review).
106. See WEILER, supra note 24, at 134-42
107. Deakin & Wilkinson, supra note 25, at 12-13
108. Walter Kamiat, Labor and Lemons: Efficient Norms in the Internal Labor Market and the Possible Failures of Individual Contracting, 144 U. PA. L. REV. 1953, 1958-59 (1996)
109. Gottesman, supra note 24.
110. See WEILER, supra note 24, at 134-42
111. Given the difficulties of individual "voice," employees' main recourse in case of dissatisfaction with a job is exit; but exit, and especially frequent recourse to exit, is costly to the employee. Apart from a temporary loss of income, exit sacrifices firm-specific skills and knowledge and the benefits of seniority, and may send damaging signals to future employers.
112. See ESTLUND, supra note 14, at 60-68
113. See id. at 93-103
114. DAVID VOGEL, THE MARKET FOR VIRTUE: THE POTENTIAL AND LIMITS OF CORPORATE SOCIAL RESPONSIBILITY 16-45 (rev. ed. 2006).
115. See JILL ESBENSHADE, MONITORING SWEATSHOPS: WORKERS, CONSUMERS, AND THE GLOBAL APPAREL INDUSTRY (2004)
116. ESTLUND, supra note 14, at 97-103
117. Heterogeneity and complexity are among the reasons Paul Weiler cites for the inadequacy of employment legislation as an answer to the shortcomings of labor markets in meeting employee needs, and the need for mechanisms of collective employee voice.
118. See WEILER, supra note 24, at 154-61
119. Ed Rock and Michael Wachter cite similar issues as a reason to prefer, under some circumstances, informal enforcement of workplace "norms" to either formal judicial enforcement of those norms or legislation of uniform standards
120. See Rock & Wachter, supra note 22, at 1932-40.
121. Preferences depend on employees' own family responsibilities and their abilities to afford whatever wage tradeoff is entailed by accommodating those responsibilities.
122. See 29 U.S.C. § 2601 (2006).
123. The FMLA covers employers with more than fifty employees. Id. § 2611.
124. See Healthy Families Act, H.R. 2460, 111th Cong. (2009) (mandating that, for every thirty hours worked, employers provide at least one hour of paid sick time that employees can use for their own or a family member's illness or injury)
125. Family and Medical Leave Enhancement Act of 2009, H.R. 824, 111th Cong. (2009) (expanding FMLA to allow employees to take up to four hours leave in any thirty-day period to attend children's school events or family members' medical appointments)
126. see also Paid Vacation Act of 2009, H.R. 2564, 111th Cong. (2009) (mandating at least one week's paid vacation annually for employers with at least fifty employees, and at least two weeks for employers with at least one hundred employees).
127. See CAL. UNEMP. INS. CODE §§ 3300-3305 (West 2010) (allowing up to six weeks leave, at reduced pay, during a twelve-month period to care for a newborn or adopted child or a seriously ill family member)
128. N.J. STAT. ANN. § 43:21-26 (West 2010) (extending state temporary disability benefits law to cover individuals "who need to care for family members incapable of self-care")
129. WASH. REV. CODE ANN. §§ 49.86.005-.903 (West 2010) (allowing up to five weeks leave, at $250 per week, during a twelve-month period to care for a newborn or adopted child).
130. The Equal Employment Opportunity Commission (EEOC) has issued its own set of best practices for workers with caregiver responsibilities.
131. See Employer Best Practices for Workers with Caregiving Responsibilities, U.S. EQUAL EMP. OPPORTUNITY COMMISSION, http://www.eeoc.gov/policy/docs/caregiver-best-practices.html (last modified May 22, 2009).
132. Working Mother magazine has compiled one of several "best employer" lists. See 2010 Working Mother 100 Best Companies, WORKING MOTHER, http://www.workingmother.com/BestCompanies/2010/08/2010-working-mother-100-best-companies (last visited Dec. 28, 2010).
133. On the economic forces that are likely to constrain voluntary employer accommodation of family responsibilities, see Rachel Arnow-Richman, Accommodation Subverted: The Future of Work/Family Initiatives in a "Me, Inc." World, 12 TEX. J. WOMEN & L. 345, 378-86 (2003).
134. A promising legislative approach to the problem, and an example of a new kind of employment mandate, is seen in the proposed Working Families Flexibility Act, H.R. 1274, 111th Cong. (2009), which would allow employees to request a change in work location or hours and would require employers to meet with employees to discuss any requests. This "procedural mandate" would effectively require employers to explicitly bargain over these matters at employees' request. It would not alter the contractual ature of the employment relationship, but it would serve an information-forcing function vis-à-vis current employees, and would likely improve some employees' ability to satisfy their preferences through individual contracts.
135. See JANET C. GORNICK, ALEXANDRA HERON & ROSS EISENBREY, ECON. POLICY INST., BRIEFING PAPER NO. 189, THE WORK-FAMILY BALANCE: AN ANALYSIS OF EUROPEAN, JAPANESE, AND U.S. WORK-TIME POLICIES (2007), available at http://www.sharedprosperity.org/bp189/bp189.pdf
136. Nancy E. Dowd, Envisioning Work and Family: A Critical Perspective on International Models, 26 HARV. J. ON LEGIS. 311, 337-39 (1989)
137. Carol Daugherty Rasnic, Balancing Respective Rights in the Employment Contract: Contrasting the U.S. "Employment-at-Will" Rule with the Worker Statutory Protections Against Dismissal in European Community Countries, 4 J. INT'L L. & PRAC. 441 (1995);
138. Annie Pelletier, Comment, The Family Medical Leave Act of 1993-Why Does Parental Leave in the United States Fall So Far Behind Europe?, 42 GONZ. L. REV. 547, 560-71 (2006/07).
