December 21, 2016 from the Kansas City Business Journal
As Graves prepares to lead Missouri GOP, he shares its legislative agenda
Kansas City attorney Todd Graves was nominated by Missouri Gov.-elect Eric Greitens to become chairman of the Missouri Republican Party.
Missouri Gov.-elect Eric Greitens has nominated Kansas City attorney Todd Graves to become chairman of the Missouri Republican Party, and right to work and tort reform will be his top legislative priorities.
Graves awaits a Jan. 7 confirmation vote by the Republican State Committee. He’ll succeed John Hancock, who is stepping down. Graves said he’ll continue to run his legal practice at Graves Garrett LLC in Kansas City and will simply be adding jobs such as party fundraising, messaging and coordination to his responsibilities.
Graves steps into the new role at a time when Republicans enjoy veto-proof majorities in the House and Senate, plus control of the governor’s office. Graves said the first moves by the new administration aren’t cloaked in mystery. The unions knew that Greitens favors right to work, which is why they donated $30 million to Chris Koster‘s campaign. Plaintiffs attorneys knew Greitens plans to enact tort reform, which is why they donated heavily to Koster as well. They backed the wrong candidate, and elections have consequences.
“Kansas is a right-to-work state. In Kansas City, we feel that,” Graves said. “St. Louis isn’t impacted as much by that because Illinois isn’t a right-to-work state. Our tort laws are also much more plaintiff friendly than they are in Kansas, which puts us in a bit of a disadvantage, aside from the tax environment. So that change is going to be good for this region.”
Graves also expects to see appointments at the state level that are far more business friendly. Those include on the bench and to the departments of insurance, natural resources, etc. Graves said the pendulum on a lot of business-related issues swung too far to the left under Gov. Jay Nixon and needs to be put back into balance. But to do that, Missouri Republicans are looking to shift the pendulum all the way in the opposite direction.
“If your goal is to find a happy medium, you never get to the middle,” Graves said. “If you shift it all the way the other way, I suppose over time you can find a happy medium. So yeah, the goal is to shift it all the way in the other direction. That said, no one is in favor of meritorious cases not getting their day in court. That’s like saying someone is in favor of dirty air and dirty water. That’s not the way it is. But we can have a reasonable debate over what a meritorious case is.”
Plaintiff lawyers had a really good run under Nixon, Graves said, and during that time they overplayed their hand, refusing any compromise. Now that’s going to head to the opposite direction, more in favor of businesses.
As for whether Missouri Republicans plan to eliminate flow-through income taxes like Kansas, Graves said it wasn’t as high a priority as right to work and tort reform. That said, tax cuts are certainly on the table, though he has no idea what it might look like.
“The more you tax productivity, the less you get of it,” Graves said. “We need to have as much of a pro-growth tax environment as we can afford. Where that line is drawn depends on what the state can afford.”
Dec 12, 2016, 7:45am CST Updated: Dec 12, 2016, 10:07am CST
Labor unions have been among the most vocal critics of Donald Trump and his expanding team of economic advisers, sounding warnings over the president-elect’s positions on a range of issues and promising to stymie his policy agenda when warranted.
Alas, federal data indicate the influence of labor unions — at least when it comes to membership — is waning. An analysis by the Bureau of Labor Statistics found that union membership as a percentage of the entire labor force declined in 24 states in 2015, while some 34 states and the District of Columbia were down from where they were a decade earlier.
States with some of the largest declines were concentrated in the U.S. Rust Belt. Wisconsin’s union membership as a percentage of its total labor force dropped 7.8 percentage points — from 16.1 percent in 2005 to 8.3 percent in 2015 — following a bitter policy battle that saw Gov. Scott Walker beat back rules around labor organizing and membership dues. Similar efforts in Indiana resulted in a 2.4 percentage-point slide, while Ohio (down 3.7 percentage points) and Michigan (5.3 percentage points) also ranked among the largest decliners.
Missouri’s concentration of union membership dropped 2.7 percentage points between 2005 and 2015, and now sits at 8.8 percent. But the decline of union membership in the state could increase in the near future, as Republicans have made passage of “right to work” legislation a priority now that the party controls the House, Senate and governor’s office. Right to work laws forbid union contracts that require workers to pay union dues as a condition of employment.
