Massachusetts bars employers from asking job applicants their salary history and demands equal pay for "comparable" work

As explained in this article by Stacy Cowley, Massachusetts has become the first state to bar employers from asking job applicants about what they earned at their prior jobs. This excerpt explains why:

By barring companies from asking prospective employees how much they earned at their last jobs, Massachusetts will ensure that the historically lower wages and salaries assigned to women and minorities do not follow them for their entire careers. Companies tend to set salaries for new hires using their previous pay as a base line.

And the law 

will require equal pay not just for workers whose jobs are alike, but also for those whose work is of “comparable character” or who work in “comparable operations.” Workers with more seniority will still be permitted to earn higher pay, but the law effectively broadens the definition of what is equal work.

The bill had bi-partisan support and was signed by the commonwealth's republican governor. Worth reading in full.

103 Members of Congress Endorse CFPB's Arbitration Rule

by Jeff Sovern

The Senate letter, signed by more than a third of the Senators, is here, and the House letter with 65 signers, is here.  The letters are more than pro forma expressions of support. They are extensively footnoted (and the House letter cites the law professor letter joined by more than 200 professors). Some excerpts from the Senate letter (with footnotes omitted):

The CFPB's study and proposal underscore the importance of class actions as a powerful tool to help consumers effectively vindicate their rights by returning billions of dollars to millions of consumers, in addition to achieving important non-monetary relief in the form of changes to harmful business practices. Because the majority of individual claims against consumer financial services companies are worth only small amounts of money, as Judge Richard Posner of the Seventh Circuit Court of Appeals once put it, "the realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30."The CFPB's data confirms this: although millions of financial consumers are covered by forced arbitration clauses and class action waivers, the CFPB found that only a few hundred consumers file arbitration claims each year and that very few file individual claims in court, particularly when compared to the 32 million consumers who benefit from class actions each year. 

Compilation of Media Coverage of CFPB Debt Collection Proposal

Here.

Guardian Article on How the Election Could Affect the CFPB

Here. Excerpt:

Even before the November election, warning lights were flashing. Jeb Hensarling, the Republican member of Congress who chairs the House financial services committee, has declared he won’t rest until he tosses post-financial crisis reforms like the Dodd-Frank Act “on to the trash heap of history”. Hensarling is also a fierce opponent of the CFPB, which has calls a “dangerously out-of-control agency”.

Hensarling’s plan to repeal Dodd-Frank and replace it with a patchwork quilt of lightweight, bank-friendly rules, unveiled in June, would gut the CFPB. It would deprive the agency of the right to scrutinize some kinds of lending altogether (such as auto loans), and it would politicize the entire process. Right now, the CFPB is about as independent as any Wall Street agency can be: its head is appointed by the president and left to get on with his job, with independent funding received from the Federal Reserve.

If Hensarling gets his way, the CFPB would become completely accountable to Congress, having five commissioners appointed by party leaders, and having to fight for an annual budget. In other words, the same politicians who receive lobbying funds from Wall Street would be deciding who runs the agency that protects consumers from Wall Street – and how much money that agency should get. That hasn’t always worked out terribly well for the SEC, which has battled for its budget, and which is still waiting for the Senate to confirm two nominees to its five-member commission.

CFPB issues guidance on foreclosure relief

National Mortgage News reports:

The Consumer Financial Protection Bureau added its voice Tuesday to a chorus of other regulators in calling for sustainable foreclosure relief when the Home Affordable Modification Program expires at yearend.

The bureau released "guiding principles" for mortgage servicers and investors that were almost identical to those described in a white paper last week from the Treasury Department, the Department of Housing and Urban Development and the Federal Housing Finance Agency.

....

The CFPB is calling for mortgage lenders, housing finance agencies and investors to create affordable and sustainable loss mitigation programs that are accessible and transparent for borrowers.

The bureau said the principles are flexible enough to apply to an array of approaches including forbearance, repayment plans and loan modifications, as well as short sales and deeds-in-lieu of foreclosure.

The full story is here. (I was unable to find the CFPB's press release on its website.)

Arbitration rejected in antitrust suit against Uber

In Meyer v. Kalanick and Uber, the named plaintiff, Spencer Meyer, alleges that Travis Kalanick orchestrated an antitrust conspiracy arising from the algorithm that co-defendant Uber uses to set Uber ride prices. The plaintiffs sued in federal court in New York. Uber and Kalanick moved to compel arbitration saying Mr. Meyer agreed to arbitrate when he signed up for Uber on his smart phone. In a July 29, 2016 opinion, district judge Jed Rakoff rejected the motion. The beginning of Judge Rakoff's opinion provides a nice overview:

Since the late eighteenth century, the Constitution of the United States and the constitutions or laws of the several states have guaranteed U.S. citizens the right to a jury trial. This most precious and fundamental right can be waived only if the waiver is knowing and voluntary, with the courts "indulg[ing] every reasonable presumption against waiver." Aetna Ins. Co. v. Kennedy to Use of Bogash, 301 U.S. 389 , 393 (1937); Merrill Lynch & Co. Inc. v. Allegheny Energy, Inc., 500 F.3d 171 , 188 (2d Cir. 2007). But in the world of the Internet, ordinary consumers are deemed to have regularly waived this right, and, indeed, to have given up their access to the courts altogether, because they supposedly agreed to lengthy "terms and conditions" that they had no realistic power to negotiate or contest and often were not even aware of.