139. See Christine Jolls, Cass R. Sunstein & Richard Thaler, A Behavioral Approach to Law and Economics, 50 STAN. L. REV. 1471, 1533-37 (1998)
140. see also Camerer et al., supra note 10, at 1230-37 (discussing how regulation can be improved by taking into account individuals' bounded rationality).
141. See Cass R. Sunstein, Human Behavior and the Law of Work, 87 VA. L. REV. 205, 212-13 (2001) [hereinafter Sunstein, Human Behavior]
142. Cass R. Sunstein, Switching the Default Rule, 77 N.Y.U. L. REV. 106, 133-34 (2002) [hereinafter Sunstein, Switching the Default Rule]
143. For example, following Issacharoff, supra note 25
144. Sunstein suggests replacing the current "at will" default term with a default "just cause" protection. Such proposals echo the case for "penalty defaults" where one party to a contract has superior access to information that affects the value of a particular term.
145. See Ian Ayres & Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 YALE L.J. 87, 95-100 (1989).
146. Or so goes the theory. In fact, most employers already do contract explicitly for employment at will; yet it appears that many employees ignore or discount even clearly and broadly worded disclaimers.
147. See Pauline T. Kim, Bargaining with Imperfect Information: A Study of Worker Perceptions of Legal Protection in an At-Will World, 83 CORNELL L. REV. 105, 139-40 (1997).
148. See WEILER, supra note 24, at 74-75
149. Employees may also lack important information about the law of the workplace, but let us set that problem aside. For discussions of that problem
150. see Kim, supra note 41
151. See also Ian H. Eliasoph, Know Your (Lack of) Rights: Reexamining the Causes and Effects of Phantom Employment Rights, 12 EMP. RTS. & EMP. POL'Y J. 197 (2008)
152. Cynthia L. Estlund, How Wrong Are Employees About Their Rights, and Why Does It Matter?, 77 N.Y.U. L. REV. 6 (2002).
153. Such a rule should also reframe the issue for employees and enhance their starting endowments, thus raising the perceived value of job security and tilting subsequent decisionmaking in favor of greater job security.
154. See Sunstein, Switching the Default Rule, supra note 40, at 112-19.
155. In earlier work I have identified another point along the spectrum from mandates to free contract in the form of "conditionally waivable rights," which can be observed in existing law in the treatment of mandatory arbitration agreements and covenants not to compete
156. See Estlund, supra note 19
157. There are two other kinds of information that some might find wanting, and worthy of disclosure, in the employment context: information (for employees) about employee rights under labor and employment laws
158. see supra note 42, and information (for employers) about employees' job qualifications and likely productivity. Those two categories of information raise issues very different from those relevant here, and are beyond the scope of this Article.
159. Among the difficult issues that surround the idea of wage transparency: Would mandatory wage transparency lead to higher wages, for example, by spurring labor market competition or by improving compliance with minimum wage and overtime requirements? Or might it lead to lower wages, at least for some workers (e.g., by facilitating employer collusion or by fueling capital market pressures to reduce labor costs)? How would wage transparency affect organizations and interpersonal relations? Would employee resentment about large disparities between and within job categories impair cooperation and collective productivity? If so, would employers respond by compressing the wage scale? What can we learn about these issues from experience in sectors of the labor market where there already is wage transparency, as in much of the public sector, the unionized workplace, and the top end of publicly traded corporations? Should employee privacy interests limit the type of wage information that should be mandated? Do employers have a legitimate commercial interest in wage and salary secrecy as against competitors? Can all these concerns be addressed by limiting the type of wage information-the level of detail-that employers should be required to disclose? Some of these concerns are echoed in the discussion of nonwage terms of employment, but many of them are distinctive, or at least more acute, in the case of wages. A separate, focused analysis of wage transparency is thus reserved for future work.
160. Prospective employees are only a subset of the potential consumers of job-related information, as I will explain below; but they are a crucial subset that may serve for now as a proxy for the interested public.
161. Employers subject to the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 201-219 (2006), must maintain records on each employee's occupation, wage rate, hours worked, overtime, additions or deductions to wages, and total wages paid each period. 29 C.F.R. § 516.6 (2010)
162. Fact Sheet #21: Recordkeeping Requirements Under the Fair Labor Standards Act (FLSA), U.S. DEP'T LAB. (July 2008), http://www.dol.gov/whd/regs/compliance/whdfs21.htm. These records must be available for inspection by the Department of Labor, which may also require employers to report the data. 29 C.F.R. §§ 516.7-.8.
163. Employers subject to OSHA are required to record work-related injuries that result in "death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid,. loss of consciousness," or diagnosis with a "significant injury or illness." 29 C.F.R. § 1904.7. Employers must report to OSHA any employee death or inpatient hospitalization involving three or more employees
164. Id. § 1904.39
165. Until recently, this data was unavailable to the public. However, historic establishment-specific data (through 2007) from these OSHA reports was made public by OSHA in 2009.
166. See infra text accompanying note 76.
167. In addition to OSHA's reporting requirements, state workers' compensation statutes generally require employers to record any injury or illness incurred by employees in the course of employment.
168. See, e.g., N.Y. WORKERS' COMP. LAW § 110 (McKinney 2010).
169. Information about contractual terms is typically found in employers' policy manuals or employee handbooks. As for facts affecting job tenure, federal law requires larger employers to give advance notice regarding plant closings or major layoffs. Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. §§ 2101-2109
170. see also N.Y. LAB. LAW §§ 860, 860-a to -i (McKinney 2010) (imposing similar but broader requirements for advance notice of plant closings or mass layoffs). In addition, state unemployment compensation regimes include reporting requirements.
171. See, e.g., CAL. UNEMP. INS. CODE § 1085(a)-(b) (West 2010) (requiring employers to keep a record of workers, their statuses (i.e., employed, on layoff), and their wages).