Despite its conservative reputation, Kansas had one of the largest increases in percentage of union members since 2005. In 2015, 8.7 percent of the state’s workforce were union members, up 1.7 percentage points from a decade earlier and up 1.3 percentage points from 2014. In raw numbers, Kansas had approximately 110,000 union members last year, compared with 95,000 in 2014.
New York, the state with the largest ratio of union members (24.7 percent) as a percentage of its total workforce, reported a 1.4 percentage point decline over the same decade. At 2.1 percent, South Carolina’s ratio of union membership ranked as the country’s lowest, having dropped by 0.2 percentage points between 2005 and 2015.
The longer-term trend is even gloomier for labor unions; membership as a percentage of the entire U.S. labor force fell to 11.1 percent in 2015, versus 20.1 percent in 1983. In total, the U.S. had 14.8 million union members in 2015, down 17 percent since 1983.
At the same time, the total number of wage and salary workers in the U.S. increased 54 percent to 133.7 million people, according to BLS.
Trump’s latest tangle with union members involved Chuck Jones, the head of United Steel Workers 1999. The incoming president recently unleashed a torrent of criticism and defensive jibes in response to accusations that he overstated the benefits from his negotiations to keep Indianapolis-based Carrier Corp. from relocating more than a thousand jobs from Indiana to Mexico. Trump aired most of his grievances via social media, calling Thomas’ representation of union members”terrible” and part of a broader labor agenda driving U.S. companies out of the country.
The back-and-forth came just weeks after a bare-knuckles election cycle that saw Trump repeatedly lock horns with labor leaders over a range of topics, from his support of charter schools to his practices as a real estate developer.
A Wall Street Journal analysis found that labor unions spent $110 million in support of political candidates in the recent election cycle. That was up 38 percent from the 2012 cycle, with the vast majority of that support going to Trump’s main opponent, Hillary Clinton, as well as other Democratic-party causes.
Craig M. Douglas
Director, Editorial Research & Analysis
Following is a statement from Christine Owens, Executive Director, National Employment Law Project, in response to the likely nomination of Andy Puzder, CEO of CKE Restaurants, for U.S. secretary of labor:
“The National Employment Law Project has serious concerns about the likely nomination of fast-food CEO Andy Puzder for the crucial post of U.S. secretary of labor. The labor secretary serves as the chief advocate and protector of our nation’s workforce. But based on Mr. Puzder’s own comments, it’s hard to think of anyone less suited for the job of lifting up America’s forgotten workers—as Trump had campaigned on—than Puzder: He opposes raising the minimum wage, threatens to replace restaurant workers with machines, has consistently opposed long-standing rules that protect workers and law-abiding employers, and demonstrated that he prizes corporate welfare and profits over workers’ well-being.
“This much is clear: Puzder will be there for his low-wage-industry CEO buddies, who are now salivating over the prospect of rolling back the Obama administration’s efforts to raise pay for low-wage workers, improve workplace safety, and increase corporate accountability for wage theft and other violations.
“Puzder’s got his fellow CEOs’ backs, even if it breaks the backs of those at the bottom.
“By federal statute, the purpose of the Labor Department is ‘to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment.’ The person holding the position of labor secretary has tremendous responsibility to improve the lives of America’s workers, requiring its occupant to push for and implement policies that will continue to turn the tide against decades of declining wages and rising income inequality. Given that mission, this rumored nomination is a sucker-punch in the gut to all the men and women of good faith who believe in the mission of the U.S. Labor Department.
“The job of the labor secretary is NOT to strengthen the power of corporations to reap record profits by squeezing every last drop out of their low-wage workforce—and threatening to replace them with machines if they ask for wages they can support their families on. While Mr. Puzder’s qualifications may fit the bill for the latter, those qualifications are anathema to what a secretary of labor should stand for.
“Puzder opposes any increase in the minimum wage. He’s quick to blame the government for workers’ woes, despite the fact that, by his own admission, he and other restaurant industry leaders are the very people deciding to invest in automation: ‘[Machines are] always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case,’ he told Business Insider.
