Faculty Articles and Papers

Unpacking the Employee-Misconduct Defense

Sachin S. Pandya — Fri, 06 Jul 2012 11:39:04 PDT

When a worker sues an employer, the employer sometimes learns thereafter that the worker had committed some misconduct at the time of hire or while on the job. In those cases, most American work laws provide the employer with a defense that precludes employer liability, or at least limits remedies, if the employer shows that, had it known of the worker’s misconduct at the time of its allegedly wrongful act, it would have fired the worker because of that misconduct. This Article evaluates the prevailing arguments for and against the employee-misconduct defense as it appears in the National Labor Relations Act, federal and state employment discrimination and retaliation statutes, state contract and tort law, as well as state workers’ compensation statutes. It finds that virtually all of these arguments (both for and against) are incomplete, incoherent, or rely on unverified empirical premises. This finding implies that, though pervasive, virtually no sound reason currently exists for adopting the defense or (apart from stare decisis) continuing to apply it.

Tax Liability for Wage Theft

Sachin S. Pandya — Fri, 06 Jul 2012 11:32:54 PDT

This paper shows how, under existing tax law, illegal wage underpayment by an employer (sometimes called “wage theft”) may generate employer tax liability for unreported income or disallowed business expense deductions. Given that the tax authority needs information from the underpaid worker to prove such liability, the paper identifies two ways that a worker can transmit that information to a tax authority: becoming a tax informant, or bringing a qui tam action under a state false claims act. Finally, the paper discusses possible influences on the decision of the unpaid worker to inform on the employer to the tax authority, and considers the conditions under which a tax authority is likely to audit an employer based on such information. In so doing, the paper identifies a new approach to combating wage theft and an undiscovered implication of basic income tax law.

The First Liability Insurance Cartel in America, 1896-1906

Sachin S. Pandya — Fri, 06 Jul 2012 11:26:16 PDT

This article studies the rise and fall of the first liability insurance cartel in the United States. In 1886, insurance companies in America began selling liability insurance for personal injury accidents, primarily to cover business tort liability for employee accidents at work and non-employee injuries occasioned by their business operations. In 1896, the leading liability insurers agreed to fix premium rates and share information on policyholder losses. In 1906, this cartel fell apart. Although largely forgotten until now, the rise and fall of this cartel confirms the expectations of both cartel theory and past studies of insurance cartels, largely in fire insurance, showing how insurers engaged in unstable price-fixing efforts and shared information to better estimate future claims costs. Moreover, this liability insurance cartel offers a deviant case for standard accounts of how law and legal institutions influenced industrial organization in the United States at the turn of the twentieth century.

Detecting the Stealth Erosion of Precedent: Affirmative Action After Ricci

Sachin S. Pandya — Fri, 06 Jul 2012 11:15:48 PDT

This paper presents a method for detecting stealth precedent erosion, i.e., when an appellate court majority deliberately writes the opinion in case y to reduce the scope of its precedent x, but does not expressly refer to precedent x in the opinion. Applying this method, the paper provides a strong basis for concluding that in Ricci v. DeStefano (2009), a United States Supreme Court case decided under Title VII of the Civil Rights Act of 1964, the Court majority eroded by stealth United Steelworkers of America v. Weber (1979), and Johnson v. Transportation Agency (1987), both cases that read Title VII to permit employers to consider race or sex in employment decisions pursuant to affirmative action plans. In so doing, the paper contributes to research on the stare-decisis norm, fills a gap in the growing literature on the Ricci case, and identifies a critical development in the judicial treatment of employer affirmative action plans in the United States.