New York has enacted new legislation, which will have a significant impact on the state’s commercial transportation industry. The legislation was initially made effective on March 11, 2014, but was subsequently amended to incorporate some “technical corrections” and to include a new, later effective date of April 10, 2014. Known as the “Commercial Goods Transportation Industry Fair Play Act” (the “Act”), this new law is intended to curtail what New York government officials view as the “misclassification” of workers – as independent contractors, rather than employees – in the transportation industry. As summarized below, the legislation will not only significantly restrict the use of such independent contractors, but will also impose other new requirements applicable to New York businesses in the commercial goods transportation industry.
As expected, on Monday, April 7, 2014, the U.S. Citizenship and Immigration Services (“USCIS”) announced that a sufficient number of H-1B petitions had been received from April 1, 2014, through April 7, 2014, to meet the statutory cap for fiscal year 2015. The statutory cap was reached in both the general Bachelor’s category, as well as the U.S. advanced-degree category. In short, more H-1B petitions were filed than the USCIS is authorized to approve for fiscal year 2015, which begins on October 1, 2014. Consequently, for the second year in a row, USCIS will conduct a random selection process (i.e., lottery) to determine which filed H-1B petitions will be selected for processing/adjudication. The USCIS has not yet announced the date when the lottery will be held.
In August of 2011, a former employee of DISH Network filed a complaint with OSHA that DISH had “blacklisted” him. Specifically, the complainant alleged that DISH had given him a negative job reference, and had refused to do business with the complainant’s subsequent employers. What was the alleged reason for the “blacklisting”? The employee, who worked in the marketing department in New York, had reported possible financial fraud to his superior in 2008, and the employee contended the actions against him by DISH — a publicly traded company — amounted to retaliation for his reporting the fraud, in violation of the Sarbanes-Oxley Act. Earlier this month, OSHA completed its investigation, finding merit to the employee’s complaint, and ordering hefty fines of over $250,000 against DISH: $157,024 in back wages, $100,000 in compensatory damages, and attorneys’ fees. DISH has 30 days to file an appeal before an Administrative Law Judge.
In a stunning and potential landmark decision, a Regional Director of the National Labor Relations Board has found that football players receiving grant-in-aid scholarships from Northwestern University (the “University”) are “employees” under the National Labor Relations Act. In his decision released Wednesday afternoon, the Regional Director determined that “players receiving scholarships to perform football-related services for [the University] under a contract for hire in return for compensation are subject to [the University]’s control and are therefore employees within the meaning of the Act.” Accordingly, the Regional Director ordered that an election be conducted among all football players receiving grant-in-aid scholarships who have not exhausted their playing eligibility for the University.
On March 4, 2014, the U.S. Supreme Court significantly expanded the Sarbanes-Oxley anti-retaliation law to cover employees of private contractors who perform services for publicly-traded companies. Passed in 2002 in the wake of the Enron scandal, the Sarbanes-Oxley Act (“SOX”) establishes strict standards for financial behavior by publicly-traded companies and protects “employees” from retaliation for blowing the whistle on a number of specific types of violations. In Lawson v. FMR LLC, the Court concluded in a 6-3 decision that not only are employees of the publicly-traded company protected from retaliation, but employees of contractors and subcontractors of the company are also similarly protected.
On December 12, 2013, the New York Court of Appeals issued a decision in Kolbe v. Tibbetts, in which the Court addressed whether the Newfane Central School District could unilaterally alter the health insurance benefits of certain retirees of the District. The Court held that the retirees had a vested right to the same health insurance coverage until they turned 70 years of age that was in place under the collective bargaining agreements (“CBAs”) that were in effect at the time of their retirement. The Court also rejected the District’s contention that it was entitled to change retiree health insurance benefits under the New York Insurance Moratorium Law, holding that the Insurance Moratorium Law does not apply to health insurance benefits that have vested under CBAs.
On March 13, 2014, President Obama issued a memorandum directing the Secretary of Labor to update and streamline the Fair Labor Standards Act (“FLSA”) overtime regulations. In the memorandum, President Obama noted that the regulations regarding exemptions from the FLSA’s overtime requirements, particularly for executive, administrative and professional employees (the white-collar exemptions), are outdated and should be updated to address the changing nature of the workplace. President Obama also stated that the regulations should be simplified so that they are easier for employers and employees to understand and apply.
As discussed in a previous blog post, the Fair Credit Reporting Act (“FCRA”) expressly requires employers to provide applicants with a stand-alone disclosure and authorization form prior to obtaining a background check. This form must be separate from the employment application, and cannot include any type of language attempting to release the employer from liability associated with obtaining the background check. Unfortunately, many employers still fail to comply with this law by relying solely on a disclosure located on an employment application to inform applicants that they will be subject to a background check, or by attempting to include additional language on the disclosure. A recent proposed class action lawsuit against Whole Foods Market California provides a reminder to employers to review their disclosure and authorization forms for FCRA compliance.
On February 7, 2014, the Appellate Division, Fourth Department, issued a significant decision regarding restrictive covenants. In Brown & Brown, Inc. v. Johnson, the plaintiffs terminated the defendant-employee and then sued her for violating non-competition and non-solicitation provisions in her employment agreement, which contained a provision stating that Florida law would govern. The Fourth Department considered several issues, including: (1) whether to enforce the Florida choice-of-law provision for the restrictive covenants; (2) whether employers can enforce restrictive covenants against employees who were involuntary terminated; and (3) whether the court must partially enforce an overbroad restrictive covenant where the agreement expressly provides for such partial enforcement.
On January 13, 2014, the Equal Employment Opportunity Commission (“EEOC”) announced it had reached a settlement with Founders Pavilion, Inc. (“Founders”), a former nursing and rehabilitation center located in Corning, New York. In the lawsuit, the EEOC alleged that Founders violated the Genetic Information Nondiscrimination Act (“GINA”). The lawsuit represented only the third time since GINA was enacted that the EEOC had brought a lawsuit against an employer in which it alleged that an employer violated GINA, and the first lawsuit in which the EEOC alleged that the discrimination was systemic.