172. Employers that are subject to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-17, and have at least one hundred employees must file annual reports with the EEOC categorizing employees by job description, sex, and race/ethnicity. 29 C.F.R. § 1602.7. Employers with at least fifty employees that hold government contracts for at least $50,000 must file the same report with the Office of Federal Contract Compliance Programs (OFCCP), 41 C.F.R. § 60-1.7, and must provide demographic information for all applicants upon request of the OFCCP
173. id. § 60-1.12.
174. See supra notes 48-51
175. The idea of ranking employers may suggest an analogy, for better and for worse, to the infamous U.S. News & World Report rankings of colleges, universities, and their graduate and professional programs. (For a nuanced affirmative case for rankings, including the U.S. News & World Report rankings of law schools
176. see Heather K. Gerken, In Praise of Rankings, 19 WIDENER L.J. 1 (2009).) Rankings might be improved both by competition among ranking bodies and by greater checks on the accuracy of data. Both would be facilitated by public disclosure of the underlying data, as proposed here.
177. Specifically, "Retirement Plan," "College Savings Plan," "Bar Association Fees," "Business Casual Dress Code," "Child Care Subsidy," "CLE," "Dental Insurance," "Domestic Partner Benefits," "Employee Assistance Program," "Family/Dependent Care Leave," "Flexible Spending Account/[P]re-tax Option," "Health Club Membership," "Life/AD&D," "Long-term Care Insurance," "Long-term Disability Insurance," "Medical Insurance," "Medical Spending Account," "On-site Child Care," "On-site Child Care-Emergency," "Parental Leave," "Parking/Transportation," "Profit Sharing," "Relocation Expenses," "Sabbatical Program," "Short-term Disability Insurance," "Sick Leave," "Technology (Laptop, PDA, etc.)," "Vacation Leave," and "Vision Insurance." Advanced Search, NALP DIRECTORY LEGAL EMPLOYERS, http://www.nalpdirectory.com/dledir_search_advanced.asp (last visited Jan. 4, 2010). The site also includes other legal employers-corporate, government, and public interest-but very few of these apparently submit NALP questionnaires. The site identifies only six non-law firm employers in New York City, for example.
178. Based on a search performed on January 3, 2010.
179. Not all firms report all items (total hours worked and billed are often missing), but nearly all report nearly all items.
180. NALP can perform those functions because it embraces, and effectively orchestrates, the entire relevant labor market; elsewhere, government action may be required.
181. The benefits that are actually offered by major law firms are both more uniform and more generous than those offered by most employers (though they have taken a hit in the recent economic downturn, as in nearly every sector of the economy). But whether or not any particular employer offers these benefits is of general interest.
182. Alan Schwartz & Louis L. Wilde, Intervening in Markets on the Basis of Imperfect Information: A Legal and Economic Analysis, 127 U. PA. L. REV. 630, 630, 632-39 (1979).
183. On the role of "informed minorities," see id. at 636-37.
184. The ability of informed minorities to police consumer contract terms has been sharply questioned.
185. See Shmuel I. Becher, Asymmetric Information in Consumer Contracts: The Challenge that Is Yet to Be Met, 45 AM. BUS. L.J. 723 (2008)
186. Yannis Bakos, Florencia Marotta-Wurgler & David R. Trossen, Does Anyone Read the Fine Print? Testing a Law and Economics Approach to Standard Form Contracts (NYU Law & Econ. Research Paper Series, Working Paper No. 09-40, 2009), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1443256.
187. In some respects, jobs are "experience goods"; many important features can be discovered only over time on the job. Disclosure is not a substitute for experience.
188. See LINDA BABCOCK & SARA LASCHEVER, WOMEN DON'T ASK: NEGOTIATION AND THE GENDER DIVIDE 1-7 (2003).
189. See id. at 62-84.
190. See PETER DORMAN, MARKETS AND MORTALITY: ECONOMICS, DANGEROUS WORK, AND THE VALUE OF HUMAN LIFE 35-36 (1996)
191. Richard Thaler & Sherwin Rosen, The Value of Saving a Life: Evidence from the Labor Market, in HOUSEHOLD PRODUCTION AND CONSUMPTION 265 (Nestor E. Terleckyj ed., 1976). The level of danger, and accordingly any risk premium, may depend not only on the type of job-construction work is obviously more dangerous than clerical work-but on less obvious variations in employer practices and the injury rates that result.
192. See Schwartz & Wilde, supra note 59, at 656
193. "If comparison shopping is convenient.[and] if prices and terms in a market are quoted in standard and relatively clear fashion, the market, other things equal, is more likely than not to be competitive.". Again, this argument is based partly on the hurdles to employees' securing this sort of information by other means, a problem to which I return in Part IV.
194. The notion that workers generally suffer from a lack of bargaining power vis-à-vis employers has been the subject of withering critiques from the law and economics camp.
195. See sources cited supra note 24.
196. See, e.g., Lawrence M. Ausubel, Peter Cramton & Raymond J. Deneckere, Bargaining with Incomplete Information, in 3 HANDBOOK OF GAME THEORY WITH ECONOMIC APPLICATIONS 1897 (Robert Aumann & Sergiu Hart eds., 2002).
197. For economists, there is no such thing as "bargaining power" in perfectly competitive markets. But market failures yield potential monopoly rents, the distribution of which may depend on the parties' relative bargaining power. Significant information asymmetries are a form of market failure, which both create the possibility of monopoly rents and confer an advantage on the party with superior access to important information. Compelling disclosure and reducing information asymmetries should tend to make markets more competitive and reduce employers' bargaining power (by reducing the rents over which bargaining might take place).
