Lawyer Joke Friday

Hey, it's Labor Day weekend. The summer sure flew by fast. Here's one I just know you'll dig:

Q. What's black and brown and looks great on a lawyer?

A. A Doberman.

Have a fun and safe holiday weekend.

And, Speaking Of Apprentices ...

Just when you thought the water was safe ... BAM! On August 28, 2007, New York Governor Eliot Spitzer announced that effective immediately, the New York State Department of Labor (the "NYSDOL") is suspending the development and approval of apprenticeship training programs in all trades. The addition of new, participating employers to existing programs is also being suspended. The entire press release can be found here. Thanks to Ben Brubeck for the head's up.

What does this all mean? Essentially, it confirms what I thought might happen when I wrote "My Kingdom For An Apprenticeship Program!" this past June. Specifically, I opined that a freeze on approving and registering new apprenticeship programs could give those which have them in place already (i.e., union contractors) a decided, and perhaps permanent advantage over their non-union competitors. I hate to say I told you so, BUT!

This is really, REALLY bad news for small to mid-sized contractors that are not affiliated with a union as well as for New York taxpayers in general. Indeed, those contractors without the programs already in place cannot bid on construction projects in the ever increasing number of municipalities and school districts that require contractors to maintain State-approved apprenticeship training programs and to use registered apprentices as a condition to bidding on and being awarded public work. In addition, such contractors cannot seek approval from the NYSDOL to start an apprenticeship training program during the period of the State's moratorium which, according to the press release, can last up to one year. Can anyone say "union monopoly?" Quite frankly, this entire episode appears to wreak of political payback. The bottom line is that the pool of qualified public works contractors has just decreased markedly. Such a lack of competition is likely to result in higher bid numbers which will probably increase the cost of public works construction and result in local tax hikes to pay for public projects.

As expected, organized labor is giddy about all this, particularly since the Governor announced the freeze at the Long Island Federation of Labor's Constitutional Convention. Sheesh, talk about pandering to a constituency in its own back yard. So, there ya have it folks ... and, I think this is only the beginning. May the saints preserve us all.

When Is An Apprentice Not An Apprentice?

Many non-union employers still don’t understand the rules regarding the use of apprentices on public works construction projects. In New York, if an apprentice working on such a project is not registered in a State approved apprenticeship training program, he/she must be paid at the journeyworker’s rate. I'll bet that most, if not all States have similar statutory provisions. Absent registration in such a program, the inexperienced person who knows spit about the trade and was making $10.00 per hour on private work must be paid perhaps triple that wage rate together with benefits; they cannot be paid at the apprentice wage rate stated in the prevailing wage schedule. The failure to pay the journeyworker's rate to an unregistered apprentice could result in a willful violation of New York Labor Law.

What’s that you say? You’ll just register them and be done with it? It’s not so easy. See my post entitled “My Kingdom For An Apprenticeship Program” for more on the extreme difficulty in having employer-sponsored apprenticeship programs approved and registered in New York. As for existing programs held at the local BOCES, etc., many require that a minimum number of persons be enrolled in order to proceed with the program during a particular semester. This can make it difficult for small contractors who wish to register one or two employees; in such cases, the employer may be left with the unenviable choice of paying the unregistered apprentice at the much higher journeyworker's rate or not utilizing their services at all on public works projects.

And so it goes.

Lawyer Joke Friday

I can't believe it's Friday already. Time flies by fast these days. Anyway, here's this week's nugget ... I have a personal affinity for this one:

Q. What's the difference between a lawyer and a herd of buffalo?
A. The lawyer charges more.

The Hybrid Rate Contract Connundrum

Recently, I’ve had several inquiries regarding the appropriate wage and benefit rate to be paid on public works construction projects where the contract makes reference to both Federal Davis-Bacon rates and New York State prevailing rates. This type of "hybrid rate contract" can be extremely confusing and dangerous to the unwary contractor since payment of the "wrong" contractual rate, as may be determined by the State enforcement agency having jurisdiction, can lead to a finding that the contractor underpaid its workers and the imposition of interest and penalty.

In New York, the general “practice” (albeit uncodified and unwritten) is that the higher of the two competing rates is paid if the subject work is performed within the State. While a preemption argument might be available if the project were funded entirely by Federal monies, these types of projects are typically funded partially from State coffers, thereby giving the State jurisdiction and eliminating any claim of preemption. I’ve heard of instances where a contractor bid and was awarded the contract at the lower rate only to be surprised later that it underpaid its workers. Apparently, inquiries to the agency/owner of the project for clarification prior to the bid proved confusing, unclear or evasive.

