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A number of employers say the Family and Medical Leave Act -- passed in 1993 -- is leading to employee abuses and generating inefficiencies. The FMLA requires firms with 50 or more employees to give workers up to 12 weeks a year of unpaid illness leave to care for a family member or themselves.

• Critics say the law only vaguely defines an eligible health problem and prevents companies from counting such leaves as absences.

• Moreover, because of labor contracts, company policies and federal and state mandates, the "unpaid" provision is avoided -- with four out of five leave users receiving either full or partial pay during the leave period.

• A Department of Labor study of 1,200 firms found that 88 percent of those covered by FMLA already had similar policies in place.

• Another study found that 36 percent of workers had taken family leave in spurts of one day to two weeks, and nearly 40 percent had taken between 30 and 120 days.

Critics say what started out as leave taken only under dire conditions has now become an entitlement -- and recommend these changes:

• Define what a serious health condition is.

• Allow companies to record family leaves as absences.

• Let firms design their own plans to fit their workplaces -- so long as they meet certain standards.

Source: Adrienne Fox, "Family Leave Proves a Headache," Investor's Business Daily, October 2, 1996.

A case currently before the Supreme Court will determine if the federal government can tax punitive damage awards. The Justice Department is arguing that they should be taxed, but businesses are afraid the prospect of taxes will only increase the size of awards.

• In Ogilvie vs. the United States, an attorney for the Ogilvie family contends that legislative history makes clear that Congress wanted punitive damages excluded from federal taxation.

• But the government contends that such damages are not meant to compensate plaintiffs for personal injuries -- but as a civil fine to punish companies for wrongdoings and deter them from repeating the offense.

In two prior cases, the Supreme Court has ruled that damages should be taxed if not "received on account of personal injury."

In most tax cases, the Court has allowed the government to broadly define income and has taken a narrow view of what can be exempted from taxes.

Source: Claude R. Marx, "High Court Case Could Boost Punitive-Damage Awards," Investor's Business Daily, October 10, 1996.

Few doubt that America's lawyers by and large perform valuable professional services. No joke. But the growth in the profession and the sheer numbers of lawyers are worrisome indicators of the exponential growth of the modern regulatory state.

• The U.S. legal system costs some $300 billion annually.

• The Washington, D.C., area alone houses nearly four times as many lawyers as the entire country of Japan.

• For each 100,000 in population, the U.S. has 281 lawyers -- compared to 111 in Germany, 82 in England and only 11 in Japan.

• Since 1979, the population of lawyers in the U.S. has grown five times faster than the population as a whole.

With half of all members of Congress being lawyers, critics say it's small wonder why new regulations and legislation are so complicated, and why lawyers drain resources from more productive uses, for example:

• Nearly half the $40 billion cost of implementing the Clean Air Act reportedly goes for attorney fees.

• Major U.S. companies today spend more for legal fees and product liability than they do on their research and development programs.

• The federal government spends nearly four times more for litigation than it does for research and development.

• The average lawsuit languishes in court for 19 months before substantive action is taken, while 18 million new lawsuits are generated in the U.S. annually.

Source: Ken Adelman, "Litigious Society In and Out of Court," Washington Times, October 10, 1996.

Legal Services Corporation lawyers are under fire for receiving huge monetary awards from civil litigation, interest earned on trust accounts and unclaimed class-action settlements.

• The federally-funded Legal Services Corp. gives grants to local poverty law groups to pursue cases involving evictions, foreclosures, divorces and child custody disputes.

• Although Congress cut LSC's funding for this fiscal year, they still received $278 million from taxpayers -- which will increase to $283 million next year.

• Court-ordered programs give these poverty law groups additional millions of dollars.

Critics find astonishing some of the cases LSC-funded lawyers pursue and the arguments they make.

• They opposed the eviction of drug-dealing residents in public housing projects and helped drug abusers receive disability benefits based on their addiction.

• Opposed the deportation of aliens convicted of serious felonies and challenged an ordinance that banned homeless people from camping on public property.

• Fought the adoption of Indian babies by non-Indian families.

• Represented prisoners in civil suits against prison authorities and sued to stop welfare reform in states on the premise that the reforms were unconstitutional or violated federal laws against experimenting on human subjects.

Now that Congress has passed reforms banning the use of federal money to fight cases in some of these categories, the lawyers have found sources of income to subsidize litigation -- interest on funds that attorneys pool in trusts for their clients. A total of $97.6 million in such funds flowed to the legal activists in 1993.