198. See Detroit Edison Co. v. NLRB, 440 U.S. 301, 303 (1979)
199. NLRB v. Acme Indus. Co., 385 U.S. 432, 435-36 (1967)
200. NLRB v. Truitt Mfg. Co., 351 U.S. 149, 153 (1956). The duty to provide employment-related information is broad, though it may be constrained in light of employee privacy interests or employers' interest in confidentiality of trade secrets or financial information.
201. See, e.g., Detroit Edison, 440 U.S. at 319
202. The full implications of mandatory public disclosure of work-related information for collective labor relations would require elaboration beyond what is possible in this Article, for it must confront vigorous debates over the impact of collective bargaining on the efficiency of labor markets. For present purposes, we may consider the value of information to union bargaining and organizing to be a potential subset of the contribution of information to efficient contracting, collective as well as individual.
203. The point is not that existing law requires employers to provide this information to individuals, but only that the NLRA suggests both a precedent and a justification for the law's imposing such a requirement.
204. See ESTLUND, supra note 14, at 60-68.
205. Most lawsuits, and probably most administrative complaints, are filed by former employees. Current employees rarely sue or file complaints as long as they are employed (presumably because of fear of reprisals), and prospective employees rarely sue or complain over even legal violations that affect them directly, such as discriminatory nonhiring (partly because of the limited individual stakes and partly because of the lack of information about why they were not hired)
206. See, e.g., John J. Donohue III & Peter Siegelman The Changing Nature of Employment Discrimination Litigation 43 STAN. L. REV. 983, 1015-19 (1991)
207. Michael J. Yelnosky, Filling an Enforcement Void: Using Testers to Uncover and Remedy Discrimination in Hiring for Lower-Skilled, Entry-Level Jobs, 26 U.MICH. J.L. REFORM 403, 411 & n.23 (1993). Prospective employees' lack of information about the reasons for nonhiring is an information asymmetry that my proposal would at best address only indirectly.
208. Aggregate litigation thus plays an essential enforcement role under some employment statutes. On the hurdles to employees playing their essential role in enforcement of employment mandates
209. see ESTLUND, supra note 14, at 142-44
210. See Lambert, supra note 1, at 1035-50
211. See supra text accompanying note 49.
212. Specifically, the tables show the number of incidents and days lost per two hundred thousand employee hours worked per year. That is equivalent to one hundred employees working forty hours per week for fifty weeks per year.
213. See Occupational Safety & Health Administration, U.S. DEP'T LAB., http://www.osha.gov/pls/odi/establishment_search.html (last visited Oct. 26, 2010). Thanks to Adam Finkel for alerting me to this development.
214. See, e.g., Estlund, supra note 19, at 423
215. See id. at 423-24.
216. An effort to do this by state law was struck down in Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681, 683 (1996), which held that state laws singling out arbitration agreements for mandatory disclosure were preempted by the FAA. Congress could obviously override that. On the extent and consequences of invalid-as-written noncompete and arbitration agreements, including their in terrorem effects
217. see Charles A. Sullivan, The Puzzling Persistence of Unenforceable Contract Terms, 70 OHIO ST. L.J. 1127 (2009).
218. See VOGEL, supra note 29, at 6-10.
219. See ESTLUND, supra note 14, at 93-97.
220. On how disclosure mandates are supposed to advance regulatory objectives, see FUNG ET AL., supra note 12, at 6-7, 50-68.
221. Id. at 5.
222. See VOGEL, supra note 29, at 19-24
223. Dalley, supra note 7, at 1122-23.
224. FUNG ET AL., supra note 12, at 6.
225. The HCS seeks "to ensure that the hazards of all chemicals produced or imported are evaluated, and that information concerning their hazards is transmitted to employers and employees." 29 C.F.R. § 1910.1200(a)(1) (2010).
226. See FUNG ET AL., supra note 12, at 86-87.
227. See id. at 122-25.
228. See Dalley, supra note 7, at 1101-03.
229. See FUNG ET AL., supra note 12, at 61-62, 86-87
230. Karkkainen, supra note 9, at 316-23.
231. See Employment Due Process Protocol, AM. ARB. ASS'N, http://www.adr.org/sp.asp?id=28535 (last visited Jan. 27, 2010).
232. For a comprehensive assessment of the CSR movement and its drivers, see VOGEL, supra note 29.
233. See id. at viii.
234. See Doorey, supra note 2, at 372-76
235. David J. Doorey, Transnational Domestic Labour Regulation: Using Domestic Disclosure Regulation to Influence Foreign Labour Practices 236-47 (Apr. 2009) (unpublished Ph.D. dissertation, Osgoode Hall Law School) (on file with author).
236. See Dalley, supra note 7, at 1115-16
237. Matthew A. Edwards, Empirical and Behavioral Critiques of Mandatory Disclosure: Socio-Economics and the Quest for Truth in Lending, 14 CORNELL J.L. & PUB. POL'Y 199, 221-23 (2005).
238. The incentives for voluntary disclosure of information (including negative information), especially in the corporate law context, are explored in Eric Talley, Disclosure Norms, 149 U. PA. L. REV. 1955, 1956 (2001).
239. Of course the role of disclosure is extremely difficult to untangle from changing norms within firms and among applicants.
240. GE ranked ninth. The others, in order, were Apple, Berkshire Hathaway, Toyota Motor, Google, Johnson & Johnson, Procter & Gamble, FedEx, Southwest Airlines, and Microsoft. World's Most Admired Companies, CNNMONEY.COM, http://money.cnn.com/magazines/fortune/mostadmired/2009/index.html (last visited Mar. 21, 2009).
241. 2010 Working Mother Best Companies, WORKING MOTHER, http://www.workingmother.com/BestCompanies/node/7818/list?page=2 (last visited Oct. 18, 2010).
