A Global Labor And Employment Practitioner Reflects On The Past And The Future

Wednesday, November 1, 2006 - 01:00

Editor: Mr. Dichter, please tell our readers something about your professional experience.

Dichter: I joined Morgan Lewis as a summer associate in the summer of 1968. While I did not have any particular interest in labor and employment law, over the course of the summer I became involved in some labor problems and found them fascinating. I also discovered, to my surprise, that representing management was what I considered to be the right side from a political perspective. After graduation from law school the following year, I joined the firm and began a labor practice. Today this has evolved into a practice that is much more employment-oriented than labor issues-focused.

Over the years I have been involved with a number of professional organizations. I was the co-chair of the American Bar Association's EEO Committee and went on to chair the ABA Section on Labor and Employment Law. I am on the Board of the American Employment Law Council and have been active in the development of employment laws over the years.

Editor: You mentioned the evolution of your practice. How has it changed over the course of your career?

Dichter: When I began my career, labor law was the focus, and we dealt with union-management issues. There were statutes such as the Fair Labor Standards Act then, but this was not a large part of the practice. It was the union-management issues that took most of our time.

In the early 1970s the Civil Rights Act of 1964 began to generate significant employment discrimination litigation claims under Title VII. In the years that followed, other statutes were passed and, as a consequence, both the volume and the complexity of the work increased. These statutes included the Americans With Disabilities Act, ERISA, OSHA, the Family and Medical Leave Act and, most recently, Sarbanes-Oxley.

At the beginning of my career, many of the specialties we have today did not exist. As a result of Congressional action and the rulings of the courts, the areas of employment regulation and litigation have expanded enormously.

Editor: You are Chair of the firm's Global Labor and Employment Practice. Would you give us an overview of the practice?

Dichter: Morgan Lewis was one of the first general practice firms to have a labor practice. That began in 1959, when Morgan Lewis merged with a labor boutique in Philadelphia. We added labor lawyers to our small Washington, DC office. By 1976, the growth of employment litigation, particularly employment discrimination claims, caused us to change the name of the practice group to reflect its focus on labor and employment law issues. Over the following years the practice expanded to New York, Miami, Los Angeles, San Francisco and Chicago, as demand for our services increased and our representations became more national. More recently, our global reach has resulted in having employment lawyers in Paris, London and Frankfurt.

For a number of years, we had a few lawyers who worked with foreign practitioners on international issues for our clients. With the accelerating pace of globalization, an increasing number of our clients began to look to us to provide the same kind of advice and representation globally that we were engaged in providing nationally.

Editor: Who are the clients? American corporations engaged in activities overseas? Foreign corporations operating in the U.S?

Dichter: The client base is very diverse and includes major U.S. corporations with substantial operations both within the U.S. and abroad and multinational corporations that we represent here and in overseas jurisdictions. Each of our offices is also engaged in the representation of local clients. That means that our Paris office is handling French employment law issues for a French company, and our Los Angeles office is representing a California enterprise in a local age discrimination case.

Editor: How does the practice relate to other disciplines and practice groups within the firm? Are you able to call upon the firm's resources - in terms of expertise and personnel - in staffing your projects?

Dichter: Absolutely. Our labor and employment practice is somewhat different from that of many firms in that most of our labor and employment work comes directly to our practice group rather than supporting corporate clients of the firm. However, we regularly work with lawyers from other practice areas in the firm including, for example, securities regulation and investment management lawyers in representing financial services clients and with lawyers from our employee benefits, tax and litigation practices. We also work with the firm's litigators on a regular basis. Through our Workforce Change Practice, we regularly work with our business lawyers on a variety of corporate transactions and reorganizations.

Editor: What are the critical issues in this area that we should be calling to the attention of our corporate counsel readers, particularly general counsel of an enterprise contemplating starting up operations in some of the jurisdictions where Morgan Lewis has been active?

Dichter: On the domestic side, we have seen a significant resurgence of employment discrimination class actions in recent years. These actions are brought by sophisticated plaintiffs' lawyers or by the EEOC. We also continue to see many high-profile sexual harassment cases. These are areas where corporate counsel can take effective preventative measures. You are never going to prevent employment litigation, but there are steps a company can take to reduce its risk. With respect to race and gender class actions, challenging pay and promotion, preventive audits and review of company policies and practices can substantially reduce the risk.

