Benefits October 19, 2004

Inflation Rise Wipes Out Earnings Gain in September

October 19, 2004 (PLANSPONSOR.com) - The Bureau of Labor Statistics, part of the US Department of Labor (DoL), has released data that shows real average weekly earnings were unchanged from August to September.
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A 0.2% increase in average hourly wages was offset by a 0.2% rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the DoL statistics show. Average weekly hours were unchanged between the two months.

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The numbers for the year ending in September were more positive. The average weekly earnings rose by 3.0% from September 2003 to September 2004. Following deflation of the CPI-W, average weekly earnings increased by 0.6%. Before adjustments for inflation and seasonal change, the average weekly earnings rose over $10 for the year, up to $530.88 from $520.33.

The data collected by the DoL is from the payroll reports of private non-farm establishments. Both full-time and part-time workers holding production and non-supervisory jobs are included. The real average weekly earnings are calculated by adjusting earnings in current dollars for changes in the CPI-W.

The real earnings for October will be released on November 17.

Compliance October 18, 2004

Court: Dangerous Work Warrants Zero-Tolerance Drug Policy

October 18, 2004 (PLANSPONSOR.com) - A federal appeals court has unanimously ruled that zero-tolerance drug tests are not unreasonable for people in dangerous work situations.
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>The 3 rd US Circuit Court of Appeals has ruled that an oil company did in fact have the right to switch to a zero-tolerance policy at its refineries, because the collective bargaining agreement (CBA) between the company and its union stated that the company had power to “make and enforce rules for the maintenance of discipline and safety,” according to the Legal Intelligencer.  The case, CITGO Asphalt Refining CO. v. Paper, Allied-Industrial, Chemical and Energy Workers International Union Local No. 2-991, reverses a decision by a US Judge in New Jersey that had previously rejected CITGO’s challenge to an arbitrator’s decision to strike down the policy.

>CITGO announced in 1998 that it was altering its policy regarding drug tests, making them random and adopting a zero-tolerance policy for 60 of its refining facilities. The union representing workers challenged the policy, lodging four complaints. When taken to an arbitrator, three of the complaints were rejected, but a fourth was upheld based on standards of ‘fairness and equality’. The fourth complaint was in regards to the zero-tolerance policy adopted by CITGO. The union, in going to the arbitrator, questioned whether it was allowed under the CBA, and whether it was reasonable.

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>CITGO subsequently filed suit, stating that the arbitrator had ruled incorrectly, but the ruling was upheld by US District Court Judge Joseph Irenas of New Jersey. However, in reversing that decision the 3rd Circuit Court of Appeals asserted that because the arbitrator had based the decision on ideas of ‘fairness and equality’ and not on the CBA, the arbitrator’s ruling was invalid. In writing for the court, US Circuit Judge Theodore McKee stated that the arbitrator has replaced CITGO’s judgment (with regards to the CBA) with his own, making it invalid. The lower court’s decision to uphold the arbitrator’s ruling was thus overturned.

>McKee also stated that, under the CBA, the arbitrator only had the power to conclude the policy was unreasonable if the company had abused its discretion in instituting it. Since the arbitrator found no such abuse, the zero-tolerance policy was reasonable, McGee asserted.

>The ruling is available online at CITGO Asphalt Refining CO. v. Paper, Allied-Industrial, Chemical and Energy Workers International Union Local No. 2-991 .

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