retaliation

Once again ruling against America’s employers, the Supreme Court Monday broadened the reach of the 1964 Civil Rights Act’s ban on retaliation. It overturned a federal appeals court ruling against a worker who claimed he suffered unlawful retaliation for complaining about discrimination, when a business allegedly fired his fiancée.

As Ed Whelan notes, the Supreme Court’s unanimous decision in Thompson v. North American Stainless abrogated “all four” of the federal appeals court rulings on the subject, all of which had ruled in favor of the employer in similar cases. Indeed, the Supreme Court took a more expansive view of workers’ ability to sue businesses than 18 “of the 25 appellate judges to address the issue,” including even “Carter and Clinton appointees” like Judge Diana Murphy, who “decided it in favor of the employer.”

This is part of a long line of rulings against employers by the Supreme Court, which is not pro-business at all, contrary to the false claims of many liberal reporters who cover the Supreme Court. Many of these rulings against employers, like Lewis v. Chicago (2010), have been unanimous reversals of lower court decisions.

Slate’s Dahlia Lithwick falsely claimed in 2009 that in the Supreme Court, “big business always prevails, environmentalists are always buried, female and elderly workers go unprotected, death row inmates get the needle, and criminal defendants are shown the door.”

That false claim contradicts reality. Over the last dozen years, the death penalty has been dramatically cut back in cases like Roper v. Simmons (2005), as the Supreme Court has invalidated the death penalty when imposed on the “retarded” (even the mildly retarded) or juveniles (even 16 to 18 year-olds), or when imposed by judges rather than juries (as state laws long provided).

The Supreme Court tossed out thousands of sentences given to criminal defendants through decisions like U.S. v. Booker (2005) and Blakely v. Washington, based not on defendants’ innocence, but rather on the mere fact that judges, rather than juries, had made findings related to their sentences. The supposedly “right-wing” justices Roberts, Scalia, and Thomas joined in these decisions.

Environmentalists have won many cases, including one of the most economically-significant decisions ever — Massachusetts v. EPA (2007) — which arguably opened the door to EPA regulation of virtually every human activity, on the grounds that virtually all activity (from industrial production to farming to cars) emits carbon dioxide. That decision also created a special rule of standing to allow state attorneys general to bring lawsuits that would otherwise be thrown out as meritless for lack of standing.

The Supreme Court allowed businesses to be sued even for products the FDA deems to be safe and effective, in Wyeth v. Levine (2009), in a ruling that legal commentator Ted Frank called the most anti-business decision in 43 years.

The Supreme Court has repeatedly broadened employers’ liability for discrimination against women. It continuously expanded the definition of sexual harassment: it overturned earlier limits on vicarious liability (in Faragher v. Boca Raton (1998)), allowed institutions to be sued based on the acts of non-employees (in Davis v. Monroe County (1999)), and rejected limits on lawsuits where there is no economic or psychological harm (Harris v. Forklift Systems (1993)). All these rulings overturned lower court judgments against plaintiffs. The Supreme Court also made it easier for older workers to sue over unintentional discrimination, even after settling with their employer.

Thus, Dahlia Lithwick’s depiction of the Supreme Court bore no relation to reality. But similarly false depictions are peddled by court reporters at publications like the New York Times, the Washington Post, and the Los Angeles Times, fostering a misleading image of the Supreme Court.

Cato’s Dan Ikenson posted today in favor of the trade retaliation measures announced by Mexico in response to the U.S. refusal to open its market to Mexican trucks, as the U.S. had agreed to do under the North America Free Trade Agreement.  Dan details the 15-year history of U.S. intransigence–which involves labor unions, environmental groups, and Congress putting up road blocks.  This recent move by Mexico expands the list of products that will have punitive duties imposed, since their earlier imposition of tariffs didn’t get the U.S. moving.

As a general rule,  I don’t support trade retaliation for a host of reasons — the first being that the measures end up harming people, the consumers in Mexico who have their choices restricted or face rising prices on those goods, and the U.S. exporters, who likely will face falling Mexican demand for the affected goods. Retaliation may also harden the opposition to free trade in the U.S., especially among the NAFTA-haters — the labor unions and environmentalists.

Trade retaliation also can escalate in a tit-for-tat fashion.  “We’ll find something we can get you on,” whether it be a pseudo-phyto-sanitary standard or some other non-tariff approach.

In favor of the Mexican retaliation, a solid argument could be made that the U.S. has acted egregiously in not living up to its NAFTA commitments over a 15-year period.  And Dan Ikenson has made a convincing case. A trade agreement is a contract, with procedures included for settling disputes relating to the agreement.  Mexican followed the rules, brought its complaint, and a NAFTA panel unanimously ruled in favor of them in 2001.  But, the U.S. delayed and tried to wiggle out of its commitments. So Mexico does wear the “white hat” in this dispute, and its actions are justified in the context of NAFTA.

What I’m concerned about is how the labor unions will use this and spin it — with calls of  “unfair” and “unsafe”– to further undermine support for free trade.  Already, the Teamsters’ Jim Hoffa has asked the president to challenge Mexico on the tariffs and said the only way to solve the problem is to not to open the U.S. borders to “unsafe” Mexican trucks but to “renegotiate” NAFTA.  And the labor unions have been running the trade show in Washington, with Congress’ advice and consent.  They have held up the three pending free trade agreements with Panama, Colombia and South Korea, and labor unions’ latest trade attack is focused on Guatemala for not abiding by their labor commitments in the Central America Free Trade Agreement.  They are flexing their muscles for the battles to come.  And it doesn’t bode well for progress on free trade.

Today the lead editorial in the Wall Street Journal takes a hard look at some of the negative economic consequences of touted cap-and-trade programs to reduce CO2 emissions and the possibility of carbon tariffs to protect U.S. businesses.  Not only would such programs cost “heavy-industry” jobs already suffering in the global recession but also could lead to trade wars as developing countries retaliate:

So in addition to all the other economic harm, a cap-and-trade tax will make foreign companies more competitive while eroding market share for U.S. businesses. The most harm will accrue to the very U.S. manufacturing and heavy-industry jobs that Democrats and unions claim to want to keep inside the U.S. A cap-and-tax plan would be the greatest outsourcing boon in history. And it may even increase CO2 emissions overall, because the developing nations where businesses are likely to relocate — if they don’t simply close — tend to use energy less efficiently than does the U.S.

Meanwhile, carbon trade barriers would almost certainly violate U.S. obligations in the World Trade Organization. Since carbon energy cuts across so many industries, a tariff would presumably have to hit tens of thousands of products. Any restriction the U.S. imposes on imports can also just as easily be turned around and imposed on U.S. exports, whatever their carbon content.

See a post last Friday with questions from House Ranking Members on committees with oversight in these areas.