242. The Best Places to Launch a Career, BLOOMBERG BUSINESSWEEK (Sept. 18, 2006), http://www.businessweek.com/magazine/content/06_38/b4001601.htm.
243. Working Environment, GE, http://www.ge.com/company/culture/working_environment.html (last visited Oct. 18, 2009).
244. The Spirit & the Letter, GE, http://www.ge.com/citizenship/reporting/the-spiritthe-letter.html (last visited Oct. 18, 2010).
245. Ombudsperson Process, GE, http://www.ge.com/company/governance/ombudsperson_process/index.html (last visited Oct. 18, 2010).
246. Life at GE, GE, http://www.ge.com/careers/life_at_ge/index.html (last visited Oct.14, 2010).
247. See Leadership Program, GE, http://www.ge.com/careers/students/cldp/index.html (last visited Dec. 28, 2010).
248. Working Environment, GE, http://www.ge.com/company/culture/working_environment.html (last visited Oct. 12, 2010).
249. Specifically, representation of women by region and of various racial and ethnic groups both by region and in executive, professional, and other job categories.
250. See GE Citizenship Performance Metrics, GE, http://www.ge.com/citizenship/performance_metrics/ehs.jsp (last visited Dec. 14, 2009).
251. GE Employee Opinion Survey, GE, http://www.ge.com/citizenship/performance_areas/employees_survey.jsp (last visited Dec. 14, 2009).
252. See, e.g., Lamb v. Gen. Elec. Consumer & Indus., No. 1:06-CV-216, 2006 WL 2228962, at *1 (N.D. Ind. Aug. 3, 2006).
253. The job was posted on several online job search sites in August 2010. See, e.g., Freight Handler, Freight Handlers, Inc., CAREERBUILDER.COM, http://www.careerbuilder.com/JobSeeker/Jobs/JobDetails.aspx?IPath=QHKCV0A&ff=21&APath=2.21.0.0.0&job_did=J8B68S6JKLMG810BM4N (last visited Sept. 6, 2010).
254. The chief executive officer, president, senior vice-president and chief administrative officer, and chief leadership officer all have the same last name.
255. See FHI Fact Sheet, FREIGHT HANDLERS, INC., http://www.freighthandlers.com/about_factsheet.htm (last visited Mar. 21, 2009).
256. Career Opportunities, FREIGHT HANDLERS, INC., http://www.freighthandlers.com/careers.htm (last visited Dec. 14, 2009).
257. See Freight Handler, Freight Handlers, Inc., supra note 113.
258. And any assurances to the contrary must be in writing from an authorized officer of the company. Application for Employment, FREIGHT HANDLERS, INC., http://www.freighthandlers.com/FHI_Job_Application.pdf (last visited Mar. 21, 2009).
259. Freight Handlers Inc. to Pay for Overtime Work, BUFF. BUS. FIRST, Nov. 15, 2004, http://www.bizjournals.com/buffalo/stories/2004/11/15/daily5.html.
260. According to the Department of Labor, as of 1997, the seventeen million small, nonfarm businesses in the United States (generally those employing fewer than five hundred employees) constituted 99.7% of all employers and employed 52% of the private sector workforce. Small Business in America, U.S. DEP'T LAB., http://www.dol.gov/odep/pubs/ek00/small.htm (last visited Mar. 30, 2009) (citing 1997 report of the U.S. Census Bureau).
261. For employers, there may be benefits to disclosing negative information to prospective applicants, according to the Realistic Job Preview (RJP) thread of human resources scholarship.
262. See James A. Breaugh, Employee Recruitment: Current Knowledge and Important Areas for Future Research, 18 HUM. RESOURCE MGMT. REV. 103, 105-08 (2008).
263. The RJP thesis posits that many job applicants have unrealistic expectations; that employers contribute to these inflated expectations if they convey only positive information during recruitment; and that hiring candidates with unrealistic perceptions may lead to employee dissatisfaction and high turnover.
264. See id. at 105.
265. Empirical research on the effects of RJPs-of giving employees negative as well as positive information-has been inconclusive.
266. See id. at 115-16.
267. HUMAN RIGHTS CAMPAIGN FOUND., CORPORATE EQUALITY INDEX 2009 3 (2009), available at http://www.hrc.org/documents/HRC_Corporate_Equality_Index_2009.pdf.
268. Ian Ayres and Jennifer Brown offer a clever twist on the use of voluntary disclosure and intermediaries that would in principle reduce the problem of puffery. They have created a new "fair employment" (FE) certification mark, like the Good Housekeeping Seal of Approval, to recognize employers that not only promise not to discriminate on the basis of sexual orientation, but that agree to make that promise enforceable as a matter of contract.
269. See IAN AYRES & JENNIFER GERARDA BROWN, STRAIGHTFORWARD: HOW TO MOBILIZE HETEROSEXUAL SUPPORT FOR GAY RIGHTS 79-94 (2005).
270. Ian Ayres & Jennifer Gerarda Brown, Mark(et)ing Nondiscrimination: Privatizing ENDA with a Certification Mark, 104 MICH. L. REV. 1639 (2006). It appears that the FE mark has gained little traction with employers. Voluntary disclosure is one thing; voluntary courting of additional employment litigation is quite another. I will briefly address the link between disclosure and liability, and the puzzles it poses, in Part V.
271. VAULT, http://www.vault.com (last visited Sept. 26, 2010).
272. GLASSDOOR.COM, http://www.glassdoor.com (last visited Sept. 26, 2010).
273. Glassdoor. com asks users to post their own information, in lieu of a fee, in order to gain full access to company information.
274. One can even find some spotty salary information (though even anonymous employees seem reluctant to disclose that information).
275. See FUNG ET AL., supra note 12, at 152-53.
276. Other distinctive features of labor markets impede employers' ability to get reliable information about prospective employees; there are information asymmetries on both sides of the bargaining table. But those issues are beyond the scope of this Article.
