NEW “PERSUADER” RULES WILL LIMIT LABOR ATTORNEYS’ ADVICE TO EMPLOYERS

The proposed “Persuader” rule requires attorneys providing advice to employers on union related issues, to disclose to the U.S. Department of Labor those matters on which they advised clients as well as all payments received from any employer the attorney has assisted either directly or indirectly with such advice. Employers utilizing attorneys for such advice are currently being requested by the NLRB to provide notice to the NLRB.  Because the rule has not yet been adopted, employers are not yet required to respond to such requests. The prior interpretation of the term “advice” required such disclosure only when a labor attorney spoke directly to or interacted with hourly employees.

Attorneys and employers fear the rule will be so expansive as to cover advice concerning wages, benefits and discipline and that it will increase the number of violations of law by employers by making it harder for employers to receive appropriate labor advice.  The change would also seriously undermine the concept of attorney/client confidentiality.  House Republicans and the American Bar Association have filed objections to the proposed rule with the Office of Labor Management Services of the U.S. Department of Labor. 

OHIO BRIDGE PAINTER SUED FOR $2.3 MILLION IN PREVAILING RATE
VIOLATIONS IN MASSACHUSETTS

On May 28, 2013 The Office of the Atty. General of Massachusetts filed suit against M&J Painting of Ohio for submitting false payroll records, false claims for payment and failing to pay both overtime and the prevailing rate to workers on the Braga Bridge Project, located between Taunton and Somerset, MA.  M&J is alleged to have falsified certified payrolls by reducing the hours actually worked by employees in order to meet the hourly prevailing rate requirements.  Mass. v. M&J Painting Co., Mass. Super. Ct., No. 13-1940

 PRESIDENTIAL RECESS APPOINTMENTS TO THE NLRB INVALIDATED BY TWO COURTS

Two federal Appeals courts (the DC and the Third Circuit) have found the President’s “recess” appointments to the NLRB invalid because the Senate was not in recess at the time they were made, and the making of such appointments expands the authority of the President beyond bounds established by the US Constitution. The Constitution requires Senate approval of Presidential appointments. The NLRB has petitioned the U.S. Supreme Court to hear the matter.  The appointments at issue are those of Sharon Block (D) and Richard F. Griffin (D) and Craig Becker (D) .  Previously, Block served as Deputy Assistant Secretary for Congressional Affairs at the U.S. Department of Labor and as Senior Labor and Employment Counsel for a Senate Committee, where she worked for Senator Edward M. Kennedy.  Griffin served as General Counsel for International Union of Operating Engineers (IUOE).  He also served on the board of directors for the AFL-CIO Lawyers Coordinating Committee.  Becker was an attorney for the Service Employees and Industrial Union (SEIU). The decisions have been appealed to the US Supreme Court.  If the Supreme Court agrees to hear the appeal, it is probable that a decision would not be issued until 2014.

Parties to NLRB cases have disputed NLRB decisions on the basis of the invalid appointments in over 200 cases.

NLRB ADVICE MEMO ON NEW CONFIDENTIALITY RULE

In July of 2012, the NLRB prohibited employers from maintaining blanket policies mandating confidentiality in investigations of employee misconduct. As a result, employers violate the National Labor Relations Act if they instruct employees to keep an investigation confidential because this instruction could unlawfully chill employee protected and concerted activities unless the employer, in each instance, is able to demonstrate a legitimate and substantial business justification for requiring confidentiality that outweighs the Section 7 rights of employees. Section 7 rights include the rights to engage in protected concerted activity, to discuss wages, benefits, terms and conditions of employment including the employer’s handling of grievances and claims of discrimination with co-workers and outsiders.  Banner Health Systems d/b/a Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012)

In April of 2013, an Advice Memorandum from the NLRB modified the new requirement, noting that certain legitimate business interests favor confidentiality, e.g, “The desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.”

It is clearly a violation of the Labor Act to prohibit employees from discussing their wages, benefits and terms and conditions of employment with each other or with outsiders either verbally, in writing or on social media.  Maintenance of a rule prohibiting such discussion could result in the NLRB requiring a rerun election following a union’s defeat in a union organizational election.

 MASSACHUSETTS SETTLEMENT AGREEMENTS MAY COVER STATE WAGE & HOUR CLAIMS

The Mass. Supreme Judicial Court held in December of 2012 that employees may release claims for non payment of wages under the Massachusetts Payment of Wages Law (MGL ch. 149 Section 148) in otherwise legal releases provided the release of wage claims is in clear and unmistakable terms and specifically refers to the Wage Act.   Therefore, in all Settlement Agreements and Releases, employers should include specific language waiving all claims under MGL ch. 149, Section 148 (the Wage Act).  Crocker v. Townsend Oil Co., No. SJC-11059 (Dec. 17, 2012)

UNION AGENTS MAY PARTICIPATE IN OSHA INVESTIGATIONS

A new interpretation letter from OSHA states that individual workers may designate union representatives to act on their behalf during OSHA investigations even where the employees are not represented by a union.  OSHA has stated that union agents may serve as both personal and “walkaround” representatives during on site inspections. 

