The Mission of the Manhattan Institute is
to develop and disseminate new ideas that
foster greater economic choice and
individual responsibility.

The Times

June 18, 1997, Wednesday

American workplace is being paralysed by fear of litigation

Tunku Varadarajan

Excuse factory must serve as warning for Britain says Tunku Varadarajan.

Anyone who was flabbergasted by the recent House of Lords ruling in Malik v BCCI—in which two former employees of the fraud-riddled bank were allowed to claim compensation from the liquidators for the "stigma" that is now alleged to hamper their rehiring by other employers—should read a riveting new book from America called The Excuse Factory .

It will soon dawn on the reader, no more than perhaps a dozen or so pages into this 378-page effort, that Britain is still far, far away from the litigative looniness that reigns in the United States. We should breathe a sigh of relief while we can. Let the book serve as a warning of the way things might become if this country were to drop its guard.

 The author, Walter Olson, a senior fellow at New York's Manhattan Institute, has shown what is wrong—and why—with the American workplace. Mr Olson's thesis, in a nutshell, is that "employment law is paralysing the American workplace".

His book, written in the best traditions of reformist polemic, is studded with one bewildering real-life case after another, each showing how the law has turned every employee into a potential plaintiff out to "shake one's boss by the ankles until coins roll out".

What exactly is Mr Olson talking about? Consider this example, from the front page of The Washington Post of April 8: "In January, a former truck driver for Ryder Systems Inc won a $5.5 million jury verdict after claiming, under the 1990 Americans with Disabilities Act, that Ryder unfairly removed him from his position after he suffered an epileptic seizure, saying his health condition could be a safety hazard. During the time he was blocked from his job at Ryder, the driver was hired by another firm, had a seizure behind the wheel and crashed into a tree."

There are other egregious examples, all stemming from what Mr Olson calls the law's "venture into freelance social reconstruction". In October 1993 Northwest Airlines announced that it had agreed to rehire pilot Norman Prouse as a ground trainer, three years after he had been sacked for flying a passenger plane with a blood-alcohol level 60 times greater than the permitted maximum for a pilot. Mr Prouse went to a "drying out" clinic and then came back to Northwest for a job.

Had he not been rehired, the disgraced former pilot could have sued the company for millions. The airline chickened out of a court battle it would probably have lost, because the law gives powerful rights to the "rehabilitated".

Under the pressure of law suits, the testing of potential employees has been all but eliminated. For example, an Ohio federal judge rejected a timed test where prospective firefighters ran upstairs carrying a heavy sack (used to simulate the body of an unconscious adult). The men outperformed the women, so the test was ruled unfair.

Mr Olson's book would make amusing reading but for the fact that it is so depressing. He lists the following job interview questions that could reap potential lawsuits for employers if asked of applicants: do not ask if an applicant grew up "in the area" (his answer might reveal his national origin); do not ask when he or she went to college (opens up the risk of an "ageism" suit); do not ask where he or she lives (are you, perchance, trying to snoop into credit records); and do not ask a woman if she wants to be called Miss, Mrs or Ms.

American courts have even ruled that it is "improper" to ask an applicant if he or she has a criminal record, a history of mental illness or a problem with alcohol. Lawsuits over employment references have led to the collapse of the job reference system in numerous industries and professions. So fearful are firms of being sued for "defamation" or "conscious indifference" that references are merely chronological catalogues of an employee's time at a firm.

As the body of law designed to "accommodate the disadvantaged" in the American workplace grows larger, virtually every decision made by employers has become the subject of a potential lawsuit. American jurisprudence now recognises, to all intents and purposes, "a new right to sue".

Before employment became the cast-iron "entitlement" that it is today, either side could end the employer-employee relation on short notice, "much as we are free to stop dealing with a tradesman if we grow dissatisfied with his service". The courts, however, now "dictate that a working relationship be continued indefinitely against one side's will". And since the days of slavery are over, that side is always the employer. In America today, there is effectively "no right to sack someone you would rather not have working for you".

Mr Olson draws an intriguing comparison between employment and matrimony. Whereas once the law required people to show good cause before they could get out of a marriage, leaving employment to the free will of the parties, the situation is now completely inverted. If a dispute arises at home, the parties are allowed to make "a fresh start"; if it arises at the workplace, the employer "may have to stick it out forever".

The author also wishes for a return to the days when workplace disputes were resolved through union negotiations. There was then a greater sense of proportion, as well as an understanding of the true nature of the employment. Today's "negotiators", lamentably, are the lawyers who encourage employees to sue, grab it and run.

A lawyer's guide on the market, called Sue Your Boss , tells employees: "The laws are very much in your favour, waiting to be used. Vast sums can be had." Another guide tells of "a jury award out there with your name on it".

Mr Olson tells a bleak story. It is, as yet, America's alone. Could it soon be ours?

The Excuse Factory by Walter Olson is published by The Free Press, New York, 1997.

©1997 The Times

Visit The Excuse Factory webpage



Home | About MI | Scholars | Publications | Books | Links | Contact MI
City Journal | CAU | CCI | CEPE | CLP | CMP | CRD | ECNY
Thank you for visiting us.
To receive a General Information Packet, please email
and include your name and address in your e-mail message.
Copyright © 2009 Manhattan Institute for Policy Research, Inc. All rights reserved.
52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494