277. See, e.g., Gillian Lester, Careers and Contingency, 51 STAN. L. REV. 73, 131-32 (1998).
278. Sunstein, Human Behavior, supra note 40, at 225-26.
279. See Kamiat, supra note 26, at 1958-59.
280. Kim, supra note 41, at 118-19.
281. David I. Levine, Just-Cause Employment Policies in the Presence of Worker Adverse Selection, 9 J. LAB. ECON. 294 (1991).
282. See Pauline T. Kim, Collective and Individual Approaches to Protecting Employee Privacy: The Experience with Workplace Drug Testing, 66 LA. L. REV. 1009, 1027 (2006).
283. See Lester, supra note 128.
284. Summers, supra note 22, at 179.
285. See Levine, supra note 129.
286. See MARK S. GRANOVETTER, GETTING A JOB (1974).
287. Mark S. Granovetter, The Strength of Weak Ties, 78 AM. J. SOC. 1360 (1973).
288. Harry J. Holzer, Hiring Procedures in the Firm: Their Economic Determinants and Outcomes (Nat'l Bureau of Econ. Research, Working Paper No. 2185, 1987).
289. See Michele Pellizzari, Do Friends and Relatives Really Help in Getting a Good Job?, 63 INDUS.& LAB. REL. REV. 494 (2010).
290. The racially disparate impact of "word-of-mouth" recruitment practices is commonly recognized, but cases are mixed on the question of whether it is a form of employment discrimination.
291. See, e.g., EEOC v. Consol. Serv. Sys., 989 F.2d 233, 237-38 (7th Cir. 1993) (holding that defendant employer's use of word-of-mouth hiring was not intentional discrimination).
292. EEOC v. Chi. Miniature Lamp Works, 947 F.2d 292, 305 (7th Cir. 1991) (holding that word-of-mouth hiring was not a "practice" that could be challenged under Title VII).
293. Domingo v. New Eng. Fish Co., 727 F.2d 1429, 1435-36 (9th Cir. 1984) (holding that word-of-mouth hiring had unlawful disparate impact).
294. See generally Melissa Hart, Disparate Impact Discrimination: The Limits of Litigation, the Possibilities for Internal Compliance, 33 J.C. & U.L. 547, 554-55 (2007) (discussing word-of-mouth cases under Title VII).
295. Samuel Estreicher, Employer Reputation at Work 1 (NYU Law & Econ. Research Paper Series, Working Paper No. 09-04, 2009), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1314257.
296. As Estreicher notes, reputation is not always reliable because reputation costs fluctuate, particularly in internal labor markets.
297. Id. at 1-2.
298. Reputation can function as a "brake" on cheating or opportunistic behavior, but it is an imperfect mechanism, "especially if sizeable unanticipated gains arise." Christopher Cornwell, Stuart Dorsey & Nasser Mehrzad, Opportunistic Behavior by Firms in Implicit Pension Contracts, 26 J. HUM. RESOURCES 704, 722 (1991).
299. See supra text accompanying note 60.
300. These are some of the reasons Weiler and others give in support of the need for mechanisms of "voice," and particularly collective voice, to supplement reliance on "exit." WEILER, supra note 24, at 218-24. But given the high hurdles to extending mechanisms of collective voice to anything like a majority of workers in the foreseeable future, it seems wise to consider additional responses to the frictions and distortions that accompany reliance on exit and loyalty in labor markets. Better informing potential entrants responds to some of those frictions and distortions.
301. Employees themselves might object to disclosure of some individualized employment- related information on privacy grounds; for example, they might object to individualized injury reports that employers are required to report to OSHA. There might be other objections of this sort that limit the scope of a disclosure mandate; but they do not put in doubt the general case for disclosure or cut back sharply on its reach.
302. Trade secrets are defined by state law. A widely used definition includes information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. UNIF. TRADE SECRETS ACT § 1(4) (amended 1985), 14 U.L.A. 538 (2005). The secrecy requirement is unlikely to be met for most of the employment-related information targeted here-that which employers already distribute to current employees and/or to the government.
303. That point is underscored by the existence of other public disclosure regimes touching on commercial information; consider, for example, the voluminous information that publicly traded corporations are required to disclose under the securities laws.
304. Such discussions are protected by section 7 of the NLRA as a necessary prelude to employees' concerted efforts to seek better terms and conditions, which are also protected by federal law.
305. See, e.g., Freund Baking Co., 336 N.L.R.B. 847, 847-48 (2001) (invalidating confidentiality rule that employees could reasonably construe to prohibit their discussing wages, hours, and other terms and conditions with coworkers and potential allies).
306. Aroostook Cnty. Reg'l Ophthalmology Ctr., 317 N.L.R.B. 218, 222 (1995) (invalidating policy manual provision that prohibited employees from discussing "office business" with spouses, family, or friends, and from discussing grievances "within earshot of patients").
307. See N.Y. Times Co. v. U.S. Dep't of Labor, 340 F. Supp. 2d 394, 403 (S.D.N.Y. 2004).
308. In dismissing the suit, the court did not need to address the claim that employees' hours of work, if actually kept secret, could constitute a trade secret; that is because the hours information was outdated, and was now required to be posted in the workplace itself (a requirement that was not under challenge).
309. Id. at 402.
310. Rudimentary site-specific injury data is now available from OSHA. See supra text accompanying note 76.
311. See Chrysler Corp. v. Brown, 441 U.S. 281, 291 (1979).
312. Westinghouse Elec. Corp. v. Brown, 443 F. Supp. 1225, 1228 (E.D. Va. 1977).
313. Chrysler Corp. v. Schlesinger, 412 F. Supp. 171, 175-76 (D. Del. 1976), vacated, 565 F.2d 1172 (3d Cir. 1977), vacated sub nom.