To avoid the strings attached to federal money, LSC grantees have been spinning off separate groups which get only trust fund interest -- leaving them free to pursue whatever causes they want. The programs operate in every state but Indiana.

Source: David A. Price, "Legal Services' Stealth Funding," Investor's Business Daily, October 15, 1996.

Reforms have reined in so-called "strike suits" at the federal level -- class-action lawsuits filed against companies (and their executives and board members) whose shares have dropped in price. California's Proposition 211 would undo that work, opponents contend. The ballot initiative would allow lawyers from across the nation to file suits against corporations in California.

Such suits are sometimes filed by stockholders disappointed when market forces cause stock prices to fall. Some attorneys specialize in filing class action suits on behalf of stockholders -- whether or not the stockholders want them to -- particularly against California electronics firms.

Opponents say Proposition 211 is heavily financed and sponsored by lawyers who want receive multi-million dollar fees from settlements wrested from corporations by what amounts to legalized blackmail.

• The chief sponsor of Proposition 211 is William Lerach, known as "the king of strike suits" who -- by his own estimate -- has racked up more than $5 billion in settlements from more than 400 companies from September 1993 to March 1996.
• Reform advocates estimate that if he cleared only one-tenth of the 33 percent that usually goes to lawyers in such cases, he pocketed $167 million.
• Strike suits earn U.S. lawyers more than $150 million in an average year.
• Of the $8.95 million given to promote Proposition 211 to date, all but $341,000 came from law firms.

Legal reform advocates charge that passage of the California ballot measure would leave all U.S. public companies helpless before legal predators.

Source: Editorial, "Prop. 211: By the Lawyers, For the Lawyers..." Investor's Business Daily, October 17, 1996.

Small business firms must maneuver delicately through a jungle of government regulations, arbitration, diversity outreach programs, real and potential lawsuits and myriad training initiatives aimed at protecting employee rights and keeping workers happy.

Big businesses usually have the financial resources to cope with the deluge, but for small businesses fighting such agencies as the Equal Employment Opportunity Commission is an expensive up-hill battle.

• At the end of last year, the EEOC had a total of 190,043 new and pending complaint cases from individuals who said they were discriminated against either by an employer or potential employer.

• Apart from EEOC cases, the number of employment-related civil rights lawsuits in U.S. district courts rose from 8,370 in 1991 to 19,059 in 1995 -- an increase of 128 percent.

• Even the EEOC was sued by one of its own attorneys and ordered to pay him $364,000 in back pay, bonuses and leave, as well as $355,000 in legal fees.

Small businesses must revamp employment applications to satisfy the EEOC, build wheelchair ramps to comply with the Americans with Disabilities Act and pay increased clerical expenses to comply with such federal mandates as the 1993 American Family and Medical Leave Act. Employers say the list of regulations is all but endless -- mourning earlier days when the business of business was to produce goods.

Source: Bob Johnson (Birmington, Alabama, Post-Herald), "Rights Battlefield in the Workplace," Washington Times, October 24, 1996.

Prominent Democrats are charging the Republic Senate with dragging its feet on confirmation of federal judges. But independent experts have analyzed the situation and concluded that there are far fewer Clinton nominees unconfirmed than there were when George Bush was President and Democrats controlled the Judiciary Committee.

• When Bush departed office in January 1993, there were 113 judiciary vacancies.

• Today, there are between 55 and 58.

• Since the Democratic Senate four years ago had not taken action on so many Bush nominees, Clinton was able to select 22 percent of the entire federal bench in less than four years.

• Even when Democrats controlled the Judiciary Committee two years ago, the Senate did not act on 39 of Clinton's nominees and there were 78 vacancies at the time of adjournment.

As for nominees to the Court of Appeals:

• The Senate had not confirmed 11 Bush nominees in 1992 -- compared to only eight Clinton nominees unconfirmed so far this year.

• Observers say that is one of the lowest numbers in years -- and there are still months to go before this term ends.

While the Judiciary Committee has been holding hearings every month and considering four to six nominations at tax time, nine Bush nominees never even received a hearing -- although four of them had been nominated in 1991.

Source: Ronald Rotunda (University of Illinois), "Judgeships Trapped in a Political Snare?" Washington Times, October 29, 1996.

For more on the Judiciary visit the NCPA's Policy Digest archives at http://www.ncpa.org/pd/law/law.html