“Last year, Puzder made more in one day ($17,192) than a minimum wage worker makes in a year, yet he doesn’t hesitate to preach that money’s not everything to workers struggling to put food on the table. Railing against the Obama administration’s updated overtime rules, Puzder opined in The Wall Street Journal that the ‘stature’ and ‘sense of accomplishment’ that workers derive from being labeled a manager should more than make up for the lost income from being denied overtime pay. (Meanwhile, Puzder’s company, CKE Restaurants, which runs the Hardee’s and Carl’s Jr. fast-food chains, has a long history of being named in class-action lawsuits alleging failure to fairly compensate fast-food outlet managers for overtime—see here, here, here, and here.)
“It’s perhaps not surprising, then, that when the current Labor Department conducted 4,000 investigations into the 20 largest fast-food brands, over half of Carl’s Jr. and Hardee’s restaurants had at least one wage-and-hour violation. Voters who thought a Trump administration would do right by the working class were certainly not sanctioning selection of a secretary of labor who has openly opposed so many basic measures essential to enabling workers to earn a decent living from their work and enjoy basic economic security in their jobs.
“If, on the other hand, the job of labor secretary is what we at NELP believe it should be—a position imbued with tremendous responsibility to improve the lives of America’s workers, requiring its occupant to push for and implement policies that will continue to turn the tide against decades of declining wages and rising income inequality—then this rumored nomination should raise grave concerns for every working man and woman who’s struggling to make a better life in our nation.”
DEC. 6, 2016
In congressional hearing rooms and on national television, Wells Fargo http://www.nytimes.com/topic/company/wells-fargo-company?inline=nyt-org has vowed to make things right for the thousands of customers who were given sham accounts. The bank’s new chief executive, Timothy J. Sloan, in his first week on the job, said his “immediate and highest priority is to restore trust in Wells Fargo.”
But in federal and state courtrooms across the country, Wells Fargo is taking a different tack. The bank has sought to kill lawsuits that its customers have filed over the creation of as many as two million sham accounts by moving the cases into private arbitration — a secretive legal process that often favors corporations.
Lawyers for the bank’s customers say the legal motions are an attempt to limit the bank’s accountability for the widespread fraud and deny its customers their day in open court. Under intense pressure to meet sales goals http://www.nytimes.com/2016/09/17/business/dealbook/wells-fargo-warned-workers-against-fake-accounts-but-they-needed-a-paycheck.html, Wells employees used customers’ personal information to create unauthorized banking and credit card accounts in a far-reaching scandal that has rattled the San Francisco bank to its core, forcing the retirement http://www.nytimes.com/2016/10/13/business/dealbook/wells-fargo-ceo.html of its longtime leader, John G. Stumpf, and enraging regulators and politicians of all stripes.
The bank’s arbitration push in recent weeks is fanning those flames anew. “It is ridiculous,” said Jennifer Zeleny, who is suing Wells Fargo in federal court in Utah, along with about 80 other customers, over unauthorized accounts. “This is an issue of identity theft http://topics.nytimes.com/your-money/credit/identity-theft/index.html?inline=nyt-classifier — my identity was used so employees could meet sales goals. This is something that needs to be litigated in a public forum.”
In arbitration, consumers often find the odds are stacked against them. The arbitration clauses prevent consumers from banding together to file a lawsuit as a class, forcing them instead to hash out their disputes one by one and blunting one of most powerful tools that Americans have in challenging harmful and deceitful practices by big companies.
Strict judicial rules limiting conflicts of interest also do not apply in arbitration, enabling some companies to steer cases to friendly arbitrators, according to a 2015 investigation by The New York Times https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html.
Arbitration is also conducted outside public view, and the decisions are nearly impossible to overturn.
Ms. Zeleny, a lawyer who lives outside Salt Lake City and opened a Wells Fargo account when she started a new law practice, said it would be impossible for her to agree to arbitrate her dispute over an account that she had never signed up for in the first place.
The bank’s counterargument: The arbitration clauses included in the legitimate contracts customers signed to open bank accounts also cover disputes related to the false ones set up in their names.
Some judges have agreed with this argument, but some lawmakers and others consider it outrageous.
“Wells Fargo’s customers never intended to sign away their right to fight back against fraud and deceit,” said Senator Sherrod Brown, an Ohio Democrat, who introduced a bill last week that would prevent Wells from forcing arbitration in the sham account cases.