In Europe, there are now age discrimination laws for the first time. These laws differ from the U.S. age discrimination laws because they protect younger workers as well as older workers. Because age discrimination laws are new to the EU, this will result in a significant cultural change similar to what occurred in the U.S. when the age discrimination laws were passed in the 1960s. American employers with employees in Europe need to be aware of the substantial differences between the new EU age discrimination laws and those in the U.S.

Another area that corporate counsel need to be sensitive to is the fact that some employment law requirements of the U.S. conflict with the laws of other countries. A number of American businesses were surprised to learn that they could not simply apply their Sarbanes-Oxley Codes of Conduct globally. They quickly discovered that in France there were limitations on the use of anonymous hotlines and mandatory reporting of wrongdoing. While in Germany, the employers needed to consult with Works Councils before adopting such policies.

Editor: I gather that employment discrimination is becoming a much larger issue in Europe than it was in the past.

Dichter: While there have been many prohibitions against employment discrimination for years in the EU, there has been relatively limited litigation involving such claims. This is, in part, because of the lack of a sophisticated plaintiffs' employment bar in Europe, the absence of class actions, the general absence of contingent fee arrangements, and limited damage awards. This is now beginning to change. We are now seeing more and more employment litigation claims being brought in the UK and elsewhere in the EU. While they are years behind the U.S. in terms of employment litigation, they are starting to catch up.

Editor: What about grounds for dismissal? The accepted wisdom - at least with respect to the EU - is that it is very difficult to dismiss an employee.

Dichter: In the U.S. we started with employment at will, which means that the employer can terminate an employee for any reason, provided the termination is not in violation of some express prohibition. In Europe they started with the premise that the employer needs good cause to terminate an employee. In practice, the two concepts are not as far apart as you would think. In the U.S., with all sorts of protected categories, and a variety of theories to challenge a termination, U.S. employers face potential litigation every time they terminate an employee, and most certainly if they terminate without a good reason.

In Europe, the remedies for inappropriate termination had been rather limited. That is changing, particularly as a result of the expansion of anti-discrimination laws. The potential for large damage lawsuits is definitely on the increase.

Editor: Is employee or workplace privacy an issue in any of the jurisdictions where the firm is active?

Dichter: The EU generally has much stronger protections for employee privacy than the U.S. This can directly impact U.S. employers with employees in Europe. For example, there are limitations in Europe on the review of employee emails and privacy issues that would impact a sexual harassment investigation. These become even more of an issue for U.S. employers when we recognize that U.S. anti-discrimination laws apply to U.S. citizens working for U.S. companies anywhere in the world.

Editor: Do you have any thoughts about the recent reports from China that Wal-Mart has apparently acquiesced to the presence of state-sponsored unions in its Chinese operations? What significance does such a step have for Wal-Mart operations elsewhere?

Dichter: I recently took a delegation of labor and employment lawyers to China. We met with representatives of the All China Federation of Trade Unions (ACFTU) - China's only union - government officials, labor and employment attorneys in private practice and labor and employment attorneys for U. S. companies doing business in China. The ACFTU is very different from unions in the U.S. They do not engage in collective bargaining. The union's role is primarily about providing benefits for their members from dues they collect from employers. The ACFTU is essentially an arm of the Chinese government and Communist Party. There is very little similarity between the ACFTU and what we recognize as organized labor in the U.S.

Over the last 20 years, with the opening of the Chinese economy, many things have changed. Prior to the adoption of market reforms, the only employer was the Chinese government. Today, there are many private employers in China, including both locally-owned and foreign-owned companies. All of this is resulting in very significant changes in the laws in China to regulate the rights between employers and employees. New employment laws are presently under consideration by the Chinese government. What I think is underway is an attempt to devise laws which recognize this state of affairs and which address - in a very careful, even tentative, way - the new relationship between employer and employee. China is aware of global standards with respect to conditions in the workplace, and the country's increasing importance in the global economy means that attention is going to be paid to these standards. How this is going to play out, however, depends on a great many variables, not least of which is a developing political situation.

Editor: Where would you like Morgan Lewis' Global Labor and Employment Practice to be in, say, five years?

Dichter: We want to expand our role as the law firm of choice for the most complex and significant labor and employment matters in the U.S. and Europe and be the trusted advisor to global employers in this ever changing area of employment law. An important aspect of that is the continued coordination of client representations among all of our offices in the United States and throughout the world.

Please email the interviewee at mdichter@morganlewis.com with questions about this interview.