Thursday, March 27, 2014

NLRB Rules That College Football Players Are Employees And May Unionize

Yesterday, the Chicago district of the National Labor Relations Board (the “NLRB”) ruled that football players at Northwestern University qualify as employees of the university and can unionize.  Certainly, one can extrapolate from the ruling that it applies to all student athletes, not just football players at Northwestern. 

While the players may be rejoicing over their new-found status, they should approach this development with some trepidation.  There are a number of unknown or unintended consequences that could occur as a result of the NLRB ruling.  Colleges and universities may elect to no longer issue scholarships for their athletes, and could avoid allegations of anti-union animus if financial considerations come into play. Indeed, if sports scholarships are discontinued, that will likely affect a great number of individuals who might not otherwise be able to afford an education, but for those  scholarships. If scholarships continue, student recipients could be taxed on all or portions of those scholarships as employee income. Small schools may decide to cancel their sports programs completely. Student athletes who are hurt in a game or in activities related to their participation in the sport may qualify for workers’ compensation benefits. 

Also, unionization raises the prospect of strikes by disgruntled players and lockouts by athletic departments. Strikes and lockouts are particularly likely since the athletes may lack any real leverage at the bargaining table; this could result in the utilization of non-union replacement players.    
           
The NLRB ruling applies solely to athletes at private schools because the NLRB lacks jurisdiction over public universities.  I expect that Northwestern will appeal and that the matter will be decided ultimately by the United States Supreme Court.  In the interim, due to potential litigation, it is likely that the matter won’t be finalized for years. Stay tuned. 

Wednesday, January 1, 2014

New York Increases Minimum Wage

Effective as of December 31, 2013, New York State has increased its minimum wage to $8.00 per hour.  This is the first of three planned increases.  The New York minimum wage will again increase on December 31, 2014 to $8.75 per hour, and will further increase to $9.00 per hour on December 31, 2015.  Note that the current federal minimum wage is $7.25 per hour, but that New York employers must  pay the higher of the two rates.  New York employers are required to post notice of the current increase in the State's minimum wage in a conspicuous place.  The poster from the NYS Department of Labor can be found here.

Happy New Year!

Wednesday, July 3, 2013

Delay Of Employer Penalties Under Obamacare

The Treasury Department has announced that the imposition of employer penalties under Obamacare will be delayed until 2015. Initially, those penalties were scheduled to become effective as of January 1, 2014. The delay applies only to the employer penalty provisions and certain related reporting requirements. Implementation of the health care exchanges as well as the mandate for individual health care coverage (including penalties for the failure to obtain such coverage) remain unaffected; they are still scheduled to become effective next year. 

The delay in implementation came about because of complaints from employers that Obamacare penalty provisions were too complex to enforce by the initial 2014 deadline, and there was a lack of guidance regarding several issues.   To somewhat paraphrase Nancy Pelosi ... Now that we know what's in the legislation, it's not all that it's cracked up to be.  Rushing to enact legislation without reading it first is a recipe for disaster. This may be the first of many delays in the implementation and enforcement of Obamacare.  Stay tuned. 


Wednesday, September 12, 2012

Amendments To Employee Wage Deductions In New York

New York's Governor Cuomo has signed legislation amending New York Labor Law §193 which restores to employers the ability to make certain deductions from employee wages in a number of instances; the New York Department of Labor (the “NYSDOL") had determined previously (via opinion letters) that such deductions were impermissible, even with the employee's consent. The legislation becomes effective on November 9, 2012.

The new amendments allow New York employers to make deductions (in addition to those existing currently under the statute) with respect to pay advances; accidental overpayment of wages; purchases made at events sponsored by bona fide charitable organizations; discounted parking passes and mass transit vouchers; gym membership dues; cafeteria, vending machine and pharmacy purchases made at the employer's place of business; tuition, room and board and fees for educational institutions; day care expenses; and payments for housing provided at no more than market rates by nonprofit hospitals.

Before an employer may take any of these additional deductions, the employer must: (i) provide the employee with written notice of the terms and conditions of the payment and its benefits; (ii) provide a written explanation of how the employer will take the deductions; and (iii) obtain the employee’s written, voluntary consent to the deduction. The employee’s consent may be revoked at any time. The employer must retain each authorization for at least six (6) years following the termination of the employee’s employment. Employees may also consent to a deduction through a collective bargaining agreement.

Interestingly, the amendments contain a "sunset provision" that automatically extinguishes the newly identified wage deductions on November 9, 2015. Accordingly, the State Legislature will likely revisit this issue at a later date to determine whether the new law is working; if it is, the "sunset provision" may be revoked.