Yet even as the bank reels in the court of public opinion, Wells Fargo has been winning its legal battles to kill off lawsuits. Judges have ruled that Wells Fargo customers must go to arbitration over the fraudulent accounts. In dismissing one large case seeking class-action status in California, a federal judge ruled last year that it was not “wholly groundless” that customers could be forced to arbitrate over accounts they had never agreed to. That case is now being settled, according to legal filings.
In a statement, Wells Fargo said it was working with customers to reimburse any improper fees. If the issues are still not resolved, the bank offers free mediation services. Arbitration, the bank said, is a “last resort.” “We want to make sure that no Wells Fargo customer loses a single penny because of these issues,” the statement said.
Although the extent of the scandal became known only in September, some fraudulent acts may have started a decade or more ago http://www.nytimes.com/2016/10/12/business/dealbook/at-wells-fargo-complaints-about-fraudulent-accounts-since-2005.html. And Wells Fargo has been moving disputes about unauthorized accounts into arbitration for years, which lawyers say may have helped keep the problems from bursting into public view sooner.
In 2013, David E. Douglas, a Wells Fargo customer in Los Angeles, filed a lawsuit claiming that several bank employees had forged his signature and opened many sham accounts in his name to meet sales quotas. The actions he described in his complaint are precisely the kinds of illegal acts the company acknowledged this year, when it paid $185 million to settle cases http://www.nytimes.com/2016/09/09/business/dealbook/wells-fargo-fined-for-years-of-harm-to-customers.html brought by federal regulators and the Los Angeles city attorney.
But Mr. Douglas’s testimony never reached a courtroom. A judge granted Wells Fargo’s request to move the case to arbitration, whisking it out of public view. Wells Fargo’s legal success shows the overwhelming power that arbitration clauses have in shaping disputes between everyday Americans and huge corporations.
Since a pair of Supreme Court rulings in 2011 and 2013 allowed for the widespread use of arbitration, companies have had great success enforcing these clauses. Proponents of arbitration say the process is a more efficient way to settle disputes than class-action lawsuits that end up mostly enriching plaintiffs’ lawyers.
“By resolving legal disputes through arbitration, both the consumer and the business have the ability to reach a positive resolution at a lower cost,” Wells Fargo said in its statement. Arbitrators are typically lawyers or retired judges who are paid large fees to conduct hearings. The arbitrators, critics say, have an economic interest in siding with the companies, which bring them multiple cases, while individual consumers are likely to appear before them only once.
At the moment, regulators can do little to prevent a bank customer from being forced into arbitration.
Most Americans never bother to take their disputes to arbitration, particularly for a dispute over a small amount of money, the Times https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html investigation showed. And that is likely to be the case for many of the Wells Fargo customers who are sent into arbitration, lawyers say.
In many instances, the fees that customers were charged on the unauthorized accounts were less than $100. Few lawyers will take up individual arbitration claims when the potential damages are low. “This is meant to have a chilling effect,” said Zane Christensen, a lawyer who represented customers in a suit against Wells Fargo in federal court in Utah. “They know customers will have a hard time finding a lawyer to represent them in arbitration.”
But those damages could cost the bank a fortune if multiplied over potentially thousands of customers in a class-action lawsuit. This is not the first time Wells Fargo has been accused of trying to use arbitration to its advantage. In June 2009, Wells was one of about 30 banks that were sued over overdraft policies designed to maximize the fees charged to customers. Wells first decided to fight the lawsuit in Federal District Court in Miami. Typically, once a bank decides to litigate a case in court, it gives up its right to go to arbitration.
But after more than a year in court, Wells argued that it still had the right to arbitrate the overdraft dispute. The vast majority of the banks have resolved their parts of the overdraft case, agreeing to pay, in total, more than $1.2 billion to affected customers. Wells, meanwhile, has filed several appeals.
“Wells Fargo keeps trying to push this down the road,” said Robert Gilbert, a Miami lawyer representing bank customers in the overdraft case.