314. Chrysler Corp. v. Brown, 441 U.S. 281 (1979).
315. This was a "reverse-FOIA" lawsuit asserting that the exceptions to FOIA's disclosure mandate implicitly banned disclosure, and created a private right of action to prevent disclosure, of such information. The Supreme Court in Chrysler rejected the theory of "reverse- FOIA" actions (but did not reach the question whether the information was within FOIA's trade secret exception).
316. Richard Pildes has made a parallel argument about how "balancing tests" operate within constitutional law: "Contrary to the connotations suggested by the balancing metaphor, constitutional adjudication is often a qualitative process, not a quantitative one. It is about defining the kinds of reasons that are impermissible justifications for state action in different spheres."
317. Richard H. Pildes, Avoiding Balancing: The Role of Exclusionary Reasons in Constitutional Law, 45 HASTINGS L.J. 711, 711-12 (1994).
318. On that view it is important to scrutinize asserted legitimate justifications for state action so as to flush out or rule out impermissible justifications.
319. Id. at 713-14.
320. The Supreme Court has recognized a legitimate public interest in discussing employees' terms and conditions of employment in several labor cases.
321. See, e.g., Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575-76 (1988); Thornhill v. Alabama, 310 U.S. 88, 102-06 (1940).
322. See, e.g., FUNG ET AL., supra note 12, at 82-83.
323. See, e.g., id. at 86-87.
324. The role of intermediaries is discussed by Fung, Graham, and Weil. See id. at 187.
325. Those assurances in turn exempt the information from disclosure under the Freedom of Information Act.
326. It might be possible in some cases to secure greater benefits at even lower cost by shifting the burden of public disclosure to the government itself. (Government disclosure would have to be prospective, as much information is currently submitted to the government voluntarily based on a reasonable expectation.n that it would not be made public.) Regulators have to assemble the data they receive into databases so as to facilitate analysis and comparison across employers; that, after all, is what we want employees and information intermediaries to be able to do with the information. Government disclosure might avoid some duplication of effort and lower the costs of digestion for intermediaries and their constituencies.
327. That is presumably one reason why most current reporting requirements include assurances of confidentiality. Such assurances may both promote honest reporting and reduce political resistance to reporting requirements.
328. See James M. Gorski, Note, Access to Information? Exemptions from Disclosure Under the Freedom of Information Act and the Privacy Act of 1974, 13 WILLAMETTE L. REV. 135, 147-49 (1976). For more on the unintended consequences of disclosure and the problem of gamesmanship.
329. see Dalley, supra note 7, at 1127-28.
330. This is among the practical and political issues that a public disclosure mandate would confront, and that would require more detailed consideration than I can give it here.
331. Employers' gains under these agreements come at some loss to employees and the public (public adjudication and elaboration of public rights and labor market competition, respectively).
332. See Estlund, supra note 19, at 411-12.
333. Even on the heroic assumption that all of the gains to employers reflect improved allocative efficiency, if those gains do not even outweigh the reputational cost of disclosing the agreements, they probably do not outweigh the other costs of the agreements to employees and the public.
334. The law of employment contracts thus arguably aims (but sometimes fails) to prevent employers from having it both ways by promising job security or other favorable conditions while avoiding any legal accountability for those assurances.
335. See Estlund, supra note 42, at 7, 19-20.
336. One such liability, and one intended benefit of mandatory disclosure, lies in the greater probability of discovering the violation of, and enforcing, existing substantive mandates. But that may only exacerbate employers' incentive to violate the disclosure mandate itself (by nondisclosure or false disclosure), absent direct penalties or liabilities for doing so.
337. While that feature limits the potential for vast new liabilities, it still poses a problem for the disclosure scheme as it may skew employer incentives against disclosure. If employers face much greater liability for what they disclose than for what they do not, then it may take rather hefty statutory penalties for nondisclosure to induce compliance.
338. Claims on behalf of consumers, on the ground that they were misled into patronizing a company on the basis of their supposedly generous labor policies, are not unthinkable. In Kasky v. Nike, Inc., 45 P.3d 243, 262 (Cal. 2002), the California Supreme Court held that a consumer stated a cause of action under a state consumer statute against Nike for falsely claiming to ensure that its products were not produced in sweatshop conditions.
339. That is not to endorse the existing limitations on employers' contractual liabilities to employees, but only to observe that those limitations, whatever they are, will also limit contractual liabilities under a disclosure regime.
340. For an argument that such skepticism is justified, see William Powers Jr., Border Wars, 72 TEX. L. REV. 1209, 1232-33 (1994).
341. I am aware of no cases that do so. That may be partly because a plaintiff's reliance on public representations might be especially difficult to prove.
342. Concerns about unpredictable new common law liabilities might be dispelled, and the task of calibrating employer incentives simplified, by statutorily precluding common law tort or contract liability based on mandatory public disclosures, and by relying wholly on a self-contained statutory enforcement scheme.
343. See Marc Linder, The Small-Business Exemption Under the Fair Labor Standards Act: The "Original" Accumulation of Capital and the Inversion of Industrial Policy, 6 J.L. & POL'Y 403, 407-09 (1998).
344. Richard J. Pierce Jr., Small Is Not Beautiful: The Case Against Special Regulatory Treatment of Small Firms, 50 ADMIN. L. REV. 537, 553-60 (1998).
345. See ANNETTE BERNHARDT ET AL., BROKEN LAWS, UNPROTECTED WORKERS: VIOLATIONS OF EMPLOYMENT AND LABOR LAWS IN AMERICA'S CITIES (2009), available at http://www.nelp.org/page/-/brokenlaws/BrokenLawsReport2009.pdf?nocdn=1.