The NYSDOL is required to issue regulations governing the timing and frequency of deductions and notice requirements, including a procedure that the employee may use to dispute the amount of the deduction. Employers are cautioned that they may wish to wait until after the NYSDOL issues its regulations, and the effective date of the new legislation, before entering into any wage deduction agreements with employees or taking any action with respect to wage deductions not permitted by statute currently.

Thursday, May 17, 2012

Retaliation Claim Dismissed As Not Related To Title VII Proceeding

In a case of first impression, the Second Circuit Court of Appeals held that the termination of employment in connection with an internal company investigation was not retaliatory where an EEOC Charge had not been filed. The case is Townsend, et al. v. Benjamin Enterprises, Inc., et al. and can be found here.

In Townsend, the Plaintiff was the director of human resources for the defendant corporation. Plaintiff alleged that she was terminated after commencing an internal investigation of a sexual harassment complaint made by the co-plaintiff against an officer of the corporation. The corporate officer was a shareholder of the company and owned it with his wife.

At the trial level, the District Court granted Defendants’ motion for summary judgment on the grounds that the Plaintiff was not engaged in protected activity under Title VII since an EEOC Charge has not been filed. On appeal, the Second Circuit affirmed and held that participation in an internal employer investigation not connected with a formal EEOC proceeding does not qualify as protected activity.

In reading the Second Circuit's decision, I can't help but believe that it will have a chilling effect on internal investigations concerning discrimination. If the investigator is not protected from retaliation where the investigation gets "too close to home," vigorous internal efforts to discover and remedy unlawful discrimination likely will suffer.

Wednesday, April 18, 2012

Further Delay In NLRB Posting Requirement

The NLRB has announced that it will not yet implement its rule requiring employers covered by the National Labor Relations Act to post a Notice advising employees of their Union rights. The posting requirement was scheduled to take effect on April 30, 2012.

In light of conflicting decisions at the district court level as to whether the NLRB has authority to promulgate the rule in the first instance, the DC Circuit Court of Appeals has temporarily enjoined the NLRB’s rule. The NLRB stated that "[i]n view of the DC Circuit's order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court."

More to come.

Monday, April 2, 2012

A Lack Of Knowledge Can Be A Dangerous Thing

There's an old saying that goes "beware of he who knows not that he knows not." Recently, I found myself in a predicament to which that adage is applicable, and thought I'd share the experience as an object lesson.

One of my clients issued a proposed, standard AIA Owner/Contractor agreement for signature. Nothing fancy, just the standard form of agreement. The Owner, who happened to be an attorney, delegated the negotiation of the agreement to her father, also an attorney. Neither father nor daughter were experienced in construction law. During the negotiations, I explained repeatedly a number of basic construction law concepts to the attorney-father such as the definition of substantial completion as well as how mechanic's liens work. It appeared that my verbal construction law primer was successful. Remember ... appearances can be deceiving. As time went on, the negotiations devolved into what seemed to be a pathetic exercise in futility.

To illustrate the absurdity of the negotiations, discussion was had ad nauseum as to whether the Owner's written approval was required in order to move an electrical outlet one inch to the right or to the left, if necessary! Sure, let's delay the Project for that while we try to track down the Owner who may have left her cell phone at home and cannot be contacted immediately. Oh, and then there was the demand that the Contractor provide its own manufacturing warranty for each and every screw, nail, piece of sheetrock and other like material which was purchased from a supply house and manufactured by a third party. Are you kidding me? I mean, really ... ARE YOU KIDDING ME?

Ultimately, it appeared that the terms of a Rider to the AIA contract had been agreed upon by the parties. Imagine my frustration when I was informed that the same issues which were resolved previously (to my mind, anyway) remained a "problem." When I asked why an attorney experienced in construction matters hadn't been retained to negotiate the contract, I was told "because my daughter wants me to do it ... I've never done this before, but the concepts are not too difficult." Oh, really? Then why did it take more hours than necessary to negotiate a basic, AIA construction contract? PUHLEEZE! My client walked away from the Project eventually, but relented when the Owner agreed to every term I proposed in the Rider to the contract.

This situation reminds me of the television commercial from a couple of years ago where a guy is trying to save some money, so he calls his surgeon to ask where he should make the initial incision for his self-performed appendectomy. Sheesh! The moral of this story is to retain experienced professionals to do the job. Just because someone has a professional license doesn't mean they are qualified to practice in a particular area. Getting the right professional from the get-go may expedite resolution of the matter and cost less in the long run. It's simply a matter of not being penny-wise and pound foolish.