This legal fiction is sometimes justified, at least where mandatory arbitration is concerned, by reference to the "liberal federal policy favoring arbitration,"AT&T Mobility LLC v. Concepcion, 563 U.S. 333 , 339 (2011) (internal quotation marks omitted). Application of this policy to the Internet is said to inhere in the Federal Arbitration Act, as if the Congress that enacted that Act in 1925 remotely contemplated the vicissitudes of the World Wide Web. Nevertheless, in this brave new world, consumers are routinely forced to waive their constitutional right to a jury and their very access to courts, and to submit instead to arbitration, on the theory that they have voluntarily agreed to do so in response to endless, turgid, often impenetrable sets of terms and conditions, to which, by pressing a button, they have indicated their agreement.

But what about situations where the consumer is not even asked to affirmatively indicate her consent? What about situations in which the consumer, by the mere act of accessing a service, is allegedly consenting to an entire lengthy set of terms and conditions? And what about the situation where the only indication to the consumer that she is so consenting appears in print so small that an ordinary consumer, if she could read it at all, would hardly notice it? Writing for the Second Circuit Court of Appeals in 2002, then-Circuit Judge Sonia Sotomayor presciently held that "[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility." Specht v. Netscape Communications Corp., 306 F.3d 17 , 35 (2002). Applying these principles to the matter at hand, the Court finds that the plaintiff here never agreed to waive his right to a jury trial or to submit to mandatory arbitration.

More CFPB 5th anniversary info

This webpage explains what the Consumer Financial Protection Bureau believes it has accomplished over its first five years. Go here or click below for a CFPB video describing the purposes and (brief) history of the agency. (The video features Elizabeth Warren and Richard Cordray.)

 

How Gun Control Advocates Could Save Lives by Manufacturing Guns

by Jeff Sovern

Smart guns--guns that block anyone other than their owner from shooting them-- would save lives.  Children would not be able to grab them and shoot themselves by accident.  People couldn't turn them on their owners. Smart gun technology exists, just as iPhones can be personalized using fingerprints and passcodes.  But gun manufacturers won't sell them because of a New Jersey law that prohibits the sale of any gun in New Jersey that is not "personalized"(the word used in the statute) after such guns are available at retailers.  See here (describing threats to kill smart gun retailer).  Gun rights advocates don't want to limit the ability to obtain regular guns in New Jersey.  So no one in the US sells or makes them. But existing gun manufacturers aren't the only people who could make them.  The statute defines personalized as meaning that:

at least one manufacturer has delivered at least one production model of a personalized handgun to a registered or licensed wholesale or retail dealer in New Jersey or any other state. As used in this subsection, the term "production model" shall mean a handgun which is the product of a regular manufacturing process that produces multiple copies of the same handgun model, and shall not include a prototype or other unique specimen that is offered for sale.

 

If gun manufacturers won't make and gun dealers won't sell such guns because of pressure from gun rights advocates, gun control advocates could make a factory to produce smart guns, and as long as the factory used "a regular manufacturing process that produces multiple copies of the same handgun model," it would qualify under the statute.  I'm not sure that the retailer would even have to sell the gun, or want to receive it, as long as the manufacturer "delivered" it. Or maybe the manufacturer could also set up its own retailer. Sure it would cost a lot of money to set up such a factory, but surely gun control advocates like Michael Bloomberg could afford it. And it would even help people outside New  Jersey, because responsible gun owners might prefer to buy such weapons to what is now on the market, if only to protect their children.  Maybe New Jersey would simply change its law, but even so, smart guns would be on the market. And wouldn't that be better than how things are now? Gun owners can already get guns; wouldn't we be better off if no one else could fire them?

An interview with CFPB director Richard Cordray

Michele Singletary, the Washington Post's consumer reporter, is doing a series of articles assessing the first five years of Consumer Financial Protection Bureau. The first in the series is an interview with the agency's director Richard Cordray.

Hoofnagle's FTC Privacy Book: Chapter on Online Privacy

Chris Hoofnagle has posted online Chapter 6, titled Online Privacy, from his excellent book, Federal Trade Commission Privacy Law and Policy (I'm still making my way as my schedule permits through the book and hope to post a review someday).  Here's the abstract:

This is the full text of Chapter 6 (Online Privacy) from Federal Trade Commission Privacy Law and Policy (Cambridge University Press 2016). This chapter introduces the reader to the Federal Trade Commission's (FTC) historical and modern approaches to consumer privacy law.

This chapter explains basic principles of privacy law, including fair information practices, which form the building blocks of most privacy protections. It describes the cases and the landscape of FTC law on online privacy. Then it shifts to present half a dozen controversies critical to the FTC’s privacy stance: the dominance of rational choice theory approaches and their deficits, the "third party problem" in privacy, self-regulation in consumer protection, default choices, the consumer protection problems implicated by the rise of internet platforms, and finally, privacy by design. Other chapters in the book focus on children's privacy, spam, telemarketing, malware, financial privacy, information security, and international privacy.