In the past, OSHA regulations permitted an inspector to be accompanied by a third party if “good cause” is shown as to why the third party may be necessary for an effective and thorough inspection. The Code of Federal Relations stated that proper third party representatives were industrial hygienists or safety engineers, limiting third party representation to experts in safety and health matters.

BIDS FOR FEDERAL CONSTRUCTION CONTRACTS MAY SOON REQUIRE SAFETY CHECKLIST

OSHA is developing a checklist for consideration by federal procurement officers to assist them in evaluating and awarding construction contracts. The current version of the checklist includes:

• Contractor’s OSHA recordable injuries
• Citations for willful violations
• Completion of OSHA 30 by supervisors and OSHA 10 by hourly employees
• Commitment to create a site specific safety program
• Safety performance record of subcontractors
• Notice of contractor encouragement of the reporting of hazards and injuries at jobsite.
• Provision of safety information in appropriate languages at Multi-lingual worksites.

INDEPENDENT CONTRACTOR LAW OF MASSACHUSETTS APPLIED TO NEW YORK

The Supreme Judicial Court of Massachusetts issued a decision on May 17, 2013 applying Massachusetts law’s restrictions on the use of Independent Contractors to an Independent Contractor working for a Massachusetts employer in New York. The contract between the individual and the employer required that all litigation under the contract be brought in Massachusetts and be determined under Massachusetts law.  See Judith Ann Taylor & Others (1) vs. Eastern Connection Operating, Inc., Supreme Judicial Court of Massachusetts No. 11222, May 17, 2013.  Contractors working out of state should be wary of requiring the use of Massachusetts courts and Massachusetts law if it will be to their detriment.

Because of strict wage laws in Massachusetts requiring treble damages when liability is established, some employers, when appropriate circumstances exist, include contract language relating to choice of law in another state. But, be careful in drafting and in the enforcement of such clauses. A Massachusetts Superior Court recently held that; because the choice of forum clause was buried in a lengthy “take it or leave it” contract, and the employer failed to raise the issue of inappropriate forum during two years of litigation, and because the clause violated Massachusetts public policy in favor of protecting employee wage rights, the contract provision requiring the case be transferred to Texas or be heard under Texas law did not control.  Okeke v. Dynamex Operations East Inc., 31 Mass. L.Rptr. No. 7 (June 3, 2013).

The Massachusetts Independent Contractor law states
(A)n individual performing any service, except as authorized under this chapter, shall be considered to be an employee . . . unless:
     (1) the individual is free from control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
     (2) the service is performed outside the usual course of the business of the employer; and
     (3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

INTERNS MUST BE PAID IF THEY PERFORM THE SAME WORK AS EMPLOYEES

A federal court in New York recently held that, failure to follow the Fair Labor Standards Act requirements for internships will result in employer liability for minimum wage and overtime payments for all hours worked by interns. Eric Glatt and Alexander Footman, et al., v. Fox Searchlight Pictures, Inc., Case No. 11-cv-6784, U.S. District Court, Southern District of New York.  Of prime concern to the court were: (1) whether Defendants (Fox Searchlight) derived an immediate advantage from interns' work, (2) whether interns displaced regular employees, and (3) whether the internship program was for the benefit of interns. The decision will be appealed. 

Under the FLSA interns are employees unless:

1. The internship provides training similar to that which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The interns does not displace regular employees, but works under close supervision of employer’s staff;
4. The employer derives no immediate advantage from the intern’s activities and, on occasion, its operations may be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and,
6. The intern and employer understand that the intern is not entitled to wages for the internship.

In its investigations, among other inquiries, the U.S. Department of Labor will want to know whether the intern is part of an educational program, the intern receives credit for the internship and the intern is performing work previously or currently performed by employees.  Employers should insure that the internship experience is educational and provide special programs for the interns in order to orient, advise and otherwise benefit them.  Alternatively, interns should be paid at least the minimum wage and should receive time and one half their regular rate of pay for all work over 40 in a workweek.

If you have any questions, please do not hesitate to contact us.

Stoneman, Chandler & Miller LLP
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Boston, MA 02110
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This client alert, which may be considered advertising under the ethical rules of certain jurisdictions, should not be construed as legal advice or a legal opinion on any specific facts or circumstances by Stoneman, Chandler & Miller LLP and its attorneys. This client alert is intended for general information purposes only and you should consult a Stoneman, Chandler & Miller LLP attorney concerning any specific legal questions you may have.  © 2013 Stoneman, Chandler & Miller LLP