Members of the Senate Banking Committee sent Wells Fargo a list of detailed questions about its arbitration history over the last nine years, including how many cases were decided in the bank’s favor. The company did not provide any specifics in its response http://www.brown.senate.gov/download/wells-fargo-questions. In the wake of the scandal, under heavy pressure from lawmakers, the bank made changes that included formally separating its chairman and chief executive roles. (Mr. Stumpf had held both.)
On Thursday, the bank’s board formally approved the separation of these roles — and simultaneously gave a huge raise to the new chairman, Stephen W. Sanger, who was named to the role in October. Mr. Sanger, a Wells Fargo board member since 2003 and a former head of General Mills, will see his annual retainer bumped to $250,000 from $60,000.
Ana Bárbara, a Mexican music star who lives in Los Angeles, sued Wells Fargo in June, saying a bank employee had created sham accounts and credit lines in her name and taken out more than $400,000 of her money. To cover his tracks, the employee regularly stopped by Ms. Bárbara’s house and stole Wells Fargo statements from her mailbox, according to her lawsuit. Devin McRae, Ms. Bárbara’s lawyer, said he would have preferred to try the case in court, where it would generate a trail of public records. But the case was moved into arbitration in September.
“I think it’s a major problem when you have a bank that is so large, doing the things that Wells Fargo did on a systematic basis, to be able to keep that under wraps,” Mr. McRae said.
ANATOMY OF A SCANDAL
For years, Wells Fargo employees secretly set up fake accounts without customers’ consent.
• $185 Million Fine http://www.nytimes.com/2016/09/09/business/dealbook/wells-fargo-fined-for-years-of-harm-to-customers.html
Regulators said the illegal practices, first reported in 2013 http://www.latimes.com/business/la-fi-wells-fargo-sale-pressure-20131222-story.html, reflected serious flaws. The bank fired 5,300 mostly low-level employees.
• Sales Goals, Broken Rules http://www.nytimes.com/2016/09/17/business/dealbook/wells-fargo-warned-workers-against-fake-accounts-but-they-needed-a-paycheck.html
“They warned us about this type of behavior,” said an ex-worker, “but the reality was that people had to meet their goals.”
• Ex-Workers File Suits http://www.nytimes.com/2016/09/27/business/dealbook/wells-fargo-workers-claim-retaliation-for-playing-by-the-rules.html
“These are the people who have been left holding the bag,” said a lawyer for the workers.
• Alarms Raised in 2005 http://www.nytimes.com/2016/10/12/business/dealbook/at-wells-fargo-complaints-about-fraudulent-accounts-since-2005.html
“Everybody knew there was fraud going on, and the people trying to flag it were the ones who got in trouble,” said a manager who was fired.
• The New Boss http://www.nytimes.com/2016/10/14/business/dealbook/shake-up-at-wells-fargo-fails-to-dispel-skepticism-from-regulators.html
“I remain concerned that incoming C.E.O. Tim Sloan is also culpable http://www.nytimes.com/2016/09/20/business/dealbook/wells-fargos-john-stumpf-has-his-wall-st-comeuppance.html,” said Representative Maxine Waters.
• ‘Lions Hunting Zebras’http://www.nytimes.com/2016/10/21/business/dealbook/lions-hunting-zebras-ex-wells-fargo-bankers-describe-abuses.html
The bank targeted immigrants who spoke little English and older adults with memory problems, ex-workers said http://www.nytimes.com/2016/10/21/business/dealbook/voices-from-wells-fargo-i-thought-i-was-having-a-heart-attack.html.
• Scrutiny for U5 Files http://www.nytimes.com/2016/11/04/business/dealbook/wells-fargo-faces-scrutiny-for-black-marks-on-ex-employee-files.html
“It’s like being blackballed,” said a lawyer who specializes in Finra arbitration. “It can be a showstopper for a career.”
The Association for Women Lawyers of Greater Kansas City (AWL) will recognize Boyd Kenter Thomas & Parrish on December 6, 2016 as The Firm of the Year. AWL is a nonprofit organization with more than 400 members in the Kansas City metropolitan area. The organization promotes the equality of women within the legal profession and society. Boyd Kenter Thomas & Parrish is honored to receive this distinction. Currently, Boyd Kenter Thomas & Parrish partner, Brianne Thomas is AWL President-Elect and she will become the President in 2017.