346. ANNETTE BERNHARDT, SIOBHÁN MCGRATH & JAMES DEFILIPPIS, BRENNAN CTR. FOR JUSTICE, UNREGULATED WORK IN THE GLOBAL CITY: EMPLOYMENT AND LABOR LAW VIOLATIONS IN NEW YORK CITY 28-29 (2007), available at http://brennan.3cdn.net/d6a52a30063ab2d639_9tm6bgaq4.pdf.
347. All European Union member nations, pursuant to a 1991 EEC directive, must require employers to give employees written notice of certain terms and conditions of employment, including: the names of the employer and employee, the place of work, a description of the work or job title, the start date and duration of employment (if temporary or fixed term), any paid leave to which the employee is entitled, the required period of notice of termination of employment (by either party), the wage rate or salary and payment schedule, and expected hours of work per day or week.
348. See Council Directive 91/533, art. 2, 1991 O.J. (L 288) 32 (EC).
349. Similarly, China's new Labor Contract Law, enacted in 2007, requires employers to give employees a written contract specifying numerous terms and conditions of employment.
350. See RONALD C. BROWN, UNDERSTANDING LABOR AND EMPLOYMENT LAW IN CHINA 37-39 (2010). Similar requirements apply, for example, in India,
351. see 2 INTERNATIONAL LABOR AND EMPLOYMENT LAWS 24-1 (2d ed. Supp. 2007) (citing India's Industrial Employment (Standing Order) Act); in New Zealand, see Section 65 of the Employment Relations Act 2000, as substituted by section 25 of the Employment Relations Amendment Act (No 2) 2004, available at http://www.legislation.govt.nz/act/public/2000/0024/latest/DLM58317.html; in Russia.
352. see TRUDOVOI KODEKS ROSSIISKOI FEDERATSII[TK RF] [Labor Code] art. 57, available at http://www.ilo.org/dyn/natlex/docs/WEBTEXT/60535/65252/E01RUS01.htm#chap10; and in South Africa.
353. see Basic Conditions of Employment Act 75 of 1997 §§ 28-29, available at http://www.saflii.org/za/legis/num_act/bcoea1997309.pdf.
354. Federal law requires such disclosure for seasonal and migrant agricultural workers, see Migrant and Seasonal Agricultural Worker Protection Act §§ 201, 301, 29 U.S.C.§§ 1821, 1831 (2006), and a few states impose such requirements on some other low-wage employers.
355. see, e.g., IOWA CODE ANN. §§ 91E.1-.4 (West 2010); NEB. REV. STAT. ANN. §§ 48-2209 to-2211 (LexisNexis 2010).
356. For example, Nebraska law requires employers that recruit and employ non-English-speaking employees to have a statement signed by both the employer and the employee that discloses minimum weekly hours, the hourly wage, job responsibilities, a description of any transportation or housing that is provided and any related costs charged to the employee, and any "occupational physical demands and hazards" of the job. Id. § 48-2210.
357. See KIM BOBO, WAGE THEFT IN AMERICA: WHY MILLIONS OF WORKING AMERICANS ARE NOT GETTING PAID-AND WHAT WE CAN DO ABOUT IT (2009).
358. See Cynthia Estlund, A Return to Governance in the Law of the Workplace (and the Question of Worker Participation), in OXFORD HANDBOOK OF GOVERNANCE (David Levi- Faur ed., forthcoming 2011), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1640566.
359. ESTLUND, supra note 14.
360. See, for example, U.S. SENTENCING GUIDELINES MANUAL § 8C2.5 (2010), and doctrines under federal employment discrimination statutes, under which an employer's maintenance of internal procedures for the prevention and remediation of discrimination may reduce or avoid some liabilities. For a discussion of the legal inducements to effective selfregulation.
361. see ESTLUND, supra note 14, at 75-92.
362. One way to achieve greater transparency is through the institution of independent monitoring (by unions or outside monitoring organizations working in conjunction with employee representatives).
363. See ESTLUND, supra note 14, at 203-07.
364. Independent monitoring by and on behalf of employees can help to ensure the bona fides and the reliability of selfregulatory systems in the workplace context. But monitoring itself would be aided by greater transparency, and by requiring employers' public disclosure of terms and conditions of employment.
365. My proposals would require good corporate citizens to meet some potentially costly conditions: employee representation, independent outside monitoring (if the employee representation is not itself through an independent union), and now public disclosure. Loading up the conditions for effective self-regulation and certifiable good citizenship, as I do, obviously raises those costs. The success of a quasi-voluntary scheme of regulated selfregulation thus depends on raising the legal benefits (and the reputational returns) to being an effective self-regulator, and the legal and reputational costs of failing to do so. For a general discussion of the issue.
366. see id. at 217-23.
367. See id. at 93-103.
368. With respect to global labor standards, for example, corporations initially were pressured to adopt "codes of conduct" for their suppliers. Antisweatshop advocates repeatedly exposed large gaps between these early codes and actual factory conditions, and pressured firms to adopt independent monitoring and other safeguards, including transparency of supply chains, inspection protocols, and inspection results.
369. See ESBENSHADE, supra note 30.
370. Not all firms are equally subject to these reputational pressures, and not all have been equally motivated to meet the advocates' demands and to seek "sweat-free" status. Moreover, there remains much uncertainty and controversy over the degree to which these private labor standards regimes have been effective.
371. Because I have set aside the complex question of how mandatory disclosure might affect union organizing and collective bargaining, see supra note 69 and accompanying text, I should qualify this conclusion accordingly. If mandatory workplace disclosure did strengthen unions' ability to both organize and bargain collectively, as it might well do, then I believe that would be a further contribution to workplace governance, labor markets, and the efficacy of employment mandates. But I recognize that support for this belief-both the "if" and the "then"-would require additional analysis beyond the scope of this Article.