New York Labor and Employment Law Report : New York Employment Lawyer & Attorney : Bond Schoeneck & King Law Firm : NY Labor Relations, Employee Benefits

As all federal contractors and subcontractors should know, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), is the federal agency charged with enforcing the non-discrimination and affirmative action obligations imposed on federal contractors and subcontractors by Executive Order 11246 (E.O. 11246). Although OFCCP’s ability to pursue a more ambitious agenda under the Obama administration has recently been hampered by budget issues, the Agency has been far from dormant. Its recent activity should serve as a warning to federal contractors that they may face a more aggressive Agency once the budget issues are straightened out. Some of OFCCP’s most recent activity is described below.

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Last month we posted on several bills signed into law by Governor Paterson in late August, one of those is the Construction Industry Fair Play Act, which applies to construction industry contractors in New York and is designed to deal with the problem of worker misclassification in that industry. Among other things, the Act creates a presumption that workers in the industry are employees, not independent contractors, unless three statutory criteria are met. The Act, which went into effect Tuesday, also provides for fines and criminal penalties for willful misclassification of employees. The New York State Department of Labor has issued a fact sheet explaining the statute. The Agency has also issued a poster which construction industry employers must display in a “prominent and accessible place on the job site.”

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Two events in the past week should remind New York employers of their legal obligation under section 11(c) of the Occupational Safety and Health Act not to discipline or terminate employees for reporting a safety hazard, or for filing a complaint with OSHA. On October 14, OSHA announced that it had obtained a consent judgment in a case brought against the John Galt Corporation and two managers, which orders them to pay a terminated employee $55,000 in back wages and to expunge all disciplinary records from the employee's personnel file related to his reporting of health and safety issues at the former Deutsche Bank Building in New York City. Earlier this week, OSHA filed suit against Promesa Systems Inc., a New York City nonprofit organization providing care to individuals with developmental disabilities, for allegedly firing an employee for voicing workplace safety and health concerns and for filing a complaint with OSHA. (The suit also names the organization's wholly owned subsidiary, East Harlem Council for Community Improvement Inc., as well as three managers.) The complaint alleges that a few days after the employee advised the defendants that she would consult OSHA regarding a work assignment, the defendants suspended her, and ultimately fired her under the pretext of poor performance. OSHA is seeking reinstatement, backpay with interest, and compensatory damages.

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The Internal Revenue Service ("IRS") recently issued guidance on the new requirements for over-the-counter medicines and drugs ("OTC Drugs") that will apply generally to employer-provided health plans and certain health accounts on January 1, 2011. Those requirements are summarized below.

• To comply with the new requirements on OTC Drugs, employers should:make sure that any employee who administers the applicable health plan or account is familiar with the new requirements;
• inform participants in the applicable health plans and accounts in 2010 about the new requirements, so they can (1) consider the new requirements for OTC Drugs when making health coverage elections for 2011, and (2) properly administer any tax-favored health accounts they have in 2010 with respect to expenditures for OTC Drugs;
• review whether any amendments are needed to their health plan(s), health accounts, and cafeteria plan(s) to comply with the new requirements; and
• make any necessary changes to applicable summary plan descriptions, web pages, and other materials regarding the new requirements.
   

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Earlier this year, Governor David Paterson signed into law Chapter 103 of the Laws of 2010 which, among other things, drastically alters the way classroom teachers and building principals are evaluated and the procedures for disciplining tenured teachers. These changes will take effect over the course of the next several years. Many key provisions were effective on July 1, 2010. The changes have significant implications for collective bargaining between school districts and the unions representing teachers and principals.

The impetus for these far reaching changes was New York State’s application for Phase II of the Federal Government’s Race to the Top Program (“RTT”). RTT was created as part of the American Recovery and Reinvestment Act of 2009 (“ARRA”), and authorizes the United States Department of Education to award up to $4.3 billion in grant money to encourage and reward States that create conditions for education innovation and reform. New York was one of several states to win Phase II of RTT. As a result, New York will receive approximately $700 million to help implement changes RTT was designed to foster, including how the performance of teachers and principals is measured.
 

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The United States Court of Appeals for the Seventh Circuit’s recent decision in United States v. Szymuszkiewicz is yet another reminder that the law governing monitoring of electronic communications in the workplace is a rapidly evolving, and requires employers to regularly revisit their technology use policies. Szymuszkiewicz was an IRS agent in Wisconsin who was convicted under the federal Wiretap Act for intentionally intercepting an electronic communication. A jury found that he secretly activated the auto-forward “rule” on his supervisor’s Microsoft Outlook e-mail account. As a result, a copy of every e-mail the supervisor received was also sent to the agent. The Wiretap Act makes it unlawful for any person to intercept an oral, wire or electronic communication without authority or the consent of at least one party to the communication.

In challenging the conviction, the agent argued that a communication is only “intercepted” under the Act if it is caught “in flight” (before it reaches its destination). Because he merely forwarded e-mails that had already arrived at his supervisor’s computer, he argued, no “interception” occurred. The only crime he could have been charged with, he contended, was a violation of the Stored Communications Act. Noting the risk in “defend[ing] against one crime by admitting another,” the Seventh Circuit rejected the agent’s argument.

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Over the past two years, the Occupational Safety and Health Administration (“OSHA”) has sought to expand significantly the reach of the General Duty Clause by issuing citations to employers for workplace violence and ergonomics issues. This expansion will soon reach another area: distracted driving. The agency plans to issue General Duty Clause citations to companies whose employees text while driving. This promise comes directly from the Assistant Secretary of Labor for OSHA David Michaels: "When OSHA receives a credible complaint that an employer requires texting while driving or who organizes work so that texting is a practical necessity, we will investigate and where necessary issue citations and penalties to end this practice." If you have employees who respond to hundreds of e-mails a day, with rapid response times required, and who frequently or occasionally travel during work time as part of their duties, you may receive a visit or an inquiry from OSHA. The impact on employers could be significant. According to a recent Pew Research Poll, 27% percent of all adults admit to texting while driving. Most troubling is the assertion that the agency will cite employers that "create incentives that encourage or condone" texting while driving. Employers that do not "condone" the practice may still receive citations if the agency concludes that an employer that expects fast responses to calls or e-mails thereby "encourages" employees who are driving to respond to texts or e-mails, instead of using a hands-free device or pulling off the road.

Employers can most effectively protect themselves from this enforcement effort by implementing and enforcing strong policies against the practice of texting while driving. Employees should be required to sign a policy explicitly stating they agree not to text while driving during work time, either as part of an employee handbook or when they receive any company-issued cell phone or texting device. Further, any employees found to be texting while driving during work time should be disciplined, up to and including termination.

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