There is also an issue as to whether payment of the “wrong” rate in a hybrid rate contract can be a willful violation under New York Labor Law Section 220. Under the statute, a contractor that receives two willful violations within a six year period is debarred and prevented from bidding on or being awarded State public work for a period of five years. On the one hand, the contractor would likely argue that it paid a lower rate permitted by contract in good faith and had no intention of underpaying its workers. On the other hand, the New York State Department of Labor (the “NYSDOL”) would likely contend that payment of a higher, statutory State prevailing rate cannot be varied by contract, even if a government owner agrees to same. Further, in making a determination as to willfulness, the NYSDOL would likely look to the contractor’s prior experience in the public work area, its familiarity with performing public contracts which reference Federal and State prevailing rates, and whether the contractor knew or should have known that it had failed to pay the proper rate. I'll give you three guesses as to which party is likely to prevail.

This is very tricky (and potentially expensive) stuff for the experienced and inexperienced contractor alike. Questions on this issue should be addressed to a qualified attorney in your State and/or to the local Department of Labor. Caveat emptor!

Lawyer Joke Friday

Here's this week's self-deprecating attempt at humor:

Q: What’s the difference between a lawyer and an onion?
A: You cry when you cut up an onion.

Enjoy the weekend!

Are Summary Judgment Motions Overused?

If I’ve said it once, I've said it a thousand times ... motions for summary judgment in employment discrimination cases are generally wasteful exercises in futility. Typically, there is some, good faith, triable issue of fact that a plaintiff can raise to defeat the motion. I see it over and over again. Here’s another case in that long line.

In Towey v. H&M Hennes & Mauritz LP (Supreme Court, N.Y. Co., 113226/04 - Decided: July 23, 2007), the Plaintiff alleged discrimination by the Defendant, a Swedish corporation, due to its failure to promote as well as the termination of her employment based on pregnancy and her national origin as a U.S. citizen in violation of State and municipal laws. The Plaintiff was employed as the Defendant's spokesperson, and had an exemplary employment record. After becoming pregnant, the Plaintiff negotiated a maternity leave package that allowed her to telecommute from home and receive her full salary. In the tenth week of her maternity leave she was terminated, ostensibly because she removed approximately $11.00 worth of sample garments from the corporate office without immediately paying for them. The company had an unwritten practice that employees could take items and pay for them later. The Court held that the Plaintiff could show the adverse employment action occurred under circumstances giving rise to an inference of discrimination. Although the Defendant proffered a non-discriminatory reason for the termination (which is not recited or otherwise described in the Court's Decision), there were triable issues of fact as to whether that reason was pre-textual.

Given that the employer had an unwritten practice of allowing employees to take items and pay for them later, I fail to see the point for its summary judgment motion other than it being a reflexive response. It seems obvious that the Plaintiff would raise a triable issue based on the unwritten policy and, accordingly, the issue of pre-text would be a matter left for the trier of fact to determine ultimately. In the employment discrimination sphere, it’s a rare bird that prevails on a summary judgment motion. While I don’t deny the efficacy or wisdom of such motions in some limited situations, I think defendants should use more prudence and discretion in weighing their potential benefits against the costs involved and the dubious likelihood of success.

Company Schlock ... Uh, Stock

On August 9, 2007, the U.S. Department of Labor (the "USDOL") announced a final regulation implementing its authority to assess civil penalties against pension plan administrators who fail to give employees notice of the right to sell company stock in their pension plan accounts. By motivating plan administrators to provide such notice, the USDOL hopes to encourage employees to diversify their pension portfolios, thereby helping to avoid disasters such as that involving Enron where significant portions of employee retirement funds were invested in the company's stock.

I've been fairly impressed with the USDOL's recent efforts. I hope it keeps up the good work.

Lawyer Joke Friday

It's rainy and dreary today in the Empire State. Hopefully, the following little ditty will brighten up your day.

Q. What happened to the banker who went to law school?
A. He became a loan shark.

Back From The Hinterlands

After a brief hiatus, I'm back from the Great White North. Inasmuch as the work piled up during my absence, posting will resume on Friday with this week's lawyer joke. Posting on more substantive issues will resume next week.

TTFN

Lawyer Joke Friday (On Thursday) & A Brief Hiatus

Now that the dog days of summer are here, a little jaunt to recharge the batteries is in order. I'm headed for the Great White North for a few days ... posting will resume next Tuesday. However, I couldn't leave you without a cool lawyer joke to get you through the trauma of my brief absence. So, here we go:

Q. What's the difference between a lawyer and a vulture?

A. The lawyer gets frequent flyer miles.

See y'all next week.